EXHIBIT 99.5
SECURITY AGREEMENT
SECURITY AGREEMENT - PLEDGE OF
TANGIBLE AND INTANGIBLE ASSETS
This SECURITY AGREEMENT-PLEDGE OF TANGIBLE AND INTANGIBLE ASSETS (this
"Agreement") is made and entered into as of the 13th day of August, 2001, by and
between Tanisys Technology, Inc., a Wyoming corporation, and its subsidiaries
("Company") (hereafter referred to as the "Pledgors"), and New Century Equity
Holdings Corp., a Delaware corporation ("New Century"), for itself and as agent
for the Purchasers, and the persons and entities listed on the Schedule of
Purchasers ("Purchasers") on that certain Series A Preferred Stock Purchase
Agreement ("Purchase Agreement"), executed on even date herewith (hereafter, New
Century and Purchasers are referred to as the "Secured Party"). All defined
terms set forth in the Purchase Agreement shall have the same meaning herein.
In consideration of the premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
For all purposes of this Agreement, unless the context requires otherwise:
(a) "Collateral". In order to secure the obligations of the Company in
favor of the Series A Preferred as further described in the Purchase Agreement,
and the performance of the obligations, covenants, agreements and undertaking of
Pledgors herein described, Pledgors hereby grant to Secured Party a security
interest in:
(i) All tangible assets of the Company (including all cash and
equivalents, inventory and equipment), wherever located,
including those located at Company's corporate headquarters
located at 00000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx,
Xxxxx 00000.
(ii) All accounts receivables of the Company; and
(iii) General intangibles (including all Intellectual Property
Rights of any kind) now held by the Company or later
acquired; and
(iv) Personal Property now owned by the Company or later
acquired as defined in the Uniform Commercial Code; and
(v) Any real property that the Company has acquired or may
acquire in the future.
(b) "Event of Default" shall have the meaning set forth in Section 5.1.
(c) "Indebtedness" shall mean the following items of indebtedness:
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(i) The performance of the Company's obligations in favor of
the Series A Preferred and the compliance with all
agreements and contained in, arising out of or in
connection with the Purchase Agreement; and
(ii) All sums advanced or expenses or costs incurred by Secured
Party that are made or incurred pursuant to, or permitted
by, the terms of this Agreement and the Purchase Agreement
or the incurring of such expenses or costs until
reimbursed, including, but not limited to, all costs
incurred by Secured Party to obtain, preserve and enforce
the Purchase Agreement and this Agreement, collect the
Indebtedness and maintain and preserve any of the
Collateral securing the Indebtedness, including, without
limitation, all taxes, assessments, reasonable attorney's
fees and legal expenses of sale.
(iii) Any and all other indebtedness or liability of Company to
Secured Party of every kind, nature and description direct
or indirect, primary or secondary, secured or unsecured
(including overdrafts), joint or several, absolute or
contingent, due or to become due, now existing or hereafter
arising regardless of how it may be evidenced, and whether
originally payable to Secured Party or to a third party and
subsequently acquired by Secured Party, including, without
limitation, all future advances whether or not presently
contemplated by the parties hereto.
(iv) The performance by the respective parties hereto or thereto
(other than Secured Party) of all obligations undertaken by
such parties in accordance with the particular terms and
provisions of this Agreement and the Purchase Agreement.
(v) Any extensions, renewals, restatements, amendments or
modifications of all or any part of such Indebtedness
hereinabove described, whether or not evidenced in writing.
ARTICLE II
GRANT OF SECURITY INTEREST
2.1. Grant of Security Interest. As security and collateral for the due
performance and compliance with all of the terms and conditions of this
Agreement and the Purchase Agreement, Pledgors hereby deliver, set over,
transfer, pledge, grant a continuing security interest in and assign to Secured
Party all of their right, title and interest in and to the Collateral, and any
proceeds thereof, to be held by Secured Party upon the terms and conditions set
forth in this Agreement. If any of the Pledgors hereafter own or acquire or
become entitled to receive or receive any Collateral, Pledgors shall accept same
as Secured Party's agent, in trust for Secured Party as part of the Collateral.
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2.2. Duty of Secured Party. Secured Party's duty with reference to the
Collateral shall be solely to use reasonable care in the custody of the
Collateral in Secured Party's possession. Secured Party shall have no obligation
or duty to take any other steps to protect, preserve or enforce any rights with
respect to the Collateral, nor shall Secured Party be responsible in any way for
any depreciation in the value of the Collateral.
