Document:

Exhibit 10.41

  Exhibit 10.41

  

SECURITY AGREEMENT

This Security Agreement is entered into on September 3, 2009  between Propell Corporation,., a Delaware corporation, ('Debtor) , and Remington Partners, Inc., a California corporation, (“Secured Party"), as follows: 

For value received, the Debtor grants to the Secured Party a security interest in the following described property, referred to in this Security Agreement as the Collateral:

All assets of the Debtor including but not limited to, all cash, equipment, inventory, machinery, accounts, together with the proceeds therefrom , intangibles, including licenses, tradenames and trademarks together with the goodwill attendant thereto , furniture, fixtures, plans and schematics, and leasehold interests, whether for personal or real property,  to secure:

(1) The Debtor's note of $500,000 dated September 3, 2009.

(2) Any and all future advances by the Secured Party to the Debtor, in whatever form;

(3) All expenditures by the Secured Party for taxes, insurance or other costs incurred by the Secured Party  in the collection and enforcement of the note and other indebtedness of the Debtor; and 

(4) All liabilities of the Debtor to the  Secured Party now existing or incurred in the future, matured or unmatured, direct or contingent and any renewals, extensions and substitutions of those liabilities.

The Debtor agrees as follows:

       Title

I.     Except for the security interest granted by this agreement, the Debtor has, or on acquisition will have, full title to the Collateral free from any lien, security interest, encumbrance, or claim, and the Debtor, at the Debtors cost and expense, will defend any action that may affect the Secured Party's security interest in, or the Debtor’s title to, the collateral. 

     Financing Statement

2.     At the Secured Party's request, the Debtor will join in executing and pay the filing fees required for all necessary financing statements in forms satisfactory to the Secured Party and will further execute all other instruments deemed necessary by the Secured Party.

       Sale, Lease, or Disposition of Collateral

3.    The Debtor will not Sell, contract to Sell, lease, further encumber, or dispose of the Collateral or any interest in it other than in the ordinary course of business without the written consent of the Secured Party which consent shall not be unreasonably withheld until this Security Agreement and all debts secured by it have been fully satisfied.

       Insurance

4.     Until final termination of this Security Agreement, the Debtor, at the Debtor’s own cost and expense, 'will insure the Collateral with companies acceptable to the Secured Party against the casualties and in the amounts that the Secured Party will reasonably require, with a loss payable clause in favor of the Debtor and Secured Party as their interests may appear. The Secured Party is authorized to collect Sums that may become due under any of the insurance policies and apply them to the obligations secured by this Security Agreement. Debtor must deliver a duplicate copy of each such policy must to the Secured Party.

       Protection of Collateral

5.    The Debtor will keep the Collateral in good order and repair ordinary wear and tear excepted and will not waste or destroy the Collateral or any part of it. The Debtor will not use the Collateral in violation of any statute or ordinance, and the Secured Party will have the right to examine and inspect the Collateral at any reasonable time.

       Taxes and Assessments

6.     The Debtor will pay promptly when due all taxes and assessments on the Collateral, or any part or the Collateral, or for its use and operation.

7.     Intentionally omitted

        Security Interest in Proceeds and Accessions

8.     The Debtor grants to the Secured Party a security interest in and to all proceeds, increases, substitutions, replacements, additions, and accessions to the Collateral and to any part of the Collateral. This provision shall not be construed to mean that the Debtor is authorized to sell, lease, or dispose of the Collateral without the prior written consent of the Secured Party.

         Decrease in Value of Collateral

9.       Intentionally omitted

         Reimbursement of Expenses

10.     At the option of the Secured Party, the Secured Party may discharge taxes, liens, interest, or perform or cause to be performed for and on behalf of the Debtor any actions and condition, obligations, or covenants that the Debtor has failed or refused to perform In addition, the Secured Party may pay for the repair, maintenance, and preservation of the Collateral. The Secured Party also may enter the premises where the Collateral or any part of it is located and cause to be performed as agent and on the account of the Debtor any acts that the Secured Party deems necessary for the proper repair or maintenance of the Collateral or any part of it. All sums expended by the Secured Party under this paragraph, including but not limited to, attorneys' fees, court costs, agent's fees, or commissions, or any other costs or expenses, will bear interest from the date of payment at the annual rate of ten percent, will be payable at the place designated in the Debtor's note, and will be secured by this Security Agreement.

          Payment

11.     The Debtor will pay the note(s) secured by this Security Agreement and any renewal or extension of it and any other indebtedness secured by this agreement in accordance with the terms and provisions of the indebtedness. The Debtor also will repay immediately all sums expended by the Secured Party in accordance with the terms and provisions of this Security Agreement. On full payment by the Debtor of all indebtedness secured by this agreement in accordance with this Security Agreement, this Security agreement will expire, and the Secured Party’s security interest in the Collateral, as set forth in this Security Agreement, will terminate.

