Document:

SECURITIES AND EXCHANGE COMMISSION

EXHIBIT

10.10

 

SECURED PROMISSORY NOTE

 

	

  $1,200,000.00

  	

   

  	

  Date:  August

  9, 2001

  

 

                The undersigned,

LIQUITEK ENTERPRISES, INC., a Nevada corporation (“LEI”) with offices at 1350

East Draper Parkway, Draper, Utah 84020, and THERMOFLOW CORPORATION, a Nevada

corporation with offices at 4000 Arcata Way, North Las Vegas, Nevada 89030

(hereinafter jointly referred to as “Makers”), promise to pay to BART WARNER

REVOCABLE TRUST, at 2240 South 5370 West, West Valley City, Utah  84120 or holder (“Payee”), the sum One Million

Two Hundred Thousand Dollars ($1,200,000.00), with interest on the unpaid

principal balance at the rate of twelve percent (12.0%) per annum, interest

payable quarterly commencing on December 31, 2001 and continuing on the last

day of each calendar quarter thereafter until paid in full, principal and

accrued but unpaid interest payable on or before the close of business on

August 9, 2002.  Privilege is given and

reserved to prepay, without penalty, all or any part

 

                A default (“Event

of Default”) shall occur on this Note upon (i) Makers’ failure to make the

payment required on this Note; (ii) the filing of a petition in bankruptcy by

either of Makers which is not dismissed within sixty (60) days; or (iii) the

appointment of a receiver for either of Makers; (iv) an assignment for the

benefit of creditors.  In the case of an

Event of Default, the Payee shall have the right to declare the entire

principal and accrued but unpaid interest on this Note immediately due and

payable.

 

                This Note is a

joint and several obligation of LEI and Thermoflow and is secured in accordance

with;

 

(i) the terms of that certain Deed of Trust, a copy of which is

attached hereto as Exhibit “A,” a copy of which is attached hereto and

incorporated herein by this reference,

 

(ii) the terms of that certain Security Agreement dated August 9, 2001,

a copy of which is attached hereto as Exhibit “B,” a copy of which is attached

hereto and incorporated herein by this reference, and

 

(iii) the terms of that certain Pledge Agreement dated August 9, 2001,

a copy of which is attached hereto as Exhibit “C” and incorporated herein by

this reference.

 

                Payee shall be

entitled to collect a reasonable attorneys’ fee from Makers, as well as other

costs and expenses reasonably incurred, in curing any default or attempting

collection of the payment due on this Note. 

This Note shall be payable in lawful money of the United States.  This Note shall be governed by and construed

solely in accordance with the laws of the State of Utah.  If any term, provision, covenant, or

condition of this Note is held to be invalid, void, or unenforceable, the rest

of the Note shall remain in full force and effect and shall in no way be

affected, impaired, or invalidated.

 

 

 

                IN WITNESS

WHEREOF, Makers have executed this Promissory Note as of the day

first hereinabove written at Draper, Utah.

 

	

  MAKERS:

  	

   

  	

  LIQUITEK ENTERPRISES, INC.

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Lester W.B. Moore, President/CEO

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  THERMOFLOW CORPORATION

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Lester W.B. Moore, CEO

  	

   

  	

   

  	

   

  
							

 

 

2Merrill Note:  this material is an insert in Item 7 under the heading

“Results of Operations

EXHIBIT

10.11

 

SECURITY AGREEMENT

 

                THIS

AGREEMENT is

entered into as of this 9th day of August, 2001, by and between THERMOFLOW

CORPORATION, a Nevada corporation (“THERMOFLOW”), 4000 Arcata Way, North Las

Vegas, Nevada 89030, and BART C. WARNER REVOCABLE TRUST (“BCW”), whose address

is 2240 South 5370 West, West Valley City, Utah  84120.

 

RECITALS:

 

                WHEREAS, the parties hereto

have entered into that certain Promissory Note (the “Note”), to which this

Agreement is attached as Exhibit “B” pursuant to which THERMOFLOW is jointly

and severally obligated to pay to BCW principal of $1,200,000.00 and interest

thereon (the “Note”); and

 

                WHEREAS, as security for the

Note, THERMOFLOW has agreed to grant BCW a security interest in all of its

assets;

 

                NOW THEREFORE, in

consideration of their mutual promises and other good and valuable

consideration, the receipt and sufficiency of which is hereby acknowledged, the

parties agree as follows:

 

                1.             Grant of Security Interest.

 

                                To

secure payment to BCW by THERMOFLOW of all or a portion of the Note, THERMOFLOW

hereby assigns and grants to BCW a security interest in the “Collateral”

defined in Section 2 below.  Upon

payment of the Note in full, BCW agrees that the security interest shall be

released and covenants that he will execute such documents as may be reasonably

necessary to release the security interest after the repayment of the Note.

 

 

 

                2.             The Collateral; Filing of Financing

Statement.

 

                                The Collateral

shall include the assets described in the Financing Statement on Form UCC-1

(the “Financing Statement”), a copy of which is attached to this Agreement as

Exhibit “1” and incorporated herein by this reference, and any and all proceeds

of the Collateral.  For purposes of this

Agreement, the term “proceeds” includes whatever is receivable or received when

any part of the Collateral is sold or otherwise disposed of, whether such

disposition is voluntary or involuntary, and includes all rights to payment

with respect to the Collateral. 

