Security Agreement ▇▇▇▇▇
FARGO
Date
03/28/2002
Debtor
Secured Party
Patient Infosystems, Inc. ▇▇▇▇▇ Fargo Bank Iowa, N.A.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 666 Walnut
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City, State, Zip Code
Zip Code
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1. Security Interest and Collateral. To secure the payment and performance of
each and every debt, liability and obligation of every type and description
which Debtor may now or at any time hereafter owe to Secured Party whether
such debt, liability or obligation now exists or is hereafter created or
incurred, whether it is currently contemplated by the Debtor and Secured
Party, whether any documents evidencing it refer to this Security
Agreement, whether it arises with or without any documents (e.g.
obligations to Secured Party created by checking overdrafts), and whether
it is or may be direct or indirect, due or to become due, absolute or
contingent, primary or secondary, liquidated or unliquidated, or joint,
several or joint and several; (all such debts, liabilities and obligations
being herein collectively referred to as "Obligations"), Debtor hereby
grants Secured Party a security interest (herein called the "Security
Interest") in the following property (herein called the "Collateral")
(check applicable boxes and complete information):
(a) INVENTORY
X All inventory of Debtor, whether now owned or hereafter acquired
and wherever located;
(b) EQUIPMENT, FARM PRODUCTS AND CONSUMER GOODS:
X All equipment of Debtor, whether now owned or hereafter acquired,
including but not limited to all present and future machinery,
vehicles, furniture, appliances, fixtures, manufacturing and
processing equipment, farm machinery and equipment, shop
equipment, office and record-keeping equipment, computer hardware
and software, parts and tools, goods and types of goods of every
kind and description,
The following equipment or types of equipment:
All farm products of Debtor, whether now owned or hereafter acquired,
including but not limited to (i) all poultry and livestock and their
young, products thereof and produce thereof, all holding marks and
brands and branding irons of Debtor that at any time cover any such
livestock, and, if the livestock includes sheep, all wool pulled,
clipped or shorn therefrom, (ii) all crops, whether annual or
perennial, and the products thereof (THIS SECURITY AGREEMENT COVERS
CROPS NOW GROWING. THIS SECURITY AGREEMENT ALSO COVERS FUTURE CROPS TO
BE GROWN IN THE CURRENT YEAR OR ANY HEREAFTER), (iii) all feed, seed,
fertilizer, medicines and other supplies used or produced by Debtor in
farming operations, and (iv) all rights to crop insurance payments and
storage payments and all rights to payments of any type under any
government agricultural diversion, assistance, support or incentive
program, Farm Services Agency program and any other government
agricultural program. The real estate concerned with the above
described crops growing or to be grown is:
and the name of the record owner(s) is:
The following consumer goods or types of consumer goods:
(C) ACCOUNTS AND OTHER RIGHTS TO PAYMENT:
X All accounts and each and every right of Debtor to the payment of
money, whether such right to payment now exists or hereafter
arises, whether such accounts or other rights to payment arise
out of a sale, lease or other disposition of goods or other
property by Debtor, out of a rendering of services by Debtor, out
of a loan by Debtor, out of the overpayment of taxes or other
liabilities of Debtor, or otherwise arises under any contract or
agreement, whether such right to payment is or is not already
earned by performance, and howsoever such right to payment may be
evidenced, together with all other rights and interests
(including all liens and security interests) which Debtor may at
any time have by law or agreement against any account debtor or
other obligor obligated to make any such payment or against any
of the property of such account debtor or other obligor; all
including but not limited to all present and future debt
instruments, chattel papers, contract rights, loans and
obligations receivable, tax refunds, unearned insurance premiums,
rebates, and negotiable documents.
(d) GENERAL INTANGIBLES:
X All general intangibles of Debtor, whether now owned or hereafter
acquired, including, but not limited to, certificates of deposit,
applications for patents, patents, copyrights, trademarks, trade
secrets, good will, trade names, customer lists, permits and
franchises, and the right to use Debtor's name, together with all
other intangible property rights such as the right to redeem or
accept payment under an annuity contract or a non-negotiable
certificate of deposit issued by a bank.
