SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is made and entered into effective as
of the 27th day of December, 2004, by and between Dynasig Corporation, an
Arizona corporation with a place of business at 00000 Xxxxx Xxxxx Xxxxxx Xxxx.,
Xxxxxxxxxx, XX 00000 ("Debtor"), and Visitalk Capital Corporation, an Arizona
corporation, with a place of business at 00000 X. 00xx Xxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxx 00000 ("Secured Party").
RECITALS
A. Secured Party has entered into that certain Agreement for Secured
Line of Credit with an effective date of December 27, 2004, (the "Agreement for
Secured Line of Credit") which provides that Lender will make available to Maker
an initial line of credit (the "Line of Credit") not to exceed One Hundred
Thousand Dollars ($100,000.00).
B. It is contemplated that the Debtor may from time to time request
loans or advances from Lender and that Lender, upon the satisfaction of certain
conditions referenced in the Agreement for Secured Line of Credit, comply with
such request, in whole or in part, and make such loan or advance and that each
such loan or advance will be evidenced by a separate Secured Promissory Note
(the "Notes"). All such amounts advanced or loaned to Debtor by Lender pursuant
to the Agreement for Secured Line of Credit are referred to hereinafter as the
"Loans."
C. All Secured Promissory Notes, financing statements, this Agreement,
the Agreement for Secured Line of Credit and all other documents and instruments
now or hereafter evidencing, securing or pertaining to the Loans collectively,
together with all modifications, renewals and replacements thereof, are herein
referred to as the "Loan Documents".
D. As an inducement to Secured Party to make the Loans, Debtor has
agreed to secure the Loans and the Notes with the assets of Debtor on the terms
and conditions set forth below.
AGREEMENT
In consideration of the above recitals, the following representations,
warranties, covenants and conditions, and other good and valuable consideration,
the receipt of which is acknowledged, the parties agree as follows:
1. GRANT. As security for the full and timely payment and performance
of all indebtedness and obligations now or hereafter due from Debtor to Secured
Party under the Loan Documents, any other loan or advance made by Lender to
Debtor and all other obligations of the Debtor to Lender, its successors and
assigns, however created, arising or evidenced, whether direct or indirect,
absolute or contingent, or now or hereafter existing or due or to become due
(collectively "Obligations"), Debtor hereby pledges, assigns and transfers to
Secured Party, and hereby grants to Secured Party a security interest in, all of
Debtor's right, title and interest now owned or hereafter acquired in and to the
collateral described in Exhibit A ("Collateral").
2. REPRESENTATIONS, WARRANTIES AND COVENANTS. Debtor represents,
warrants, and covenants that:
(A) Debtor has been duly incorporated and organized and is existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation and is duly qualified and in good standing as a foreign
corporation in those jurisdictions where the conduct of its business or the
ownership of its properties requires qualification; Debtor has the power and
authority to own the Collateral, to enter into and perform this Agreement, and
any other document or instrument delivered in connection herewith.
(B) Debtor has good title to the Collateral and is the legal and
beneficial owner thereof and Debtor warrants and will, at its own expense,
defend Secured Party's security interest in and to the Collateral against the
claims of any other person; Debtor has not otherwise assigned, transferred or
granted a security interest in the Collateral or any right or interest therein
which remains in force except to Secured Party or an affiliate of Secured Party;
and has not executed any other instrument, and is not subject to any
restriction, which might prevent or limit Secured Party from enjoying the
benefits of this Agreement;
(C) Debtor will not further assign, transfer or grant or suffer to
exist a security interest in the Collateral or any other right, encumbrance,
charge or other interest therein, except to Secured Party or an affiliate
thereof or in connection with a transaction as a result of which the Obligations
are repaid in full;
(D) this Agreement has been duly authorized, executed and delivered,
constitutes the valid and binding obligation of Debtor and is enforceable in
accordance with its terms;
(E) Debtor will promptly (but not later than three days after receipt
thereof) deliver to Secured Party copies of all written notices received with
respect to the Collateral;
(F) Debtor shall execute, acknowledge, deliver, record and file such
further instruments and do such further acts (including delivery of financing
statements) as Secured Party in its sole and absolute judgment deems necessary,
desirable or proper to carry out the purposes of this Agreement and to subject
to the security interest created hereby any property intended to be covered
hereby;
(G) no event has occurred (including, specifically, Debtor's execution,
delivery of and performance under this Agreement) which will violate, constitute