2.3. Financing Statements. Pledgors agree to sign, execute, and deliver to
Secured Party any Financing Statement or other document or procure any document,
which Secured Party may reasonably request, and pay all connected costs,
necessary to protect the security interest granted hereby against the right or
interests of third persons. In addition, a carbon, photographic or other
reproduction of this Agreement or of any financing statement relating to this
Agreement shall be sufficient as a financing statement.
2.4. Defense of Claims. Pledgors will notify Secured Party, in writing,
promptly upon the commencement of any legal proceedings affecting the lien
hereof or the Collateral, or any part thereof, and will take such action,
including employing attorneys acceptable to Secured Party, as may be necessary
to preserve Pledgors' and Secured Party's rights affected thereby; and should
Pledgors fail or refuse to take any such action, Secured Party may, upon giving
prior written notice thereof to Pledgors, take such action in behalf and in the
name of Pledgors and at Pledgors' expense. Secured Party may take such
independent action in connection therewith as it may, in its discretion, deem
proper. At Secured Party's option, it may discharge taxes, liens, levies,
security interests or other encumbrances at any time levied or placed upon the
Collateral, and may otherwise incur expenses for the preservation of the
Collateral.
2.5. Advances by Secured Party. Each and every agreement and covenant
herein contained shall be performed and kept by Pledgors solely at Pledgors'
expense. If Pledgors shall fail to perform or keep any of the agreements or
covenants of whatsoever kind or nature contained in this Agreement, Secured
Party may, but shall not be obligated to, make advances to perform the same on
Pledgors' behalf. No such advance shall be deemed to relieve Pledgors from any
default hereunder.
2.6. Preservation of Rights in Collateral. Pledgors shall take any action
necessary to preserve rights against any prior parties (including endorsers) on
any instrument or instruments constituting the Collateral hereunder. Secured
Party may, but need not, take any action to preserve such rights. No failure to
act by Secured Party shall relieve Pledgors of Pledgors' duties under this
paragraph or in any way impair or discharge Pledgors' obligations hereunder or
under the Purchase Agreement and no failure to act by Secured Party shall result
in any liability to Pledgors on the part of Secured Party.
2.7. Termination of Secured Party's Interest. If (i) the Indebtedness and
all covenants, conditions, warranties, representations, and other obligations
made or undertaken by Company, or others, under the Purchase Agreement have been
satisfied, and (ii) no Event of Default shall exist under this Agreement or the
Purchase Agreement, then Secured Party in such case shall, upon the request of
Pledgors and at Pledgors' cost and expense, deliver to the Pledgors (i)
termination statements with respect to any financing statements filed with
respect hereto, and (ii) without warranty or recourse, any of the Collateral in
the possession of Secured Party; provided, however,
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until Secured Party takes such actions upon request of Pledgors, this Agreement
and all of the rights, powers and remedies of Secured Party hereunder shall
continue in full force and effect.
ARTICLE III
REPRESENTATIONS AND WARRANTIES WITH PLEDGORS
Pledgors jointly and severally represent and warrant:
(a) That no bankruptcy or insolvency proceedings are pending or to
Pledgors' knowledge, or are contemplated by or against Pledgors;
(b) That all information, reports, statements and other data furnished
by Pledgors to Secured Party contemporaneously with or subsequent to the
execution of this Agreement or in connection with the indebtedness secured
hereby are and shall be true and correct and do not and will not omit to
state any fact or circumstance necessary to make the statements contained
therein not misleading;
(c) That Pledgors have good right and authority to grant a security
interest in the Collateral;
(d) That the Collateral is free and clear from all security interests
and encumbrances except the security interest held by Silicon Valley Bank;
(e) That there is no financing statement (or similar statement or
instrument of registration under the laws of any jurisdiction) covering or
purporting to cover any interest of any kind in the Collateral or its
proceeds on file or registered in any public office, other than by Silicon
Valley Bank;
(f) That the Collateral and the intended use thereof by Pledgors
comply with all applicable laws, rules and regulations;
(g) That the Collateral is free from damage caused by fire or other
casualty;
(h) That this Agreement constitutes the legal, valid and binding
obligation of Pledgors enforceable against Pledgors in accordance with its
terms;
(i) That the execution, delivery and performance of this Agreement
does not and will not contravene or violate any provision of any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or
award presently in effect and applicable to Pledgors or result in a breach
of or constitute a default (with or without the giving of notice of the
lapse of time or both) under any indenture or any loan, credit or other
agreement to which Pledgors are a party or by which Pledgors may be bound
or affected;
(j) No part of the proceeds of the Indebtedness will be used to
purchase or carry, directly or indirectly, any "margin stock" within the
meaning of Regulation U of the
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Board of Governors of the Federal Reserve System or to extend credit to
others for the purpose of purchasing or carrying any such margin stock, or
for any other purpose which would involve Secured Party in a violation of
said Regulation U.
