Exhibit 10.35
COMMERCIAL SECURITY AGREEMENT
Principal Loan Date Maturity Loan No Call/Coll Account Officer Initials
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$2,000,000.00 12-21-2001 05-30-2003 89000103 3025 307877 076
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
Any item above "***" has been omitted due to text length limitations.
Grantor: microHelix, Inc. Lender: WEST COAST BANK
00000 XX 00xx Xxx Portland Metro Business Banking
Xxxxxx, XX 00000 0000 XX Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
THIS COMMERCIAL SECURITY AGREEMENT dated December 21, 2001, is made and executed
between microHelix, Inc. ("Grantor") and WEST COAST BANK ("Lender").
GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender
a Security Interest in the Collateral to secure the indebtedness and agrees that
Lender shall have the rights stated in this Agreement with respect to the
Collateral, in addition to all other rights which Lender may have by law.
COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement means
the following described property, whether now owned or hereafter acquired,
whether now existing or hereafter arising, and wherever located, in which
Grantor is giving to Lender a Security Interest for the payment of the
indebtedness and performance of all other obligations under the Note and this
Agreement:
All Inventory, Chattel Paper, Accounts, Equipment, Instruments, and
General Intangibles
In addition, the word "Collateral" also includes all the following,
whether now owned or hereafter acquired, whether now existing or
hereafter arising, and wherever located:
(A) All accessions, attachments, accessories, tools, parts, supplies,
replacements and additions to any of the collateral described herein,
whether added now or later.
(B) All products and produce of any of the property described in this
Collateral section.
(C) All accounts, general intangibles, instruments, rents, monies,
payments, and all other rights, arising out of a sale, lease, or
other disposition of any of the property described in this Collateral
section.
(D) All proceeds (including insurance proceeds) from the sale,
destruction, loss, or other disposition of any of the property
described in this Collateral section, and sums due from a third party
who has damaged or destroyed the Collateral or from that party's
insurer, whether due to judgment, settlement or other process.
(E) All records and data relating to any of the property described in
this Collateral section, whether in the form of a writing,
photograph, microfilm, microfiche, or electronic media, together with
all of Grantor's right, title, and interest in and to all computer
software required to utilize, create, maintain, and process any such
records or data on electronic media.
Despite any other provision of this Agreement, Lender is not granted, and will
not have, a nonpurchase money Security Interest in household goods, to the
extent such a Security Interest would be prohibited by applicable law. In
addition, if because of the type of any Property, Lender is required to give a
notice of the right to cancel under Truth in Lending for the indebtedness, then
Lender will not have a Security Interest in such Collateral unless and until
such a notice is given.
CROSS-COLLATERALIZATION. In addition to the Note, this Agreement secures the
following described additional indebtedness: This note is cross-collateralized
with note #89000102.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Grantor's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Grantor holds
jointly with someone else and all accounts Grantor may open in the future.
However, this does not include any XXX or Xxxxx accounts, or any trust accounts
for which setoff would be prohibited by law. Grantor authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts.
GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With
respect to the Collateral, Grantor represents and promises to Lender that:
Perfection of Security Interest. Grantor agrees to execute financing
statements and to take whatever other actions are requested by Lender
to perfect and continue Lenders Security Interest in the Collateral.
Upon request of Lender, Grantor will deliver to Lender any and all of
the documents evidencing or constituting the Collateral, and Grantor
will note Lender's interest upon any and all chattel paper it not
delivered to Lender for possession by Lender. This is a continuing
Security Agreement and will continue in effect even though all or any
part of the indebtedness is paid in full and even though for a period
of time Grantor may not be indebted to Lender.
Notices to Lender. Grantor will promptly notify Lender in writing at
Lender's address shown above (or such other addresses as Lender may
designate from time to time) prior to any (1) change in Grantor's
name; (2) change in Grantor's
assumed business name(s); (3) change in the management of the
Corporation Grantor; (4) change in the authorized signer(s); (5)
change in Grantor's principal office address; (6) change in Grantor's
state of organization; (7) conversion of Grantor to a new or
different type of business entity; or (8) change in any other aspect
of Grantor that directly or indirectly relates to any agreements
between Grantor and Lender. No change in Grantor's name or state of
organization will take effect until after Lender has received notice
No Violation. The execution and delivery of this Agreement will not
violate any law or agreement governing Grantor or to which Grantor is
a party, and its certificate or articles of incorporation and bylaws
do not prohibit any form or condition of this Agreement.