(with notice and/or lapse of time) a default under, or result in the imposition
of any lien or other encumbrance upon, the Collateral pursuant to the terms of
(i) any judgment, decree, order, statute, ordinance, or regulation applicable to
Debtor or any of the Collateral or (ii) any other contract or agreement to which
Debtor is a party or by which its assets are bound;
(H) Debtor is fully familiar with all the terms and conditions of this
Agreement;
(I) Debtor has not changed the location of its chief place of business
or chief executive office disclosed herein as Debtor's Address or the location
of its records with respect to Receivables (defined in Exhibit A), the location
of any returns of Inventory (defined in Exhibit A), the location of any of the
Inventory, the location of the Equipment (defined in Exhibit A), and the
location of any General Intangibles (defined in Exhibit A);
(J) as to the Inventory part of the Collateral:
I. all Inventory is in possession of Debtor at either of the Debtor's
address set forth on the signature page hereof ("Debtor's Address") and all
records of Debtor pertaining thereto are kept at Debtor's Address and Debtor
shall notify Secured Party no later than thirty (30) days prior to any change of
any location where the Inventory is or may be kept;
II. Debtor shall not sell, lease or otherwise transfer any interest in the
Inventory except that Debtor may, until an Event of Default occurs, hold,
process, sell, use or consume Inventory in the ordinary course of Debtor's
business, excluding, however, any sale or transfer made in partial or total
satisfaction of a debt;
III. Debtor shall keep current stock, cost and sales records of the
Inventory, accurately itemizing and describing the types and quantities of
Inventory, and the cost and selling price thereof and all books, records and
documents relating to the Inventory are and will be genuine, complete and
correct;
IV. none of the Inventory is, or at any time or times hereafter will
be, stored with a bailee, without the prior written consent of Secured Party;
and
V. Debtor shall, at Secured Party's request, deliver to Secured Party
any and all evidence of ownership of, certificates of title to, or other
documents evidencing any interest in, any and all of the Inventory;
(K) As to the Equipment part of the Collateral:
I. The Equipment is in the possession of Debtor at Debtor's Address and
that said location if not owned by Debtor is leased by Debtor from the party set
forth on the signature page hereof; if Equipment is or shall be affixed to any
real estate, including any buildings owned or leased by Debtor or used by Debtor
in the operation of its business, Debtor shall provide Secured Party with
disclaimers and waivers necessary to make the security interest in the Equipment
valid against Corporate Debtor and other persons holding an interest in such
real estate;
II. Debtor shall keep and maintain all Equipment in good operating
condition and repair, make all necessary repairs thereto and replacement of
parts thereof so that the value and operating efficiency thereof shall at all
times be maintained and preserved; and Debtor shall keep complete and accurate
books and records with respect to Equipment, including maintenance records;
III. Debtor shall deliver to Secured Party any and all evidence of
ownership of, and certificates of title to, any and all of the Equipment;
IV. Debtor shall not, without the prior written consent of Secured
Party, sell, offer to sell, lease or in any other manner dispose of any
Equipment; and
V. Debtor shall notify Secured Party no later than thirty (30) days
prior to any change of any location where the Equipment is or may be kept;
(L) As to the Receivables part of the Collateral:
I. The address of the chief executive office and chief place of
business of Debtor is Debtor's Address and Debtor has no other places of
business except as set forth above. All records pertaining to the Receivables
(including computer records) and all returns of Inventory are kept at Debtor's
Address, and Debtor will notify Secured Party no later than thirty (30) days
prior to any change in address of the chief executive office or chief place of
business of Debtor of the change of the location where records pertaining to
Receivables or returns of Inventory are kept;
II. All books, records, and documents relating to any of the
Receivables (including computer records) are and will be genuine and in all
respects what they purport to be; and the amount of each Receivables shown on
the books and records of Debtor is and will be the correct amount actually owing
or to be owing at maturity of such Receivables;
III. Until Secured Party directs otherwise, Debtor shall collect the
Receivables. Secured Party may allow Debtor to use such funds until an Event of
Default (hereafter defined) occurs; and if an Event of Default does occur,
proceeds of Receivables collected by Debtor shall, upon the request of Secured
Party, be immediately delivered to Secured Party in the form received, except
for necessary endorsements to permit collection;
IV. Debtor shall notify Secured Party if any Receivables arise out of
contracts with the United States or any department, agency or instrumentality
thereof, and Debtor shall execute any instruments and take any steps to perfect