(k) That the execution, delivery and performance of this Agreement
does not require the consent or approval of any person, including, without
limitation, any regulatory body or governmental authority, except the
consent by Silicon Valley Bank;
(l) That Pledgors will warrant and forever defend the title to the
Collateral and its proceeds against the claims of all persons whomsoever
claiming or to claim the same or any part thereof;
(m) That the location of Pledgors is the address set forth in Section
6.10 of this Agreement and in this regard, Pledgors' location is defined to
mean (i) Pledgors' place of business if Pledgors have only one such place
of business; (ii) Pledgors' chief executive office if Pledgors have more
than one place of business; or (iii) Pledgors' residence if Pledgors have
no place of business;
(n) That Pledgors' books and records with regard to the Collateral are
maintained and kept at the address of Pledgors set forth in this Agreement;
(o) That Pledgors have heretofore obtained the written consent of all
necessary parties, if any, required to be obtained to authorize the
assignment, transfer and pledge of the Collateral evidenced by this
Agreement.
ARTICLE IV
COVENANTS OF PLEDGORS
4.1. Pledgors hereby covenant that, until all the Indebtedness has been
satisfied in full:
(a) Pledgors shall make promptly perform the obligations, as the same
become due, of all indebtedness secured hereby in accordance with the terms
and provisions of the Purchase Agreement and any related agreements
evidencing such indebtedness.
(b) Subject only to the rights of Silicon Valley Bank, Pledgors shall
promptly perform the obligations, immediately upon receipt, deliver to
Secured Party, all cash, checks, drafts and other instruments representing
the proceeds of the Collateral received by Pledgors. Pledgors shall at
Pledgors' own expense take all reasonable and appropriate steps when
necessary to enforce the collection of the Collateral and items
representing proceeds thereof.
(c) Pledgors shall at all times keep accurate books and records
reflecting all facts concerning the Collateral, including those pertaining
to Pledgors' warranties, representations and agreements under this
Agreement. Pledgors will allow Secured Party or its authorized
representative to inspect Pledgors' books and records and will assist
Secured
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Party or said representative in whatever reasonable way necessary to make
such inspections.
(d) Pledgors will cause to be paid prior to delinquency all taxes,
charges, liens and assessments heretofore or hereafter levied or assessed
against the Collateral, or any part thereof, or against the Secured Party
for or on account of the indebtedness secured hereby or the interest
created by this Agreement and will upon request furnish Secured Party with
receipts showing payment of such taxes and assessments at least ten (10)
days prior to the applicable default date therefor.
(e) If the validity or priority of this Agreement or of any rights,
titles, security interests or other interests created or evidenced hereby
shall be attacked, endangered or questioned or if any legal proceedings are
instituted with respect thereto, Pledgors will give prompt written notice
thereof to Secured Party and at Pledgors' own cost and expense will
diligently endeavor to cure any defect that may be developed or claimed,
and will take all necessary and proper steps for the defense of such legal
proceedings, and Secured Party (whether or not named as a party to legal
proceedings with respect thereto) is hereby authorized and empowered to
take such additional steps as in its judgment and discretion may be
necessary or proper for the defense of any such legal proceedings or the
protection of the validity or priority of this Agreement and the rights,
titles, security interests and other interests created or evidenced hereby,
and all expenses so incurred of every kind and character shall be a demand
obligation owing by Pledgors and the party incurring such expenses shall be
subrogated to all rights of the person receiving such payment.
(f) Pledgors will, on request of Secured Party, (i) promptly correct
any defect, error or omission which may be discovered in the contents of
this Agreement or in any other instrument executed in connection herewith
or in the execution or acknowledgment thereof; (ii) execute, acknowledged,
deliver and record or file such further instruments (including without
limitation further security agreements, financing statements, and
continuation statements) and do such further acts as may be necessary,
desirable or proper to carry out the purposes of this Agreement and such
other instruments and to subject to the security interests hereof and
thereof any property intended by the terms hereof and thereof to be covered
hereby and thereby including specifically, but without limitation, any
renewals, additions, substitutions, replacements or appurtenances to the
then Collateral; and (iii) execute, acknowledge, deliver, procure and
record or file any document or instrument (including specifically any
financing statement) deemed advisable by Secured Party to protect the
security interest hereunder against the rights or interests of third
persons, and Pledgors will pay all costs connected with any of the
foregoing.