         Change of Residence or Place of Business

12.     The Debtor will promptly notify the Secured Party of any change of the Debtor's residence, chief place of business, or place where records concerning the collateral are kept.

          Attorney-in-Fact

13.     The Debtor appoints the Secured Party as the Debtors attorney-in-fact to do any act that the Debtor is obligated by this Security Agreement to do, to exercise all rights of the Debtor in the Collateral, to make collections,   to execute all papers and instruments, and to do all other things necessary to  preserve and protect the Collateral, to make collections, and to perfect and protect the Secured Party’s security interest in the Collateral

          Time of Performance and Waiver

14.     In performing any act under this Security Agreement and the note secured by it, time is of the essence. The Secured Party’s  acceptance of partial or delinquent payments, or the failure of the Secured Party to exercise any right or remedy, will not constitute a waiver of any obligation of the Debtor or right of the Secured Party and will not constitute a Waiver of any other similar default that occurs later.

           Default

15.     The Debtor will be in default under this Security Agreement on the occurrence of any of the following events or conditions;

          (a) Default in the payment or performance of any note, obligation, covenant, or liability secured by this Security Agreement;

          (b) Any warranty, representation, or statement made or furnished to the Secured Party by or on behalf of the Debtor proves to have been false in any material respect when made or furnished;

           (c) Any event that results in the acceleration of the maturity of the indebtedness of the Debtor to others under any material indenture, agreement, or undertaking;

 

          (d) Loss, theft, substantial damage, destruction, sale, or encumbrance to or of any of the Collateral, or the making of any levy, seizure, or attachment of or on the Collateral;

          (e) Dissolution, termination of existence, insolvency, business failure, appointment of a receiver for any part of the Collateral, assignment for the benefit of creditors, or the commencement of any proceeding under any bankruptcy or insolvency law by or against the Debtor or any guarantor or surety for the Debtor.

          Remedies

16.     On the occurrence of any event of default and at any later time, the Secured Party may declare all obligations secured due and payable immediately and may proceed to enforce payment and exercise any and all of the rights and remedies provided by the California Commercial Code as well as other rights and remedies either at law or in equity possessed by the Secured Party.

     The Secured Party may require the Debtor to assemble the Collateral and make it available to the Secured Party at any place to be designated by the Secured Party that is reasonably convenient to both parties. Unless the Collateral is perishable, threatens to decline speedily in value, or is of a type customarily sold on a recognized market, the Secured Party will give the Debtor reasonable notice of the time and place of any public sale or of the time after which any private sale or any other intended disposition of the Collateral is to be made The requirements of reasonable notice will be met if the notice is mailed, postage prepaid, to the address of the Debtor shown at the beginning of this Security Agreement at least 10 days before the time of the sale or disposition. Expenses of retaking, holding, preparing for sale, selling, or the like will include the Secured Party's reasonable attorneys' fees and legal expenses.

         Governing Law and Venue

17.     This Security Agreement will he construed in accordance with the California Commercial Code and other applicable laws of the State of California. Any actions brought under this Agreement shall be brought in the courts Marin County, California.

          Waiver of Jury Trial

18.     GRANTOR AND HOLDER WAIVE ANY RIGHT TO A JURY TRIAL IN ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ARISING OUT OF TRANSACTIONS BETWEEN HOLDER AND GRANTOR.

GRANTOR’s Initials                                     HOLDER’s Initials                       

          Parties Bound

19.     This Security Agreement will be binding on and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, successors, and assigns as permitted by this Security Agreement.

          Attorneys' Fees

20.     If any litigation is begun between the parties to this Security Agreement concerning the Collateral, this Security Agreement, or the rights and duties of either party, the prevailing party will be entitled to a reasonable sum as reimbursement for that party's attorneys' fees and legal expenses.

          Validity and Construction

21.     If any one or more of the provisions contained in this Security Agreement is for any reason held to be invalid, illegal, or unenforceable, the invalidity, illegality, or unenforceable of that provision will not affect any other provision of this Security Agreement, and this Security Agreement will be construed as if the invalid, illegal, or unenforceable provision had never been contained in it.

22.     Intentionally Omitted

          Commercial Code Deflnitlon Applicable

23.     All terms used in this Security Agreement that are defined in the California Commercial Code will have the same meaning in this Security Agreement as in the Code.

Dated: As Of September 3, 2009

Propell Corporation

By:                                                                                

                                                                                      

REMINGTON PARTNERS, INC.