the assignment of the rights to Debtor to Secured Party as required under the
Federal Assignment of Claims Act or any similar act or regulation; and
V. Debtor shall provide Secured Party, at its request, from time to
time with: confirmatory assignment schedules; copies of all invoices relating to
the Receivables; evidence of shipment or delivery of inventory; and, such
further information and/or schedules as Secured Party may reasonably require,
all in a form satisfactory to Secured Party;
(M) As to the General Intangibles part of the Collateral:
I. all General Intangibles owned by Debtor are kept or held at
Debtor's Address, all copies of all General Intangibles and all records of
Debtor pertaining thereto are kept at Debtor's Address and Debtor shall notify
Secured Party no later than thirty (30) days prior to any change of any location
where the General Intangibles are or may be kept;
II. Debtor shall not assign, sell, license, lease, otherwise transfer or
offer to assign, sell, license, lease, otherwise transfer any interest in the
General Intangibles without the prior written consent of Secured Party except
that Debtor may, until an Event of Default develop, use, write, modify, enhance
or create new versions of General Intangibles in the ordinary course of Debtor's
business;
III. Debtor shall keep current records regarding the General
Intangibles and any development, modifications, enhancements or versions of the
general Intangibles and shall implement and maintain strict controls over access
to and knowledge of the General Intangibles and, at all times, treat and
maintain such General Intangibles as trade secrets and take all measures
necessary to prevent unauthorized persons from obtaining access to, knowledge of
and control over the General Intangibles and any other persons from using or
transferring any General Intangibles or knowledge relating to the general
Intangibles to any person except as authorized by Secured Party;
IV. If the Debtor is the holder of a license (the "License") to use,
but does not own, certain software and copyrights owned by Secured Party, Debtor
shall not assign, sell, license, lease or otherwise transfer any interest in any
software or copyrights owned by Secured Party and which are the subject of the
License; and
V. Debtor shall, at Secured Party's request, deliver to Secured Party
any and all evidence of ownership of, certificates of title to, or other
documents evidencing any interest in, any and all of the General Intangibles;
(N) Maintain casualty insurance coverage on the Collateral in such
amounts and of such types as may be requested by Secured Party, and in any
event, as are ordinarily carried by similar businesses; and, in the case of all
policies insuring property in which Debtor shall have a security interest of any
kind whatsoever, all such insurance policies shall provide that the proceeds
thereof shall be payable to Lender as the loss payee. All said policies or
certificates thereof, including all endorsements thereof and those required
hereunder, shall be deposited with Secured Party; and such policies shall
contain provisions that no such insurance may be canceled or decreased without
thirty (30) days prior written notice to Secured Party; and in the event of
acquisition of additional insurable Collateral, Debtor shall cause such
insurance coverage to be increased or amended in such manner and to such extent
as prudent business judgment would dictate. If Debtor shall at any time or
times hereafter fail to obtain and/or maintain any of the policies of insurance
required herein, or fail to pay any premium in whole or in part relating to any
such policies, Secured Party may, but shall not be obligated to obtain and/or
cause to maintained insurance coverage with respect to the Collateral,
including, at Secured Party's option, the coverage provided by all or any of the
policies of Debtor and pay all or any part of the premium, therefor, without
waiving any Event of Default by Debtor, and any sums so disbursed by Secured
Party shall be additional Obligations of Debtor to Secured Party payable on
demand. Secured Party shall have the right to settle and compromise any and all
claims under any of the policies required to be maintained by Debtor hereunder
and Debtor hereby appoints Secured Party as its attorney-in-fact, with power to
demand, receive and receipt for all monies payable thereunder, to execute in the
name of Debtor or Secured Party or both any proof of loss, notice, draft or
other instruments in connection with such policies or any loss thereunder and
generally to do and perform any and all acts as Debtor, but for this
appointment, might or could perform; and
(O) Permit Secured Party, through its authorized attorneys, accountants
and representatives, to inspect and examine the Collateral and the books,
accounts, records, ledgers and assets of every kind and description of Borrower
with respect thereto at all reasonable times.
3. WAIVER. Debtor hereby waives any and all rights available to it as
a surety by operation of law or otherwise, including, without limitation, its
rights under A.R.S. Sec.Sec. 12-1641 et. seq., Arizona Rule of Civil Procedure
17 (f), and other laws and regulations of similar import.