(g) Notwithstanding the security interest in proceeds granted herein,
Pledgors will not sell, lease, exchange, lend, rent, assign, transfer or
otherwise dispose of all or any part of the Collateral or any interest
therein or permit the title to the Collateral, or any interest therein, to
be vested in any other party, in any manner whatsoever, by operation of law
or otherwise, without the prior written consent of Secured Party.
(h) Pledgors will pay all appraisal fees, filing fees, taxes,
brokerage fees and commissions, Uniform Commercial Code search fees, escrow
fees, attorneys' fees, and all
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other costs and expenses of every character reasonably incurred by Pledgors
or Secured Party in connection with the secured indebtedness, and will
reimburse Secured Party for all such reasonable costs and expenses incurred
by it. Pledgors shall pay all expenses and reimburse Secured Party for any
expenditures, including reasonable attorneys' fees and legal expenses,
incurred or expended in connection with Secured Party's exercise of any of
its rights and remedies hereunder or Secured Party's protection of the
Collateral and its security interest therein. Any amount to be paid
hereunder by Pledgors to Secured Party shall be a demand obligation owing
by Pledgors to Secured Party and shall bear interest from date of
expenditure until paid at the rate of ten percent (10%) per annum (herein
called the "Past Due Rate").
(i) Pledgors shall account fully and faithfully for and, if Secured
Party so elects, shall promptly pay or turn over to Secured Party the
proceeds in whatever form received from the sale or disposition in any
manner of any of the Collateral, the order and method of application to be
in the sole discretion of Secured Party, except as otherwise specifically
authorized herein. Pledgors shall at all times keep the Collateral and its
proceeds separate and distinct from other property of Pledgors and shall
keep accurate and complete records of the Collateral and its proceeds.
(j) Pledgors will not change their address, location, name, identity
or corporate structure without notifying Secured Party of such change in
writing at least thirty (30) days prior to the effective date of such
change, and shall have taken such action, satisfactory to Secured Party, to
have caused the security interest of Secured Party in the Collateral to be
at all times fully perfected and in full force and effect.
(k) Pledgors shall furnish Secured Party all such information as
Secured Party may reasonably request with respect to the Collateral.
(l) Pledgors agree to furnish to Secured Party all executed original
written consents, if any, required as a condition precedent to the creation
of this security interest promptly upon request by Secured Party.
(m) Pledgors will notify Secured Party immediately of the receipt of
any written notice with respect to the Collateral.
(n) Pledgors will: (i) perform or cause to be performed all of the
terms, covenants and conditions on their part to be performed under the
Collateral; (ii) promptly to notify Secured Party in writing of (x) the
occurrence of any default (of which Pledgors have knowledge) in the
observance or performance of any of the terms, covenants and conditions to
be performed with respect to the Collateral, and (y) the giving of any
notice of any such default; and (z) whenever required by Secured Party, at
the sole cost and expense of Pledgors, to take all such action as may be so
requested to enforce or secure the performance of any term, covenant or
condition of any of the Collateral, and to exercise any right of Pledgors
under the Collateral.
(o) Until such time as Secured Party shall notify Pledgors of the
revocation of
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such power and authority, Pledgors will, at their own expense, endeavor to
collect, as and when due, all amounts due with respect to any of the
Collateral, including the taking of such action with respect to such
collection as the Secured Party may reasonably request or, in the absence
of such request, as Pledgors may deem advisable. Secured Party, however,
may at any time, whether before or after any revocation of such power and
authority or the maturity of any of the indebtedness secured hereby, notify
any party to the Collateral to make direct payment to Secured Party of any
amounts due or to become due Pledgors under the Collateral.
(p) Pledgors will (except as Secured Party may otherwise consent in
writing) forthwith, upon receipt, transmit and deliver to Secured Party, in
the form received, all cash, checks, drafts, chattel paper and other
instruments or writings for the payment of money (properly endorsed, where
required, so that such items may be collected by Secured Party) which may
be received by Pledgors at any time as proceeds of any of the Collateral.
