Exhibit 10.7 to Form 10-K

 
| $125,000 |   |   |   | November  30, 2001 |
|----------|--------|--------|--------|--------------------|

** **

**SECURED PROMISSORY NOTE**

#  

# 1.             Obligation.  For value received, AMERICABILIA.COM, INC.,a Florida corporation (“Maker”) promises to pay to the order of HENRY E.CARTWRIGHT (“Holder”) the Principal Amount (as defined below) together withInterest (as defined below) in the manner and upon the terms and conditions setforth herein (the “Obligation”).

 

Amount and Payment.  The principal amount (“Principal Amount”) ofthis Note is One Hundred Twenty Five Thousand Dollars ($125,000).  This Note shall bear interest on the unpaidPrincipal Amount at the rate of ten percent (10%) per annum (“Interest”).  The Principal Amount and Interest shall beall due and payable on December 31, 2002.

#  

# 2.             Manner and Place of Payment.  Payments of the Principal Amount andInterest shall be made in lawful money of the United States of America.  Principal is payable at 13 Dovetail Circle,Henderson, Nevada 89120 or at such place as Holder may designate in writing.

#  

# 3.             Security.  The Obligation guaranteed by WorldwideCollectibles, Inc., the wholly owned subsidiary of Maker, and performance ofthe guaranty is secured by a Security Agreement of even date herewith betweenWorldwide Collectibles, Inc. as debtor and Gary Moore and Henry E. Cartwrightas secured party.

#  

# 4.             Prepayment.  Maker shall have the right, at its option,to prepay this Note, in part or in full, at any time and from time to time,prior to maturity, without penalty, bonus or charge.

#  

# 5.             Events of Default.  The following shall each constitute an“Event of Default” under this Note: (i) default in the payment when due of aninstallment of Principal Amount and such default shall continue for a period offive (5) days; (ii) an event of default under the Loan Agreement of evendate herewith; (iii) an event of default under the Security Agreement ofeven date herewith; and (iv) any of the following events of bankruptcy orinsolvency:  (A) Maker shall file avoluntary bankruptcy or reorganization petition under the provisions of theFederal Bankruptcy Act, any other bankruptcy or insolvency law or any othersimilar statute applicable to Maker (“Bankruptcy Laws”), (B) Maker shallconsent to the filing of any bankruptcy or reorganization petition againstMaker under any Bankruptcy Law, (C) Maker shall file a petition or answeror consent seeking relief or assisting in seeking relief for Maker in aproceeding under any Bankruptcy Law or any answer admitting the materialallegations of a petition filed against Maker in such a proceeding, (D) Makershall make an assignment for the benefit of creditors, (E) Maker shall admit inwriting the inability to pay debts generally as they become due, (F) Makershall consent to the appointment of a receiver, trustee, or by the order of acourt of competent jurisdiction, a receiver, liquidator or trustee of Maker orof any substantial part of the property of which shall not have been dischargedwithin a period of sixty (60) days, (G) by decree of such a court, Makerbe adjudicated bankrupt or insolvent or any substantial part of the property ofMaker shall have been sequestered and such decree shall have continuedundischarged and unstayed for a period of sixty (60) days after the entrythereof, or (H) an involuntary bankruptcy 

#  

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# reorganization petitionpursuant to any Bankruptcy Law shall be filed against Maker (and, in the caseof any such petition filed pursuant to any provision of a statute whichrequires the approval of such petition by a court, shall be approved by such acourt) and shall not be dismissed within sixty (60) days after such filing.

#  

# 6.             Acceleration Upon Event ofDefault.  Upon the occurrence of anEvent of Default specified in Section 5 above, the then unpaid Principal Amountof this Note shall, at the option of Holder, become immediately due andpayable, without further presentment, notice or demand for payment.

#  

# 7.             Business, Trade or Profession.  This Note and the Obligation arise out ofthe conduct by Maker of a business, trade or profession.

#  

# 8.             Expenses of Enforcement.  Maker agrees to pay all reasonable costs andexpenses, including, without limitation, reasonable attorneys’ fees, as a courtof competent jurisdiction shall award, which Holder shall incur in connectionwith any legal action or legal proceeding commenced for the collection of thisNote or the exercise, preservation or enforcement of Holder’s rights andremedies thereunder.