4. ATTORNEY IN FACT. Debtor does hereby authorize and appoint Secured
Party as its attorney-in-fact, with full power of substitution to execute all
documents and to do all things deemed necessary or appropriate by Secured Party
to discharge Debtor's obligations under or with respect to the Collateral and/or
preserve or reenforce its rights thereunder or with respect thereto (but without
obligation to do so) including, without limitation, the right to file financing
statements. All sums expended by Secured Party for the above purposes shall be
deemed to be part of the Obligations, shall be payable to Secured Party
immediately (without demand), together with interest thereon at a rate equal to
eight (8) percentage points above the "prime rate" of interest charged by Xxxxx
Fargo Bank to large business borrowers in Arizona, as announced by that bank
from time to time, per annum (the "Default Rate"), however, in the event that
applicable law may limit the amount of interest that may be charged under this
Agreement and the Secured Promissory Notes, such Default Rate shall be at the
highest rate allowed by applicable law, from the date the expenditure was
incurred until paid, and shall be secured by all security for the payment and
performance of the Obligations.
5. EVENTS OF DEFAULT; REMEDIES.
(A) The occurrence of any of the following events shall constitute an
Event of Default: (i) if there occurs a default or violation in the full and
timely performance of any Obligation owing to Secured Party hereunder or under
the Loan Documents; (ii) if any representation, warranty or certification made
to Secured Party in, under or pursuant to this Agreement is false or misleading
in any material respect as of the date deemed made; (iii) if there occurs any
Event of Default (as defined therein) under any Loan Document, or an event
occurs which, whether or not denominated as an Event of Default, expressly
entitles Secured Party to accelerate repayment of any note and/or exercise its
other remedies under the Loan Documents; or (iv) if the holder of any lien or
security interest on any part of the Collateral (without implying Secured
Party's consent to the creation or existence of any such lien or security
interest) gives notice of public or private sale of any portion of the
Collateral or institutes foreclosure or other proceedings for the enforcement of
its remedies under any instrument creating such lien or security interest.
(B) All cash payments and other proceeds received by Secured Party with
respect to the Collateral may be applied by Secured Party to payment of the
Loans and to payment and performance of the other Obligations in such order and
manner as Secured Party, may elect in its sole and absolute discretion or, at
the election of Secured Party, may be held as additional security for the
Obligations. Upon the occurrence of an Event of Default hereunder or Debtor
otherwise fails to perform any of its duties, covenants, undertakings and
responsibilities contained herein or in any of the other Loan Documents, Secured
Party shall provide to Lender a written Notice of Default at the address set
forth herein and provide to Debtor a period of seven (7) business days from the
date of the Notice of Default in order to cure all defaults under this Agreement
and/or any of the other Loan Documents. If any such defaults remain uncured as
of the close of business on the seventh business day following the date of the
Notice of Default, in addition to its other rights hereunder or any of the other
Loan Documents: Secured Party may exercise any and all other rights, remedies
and recourses under the Loan Documents or now or hereafter existing at law
(including, without limitation, those granted by the applicable Uniform
Commercial Code) or in equity. Notwithstanding anything herein to the contrary,
if Debtor fails or refuses to pay or perform any obligation hereunder, then at
any time thereafter, and without waiving or releasing any other right, remedy or
recourse Secured Party may have, Secured Party may (but shall not be obligated
to), after having provided the notice to Maker required herein, pay or perform
such obligation for the amount of and at the expense of Debtor. Upon demand
therefor, Debtor will reimburse Secured Party for all sums paid by Secured Party
pursuant to this Paragraph, together will interest thereon at the Default Rate
from the date incurred until reimbursed to Secured Party. All such sums shall
be deemed to be part of the Obligations and shall be secured by all the security
for the payment and performance of the Obligations.