(e) OTHER:
Regardless of which boxes are checked above, this Agreement also
covers all substitutions and replacements for and products of any of
the foregoing property not constituting consumer goods and proceeds of
any and all of the foregoing property including, but not limited to,
insurance proceeds and any rights of subrogation resulting from the
damage or destruction thereof, and, in the case of all tangible
Collateral, together with all accessions and, except in the case of
consumer goods, together with (i) all accessories, attachments, parts,
equipment and repairs now or hereafter attached or affixed to or used
in connection with any such goods, and (ii) all warehouse receipts,
bills of lading and other documents of title now or hereafter covering
such goods.
2. Representations, Warranties and Agreements. Debtor represents, warrants and
agrees that:
(a) Debtor is a(n) Corporation ;
(b) The collateral will be used primarily for __ personal, family or
household purposes; __ agricultural purposes; X business purposes;
(c) __ If any part or all of the tangible Collateral will become so
related to particular real estate as to become a fixture, the real
estate concerned is: ;
--------------------
and the name of the record owner is: ;
--------------------
(d) Debtor's chief executive office is located at: ;
--------------------
or, if left blank, at the address of Debtor shown at the beginning of
this Agreement. If Debtor is an individual, the Debtor's residence is
at the address of Debtor shown at the beginning of this Agreement.
3. Additional Representations, Warranties and Agreements. Debtor represents,
warrants and agrees that:
(a) Debtor has (or will have at the time Debtor acquires rights in
Collateral hereafter arising) absolute title to each item of
Collateral free and clear of all security interests, liens and
encumbrances, except the Security Interest, and will defend the
Collateral against all claims or demands of all persons other than
Secured Party. Debtor will not sell or otherwise dispose of the
Collateral or any interest therein without the prior written consent
of Secured Party, except that, until the occurrence of an Event of
Default and the revocation by Secured Party of Debtor's right to do
so, Debtor may sell any inventory constituting Collateral to buyers in
the ordinary course of business and use and comsume any farm products
constituting Collateral in Debtor's farming operation. If Debtor is
not an individual, this Agreement has been duly and validly authorized
by all necessary action of the Debtor's governing body.
(b) Debtor will not perrmit any tangible Collateral to be located in any
state (and, if county filing is required, in any county) in which a
financing statement covering such Collateral is required to be, but
has not in fact been, filed in order to perfect the Security Interest.
(c) Each account and right to payment and each instrument, document,
chattel paper and other agreement constituting or evidencing
Collateral is (or will be when arising or issued) the valid, genuine
and legally enforceable obligation, subject to no defense, set-off or
counterclaim (other than those arising in the ordinary course of
business) of the account debtor of other obligor named therein or in
Debtor's records pertaining thereto as being obligated to pay such
obligation. Debtor will neither agree to any material modification or
amendment nor agree to any cancellation of any such obligation without
Secured Party's prior written consent, and will not subordinate any
such right to payment to claims of other creditors of such account
debtor or other obligor.