#  

# 9.             Cumulative Rights and Remedies.  All rights and remedies of Holder under thisNote shall be cumulative and not alternative and shall be in addition to allrights and remedies available to Holder under applicable law.

#  

# 10.           Governing Law.  This Note shall be governed by andinterpreted and construed in accordance with the laws of the State ofNevada.  Any action or proceedingarising under or pursuant to this Note shall be brought in Clark County,Nevada.

 

IN WITNESS WHEREOF, Maker has caused this Note to be executed anddelivered at Henderson, Nevada as of the day and year first above written.

 
|   | AMERICABILIA.COM, INC., |
|--------|-------------------------|
|   | a Florida corporation   |

 
|   | By:    |                  |   |
|--------|--------|-----------------------|--------|
|   |   | Gary Moore, President |   |

 

2

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| $125,000 |   |   |   | November  30, 2001 |
|----------|--------|--------|--------|--------------------|

** **

**SECURED PROMISSORY NOTE**

#  

# 11.           Obligation.  For value received, AMERICABILIA.COM, INC.,a Florida corporation (“Maker”) promises to pay to the order of GARY MOORE(“Holder”) the Principal Amount (as defined below) together with Interest (asdefined below) in the manner and upon the terms and conditions set forth herein(the “Obligation”).

 

Amount and Payment.  The principal amount (“Principal Amount”) ofthis Note is One Hundred Twenty Five Thousand Dollars ($125,000).  This Note shall bear interest on the unpaidPrincipal Amount at the rate of ten percent (10%) per annum (“Interest”).  The Principal Amount and Interest shall beall due and payable on December 31, 2002.

#  

# 12.           Manner and Place of Payment.  Payments of the Principal Amount andInterest shall be made in lawful money of the United States of America.  Principal is payable at 2700 Sunset Road,Suite A-11, Las Vegas, Nevada 89120 or at such place as Holder may designate inwriting.

#  

# 13.           Security.  The Obligation is guaranteed by WorldwideCollectibles, Inc., the wholly owned subsidiary of Maker, and performance ofthe guaranty is secured by a Security Agreement of even date herewith betweenWorldwide Collectibles, Inc. as debtor and Gary Moore and Henry E. Cartwrightas secured parties.

#  

# 14.           Prepayment.  Maker shall have the right, at its option,to prepay this Note, in part or in full, at any time and from time to time,prior to maturity, without penalty, bonus or charge.

#  

# 15.           Events of Default.  The following shall each constitute an“Event of Default” under this Note: (i) default in the payment when due of aninstallment of Principal Amount and such default shall continue for a period offive (5) days; (ii) an event of default under the Loan Agreement of evendate herewith; (iii) an event of default under the Security Agreement ofeven date herewith; and (iv) any of the following events of bankruptcy orinsolvency:  (A) Maker shall file avoluntary bankruptcy or reorganization petition under the provisions of theFederal Bankruptcy Act, any other bankruptcy or insolvency law or any othersimilar statute applicable to Maker (“Bankruptcy Laws”), (B) Maker shallconsent to the filing of any bankruptcy or reorganization petition againstMaker under any Bankruptcy Law, (C) Maker shall file a petition or answeror consent seeking relief or assisting in seeking relief for Maker in aproceeding under any Bankruptcy Law or any answer admitting the materialallegations of a petition filed against Maker in such a proceeding, (D) Makershall make an assignment for the benefit of creditors, (E) Maker shall admit inwriting the inability to pay debts generally as they become due, (F) Maker shallconsent to the appointment of a receiver, trustee, or by the order of a courtof competent jurisdiction, a receiver, liquidator or trustee of Maker or of anysubstantial part of the property of which shall not have been discharged withina period of sixty (60) days, (G) by decree of such a court, Maker beadjudicated bankrupt or insolvent or any substantial part of the property ofMaker shall have been sequestered and such decree shall have continuedundischarged and unstayed for a period of sixty (60) days after the entrythereof, or (H) an involuntary bankruptcy 

 

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# reorganizationpetition pursuant to any Bankruptcy Law shall be filed against Maker (and, inthe case of any such petition filed pursuant to any provision of a statutewhich requires the approval of such petition by a court, shall be approved bysuch a court) and shall not be dismissed within sixty (60) days after suchfiling.