(C) Pursuant to its rights under Paragraph 5(b), and subject to the
terms and conditions hereof, Secured Party and any officer or agent of Secured
Party is hereby constituted and appointed as true and lawful attorney-in-fact of
Debtor with power: (i) to notify or require Debtor to notify any and all
account debtors or parties against which Debtor has a claim that the Receivables
have been assigned to Secured Party and/or that Secured Party has a security
interest therein and that all payments should be made to Secured Party; (ii) to
endorse the name of Debtor upon any invoice, freight or express xxxx, xxxx of
lading, storage or warehouse receipt, drafts against account debtors or other
obligors and if Receivables are a part of Collateral, to sign and endorse the
name of Debtor on any assignments, verifications and notices in connection with
Receivables, and any instrument or document relating thereto or to rights of
Debtor therein; (iv) to notify the post office authorities to change the address
for delivery of mail of Debtor to an address designated by Debtor and to
receive, open and dispose of all mail addressed to Debtor; (v) and, to send
requests for verification to account debtors or other obligors; (vi) to sell,
assign, xxx for, collect or compromise payment of all or any part of the
Collateral in the name of Debtor or in its own name, or make any other
disposition of Collateral, or any part thereof which disposition may be for
cash, credit or any combination thereof, and Secured Party may purchase all or
any part of the Collateral, at public or, if permitted by law, private sale, and
in lieu of actual payment of such purchase price, may set-off the amount of such
price against the Obligations; granting the Secured Party as the
attorney-in-fact of Debtor, full power of substitution and full power to do any
and all things necessary to be done in and about the premises as fully and
effectually as Debtor might or could do but for this appointment, and hereby
ratifying all that said attorney-in-fact shall lawfully do or cause to be done
by virtue hereof. Neither Secured Party nor its agents shall be liable for any
acts or omissions or for any error judgment of mistake of fact or law in its
capacity as such attorney-in-fact. This power of attorney is coupled with an
interest and shall be irrevocable so long as any Obligations shall remain
outstanding. Secured Party may, in its discretion, at any such sale, restrict
the prospective bidders or purchasers as to their number, nature of business or
qualification given the nature of the Collateral and investment intention.
Upon any such sale, Secured Party shall have the right to deliver, assign
and transfer to the purchaser thereof the Collateral so sold. Each purchaser at
any such sale shall hold the Collateral so sold absolutely free from any claim
or right of whatsoever kind, including, without limitation, any equity or right
of redemption of Debtor, which Debtor hereby specifically waives to the extent
Debtor may lawfully do so.
Secured Party shall give Debtor at least ten (10) days written notice of
any such public or private sale. Such notice, in the case of a public sale,
shall state the time and place fixed for such sale. Any such public sale shall
be held at such time or times within ordinary business hours as Secured Party
shall not be obligated to make any sale pursuant to such notice, but if no such
sale is made or only a partial sale is made, subsequent sale. In the case of
any sale of all or any part of the Collateral on credit or for future delivery,
the Collateral so sold may be retained by Secured Party until the selling price
is paid by the purchaser thereof, but Secured Party shall not incur any
liability in case of the failure of such purchaser to take up and pay for the
Collateral so sold, and in case of any such failure, such Collateral may again
be sold under and pursuant to and in compliance with the provisions hereof.
Secured Party as attorney-in-fact for Debtor may, in the name and instead
of Debtor, make and execute all conveyances, assignments and transfers of the
Collateral sold pursuant to this Agreement. Nevertheless, Debtor shall, if so
requested by Secured Party, ratify and confirm any sale or sales by executing
and delivering to Secured Party, or to such purchaser or purchasers, all such
instruments as may, in the judgment of Secured Party, be advisable for the
purpose.
The receipt of Secured Party for the purchase money paid at any such sale
made by it shall be a sufficient discharge therefor to any purchaser of the
Collateral or any portion thereof, and no such purchaser, after paying such
purchase money and receiving such receipt, shall be bound to see to the
application of such purchase money or any part thereof or in any manner
whatsoever be answerable for any loss, misapplication or non-application of any
such purchase money, or any part thereof, or be bound to inquire as to the
authorization, necessity, expediency or regularity of any such sale.
Secured Party shall have the right to enter and/or remain upon the premises
of Debtor without any obligation to pay rent to Debtor or others, or any other
place or places where any of the Collateral is located and kept and: (i) remove
Collateral therefrom to the premises of Secured Party or any agent of Secured
Party, for such time as Secured Party may desire, in order to maintain, collect,
sell and/or liquidate the Collateral, or (ii) use such premises, together with
materials, supplies, books and records of Debtor, to maintain possession and/or
the condition of the Collateral, and to prepare the Collateral for selling,
liquidating or collection. Secured Party may require Debtor to assemble the
Collateral and make it available to Secured Party at a place to be designated by
Secured Party that is reasonably convenient to both parties.
Debtor shall be liable for reasonable attorneys' fees and legal expenses
incurred by Secured Party in enforcing any of its rights or remedies hereunder
and, without limiting the rights of Secured Party; the proceeds of disposition
of the Collateral may be applied, in Secured Party's discretion, to payment of
such reasonable attorneys' fees and legal expenses.