By:ex10-77.htm

EXHIBIT 10.77

 

PROMISSORY NOTE

 

 

	$300,000	 Orange County, California

                                                                                                                                          November  11, 2010

 

FOR VALUE RECEIVED, the undersigned, Location Based Technologies, Inc., a Nevada corporation (referred to herein as the “Company”), hereby unconditionally promises to pay to the order of Greggory Haugen, his endorsees, successors and assigns (the “Lender”), in lawful money of the United States, at 3320 Fox Street, Orono, MN  55346 or such other address as the Lender may from time to time designate, the principal sum of Three Hundred Thousand Dollars ($300,000) together with accrued interest thereon as provided herein..

 

1.           Terms of Repayment and Conversion.

 

a.           Upon the execution and delivery of this Note, the Lender shall disburse to the Company the sum of $300,000, which is the principal amount, in accordance with the wire instructions set forth. All amounts of unpaid principal and accrued interest outstanding under this Note shall mature and become due and payable in full on the earlier of (i) December 10, 2011 (ii) receipt by the Company of the proceeds from the sale of securities in an aggregate amount of at least $2,000,000, or (iii) the closing by the Company of a credit facility for the benefit of the Company in the amount of at least $2,000,000, subject to any prior payment required by this Note.  The amounts due hereunder may not be prepaid in whole or in part at any time and Lender shall be entitled to exercise the conversion privileges described in the following subparagraph b in whole or in part in lieu of accepting part or all of any payment tendered hereunder.

 

b.           At any time and from time to time this Note shall be convertible, in whole or in part, into shares of the Company’s Common Stock (“Conversion Shares”) at the option of the Lender, by submitting the Notice of Conversion (Exhibit A).  The Lender shall effect conversions by delivering written notice to the Company specifying therein the principal amount of this Note to be converted.  The number of Conversion Shares issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted plus any accrued but unpaid interest thereon, by (y) the Conversion Price, where the “Conversion Price” shall equal $0.20. The Conversion Price shall be appropriately and equitably adjusted following any stock splits, stock dividends, spin-offs, distributions and similar events in the same manner as provided under the terms of any warrant to acquire common stock of the Company now or hereafter issued by the Company to Lender, or if no such warrant is issued, in accordance with the terms of other warrants issued by the Company as of the date hereof.  The Conversion Shares shall be duly and validly issued, fully paid and non-assessable, and not subject to any restrictions on transfer other than as required by applicable state and federal securities law.  If the Lender converts the entire principal balance and waives the accrued interest balance within the first ninety (90) days of the loan, the Company shall issue an additional 200,000 shares of its Common Stock.  The Lender shall receive the stock certificate(s) within ten (10) business days following the date of conversion.

 

2.           Interest Rate.  This Note shall accrue interest on the unpaid principal balance from the date of this Note until paid at a rate of ten percent (10%) per annum, compounded monthly (the “Interest Rate”).  All payments hereunder are to be applied first to the payment of accrued interest, and the remaining balance to the payment of principal.

 

  

  

  

 

3.           Events of Default.  If any of the events of default specified in this Section shall occur, Lender may, so long as such condition continues, declare the entire principal and unpaid accrued interest thereon immediately due and payable, by notice in writing to the Company, and thereupon this Note and any other obligations of the Company to the Lender, shall become due immediately, without demand or notice:

 

a.           Default in the payment of the principal or unpaid accrued interest of this Note when due and payable;

 

b.           Failure to issue Conversion Shares following a conversion hereunder;

 

c.           Filing of bankruptcy proceedings involving the Company;

 

d.           Default by the Company under any loan or other credit facility secured by all or substantially all of the assets of the Company; or

 

e.           Any demand for payment by Lender under the terms of any guaranty by Lender of obligations of the Company.

 

4.           Notice of Certain Events.  In case: (i) the Company shall take a record of the holders of its Common Stock for the purpose of entitling them to receive any dividend or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, or (ii) of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger of the Company with or into another corporation, or any conveyance of all or substantially all of the assets of the Company to another corporation, or (iii) of any voluntary dissolution, liquidation or winding-up of the Company, then, and in each such case, the Company will mail or cause to be mailed to the Lender a notice specifying, as the case may be, (A) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (B) the date on which such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock shall be entitled to exchange their shares of Common Stock) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up. Such notice shall be mailed at least 15 days prior to the record date therein specified.