#  

# 16.           Acceleration Upon Event of Default.  Upon the occurrence of an Event of Defaultspecified in Section 5 above, the then unpaid Principal Amount of this Noteshall, at the option of Holder, become immediately due and payable, withoutfurther presentment, notice or demand for payment.

#  

# 17.           Business, Trade or Profession.  This Note and the Obligation arise out ofthe conduct by Maker of a business, trade or profession.

#  

# 18.           Expenses of Enforcement.  Maker agrees to pay all reasonable costs andexpenses, including, without limitation, reasonable attorneys’ fees, as a courtof competent jurisdiction shall award, which Holder shall incur in connectionwith any legal action or legal proceeding commenced for the collection of thisNote or the exercise, preservation or enforcement of Holder’s rights andremedies thereunder.

#  

# 19.           Cumulative Rights and Remedies.  All rights and remedies of Holder under thisNote shall be cumulative and not alternative and shall be in addition to allrights and remedies available to Holder under applicable law.

#  

# 20.           Governing Law.  This Note shall be governed by andinterpreted and construed in accordance with the laws of the State ofNevada.  Any action or proceedingarising under or pursuant to this Note shall be brought in Clark County,Nevada.

 

IN WITNESS WHEREOF, Maker has caused this Note to be executed anddelivered at Henderson, Nevada as of the day and year first above written.

 
|   | AMERICABILIA.COM, INC., |
|--------|-------------------------|
|   | a Florida corporation   |

 
|   | By:    |                  |   |
|--------|--------|-----------------------|--------|
|   |   | Gary Moore, President |   |

 

4

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**SECURITYAGREEMENT**

 

THIS SECURITY AGREEMENT (“Agreement”) is made and entered into this 30thday of November, 2001 by and between WORLDWIDE COLLECTIBLES, INC., a Nevadacorporation (“Debtor”) and HENRY E. CARTWRIGHT and GARY MOORE(collectively, “Secured Party”).

#  

# 21.           Definitions.  As used in this Agreement:

##  

## (i)            “Collateral” means all assets ofDebtor, together with any and all hazard insurance policies thereon togetherwith all advance payments and any and all rights thereunder and proceedstherefrom.

##  

## (ii)           “Indebtedness” means Debtor’sobligations to Secured Party pursuant to the Secured Promissory Notes in favorof each Secured Party of even date herewith.

##  

## (iii)          Terms defined in the Nevada UniformCommercial Code not otherwise defined in this Agreement are used in thisAgreement as defined in that Code on the date of this Agreement.

#  

# 22.           Creation of Security Interest.  Debtor hereby grants to Secured Party a lienand security interest in the Collateral to secure the payment of theIndebtedness.

#  

# 23.           Care of Collateral.  Debtor shall, unless otherwise specificallyagreed to in writing by Secured Party:

##  

## (i)            Properly care for and keep alltangible Collateral in good condition and repair and make the Collateralavailable for inspection by Secured Party and its authorized agents at allreasonable times.

##  

## (ii)           Provide and maintain in force, at alltimes, fire, casualty and public liability insurance and other types ofinsurance as is customary for owners of like property.

##  

## (iii)          Appear in and defend any action orproceeding, affecting or purporting to affect the Collateral or the security ofthis Agreement, and pay all costs and expenses thereof and all costs andexpenses in any such action or proceeding in which Secured Party may appear,but only if Secured Party is reasonably required to appear in and defend suchaction or proceeding to protect its interest in the Collateral.

##  

## (iv)          Pay before delinquent all taxes andassessments affecting the Collateral and/or the business of Debtor and allcosts or penalties thereon.

##  

## (v)           Not remove all the Collateral, or anymaterial part thereof, from its present location without providing priorwritten notice to Secured Party.

 

5

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## (vi)          Not transfer voluntarily or permit anyinvoluntary transfer of the Collateral or any interest therein other than inthe ordinary course of business, by way of sale, creation of security interest,hypothecation, levy or other judicial process without first obtaining thewritten consent of Secured Party.

##  

## (vii)         Not (i) merge or consolidate whereDebtor is not the surviving entity; (ii) dissolve the business of Debtor;(iii) pay or declare any dividends or distributions; or (iv) lend ordistribute any of Debtor’s property or assets, or incur any debts outside the ordinarycourse of business.