(D) The proceeds of any sale of all or any part of the Collateral shall
be applied in the following order or priorities:
FIRST, to the payment of all costs and expenses of such sale, including,
without limitation, reasonable compensation to Secured Party, its agents and
attorneys, and all other expenses, liabilities and advances incurred or made by
Secured Party, its agents and attorneys, in connection with such sale, and any
other unreimbursed expenses for which Secured Party may be reimbursed pursuant
hereto;
SECOND, to the payment of the Loans in such priority as Secured Party shall
choose with no amounts applied to payment of principal until all interest has
been paid;
THIRD, to the payment or satisfaction of any other Obligations; and
FOURTH, to the payment to Debtor, its successors or assigns, or to
whomsoever may be lawfully entitled to receive the same, or as a court of
competent jurisdiction may direct, of any surplus then remaining from such
proceeds.
6. NO THIRD PARTY BENEFICIARY. This Agreement and the power of
attorney contained herein are solely for the benefit and protection of Secured
Party, its successors and assigns and are not intended to confer upon any person
other than the parties hereto and their successors and assigns any right or
remedies under or by reason of this instrument. The acceptance of this
Agreement shall not obligate Secured Party to perform any obligation of Debtor
under, or take any other action with respect to, the Collateral or otherwise
render Secured Party liable therefor. All such obligations and liabilities
shall continue to remain upon Debtor as though this Security Agreement had not
been made.
7. INDEMNITY. Debtor will defend, at its own cost and expense, and
hold Secured Party, its officers, directors, employees, shareholders and agents
harmless from and against all loss, damage and expense resulting from an action,
proceedings, liability or claim brought by a third party arising from this
Agreement or actions contemplated by or permitted under this Agreement, except
when due to Secured Party's willful misconduct or Debtor is the prevailing
party; and Debtor will pay all costs and expenses incurred by such persons in
protecting their interests in such an event (including all court costs and
reasonable attorneys' fees). If Secured Party incurs any such loss, damage or
expense, the amount thereof, together with interest thereon at the Default Rate,
shall be deemed to be part of the Obligations, shall be payable by Debtor to
Secured Party immediately, without demand, and shall be secured by all the
security for the payment and performance of the Obligations.
8. PURSUIT OF RIGHTS. All rights, remedies and recourse of Secured
Party (a) may, in the sole and absolute discretion of Secured Party, be pursued
separately, successively or concurrently and (b) may be exercised as often as
occasion therefor shall arise. Secured Party may resort to any security for the
payment and performance of the Obligations in such order and manner as Secured
Party may elect without affecting the lien and security interest hereof. No
exercise of any right, remedy or recourse of Secured Party shall have the effect
of curing any default of Debtor.
9. NO DISCHARGE. Neither release, subordination or taking of this
Agreement by Secured Party shall effect the release or discharge of Debtor,
Borrowers or any other person primarily or secondarily liable for the
Obligations of any other security now or hereafter the Obligations, nor shall
the taking of additional security for the performance of the Obligations effect
a release or termination of this Pledge and Security Agreement or any terms or
provisions hereof.
10. NO WAIVER. Secured Party's delay in insisting or failure to insist
upon strict performance of any obligation of Debtor hereunder shall not be
deemed to be a waiver of strict performance of such obligation or of any other
obligation of Debtor; and Secured Party shall have the right at any time
thereafter to insist upon strict performance of any and all such obligations.
No waiver of any default or breach of any provision of the Agreement shall be
considered a waiver of any other or subsequent default or breach, and no delay
or omission in exercising or enforcing any right, remedy or recourse herein
granted shall be construed as a waiver or release thereof or of any other right,
remedy or recourse.
11. NOTICES. All communications or notices required or permitted to be
given or served under this Agreement shall be in writing and shall be deemed to
have been duly given or made if: (a) delivered in person or by courier (e.g.,
Federal Express), (b) deposited in the United States mail, postage prepaid, for
mailing by certified or registered mail, return receipt requested, or (c) sent
by facsimile and addressed to the intended recipient at the address and/or the
facsimile number set forth below such party's signature at the end of this
Agreement. All communications and notices shall be effective upon delivery in
person or by courier, three (3) days after being deposited in the United States
mail or two (2) business hours after being sent by facsimile. Any party may
change his or her address and/or facsimile number by giving notice in writing,
stating his or her new address and/or facsimile number, to all of the other
parties in the foregoing manner.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective assigns, legal
representatives, executors, heirs and successors, provided, however, that no
party hereto shall have the right to assign any right hereunder or delegate any
obligation hereunder, in whole or in part, without the prior written consent of
the other parties hereto, and any attempt to do so shall be void.