 

5.           Compliance with Securities Laws.  The Lender, by acceptance hereof, agrees, represents and warrants that this Note and any Conversion Shares are being acquired for investment, that the Lender has no present intention to resell or otherwise dispose of all or any part of this Note or any Conversion Shares, and that the Lender will not offer, sell or otherwise dispose of all or any part of this Note or any Conversion Shares except under circumstances which will not result in a violation of the Federal Securities Act of 1933, as amended, or applicable state securities laws.  The Company may condition any transfer, sale, pledge, assignment or other disposition on the receipt from the party to whom this Note is to be so transferred or to whom Conversion Shares are to be issued or so transferred, of any representations and agreements requested by the Company in order to permit such issuance or transfer to be made pursuant to exemptions from registration under federal and applicable state securities laws.  Upon conversion of this Note, the holder hereof shall, if requested by the Company, confirm in writing such holder’s investment purpose and acceptance of the restrictions on transfer of the Conversion Shares, as well as any representations and agreements requested by the Company in order to permit the issuance of Conversion Shares to be made pursuant to exemptions from registration under federal and applicable state securities laws.

 

  

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6.           Successors and Assigns: Assignment.  Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.  Nothing in this Note, express or implied, is intended to confer upon any party, other than the parties hereto and their successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Note, except as expressly provided herein.  The Company may not assign this Note or any of the rights or obligations referenced herein without the prior written consent of Lender.

 

7.           Governing Law.  This agreement is entered into in Orange County, California, and shall be construed in accordance with and governed by the laws of the State of California applicable to contracts made and to be performed in California.  Further, the parties agree that venue shall rest solely and exclusively in Orange County, California, and any challenge or objection thereto is hereby waived.

 

8.           Notices.  For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given as of the date if delivered in person, on the next business day, if sent by a nationally recognized overnight courier service, and on the second business day if mailed by registered mail, return receipt requested, postage prepaid, addressed as follows:

 

	
  

	
If to the Company:

	
Location Based Technologies, Inc.

	
  

	
38 Discovery – 150

	
  

	
Irvine, CA 92618

	
  

	
Facsimile Number:  (714) 200-0287

	
 

 

If to Lender:      

	
E-mail:  dave@pocketfinder.com

 

Greggory S. Haugen

3320 Fox Street

Orono, MN  55356

Email:  gregg.haugen@gmail.com

 

or, as to each party, at such other address as shall be designated by such party in a written notice to the other parties.

 

9.           Miscellaneous Provisions.

 

a.           No provision of this Note may be waived, amended, discharged, modified, changed, or terminated except upon the written consent of the Company and Lender.  Neither the failure on the part of the Lender in exercising any right or remedy, nor any single or partial exercise of any other right or remedy, shall operate as a waiver.  The acceptance by the Lender of any payment hereunder which is less than payment in full of all amounts due and payable at the time of such payment shall not constitute a waiver of the right to exercise any of the options hereunder at that time or at any subsequent time.

 

  

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b.           The Company hereby waives diligence, presentment, demand for payment, notice of dishonor, notice of non-payment, protest, notice of protest, and any and all other demands in connection with the delivery, acceptance, performance, default or enforcement of this Note.

 

c.           The Company agrees to reimburse the Lender upon written demand for all reasonable attorneys’ fees and legal expenses incurred in connection with the Lender’s enforcement of the obligations of the Company hereunder.  The obligations of the Company under this Section 9(c) shall survive any termination of this Note.

 

d.           The headings have been inserted for convenience only and are not to be considered when construing the provisions of this Agreement.

 

e.           This Promissory Note constitutes the entire understanding between the parties hereto in respect of the terms of this Note by the Lender and by the Company, superseding all negotiations, prior discussions, prior written, implied and oral agreements, preliminary agreements and understandings with Company or any of its officers, employees or agents.

 

IN WITNESS WHEREOF, the Company has executed this Promissory Note as of the date first set forth above.

 

Company:

 

LOCATION BASED TECHNOLGIES, INC.

 

 

	By: 	 	 	 	By:	 	 
	 	
David M. Morse

CEO & Chairman

	 	 	 	
Joseph F. Scalisi

CDO & Co-President

	 
	 	 	 	 	 	 	 
	Date: November 11, 2010	 	 	Date: November 11, 2010	 

 

 

Lender:

 

By: ______________________________________

 

Printed Name: Mr. Greggory Haugen

 

Date: November 11, 2010

[Signature Page to $300,000 Promissory Note dated November 11, 2010]

/

  

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Exhibit A

Notice of Conversion

The undersigned herby elects to convert $___________ of the principal and $____________ of the interest due on the Promissory Note issued by Location Based Technologies, Inc., on November 11, 2010 into shares of Common Stock of Location Based Technologies, Inc. according to the conditions set forth in such Note, as the date written below.

Date of Conversion: ___________________

Conversion Price: $0.20

Shares To Be Delivered: ________________

Signature: ___________________________

Printed Name: Greggory Haugen (the “Holder”)

Name on the Certificate (if different from above): _________________________

Mailing Address:                 ______________________

______________________

______________________

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