#  

# 24.           Warranties of Debtor.  Debtor warrants and covenants that:

##  

## (i)            Debtor will be, at the time ofacquisition of an interest in any Collateral, the lawful owner of suchCollateral, free of any interest, including without limitation all rights,claims, liens, encumbrances or options whatsoever.

##  

## (ii)           All items of Collateral are locatedin the State of Nevada.

##  

## (iii)          So long as any Indebtedness securedhereby remain outstanding, the warranties contained herein shall have acontinuing effect.

#  

# 25.           Default.  The occurrence of any of the followingevents shall constitute a default hereunder:

##  

## (i)            Debtor shall default under theIndebtedness or default under or breach any covenant or provision of thisAgreement.

##  

## (ii)           Any representation or warranty ofDebtor in this Agreement shall prove to have been false or misleading in anymaterial respect when made.

##  

## (iii)          Any receiver or trustee of all or asubstantial portion of the assets of Debtor shall be appointed, or Debtor shallbecome insolvent or unable to pay debts as they mature, shall make a generalassignment for the benefit of creditors, voluntarily file under any bankruptcyor similar law, any involuntary petition in bankruptcy shall be filed againstDebtor and not be dismissed within sixty (60) days, or any levies ofattachment, executions, tax assessments, or similar processes shall be issuedagainst the assets of Debtor and shall not be released within sixty (60) daysthereof.

#  

# 26.           Remedies After Default.  In the event of any default, Secured Partymay exercise any and all of the rights and remedies of a secured party underthe Nevada Uniform Commercial Code or under any other applicable law or inequity, and in this connection, Secured Party may, without limitation, uponfive days’ notice to Debtor, sent by registered mail, or certified mail, returnreceipt requested, and without liability for any diminution in price which mayhave occurred, sell all or part of the Collateral in such manner and for suchprice as Secured Party may determine. At any bona fide public sale Secured Party shall be free to purchase allor any part of the Collateral.

 

6

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# 27.           Further Actions in Event ofDefault.  If a default shall occurand be continuing, the Secured Party may take any or all of the followingactions, at the same or different times:

##  

## (i)            declare any or all of the sumsrepresenting the Indebtedness immediately due and payable; and

##  

## (ii)           with or without legal process enterany premises where the Collateral is located and take possession of theCollateral, and make disposition of the Collateral, subject to any and allapplicable provisions of law.

#  

# 28.           Miscellaneous.

##  

## (i)            Waiver.  Acceptance of partial or delinquent paymentsby Secured Party or the failure of Secured Party to exercise any righthereunder shall not waive any obligation of Debtor, or right of Secured Party,or modify this Agreement or waive any other similar default.

##  

## (ii)           Entire Agreement.  This Agreement contains the securityagreement between Secured Party and Debtor. There are no representations, agreements, arrangements orunderstandings, oral or written, between the parties hereto, relating to thesubject matter contained in this Agreement, which are not fully expressedherein.

##  

## (iii)          Additional Documents.  Debtor agrees to that Secured Party may filea Form UCC-1 Financing Statement and any additional agreements, financingstatements or other documents (collectively, “Financing Statements”) reasonablyrequired by Secured Party to perfect the security interest granted hereby or tootherwise effectuate the purpose of this Agreement.  Upon termination of the security interest granted hereby, SecuredParty shall promptly execute and deliver such documents as may reasonably berequested by Debtor.

##  

## (iv)          Effect of Headings.  The headings of sections and subsectionsherein are inserted for convenience only and shall not control or affect themeaning or construction of any of the provisions of this Agreement.

##  

## (v)           Amendment.  This Agreement may only be amended by thewritten consent of all of the parties to this Agreement at the time of suchamendment.

##  

## (vi)          Attorneys’ Fees.  Should any litigation be commenced betweenthe parties hereto or their assigns or successors in interest concerning anyprovision of this Agreement or the rights and duties of any person in relationthereto, the party to such other relief that may be granted, to a reasonablesum as and for it or its attorneys’ fees in such litigation.

##  

## (vii)         Governing Law; Venue.  This Agreement shall be governed by, andconstrued and enforced in accord­ance with, the internal laws of the State ofNevada.  Any action or proceedingbrought under or pursuant to this agreement shall be brought in Clark County,Nevada.