13. AMENDMENT, MODIFICATION OR WAIVER. No amendment, modification or
waiver of any condition, provision or term of this Agreement shall be valid or
of any effect unless made in writing, signed by the party or parties to be bound
and specifying with particularity the nature and extent of such amendment,
modification or waiver. Failure on the part of any party to complain of any act
or failure to act of another party or to declare another party in default,
irrespective of how long such failure continues, shall not constitute a waiver
by such party of its rights hereunder. Any waiver by any party of any default
of another party shall not affect or impair any right arising from any other or
subsequent default. Nothing herein shall limit the remedies and rights of the
parties hereto under and pursuant to this Agreement.
14. SEVERABLE PROVISIONS; ENFORCEABILITY. Each provision of this
Agreement is intended to be severable. If any provision hereof shall be
declared by a court of competent jurisdiction to be illegal, unenforceable or
invalid for any reason whatsoever, such illegality, unenforceability or
invalidity shall not affect the validity of the remainder of this Agreement.
15. ENTIRE AGREEMENT. This Agreement, including the exhibits and
schedules hereto, and the Loan Documents contain the entire understanding and
agreement among the parties hereto with respect to the subject matter hereof,
and supersedes all prior agreements and understandings, express or implied, oral
or written, among the parties with respect to such subject matter. The express
terms of this Agreement shall control and supersede any course of performance or
usage of the trade inconsistent with any of the terms hereof. Each of the
exhibits and schedules hereto is incorporated herein by this reference and
constitutes a part of this Agreement.
16. TERMINOLOGY. All captions, headings or titles in the paragraphs or
sections of this Agreement are inserted for convenience of reference only and
shall not constitute a part of this Agreement or a limitation of the scope of
the particular paragraph or section to which they apply. All personal pronouns
used in this Agreement, whether used in the masculine, feminine, or neuter
gender, shall, where appropriate, include all other genders and the singular
shall include the plural and vice versa.
17. COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which together shall
constitute one and the same agreement. This Agreement shall become binding when
one or more counterparts have been signed by each of the parties hereto and
delivered to the other parties hereto.
18. LAW TO GOVERN. The enforcement, performance, discharge, lack of
performance and formation of this Agreement shall be governed by, and construed
and enforced in accordance with, the law of the State of Arizona, regardless of
any applicable conflict-of-law rules to the contrary.
19. ADDITIONAL ACTIONS. Each party hereto agrees to do all acts and
things and to make, execute, and deliver such written instruments and documents
as shall from time to time be reasonably required to carry out the terms and
provisions of this Agreement.
20. ATTORNEYS' FEES. In the event of any claim, controversy or dispute
arising out of or relating to this Agreement, or the breach thereof, the
prevailing party shall be entitled to recover reasonable attorneys' fees
incurred in connection with any arbitration or court proceeding set by the court
sitting without a jury.
21. REMEDIES CUMULATIVE. The remedies of the parties hereto under this
Agreement are cumulative and shall not exclude any other remedies to which any
party may be lawfully entitled.
22. COMPUTATION OF TIME. Whenever the last day for the exercise of any
privilege or discharge of any duty hereunder shall fall upon Saturday, Sunday or
any public or legal holiday, whether under federal or state law, the party
having such privilege or duty shall have until 5:00 p.m. (Pacific time) on the
next succeeding regular business day to exercise such right or to discharge such
duty.
23. AUTHORITY. Any individual signing below on behalf of a
corporation, partnership or other entity hereby personally represents that he or
she has full authority to bind the party or parties on whose behalf he or she is
signing.
24. SUBMISSION TO JURISDICTION. The parties hereby:
(I) irrevocably submit to the jurisdiction of the Superior Court of
Maricopa County, State of Arizona, or any successor to said court, and to the
jurisdiction of the United States District Court for the District of Arizona, or
any successor to said court (hereinafter referred to as the "Arizona Courts")
for purposes of any suit, action or other proceeding which relates to the
transactions contemplated in this Agreement;
(II) to the extent permitted by applicable law, waive and agree not to
assert by way of motion, as a defense or otherwise in any such suit, action or
proceeding, any claim that they are not personally subject to the jurisdiction
of the Arizona Courts; that the suit, action or proceeding is brought in an
inconvenient forum; that the venue of the suit, action or proceeding is
improper; or that this Agreement or any transaction provided for herein may not
be enforced in or by the Arizona Courts; and
(III) agree not to seek, and hereby waive, any collateral review by any
other court, which may be called upon to enforce the judgment or any of the
Arizona Courts, of the merits of any such suit, action or proceeding or the
jurisdiction of said Arizona Court.
