Exhibit 10.6
THIS SECURITY AGREEMENT IS SUBJECT TO THE SUBORDINATION PROVISIONS SET FORTH IN
THE CERTAIN SUBORDINATION AND INTERCREDITOR AGREEMENT DATED DECEMBER
, 2003,
AMONG EACH OF EQUINOX BUSINESS CREDIT CORPORATION ("DEBTOR"), EQUIFIN, INC.,
WELLS FARGO FOOTHILL, INC. AND LAURUS MASTER FUND, LTD., A COPY OF WHICH IS ON
FILE AT THE OFFICE OF DEBTOR AND IS AVAILABLE FOR INSPECTION AT SUCH OFFICE.
EQUINOX BUSINESS CREDIT CORP.
SECURITY AGREEMENT
To:
Laurus Master Fund, Ltd.
c/o Onshore Corporate Services, Ltd.
P.O. Box 1234 G.T
Queensgate House
South Church Street
Grand Cayman, Cayman Islands
Gentlemen:
1.
TO SECURE THE PAYMENT OF ALL OBLIGATIONS (AS HEREAFTER DEFINED),
WE HEREBY GRANT TO YOU A CONTINUING SECURITY INTEREST IN ALL OF THE FOLLOWING
PROPERTY NOW OWNED OR AT ANY TIME HEREAFTER ACQUIRED BY US, OR IN WHICH WE NOW
HAVE OR AT ANY TIME IN THE FUTURE MAY ACQUIRE ANY RIGHT, TITLE OR INTEREST (THE
"COLLATERAL"): ALL , ALL ACCOUNTS, INVENTORY, EQUIPMENT, GOODS, DOCUMENTS,
INSTRUMENTS (INCLUDING, WITHOUT LIMITATION, PROMISSORY NOTES), CONTRACT RIGHTS,
GENERAL INTANGIBLES (INCLUDING, WITHOUT LIMITATION, PAYMENT INTANGIBLES AND AN
ABSOLUTE RIGHT TO LICENSE ON TERMS NO LESS FAVORABLE THAN THOSE CURRENT IN
EFFECT AMONG OUR AFFILIATES, BUT NOT OWN INTELLECTUAL PROPERTY), CHATTEL PAPER,
SUPPORTING OBLIGATIONS, INVESTMENT PROPERTY, LETTER-OF-CREDIT RIGHTS, TRADEMARKS
AND TRADESTYLES IN WHICH WE NOW HAVE OR HEREAFTER MAY ACQUIRE ANY RIGHT, TITLE
OR INTEREST, ALL PROCEEDS AND PRODUCTS THEREOF (INCLUDING, WITHOUT LIMITATION,
PROCEEDS OF INSURANCE) AND ALL ADDITIONS, ACCESSIONS AND SUBSTITUTIONS THERETO
OR THEREFOR.
2.
THE TERM "OBLIGATIONS" AS USED HEREIN SHALL MEAN AND INCLUDE ALL
DEBTS, LIABILITIES AND OBLIGATIONS OWING BY (A) US TO YOU HEREUNDER AND UNDER
THE CONVERTIBLE TERM NOTE DATED AS OF THE DATE HEREOF MADE BY US IN FAVOR OF YOU
IN THE ORIGINAL PRINCIPAL AMOUNT OF $1,100,000, AS AMENDED, MODIFIED AND
SUPPLEMENTED FROM TIME TO TIME OR OTHERWISE (AS AMENDED, MODIFIED AND
SUPPLEMENTED FROM TIME TO TIME, THE "NOTE ").
3.
WE HEREBY REPRESENT, WARRANT AND COVENANT TO YOU THAT: (A) WE ARE
A COMPANY VALIDLY EXISTING, IN GOOD STANDING AND FORMED UNDER THE LAWS OF THE
STATE OF NEW JERSEY AND WE WILL PROVIDE YOU THIRTY (30) DAYS' PRIOR WRITTEN
NOTICE OF ANY CHANGE IN OUR STATE OF FORMATION; (B) OUR LEGAL NAME IS EQUINOX
BUSINESS CREDIT CORP. AS SET FORTH IN OUR CERTIFICATE OF INCORPORATION AS
AMENDED THROUGH THE DATE HEREOF; (C) WE ARE THE LAWFUL OWNER OF THE COLLATERAL
AND HAVE THE SOLE RIGHT TO GRANT A SECURITY INTEREST THEREIN AND, SUBJECT TO THE
PERMITTED ENCUMBRANCES, WILL DEFEND THE COLLATERAL AGAINST ALL CLAIMS AND
DEMANDS OF ALL PERSONS AND ENTITIES; (D) WE WILL KEEP THE COLLATERAL FREE AND
CLEAR OF ALL ATTACHMENTS, LEVIES, TAXES, LIENS, SECURITY INTERESTS AND
ENCUMBRANCES OF EVERY KIND AND NATURE ("ENCUMBRANCES"), OTHER THAN PERMITTED
ENCUMBRANCES (AS HEREINAFTER DEFINED), EXCEPT TO THE EXTENT SAID ENCUMBRANCE
DOES NOT SECURE INDEBTEDNESS IN EXCESS OF $100,000 AND SUCH ENCUMBRANCE IS
REMOVED OR OTHERWISE RELEASED WITHIN 10 DAYS OF THE CREATION THEREOF; (E) WE
WILL AT OUR OWN COST AND EXPENSE KEEP THE