 

7

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## (viii)        Counterparts.  This Agreement may be executed incounterparts, each of which shall be deemed to be an original, but suchcounterparts, when taken together, shall constitute but one agreement.

##  

## (ix)           Notices.  Any notice required or permitted under thisAgreement shall be in writing and shall be deemed effective: (i) upon receiptin the event of delivery by hand, including delivery made by private deliveryor overnight mail service where either the recipient or delivery agent executesa written receipt or confirmation of delivery; or (ii) 48 hours after depositedin the United States mail, registered or certified mail, return receiptrequested, postage prepaid.  Any noticeunder this Agreement shall be addressed to the respective party as follows, orto such other address as may be designated in writing from time to time:

 
| If to Debtor:        | Worldwide Collectibles,  Inc.

150 Cassia Way 

Suite 400 

Henderson, Nevada 89014 |
|----------------------|-------------------------------------------------------------------------------------|
|                 |                                                                                |
| If to Secured Party: | Henry E. Cartwright 

13 Dovetail Circle 

Henderson, Nevada  89014            |
|                 |                                                                                |
|                 | Gary Moore 2700 

Sunset Road 

Suite 11 

Las Vegas, Nevada 89120                  |

 

INWITNESS WHEREOF, the parties hereto have executed this Agreement as of the dayand year first above written.

 

WORLDWIDECOLLECTIBLES, INC.,

aNevada corporation 

 
| By:    |                    |   |
|--------|-------------------------|--------|
|   | Keith Veltre, President |   |
|   |                    |   |
|   |                    |   |
|   | HENRY E. CARTWRIGHT     |   |
|   |                    |   |
|   |                    |   |
|   | GARY MOORE              |   |

 

8

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**CONTINUING GUARANTY**

 

The undersigned (“Guarantor”) hereby requestsGARY MOORE and HENRY E. CARTWRIGHT (“Lenders”) to accept Promissory Notes ofeven date herewith (the “Notes”) from AMERICABILIA.COM. INC., a Floridacorporation (“americabilia”).

 

1.             Guarantorhereby unconditionally guarantees and promises to pay to Lenders any and allindebtedness of americabilia to Lenders as evidenced by the Notes.

 

2.             Eitherbefore or after revocation hereof and in such manner, upon such terms and atsuch times as he considers best and with or without notice to Guarantor,Lenders may alter, compromise, accelerate, extend or change the time or mannerfor the payment or performance of any indebtedness hereby guaranteed, releaseor add any one or more guarantors or endorsers, accept additional orsubstituted security therefor, or release or subordinate any security therefor.  No exercise or nonexercise by Lenders of anyright hereby given him, no dealing by Lenders with americabilia or any otherperson, and no change, impairment or suspension of any right or remedy ofLenders shall in any way affect any of the obligations of Guarantor hereunderor any security furnished by Guarantor or give Guarantor any recourse againstLenders.

 

3.             Guarantorwaives and agrees not to assert or take advantage of: (a) any right to requireLenders to proceed against americabilia or any other person, firm orcorporation or to proceed against or exhaust any security held by it at anytime or to pursue any other remedy in his power; (b) the defense of the statuteof limitations in any action hereunder or for the collection of anyindebtedness or the performance of any obligation guaranteed hereby; (c) anydefense that may arise by reason of the incapacity, lack of authority, death ordisability of, or revocation hereof by, any other or others or the failure ofLenders to file or enforce a claim against the estate (either inadministration, bankruptcy, or other proceeding) of any other or others; (d)demand, protest and notice of any kind including, without limiting thegenerality of the foregoing, notice of the existence, creation or incurring ofnew or additional indebtedness or of any action or non–action on the partof americabilia, Lenders, any endorser, creditor of americabilia or Guarantorunder this or any other instrument, or any other person whomsoever, inconnection with any obligation or evidence of indebtedness held by Lenders ascollateral or in connection with any indebtedness or obligation herebyguaranteed; (e) any defense based upon an election of remedies by Lenders,including without limitation, an election to proceed by nonjudicial rather thanjudicial foreclosure, which election destroys or otherwise impairs subrogationrights of Guarantor or the right of Guarantor to proceed against americabiliafor reimbursement, or both, if any, including, without limitation, theimpairment of subrogation rights arising by virtue of statute; (f) any defenseor right based upon the fair value deficiency protections and provisions ofapplicable law; and (g) any suretyship defenses available to Guarantor underapplicable law.