25. TERMINATION. This Agreement shall terminate upon payment of the
Loans and payment in full of all amounts due and owing or which may become due
and owing and full performance under the terms of the Agreement for Secured Line
of Credit and any of the other Loan Documents and Secured Party (a) will
immediately return to Debtor all of the collateral and execute and deliver any
releases, assignments or any other documents necessary to release the security
interests and liens granted and conveyed to Secured party hereunder (and not
applied to pay the Loans), and any and all other instruments, certificates and
the like delivered to Secured Party pursuant hereto, and, (b) file any and all
releases, termination statements and other notices to evidence the termination
of this Agreement and the security interests created hereby.
IN WITNESS WHEREOF, the parties have executed this Agreement, or caused
this Agreement to be executed, as of the day and year first set forth above.
"DEBTOR" "SECURED PARTY"
Dynasig Corporation Visitalk Capital Corporation
By: /s/ Xxxxxxx X. Xxx By: /s/ X. X. Xxxxxxxx
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Name: Xxxxxxx Xxx Name: Xxxxxxx X. Xxxxxxxx
Title: President Title: President
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EXHIBIT A - COLLATERAL DESCRIPTION page 2 of 2
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EXHIBIT A
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SECURITY AGREEMENT
COLLATERAL
ALL PROPERTY
This is Exhibit A to the Security Agreement dated December 27, 2004,
between Visitalk Capital Corporation, an Arizona corporation ("Secured Party")
and Dynasig Corporation, an Arizona corporation ("Debtor"). The collateral
covered by this financing statement consists of the Debtor's interest in all of
the following property, whether in all cases whether now owned or hereafter
owned, presently existing or hereafter created, acquired or arising, and
wherever located:
A. All accounts, contract rights, chattel paper, instruments (including
certificated securities), letters of credit and documents;
B. All inventory, including without limitation: all goods intended for sale
or lease by the Debtor, or for display or demonstration; all work in process;
all raw materials and other materials and supplies of every nature and
description used or which might be used in connection with the manufacture,
printing, packing, shipping, advertising, selling, leasing or furnishing of such
goods or otherwise used or consumed in the Debtor's business; and all documents
evidencing and general intangibles relating to any of the foregoing (referred to
collectively as "Inventory");
C. All equipment, machinery, molds, apparatus, fittings, furniture,
fixtures, motor vehicles and other tangible personal property (other than
inventory) of every kind and description owned by the Debtor or in which the
Debtor has an interest, and all parts, accessories and special tools;
D. All general intangibles, including without limitation: all choices in
action, causes of action, corporate or other business records, deposit accounts,
inventions, designs, patents, patent applications, trademarks, trademark
applications, trade names, trade secrets, goodwill, copyrights, copyright
applications, registration, licenses, franchises, customer lists, tax refund,
refund claims, and computer programs; all claims under guaranties, security
interests or other security held by or granted to the Debtor to secure payment
of any obligation owed to the Debtor; all rights to indemnification; and all
other intangible property of every kind and nature (other than accounts);
E. All monies and other property of any kind, now or at any time or times
hereafter, in the possession or under the control of the Secured Party or a
bailee of the Secured Party;
F. All accessions to, substitutions for, and all replacements, products and
cash and non-cash proceeds of A, B, C, D and E above, including, without
limitation, proceeds of unearned premiums with respect to insurance policies
insuring any of such property or interest;
G. All intellectual and copyrighted property, including but not limited to,
any source code or other code necessary to operate the Debtor's web site or web
sites subsequently developed by the Debtor (jointly the "Site"), including any
programs provided by third parties and such intellectual property shall include
all necessary and detailed instructions as to how to compile or operate the Site
as well as the rights to any programs that allow the site to operate; and
H. All books and records (including, without limitation, customer lists,
credit files, computer programs, printouts, and other computer materials and
records) of the Debtor pertaining to any of A, B, C, D, E, F or G above.