(d) Debtor will (i) keep all tangible Collateral in good repair, working
order and condition, normal depreciation excepted, and will, from time
to time, replace any worn, broken or defective parts thereof; (ii)
promptly pay all taxes and other governmental charges levied or
assessed upon or against any Collateral or upon or against the
creation, perfection or continuance of the Security Interest; (iii)
keep all Collateral free and clear of all security interests, liens
and encumbrances except the Security Interest; (iv) at all reasonable
times, permit Secured Party or its representatives to examine or
inspect any Collateral, wherever located, and to examine, inspect and
copy Debtor's books and records pertaining to the Collateral and its
business and financial condition and to discuss with account debtors
and other obligors requests for verifications of amounts owed to
Debtor; (v) keep accurate and complete records pertaining to the
Collateral and pertaining to Debtor's business and financial condition
and submit to Secured Party such periodic reports concerning the
Collateral and Debtor's business and financial condition as Secured
Party may from time to time reasonably request; (vi) promptly notify
Secured Party of any loss of or material damage to any Collateral or
of any adverse change, known to Debtor, in the prospect of payment of
any sums due on or under any instrument, chattel paper, or account
constituting Collateral; (vii) if Secured Party at any time so
requests (whether the request is made before or after the occurrence
of an Event of Default), promptly deliver to Secured Party any
instrument, document or chattel paper constituting Collateral, duly
endorsed or assigned by Debtor; (viii) at all times keep all tangible
Collateral insured against risks of fire (including so-called extended
coverage), theft, collision (in case of Collateral consisting of motor
vehicles) and such other risks and in such amounts as Secured Party
may reasonably request, with any loss payable to Secured Party (to the
extent of its interest and with the commitment of the issuer to notify
Secured Party before cancellation (DEBTOR HAS THE OPTION OF FURNISHING
THE REQUIRED INSURANCE EITHER THROUGH EXISTING POLICIES OF INSURANCE
OWNED OR CONTROLLED BY DEBTOR OR OF PROCURING AND FURNISHING
EQUIVALENT INSURANCE COVERAGES THROUGH ANY INSURANCE COMPANY
AUTHORIZED TO TRANSACT BUSINESS IN THE STATE NAMED AS PART OF SECURED
PARTY'S ADDRESS ABOVE. IF DEBTOR FAILS TO FURNISH THE REQUIRED
INSURANCE OR MAINTAIN THE REQUIRED INSURANCE IN FORCE, SECURED PARTY
MAY (BUT NEED NOT) PROCURE THE REQUIRED INSURANCE AT DEBTOR'S EXPENSE,
AND THE COST OF THE REQUIRED INSURANCE WILL BE ADDED TO THE
OBLIGATIONS. IF SECURED PARTY IS LOCATED IN TEXAS AND SHOULD PROCURE
SUCH REQUIRED INSURANCE AT A PREMIUM OR RATE OF CHARGE NOT FIXED OR
APPROVED BY THE STATE BOARD OF INSURANCE, SECURED PARTY SHALL NOTIFY
THE DEBTOR AND THE DEBTOR SHALL HAVE THE OPTION FOR A PERIOD OF 5 DAYS
FROM THE DATE OF THIS AGREEMENT OF FURNISHING THE REQUIRED INSURANCE
COVERAGE THROUGH ANY INSURANCE COMPANY AUTHORIZED TO TRANSACT BUSINESS
IN THE STATE OF TEXAS); (ix) from time to time execute such financing
statements and effective financing statements, and furnish lists of
potential buyers of farm products as Secured Party may reasonably
require in order to perfect the Security Interest and, if any
Collateral consists of a motor vehicle, execute such documents as may
be required to have the Security Interest properly noted on a
certificate of title; (x) pay when due or reimburse Secured Party on
demand for all costs of collection of any of the Obligations and all
other out-of-pocket expenses (including in each case all reasonable
attorneys' fees) incurred by Secured Party in connection with the
creation, perfection, satisfaction, protection, defense or enforcement
of the Security Interest or the creation, continuance, protection,
defense or enforcement of this Agreement or any or all of the
Obligations, including expenses incurred in any litigation or
bankruptcy, receivership or insolvency proceedings; (xi) execute,
deliver or endorse any and all instruments, documents, assignments,
security agreements and other agreements and writings which Secured
Party may at any time reasonably request in order to secure, protect,
perfect or enforce the Security Interest and Secured Party's rights
under this Agreement; (xii) not use the Collateral for hire, use or
keep any Collateral, or permit it to be used or kept, for any unlawful
purpose or in violation of any federal, state or local law, statute,
ordinance, or insurance policy; (xiii) permit Secured Party at any
time and from time to time to send requests (both before and after the
occurrence of an Event of Default) to account debtors or other
obligors for verification of amounts owed to Debtor; (xiv) not permit
any tangible Collateral to become part of or to be affixed to any real