 

4.             Guarantor,by execution hereof, represents to Lenders that the relationship betweenGuarantor and americabilia is such that Guarantor has access to all relevantfacts and information concerning the indebtedness and americabilia and thatLenders can rely upon Guarantor’s having 

 

9

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such access.  Guarantor waivesand agrees not to assert any duty on the part of Lenders to disclose toGuarantor any facts that Lenders may now or hereafter know about americabilia,regardless of whether Lenders has reason to believe that any such factsmaterially increase the risk beyond that which Guarantor intends to assume, orhas reason to believe that such facts are unknown to Guarantor, or has areasonable opportunity to communicate such facts to Guarantor.  Guarantor is fully responsible for being andkeeping informed of the financial condition of americabilia and allcircumstances bearing on the final risk of non–payment of theindebtedness guaranteed hereby.

 

5.             Untilthe Notes has been paid in full, Guarantor shall have no right of subrogationand waives any right to enforce any remedy which Lenders now has or mayhereafter have against americabilia and any benefit of and any right toparticipate in, any security now or hereafter held by Lenders.

 

6.             Theamount of Guarantor’s liability and all rights, powers and remedies of Lendershereunder and under any other agreement now or at any time hereafter in forcebetween Lenders and Guarantor shall be cumulative and not alternative, and suchrights, powers and remedies shall be in addition to all rights, powers andremedies given to Lenders by law.

 

7.             Guarantor’sobligations hereunder are independent of the obligations of americabilia and,in the event of any default hereunder, a separate action or actions may bebrought and prosecuted against Guarantor whether action is brought againstamericabilia or whether americabilia is joined in any such action oractions.  Lenders may maintainsuccessive actions for other defaults. Lenders’ rights hereunder shall not be exhausted by their exercise ofany of their rights or remedies or by any such action or by any number ofsuccessive actions until and unless all indebtedness and obligations herebyguaranteed have been paid and fully performed.

 

8.             Guarantoragrees to pay to Lenders without demand reasonable attorneys’ fees and allcosts and other expenses which Lenders expend or incur in collecting orcompromising any indebtedness of americabilia or in enforcing this guarantyagainst Guarantor including, without limitation, reasonable attorneys’ fees,costs and other such expenses incurred in any bankruptcy proceeding.  Guarantor warrants and represents that it isfully empowered to execute this guaranty.

 

9.             Thisguaranty shall bind Guarantor’s successors and assigns.  No delegation or assignment of this guarantyby Guarantor shall be of any force or effect or release Guarantor from anyobligation hereunder.

 

10.           Noprovision of this guaranty or right of Lenders hereunder can be waived nor canGuarantor be released from its obligations hereunder except by a writing dulyexecuted by Lenders.  Should any one ormore provisions of this guaranty be determined to be invalid  or unenforceable, the remaining provisionshereof shall be deemed severable therefrom and shall remain in full force andeffect.

 

11.           Thisguaranty shall be governed by, and construed and enforced in accord­ance with,the internal laws of the State of Nevada. All actions or proceedings with respect to this guaranty may beinstituted in state or federal courts located in Clark County, Nevada.  Each party consents to the jurisdiction ofsuch courts.

 

10

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12.           Exceptas provided in any other written agreement now or at any time hereafter inforce between Lenders and Guarantor, this Continuing Guaranty shall constitutethe entire agreement of Guarantor with Lenders with respect to the subjectmatter hereof and no representation, understanding, promise or conditionconcerning the subject matter hereof shall be binding upon Lenders unlessexpressed herein or therein.  Any noticeto Guarantor shall be deemed to have been duly given when delivered personallyor five (5) days after being mailed, postage prepaid, to 150 Cassia Way, Suite400, Henderson, Nevada 89014 or to such other address(es) as Guarantor may fromtime to time designate by giving written notice to Lenders.

 

Executed by Guarantor on November 30, 2001.

 
|   | WORLDWIDE COLLECTIBLES, INC., |
|--------|-------------------------------|
|   | a Nevada corporation          |

 
|   |   | By:    |                    |   |
|--------|--------|--------|-------------------------|--------|
|   |   |   | Keith Veltre, President |   |

 

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