Except as Secured Party may otherwise consent in writing, any such items
which may be received by Pledgors will not be commingled with any other of
its funds or property, but will be held separate and apart from its own
funds and property and upon express trust for Secured Party until delivery
is made to Secured Party. Pledgors will comply with the terms and
conditions of any consent given by Secured Party pursuant to the provisions
of this paragraph.
(q) Pledgors shall furnish to Secured Party such powers of attorney,
instruments of assignment and transfer and/or chattel paper relating to the
Collateral and other instruments as may be required by Secured Party to
assure the transferability of the Collateral when and as often as may be
requested by Secured Party.
4.2. Pledgors agree that, if Pledgors fail to perform any act or to take
any action which hereunder Pledgors are required to perform or take, or to pay
any money which hereunder Pledgors are required to pay, Secured Party, in
Pledgors' name or in its own name, may but shall not be obligated to perform or
cause to be performed such act or take such action or pay such money, and any
expenses so incurred by Secured Party, and any money so paid by Secured Party,
shall be a demand obligation owing by Pledgors to Secured Party and Secured
Party, upon making such payment, shall be subrogated to all of the rights of the
person, corporation or body politic receiving such payment.
4.3. It is expressly agreed that, anything herein contained to the contrary
notwithstanding, Pledgors shall remain liable to perform all of the obligations
assumed by it thereunder and Secured Party shall have no obligation or liability
with respect to the Collateral by reason of or arising out of this Agreement,
nor shall Secured Party be required or obligated by reason of this Agreement in
any manner to perform or fulfill any obligation of Pledgors under or pursuant to
the policy or to make any payment or to make any inquiry as to the nature and
sufficiency of any payment received by it to which it may be entitled at any
time or times. In particular, and without limiting the generality of the
foregoing, Secured Party shall be under no obligation to pay any premium, or the
principal of or interest on any loans or advances on the Collateral, whether or
not obtained by Secured Party, or any other charges on the Collateral, but any
such amounts so paid by Secured Party from its own funds shall become a part of
the indebtedness
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secured hereby, shall be due immediately, and shall draw interest at the Past
Due Rate.
4.4. Pledgors hereby constitute Secured Party, and its successors and
assigns, Pledgors' true and lawful attorney, irrevocably, with full power (in
the name of Pledgors or otherwise) in its discretion, after Pledgors' default,
to ask, require, demand, receive, compound and give acquittance for any and all
amounts which may be or become due under or arising out of the Collateral, to
endorse any checks or other instruments or orders in connection therewith and to
file any claims or take any action or institute any proceedings which Secured
Party may deem to be necessary or advisable in the premises.
4.5. After an Event of Default, Secured Party in its discretion may, if and
only if any of the indebtedness secured hereby be due, in its name or in the
name of Pledgors or otherwise, demand, xxx for, collect or receive any money or
other property at any time payable or receivable on account of or in exchange
for, or make any compromise settlement deemed desirable with respect to, any of
the Collateral, but Secured Party shall be under no obligation so to do. After
an Event of Default, Secured Party may extend the time of performance or
payment, arrange for payment (as defined in the Settlement Agreement) in
installments, otherwise modify the term of, or release, any of the Collateral,
without thereby incurring responsibility to, or discharging or otherwise
affecting any liability of, Pledgors. Secured Party shall not be required to
take steps necessary to preserve any rights against prior parties to any of the
Collateral.
4.6. To the fullest extent that it lawfully may, Pledgors agree that the
rights assigned hereunder with respect to the Collateral include, in addition to
the rights set forth herein, and without limitation, Pledgors' right and power
to
(a) terminate all or any part of the Collateral;
(b) exercise any right in the performance of any of the Collateral.
The exercise of any right, option, privilege or power herein given to Secured
Party shall be at the option of Secured Party, but, except as provided in this
Section 4.6 hereof, Secured Party may exercise any such right, option, privilege
or power without notice to, or assent by, and without affecting the liability
of, or releasing any interest hereby assigned by, Pledgors.