property without first assuring to the reasonable satisfaction of
Secured Party that the Security Interest will be prior and senior to
any interest or lien then held or thereafter acquired by any mortgagee
of such real property or the owner or purchaser of any interest
therein; (xv) upon Secured Party's request, obtain a waiver or consent
from the owner and any mortgagee of any real property where the
Collateral may be located that provides that the Security Interest
will at all times be senior to any such interest or lien; and (xvi) if
any Collateral consists of farm products, if applicable, sell, cosign
or transfer the Collateral only to those persons whose names and
addresses have been furnished to Secured Party as potential buyers of
farm products. If Debtor at any time fails to perform or observe any
agreement contained in this Section, and if such failure shall
continue for a period of ten calendar days after Secured Party gives
Debtor written notice thereof (or, in the case of the agreements
contained in clauses (viii) and (ix) of this Section, immediately upon
the occurrence of such failure, without notice or lapse of time),
Secured Party may (but need not) perform or observe such agreement on
behalf and in the name, place and stead of Debtor (or, at Secured
Party's option, in Secured Party's own name) and may (but need not)
take any and all other actions which Secured Party may reasonably deem
necessary to cure or correct such failure (including, without
limitation, the payment of taxes, the satisfaction of security
interests, liens, or encumbrances, the performance of obligations
under contracts or agreements with account debtors or other obligors,
the procurement and maintenance of insurance, the execution of
financing statements, the endorsement of instruments, and the
procurement of repairs, transportation or insurance); and, except to
the extent that the effect of such payment would be to render any loan
or forbearance of money usurious or otherwise illegal under any
applicable law. Debtor shall thereupon pay Secured Party on demand the
amount of all moneys expended and all costs and expenses (including
reasonable attorneys' fees) incurred by Secured Party in connection
with or as a result of Secured Party's performing or observing such
agreements or taking such actions, together with interest thereon from
the date expended or incurred by Security Party at the highest rate
then applicable to any of the Obligations. To facilitate the
performance or observance by Secured Party of such agreements of
Debtor, Debtor hereby irrevocably appoints (which appointment is
coupled with an interest) Secured Party, or its delegate, as the
attorney-in-fact of Debtor with the right (but not the duty) from time
to time to create, prepare, complete, execute, deliver, endorse or
file, in the name and on behalf of Debtor, any and all instruments,
documents, financing statements, applications for insurance and other
agreements and writings required to be obtained, executed, delivered
or endorsed by Debtor under this Section and the Section entitled
"Lock Box, Collateral Account." Unless not permitted by applicable
law, Debtor hereby irrevocably authorizes Secured Party to create,
prepare, complete, execute and file, in the name and on behalf of
Debtor, such financing statements as may be required to perfect the
Security Interest.
4. Lock Box, Collateral Account. If Secured Party so requests at any time
(whether before or after the occurrence of an Event of Default), Debtor
will direct each of its account debtors to make payments due under the
relevant account or chattel paper directly to a special lock box to be
under the control of Secured Party. Debtor hereby authorizes and directs
Secured Party to deposit into a special collateral account to be
established and maintained with Secured Party all checks, drafts and cash
payments, received in said lock box. All deposits in said collateral
account shall constitute proceeds of Collateral and shall not constitute
payment of the Obligations. At its option, Secured Party may, at any time,
apply finally collected funds on deposit in said collateral account to the
payment of the Obligations in such order of application as Secured Party
may determine, or permit debtor to withdraw all or any part of the balance
on deposit in said collateral account. If a collateral account is so
established, Debtor agrees that Debtor will promptly deliver to Secured
Party, for deposit into said collateral account, all payments on accounts
and chattel paper received by Debtor. All such payments shall be delivered
to Secured Party in the form received except for Debtor's endorsement where
necessary. Until so deposited, all payments on accounts and chattel paper
received by Debtor shall be held in trust by Debtor for and as the property
of Secured Party and shall not be commingled with any funds or property of
Debtor.