THERMOFLOW hereby consents to the filing of the Financing Statement in

the State of Nevada without the signature of THERMOFLOW.

 

                3.             Covenants of THERMOFLOW.

 

                                THERMOFLOW

hereby agrees, until the Note has been fully paid:

 

                                                (a)           To execute and deliver from time to

time any endorsements, assignments and other writings reasonably deemed

necessary or appropriate by BCW to perfect, maintain and protect his security

interest in the Collateral, including the the Financing Statement; and

 

                                                (b)           Not to sell, encumber or otherwise

dispose of or transfer any Collateral, except in the ordinary course of

business, or to BCW and in accordance with the terms of the Agreement.

 

                4.             Rights Upon Default.

 

                                If

THERMOFLOW shall default in the performance of any of its duties under the Note

or this Agreement, BCW may exercise any and all rights with respect to the

Collateral which it may have as a secured creditor under applicable provisions

of the Nevada Uniform Commercial Code or any other applicable law.  BCW’s rights hereunder shall not be

exclusive, and BCW reserves the right to seek repayment of the Note against

THERMOFLOW without regard to the terms of this Agreement.  THERMOFLOW agrees that BCW shall have full

recourse against him in the event of a default on the Note and that BCW’s

rights under this Agreement are in addition to any other rights he may have to

seek repayment from THERMOFLOW.

 

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                5.             Rights to Accept Thermoflow Shares

as Payment of the Note.

 

                                Simultaneous

with the execution of this Agreement, BCW has entered into a Pledge Agreement

with LIQUITEK ENTERPRISES, INC. (“LEI”), pursuant to which LEI has delivered

all of the outstanding shares of common stock of THERMOFLOW (the “Thermoflow

Shares”) to Bruce H. Haglund, Esq. (the “Pledge Holder”), counsel to LEI and

THERMOFLOW, as additional security for the Note.  If THERMOFLOW and/or LEI are delinquent in paying the Note, BCW

shall have the right at any time prior to the maturity of the Note to notify

LEI and the Pledge Holder that it is taking possession of the Thermoflow Shares

in satisfaction of all or a portion of the Note.  Upon such notice, BCW shall send the Note to the Pledge Holder,

and have a new certificate in replacement of the Collateral issued to BCW.

 

                6.             Entire Agreement.

 

                                This

Agreement, together with the Note, contains the entire agreement between the

parties, and supersedes all prior agreements, representations and

understandings of the parties, relating to the subject matter of this

Agreement.

 

                7.             Amendments.

 

                                No

supplement or amendment of this Agreement will be binding unless executed in

writing by both the parties.

 

                8.             Waivers.

 

                                Any

term or provision of this Agreement may be waived at any time by the party

entitled to its benefit by a written instrument executed by the party or by a

duly authorized officer of the party. 

No waiver of any of the provision of this Agreement will be deemed, or

will constitute, a waiver of any other provision, whether or not similar, nor

will any waiver constitute a continuing waiver.

 

                9.             Successor and Assigns.

 

                                This

Agreement will be binding on, and will inure to the benefit of, the parties and

their respective heirs, legal representatives, successors and assigns.

 

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10.          Attorneys’

Fees.

 

                                If

any legal action or other proceeding is brought in connection with any of the

provisions of this Agreement, the successful or prevailing party will be

entitled to recover reasonable attorneys’ fees and other costs incurred in that

action or proceeding, in addition to any other relief to which that party may

be entitled.

 

                11.          Governing Law.

 

                                All

questions with respect to the construction of this Agreement, and the rights

and liabilities of the parties under this Agreement, will be governed by the

laws of the State of Utah.

 

                12.          Counterparts.

 

                                This

Agreement may be executed in one or more counterparts, each of which will be

deemed a valid, original agreement, but all of which together will constitute

one and the same instrument.

 

                13.          Severability.

 

                                If

any provision of this Agreement is held to be unenforceable or invalid by any

court of competent jurisdiction, the validity and enforceability of the

remaining provisions shall not be affected thereby.

 

                14.          Notices.

 

                                Any

notice or the delivery of any item to be delivered by a party hereto shall be

delivered personally, by U.S. mail, return receipt requested, or by Federal

Express, next-day delivery.  Any

personal delivery made shall be deemed to have been made upon the execution of

a receipt for the item to be delivered by the party to whom delivery is

made.  Delivery by U.S. mail or Federal

Express shall be deemed to have been made when delivered by Federal Express to

the party to whom addressed.  All such

deliveries shall be made to the addresses set forth below, or such other

addresses as the parties may have instructed the others in accordance with the

provisions of this Section 14 hereof.

 

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                IN WITNESS

WHEREOF, the parties have executed this Agreement at Draper, Utah as

of August 9, 2001.

 

 

THERMOFLOW:

 

THERMOFLOW CORPORATION

 

 

	

  By:

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Lester W.B. Moore,

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Chief Executive Officer

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  BCW:

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  BART C. WARNER REVOCABLE TRUST

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  , Trustee

  	

   

  	

   

  	

   

  
							

 

 

 

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