ARTICLE V
DEFAULT AND REMEDIES
5.1. Events of Default. Pledgors shall be in default under this Agreement
upon the happening of any one or more of the following events or conditions
(hereinafter called an "Event of Default"):
(a) Default in the punctual performance of or compliance with any of
the obligations, covenants, terms or provisions contained herein, the
Purchase Agreement, and related agreements, which default continues for a
period of ten (10) days after Secured Party gives notice of such default to
Pledgors;
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(b) If any warranty or representation made herein and the Purchase
Agreement by Pledgors proves to have been false when made;
(c) The levy of an attachment, execution or other process against the
Collateral;
(d) The entry of any judgment, consent decree or similar order or
instrument, in an aggregate amount in excess of $200,000, enforceable
against the Collateral;
(e) The repossession or foreclosure, or notice or attempt thereof, by
Silicon Valley Bank or any other third party, against the Collateral, or
(f) If any of the Pledgors shall make a general assignment for the
benefit of creditors or shall admit its inability to pay its debts as they
become due, or shall file a voluntary petition in bankruptcy, or shall be
adjudicated a bankrupt or insolvent, or shall file any petition or answer
seeking for itself, or consenting to, or acquiescing in, any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, or shall file an answer or other pleading admitting or shall
fail to deny or contest the material allegations of a petition filed
against it in any such proceedings, or shall seek, or consent to or
acquiesce in, the appointment of any trustee, receiver or liquidator of any
of the Pledgors.
5.2. Remedies of Secured Party. In addition to such other rights and
remedies as may be provided for herein, upon the occurrence of any Event of
Default and at any time thereafter, Secured Party may, without waiving any
rights and remedies of a Secured Party under the Uniform Commercial Code of
Texas and without any further notice, exercise one or more of the following
remedies as Secured Party, in its sole discretion, may elect:
(a) Secured Party may declare the Indebtedness and any interest
accrued and earned thereon immediately due and payable.
(b) Secured Party shall have, then or at any time thereafter, the
rights and remedies provided in the Uniform Commercial Code in force in the
State of Texas at the date of execution of this Security Agreement or the
date of any Event of Default.
(c) Secured Party may, in accordance with the terms of Section 5.3
below, in its discretion, sell, assign and deliver all or any part of the
Collateral at public or private sale and bid and become purchaser at any
such sale, without any notice, advertisement or demand whatsoever except
for the notice provided for in Section 5.3 below.
(d) All income, dividends, distributions or benefits attributable or
accruing to the Collateral delivered to Secured Party may be held by
Secured Party as security for the Indebtedness or applied by Secured Party
on the principal amount of the Indebtedness, whether or not then due, and
all interest accrued thereon, in such order or manner as Secured Party may
elect.
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(e) Secured Party may exercise any one or more of the other rights and
remedies provided for in this Agreement or the Purchase Agreement,
including, but not limited to, the rights and remedies provided for in
Section 4.2 and Section 4.5 above.
Provided, however, Secured Party shall have no duty to exercise any of the
aforesaid rights, privileges or options provided for in this Section 5.2 and
shall not be responsible for any failure to do so or delay in so doing and shall
not do so if such act would create or result in a violation of the federal
Change in Bank Control Act or Bank Holding Company Act or any other federal,
state of other governmental statute, law, rule or regulation.
The Pledgors will execute all such applications and other instruments as
may be necessary or appropriate to obtain any consent, approval or authorization
of any federal, state or other governmental department, agency or authority as
shall be necessary to effectuate any of the foregoing rights or remedies and
will otherwise use their best efforts to secure the same.
5.3. Application of Proceeds. The proceeds of any sale of the Collateral or
any part thereof, whether under the power of sale herein granted and conferred,
by virtue of judicial proceedings or otherwise, shall be applied as follows:
First: To the payment of all costs and expenses incurred in
connection with such sale of the Collateral and the collection of such
proceeds, including, without limitation, the expenses of preparing for
sale, selling and the like, and attorney's fees and legal expenses
incurred by Secured Party in connection therewith;
Second: To the payment of the Indebtedness, with interest accrued
to the date of such payment; and
Third: Any surplus thereafter remaining shall be paid to the
appropriate Parties, as their interests shall appear.
5.4. Costs and Expenses. All costs and expenses (including attorney's fees)
incurred by Secured Party in protecting and enforcing its rights hereunder shall
constitute a demand obligation owing by Pledgors to Secured Party and shall bear
interest at the highest rate permitted under applicable law, all of which shall
constitute a portion of the Indebtedness.
5.5. Additional Remedies. All remedies herein expressly provided are in
addition to any and all other remedies now or hereafter existing at law or in
equity, and the resort to any remedy provided for hereunder or provided for by
law shall not prevent the concurrent or subsequent employment of any other
appropriate remedy or remedies.