5. Collection Rights of Secured Party. Notwithstanding Secured Party's rights
under the Section entitled "Lock Box, Collateral Account" with respect to
any and all debt instruments, chattel papers, accounts, and other rights to
payment constituting Collateral (including proceeds), Secured Party may, at
any time (both before and after the occurrence of an Event of Default)
notify any account debtor, or any other person obligated to pay any amount
due, that such chattel paper, account, or other right to payment has been
assigned or transferred to Secured Party for security and shall be paid
directly to Secure Party. If Secured Party so requests at any time, Debtor
will so notify such account debtors and other obligors in writing and will
indicate on all invoices to such account debtors or other obligors that the
amount due is payable directly to Secured Party. At any time after Secured
Party or Debtor gives such notice to an account debtor or other obligor,
Secured Party may (but need not), in its own name or in Debtor's name,
demand, ▇▇▇ for, collect or receive any money or property at any time
payable or receivable on account of, or securing, any such chattel paper,
account, or other right to payment, or grant any extension to, make any
compromise or settlement with or otherwise agree to waive, modify, amend or
change the obligations (including collateral obligations) of any such
account debtor or other obligor.
6. Assignment of Insurance. Debtor hereby assigns to Secured Party, as
additional security for the payment of the Obligations, any and all moneys
(including but not limited to proceeds of insurance and refunds of unearned
premiums) due or to become due under, and all other rights of Debtor under
or with respect to, any and all policies of insurance covering the
Collateral, and Debtor hereby directs the issuer of any such policy to pay
any such moneys directly to Secured Party. Both before and after the
occurrence of an Event of Default, Secured Party may (but need not), in its
own name or in Debtor's name, execute and deliver proofs of claim, receive
all such moneys, endorse checks and other instruments representing payment
of such moneys, and adjust, litigate, compromise or release any claim
against the issuer of any such policy.
7. Events of Default. Each of the following occurrences shall constitute an
event of default under this Agreement (herein called "Event of Default"):
(i) any amount payable under the Obligations is not paid when due, whether
through lapse of time or acceleration, after giving effect to any
applicable grace period therein;(ii) Debtor is otherwise in default under
the terms of the Obligations; (iii) Grantor fails to observe or perform any
of the covenants, agreements or conditions contained in this Agreement; or
(iv) Any representation or warranty in this Agreement is false or
materially misleading.
8. Remedies upon Event of Default. Upon the occurrence of an Event of Default
under the Section entitled "Events of Default" and at any time thereafter,
Secured Party may exercise any one or more of the following rights and
remedies: (i) declare all unmatured Obligations to be immediately due and
payable, and the same shall thereupon be immediately due and payable,
without presentment or other notice or demand; (ii) exercise and enforce
any or all rights and remedies available upon default to a secured party
under the Uniform Commercial Code, including but not limited to the right
to take possession of any Collateral, proceeding without judicial process
or by judicial process (without a prior hearing or notice thereof, which
Debtor hereby expressly waives), and the right to sell, lease or otherwise
dispose of any or all of the Collateral, and in connection therewith,
Secured Party may require Debtor to make the Collateral available to
Secured Party at a place to be designated by Secured Party which is
reasonably convenient to both parties, and if notice to Debtor of any
intended disposition of Collateral or any other intended action is required
by law in a particular instance, such notice shall be deemed commercially
reasonable if given in the manner specified in the Section entitled
"Miscellaneous" at least ten calendar days prior to the date of intended
disposition or other action; (iii) exercise or enforce any or all other
rights or remedies available to Secured Party by law or agreement against
the Collateral, against Debtor or against any other person or property.
Secured Party is hereby granted a nonexclusive, worldwide and royalty-free
license to use or otherwise exploit all trademarks, trade secrets,
franchises, copyrights and patents of Debtor that Secured Party deems
necessary or appropriate to the disposition of any Collateral.