ARTICLE VI
GENERAL PROVISIONS
6.1. Limitation on Interest. This Agreement is subject to and shall be
controlled by the
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provisions of the Purchase Agreement regarding limitations on the maximum rate
of interest.
6.2. Unenforceable or Inapplicable Provisions. If any provision hereof or
of the Purchase Agreement is invalid or unenforceable in any jurisdiction, the
other provisions hereof or of the Purchase Agreement shall remain in full force
and effect in such jurisdiction, and the invalidity of any provision hereof or
the Purchase Agreement in any jurisdiction shall not affect the validity or
enforceability of any such provision in any other jurisdiction.
6.3. Rights Cumulative. Each and every right, power and remedy given to
Secured Party by this Agreement or the Purchase Agreement, or now or hereafter
existing at law or in equity or by statute or otherwise shall be cumulative and
not exclusive; and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time and so
often and in such order as may be deemed expedient by Secured Party; and the
exercise, or the beginning of the exercise, of any such right, power or remedy
shall not be deemed a waiver of the right to exercise, at the same time or
thereafter, any other right, power or remedy. No delay or omission by Secured
Party in the exercise of any right, power or remedy shall impair any such right,
power or remedy then or thereafter existing.
6.4. Waiver by Secured Party. Any and all covenants in this instrument may
from time to time by instrument in writing signed by Secured Party be waived to
such extent and in such manner as Secured Party may desire, but no such waiver
shall affect or impair Secured Party's rights or liens hereunder, except to the
extent specifically stated in such written instrument. Secured Party may waive
any default without waiving any prior or subsequent default.
6.5. Successors and Assigns. This instrument is binding upon and shall
inure to the benefit of Secured Party and Pledgors, their respective heirs
executors or administrators, successors, representatives, receivers, trustees or
assigns.
6.6. Article and Section Headings. The article and section headings in this
instrument are inserted for convenience and shall not be considered a part of
this instrument or used in its interpretation.
6.7. Counterparts. This instrument may be executed in any number of
counterparts, each of which shall for all purposes be deemed to be an original,
and all of which shall constitute one and the same document.
6.8. Joint and Several Liability. The liability of Pledgors shall be joint
and several, and Secured Party may pursue any remedy it may have hereunder
against any one or more of such parties without joinder of the remaining
Pledgors and without waiving any cause of action against any of the Pledgors not
so joined.
6.9. Applicable Law. This Agreement is performable in San Antonio, Bexar
County, Texas, and shall be governed in all respects by the laws of the State of
Texas.
6.10. Notices. Any notice or communication authorized or required hereunder
shall be deemed to have been given to the party in question if given in writing
and forwarded by registered
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mail, postage prepaid, to such party at the address reflected below:
If to Secured Party: To the addresses and facsimile numbers set
forth on Schedule A of the Purchase
Agreement.
with copy to: XXXXXXXX, XXXXX & XXXXXX, L.L.P.
000 Xxxxx Xxxxx Xxxx'x Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
If to Pledgors: TANISYS TECHNOLOGY, INC.
00000 Xxxxxxxxxx Xxxx., Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Chief Executive Officer
Such address may be changed by giving notice in accordance herewith;
provided, however, that any such change in address shall not be effective until
five (5) days after actual receipt of the notice of such change.
6.11. Complete Agreement. This Agreement is the complete and exclusive
statement of the Agreement between the parties and supersedes all prior
communications or representations, oral or written, between the parties relating
to the subject matter hereof. No modification, termination or waiver of any
provision hereof shall be binding unless executed in writing by all parties
hereto.
6.12. Interpretation. Wherever the context shall require, words in the male
gender shall be deemed to include the female or neuter gender, words in the
neuter gender shall be deemed to include the male or female gender, all singular
words shall include the plural, and all plural words shall include the singular.
6.13. Pledgors' Obligations Absolute. The obligations of Pledgors under
this Agreement shall be absolute and unconditional and shall remain in full
force and effect without regard to, and shall not be released, suspended,
discharged, terminated, lessened or otherwise affected by any circumstance or
occurrence whatsoever, including, without limitation:
(a) any renewal, extension, substitution, amendment or
modification of or addition or supplement to or deletion from the
Purchase Agreement or this Agreement, or any assignment or transfer of
any thereof;
(b) any waiver, consent, extension, indulgence or other action or
inaction under or in respect of the Purchase Agreement or this
Agreement, or any exercise or non-exercise of any right, remedy, power
or privilege under or in respect of the Purchase Agreement, or this
Agreement;
(c) any furnishing of any additional collateral or security to
the Secured Party or its assignee or any acceptance thereof or any
release of any collateral or security in whole or in part by the
Secured Party or its assignee under this Agreement or under the
Purchase
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Agreement, or otherwise;
(d) any limitation on any party's liability or obligations under
the Purchase Agreement or under this Agreement, or any invalidity or
unenforceability in whole or in part, of any such instrument or any
term thereof;
(e) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating
to the Pledgors or the Corporations, or any action taken with respect
to this Agreement or the Purchase Agreement by any trustee or
receiver, or by any court, in any such proceeding; or
(f) any other circumstances; whether or not the Pledgors shall
have notice or knowledge of any of the foregoing.
6.14. Renewals, Amendments and Other Security. The security interest herein
granted shall not be affected by nor affect any other security taken for the
Indebtedness, or any part thereof. Any extensions or renewals may be made of the
Indebtedness and the security interest created hereby and any releases may be
executed of the Collateral, or any part thereof, without affecting Secured
Party's priority or the validity thereof with reference to any third person.
Secured Party may take or may now hold other security for the Indebtedness.
Secured Party may resort first to such other security or any part thereof, or
from time to time to either or both, even to the partial or complete abandonment
of either security, and such action shall not be a waiver of any rights
conferred by this instrument.
6.15. Assignment by Secured Party. This Agreement, Secured Party's rights
hereunder or the Indebtedness may be assigned from time to time by Secured
Party, and in any case the assignee shall be entitled to all of the rights,
privileges and remedies granted in this Agreement to Secured Party.
6.16. Further Assurances. Pledgors, at their expense, will execute,
acknowledge and deliver all such instruments and take all such action as the
Secured Party may request in order further to effectuate the purpose of this
Agreement and to carry out the terms hereof.
6.17. Liability Disclaimer. Under no circumstances whatsoever shall the
Secured Party be deemed to assume any responsibility for or obligation or duty
with respect to any part or all of the Collateral, of any nature or kind
whatsoever, or any matter or proceedings arising out of or relating thereto. The
Secured Party shall not be required to take any action of any kind to collect or
protect any interest in the Collateral, including, but not limited to, any
action necessary to preserve its or Pledgors' rights against prior parties to
any of the Collateral. The Secured Party shall not be liable or responsible in
any way for the safekeeping, care or custody of any of the Collateral, or for
any loss or damage thereto, or for any diminution in the value thereof, or for
any act or default of any agent or bailee of the Secured Party or Pledgors, or
of any carrier, forwarding agency or other person whomsoever, or for the
collection of any proceeds, but the same shall be at the Pledgors' sole risk at
all times. The Pledgors hereby release the Secured Party from any claims, causes
of action and demands at any time arising out of or with respect to this
Agreement or the Purchase Agreement or the Indebtedness, and any action taken or
omitted to be taken by the Secured Party
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with respect thereto, and Pledgors hereby agree to hold the Secured Party
harmless from and with respect to any and all such claims, causes of action and
demands. The Secured Party's Prior recourse to any part or all of the Collateral
shall not constitute a condition of any demand for payment of the Indebtedness
or of any suit or other proceeding for the collection of the Indebtedness.
WITNESS THE EXECUTION HEREOF, as of the date first above written.
PLEDGOR:
TANISYS TECHNOLOGY, INC.
BY: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
NAME: Xxxxxxx X. Xxxxxx
TITLE: President and Chief Executive Officer
SECURED PARTY:
NEW CENTURY EQUITY HOLDINGS CORP.
BY:
--------------------------------------
NAME:
--------------------------------------
TITLE:
--------------------------------------
OTHER PURCHASERS
BY THEIR EXECUTION OF VARIOUS
SUBSCRIPTION AGREEMENTS
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STATE OF TEXAS ss.
ss.
COUNTY OF TRAVIS ss.
The foregoing instrument was acknowledged before me this _____ day of
__________, _____, by _______________________, ______________ of Tanisys
Technology, Inc., a Wyoming corporation, on behalf of said corporation.
-----------------------------
Notary Public, State of Texas
STATE OF TEXAS ss.
ss.
COUNTY OF BEXAR ss.
The foregoing instrument was acknowledged before me this _____ day of
__________, _____, by _______________________, ______________ of New Century
Equity Holdings Corp., a Delaware corporation, on behalf of said corporation.
-----------------------------
Notary Public, State of Texas
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