9. Other Personal Property. Unless at the time Secured Party takes possession
of any tangible Collateral, or within 7 days thereafter, Debtor gives
written notice to Secured Party of the existence of any goods, paper or
other property of Debtor, not affixed to or constituting a part of such
Collateral, but which are located or found upon or within such Collateral,
describing such property, Secured Party shall not be responsible or liable
to Debtor for any action taken or omitted by or on behalf of Secured Party
with respect to such property without actual knowledge of the existence of
any such property or without actual knowledge that it was located or to be
found upon or within such Collateral.
10 Miscellaneous. This Agreement does not contemplate a sale of accounts, or
chattel paper. Debtor agrees that each provision whose box is checked is
part of this Agreement. This Agreement can be waived, modified, amended,
terminated or discharged, and the Security Interest can be released, only
explicitly in a writing signed by Secured Party. A waiver signed by Secured
Party shall be effective only in the specific instance and for the specific
purpose given. Mere delay or failure to act shall not preclude the exercise
or enforcement of any of Secured Party's rights or remedies. All rights and
remedies of Secured Party shall be cumulative and may be exercised
singularly or concurrently, at Secured Party's option, and the exercise or
enforcement of any one such right or remedy shall neither be a condition to
nor bar the exercise or enforcement of any other. All notices to be given
to Debtor shall be deemed sufficiently given if delivered or mailed by
registered or certified mail, postage prepaid, to Debtor at Debtor's
address set forth above or at the most recent address shown on Secured
Party's records. Secured Party's duty of care with respect to Collateral in
its possession (as imposed by law) shall be deemed fulfilled if Secured
Party exercises reasonable care in physically safekeeping such Collateral
or, in the case of Collateral in the custody or possession of a bailee or
other third person, exercises reasonable care in the selection of the
bailee or other third person, and Secured Party need not otherwise
preserve, protect, insure or care for any Collateral. Secured Party shall
not be obligated to preserve any rights Debtor may have against prior
parties, to realize on the Collateral at all or in any particular manner or
order, or to apply any cash proceeds of Collateral in any particular order
of application. This Agreement shall be binding upon and inure to the
benefit of Debtor and Secured Party and their respective heirs,
representatives, successors and assigns and shall take effect when signed
by Debtor and delivered to Secured Party, and Debtor waives notice of
Secured Party's acceptance hereof. Secured Party may execute this Agreement
if appropriate for the purpose of filing, but the failure of Secured Party
to execute this Agreement shall not affect or impair the validity or
effectiveness of this Agreement. A photographic or other reproduction of
this Agreement or of any financing statement signed by the Debtor shall
have the same force and effects as the original for all purposes of a
financing statement. Except to the extent otherwise required by law, this
Agreement shall be governed by the internal laws of the state named as part
of Secured Party's address above. If any provision or application of this
Agreement is held unlawful or unenforceable in any respect, such illegality
or unenforceability shall not affect other provisions or applications which
can be given effect, and this Agreement shall be construed as if the
unlawful or unenforceable provision or application had never been contained
herein or prescribed hereby. All representations and warranties contained
in this Agreement shall survive the execution, delivery and performance of
this Agreement and the creation and payment of the Obligations. If this
Agreement is signed by more than one person as Debtor, the term "Debtor"
shall refer to each of them separately and to both or all of them jointly;
all such persons shall be bound both severally and jointly with the
other(s); and the Obligations shall include all debts, liabilities and
obligations owed to Secured Party by any Debtor solely or by both or
several or all Debtors jointly or jointly and severally, and all property
described in the Section entitled "Security Interest and Collateral" shall
be included as part of the Collateral, whether it is owned jointly or by
both or all Debtors or is owned in whole or in part by one (or more) of
them.
THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES WITH
RESPECT TO THE COLLATERAL AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES WITH RESPECT TO THE COLLATERAL.
Signatures
Debtor's Name
Patient Infosystems, Inc.
Signature Signature
X /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ X
Name and Title (if applicable) Name and Title (if applicable)
Vice President of Financial Planning
Signature Signature
X X
Name and Title (if applicable) Name and Title (if applicable)
Bank's Name
▇▇▇▇▇ Fargo Bank Iowa, N.A.
Signature
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President