Enforceability of Collateral. To the extent the Collateral consists
of accounts, chattel paper, or general intangibles, as defined by the
Uniform Commercial Code, the Collateral is enforceable in accordance
with its terms, is genuine, and fully complies with all applicable
laws and regulations concerning form, content and manner of
preparation and execution, and all persons appearing to be obligated
on the Collateral have authority and capacity to contract and are in
fact obligated as they appear to be on the Collateral. At the time
any Account becomes subject to a Security Interest in favor of
Lender, the Account shall be a good and valid account representing an
undisputed, bona fide indebtedness incurred by the account debtor,
for merchandise held subject to delivery instructions or previously
shipped or delivered pursuant to a contract of sale, or for services
previously performed by Grantor with or for the account debtor. So
long as this Agreement remains in effect, Grantor shall not, without
Lender's prior written consent, compromise, settle, adjust, or extend
payment under or with regard to any such Accounts. There shall be no
setoffs or counterclaims against any of the Collateral, and no
agreement shall have been made under which any deductions or
discounts may be claimed concerning the Collateral except those
disclosed to Lender in writing.
Location of the Collateral. Except in the ordinary course of
Grantor's business, Grantor agrees to keep the Collateral (or to the
extent the Collateral consists of intangible property such as
accounts or general intangibles, the records concerning the
Collateral) at Grantor's address shown above or at such other
locations as are acceptable to Lender. Upon Lender's request, Grantor
will deliver to Lender in form satisfactory to Lender a schedule of
real properties and Collateral locations relating to Grantor's
operations, including without limitation the following: (1) all real
property Grantor owns or is purchasing; (2) all real property Grantor
is renting or leasing; (3) all storage facilities Grantor owns,
rents, leases, or uses; and (4) all other properties where Collateral
is or may be located.
Removal of the Collateral. Except in the ordinary course of Grantor's
business, including the sales of Inventory, Grantor shall not remove
the Collateral from its existing location without Lender's prior
written consent. To the extent that the Collateral consists of
vehicles, or other titled property, Grantor shall not take or permit
any action which would require application for certificates of title
for the vehicles outside the State of Oregon, without Lender's prior
written consent. Grantor shall, whenever requested, advise Lender of
the exact location of the Collateral.
Transactions involving Collateral. Except for inventory sold or
accounts collected in the ordinary course of Grantor's business, or
as otherwise provided for in this Agreement, Grantor shall not sell,
offer to sell, or otherwise transfer or dispose of the Collateral.
While Grantor is not in default under this Agreement, Grantor may
sell inventory, but only in the ordinary course of its business and
only to buyers who qualify as a buyer in the ordinary course of
business, A sale in the ordinary course of Grantor's business does
not include a transfer in partial or total satisfaction of a debt or
any bulk sale. Grantor shall not pledge, mortgage, encumber or
otherwise permit the Collateral to be subject to any lien, Security
Interest, encumbrance, or charge, other than the Security Interest
provided for in this Agreement, without the prior written consent of
Lender. This includes Security Interests even if junior in right to
the Security Interests granted under this Agreement. Unless waived by
Lender, all proceeds from any disposition of the Collateral (for
whatever reason) shall be held in trust for Lender and shall not be
commingled with any other funds; provided however, this requirement
shall not constitute consent by Lender to any sale or other
disposition. Upon receipt, Grantor shall immediately deliver any such
proceeds to Lender.
Title. Grantor represents and warrants to Lender that Grantor holds
good and marketable title to the Collateral, free and clear of all
liens and encumbrances except for the lien of this Agreement. No
financing statement covering any of the Collateral is on file in any
public office other than those which reflect the Security Interest
created by this Agreement or to which Lender has specifically
consented. Grantor shall defend Lender's rights in the Collateral
against the claims and demands of all other persons.
Repairs and Maintenance. Grantor agrees to keep and maintain, and to
cause others to keep and maintain, the Collateral in good order,
repair and condition at all times while this Agreement remains in
effect. Grantor further agrees to pay when due all claims for work
done on, or services rendered or material furnished in connection
with the Collateral so that no lien or encumbrance may ever attach to
or be filed against the Collateral.
Inspection of Collateral. Lender and Lender's designated
representatives and agents shall have the right at all reasonable
times to examine and inspect the Collateral wherever located.
Taxes, Assessments and Liens. Grantor will pay when due all taxes,
assessments and liens upon the Collateral, its use or operation, upon
this Agreement, upon any promissory note or notes evidencing the
indebtedness, or upon any of the other Related Documents. Grantor may
withhold any such payment or may elect to contest any lien if Grantor
is in good faith conducting an appropriate proceeding to contest the
obligation to pay and so long as Lender's interest in the Collateral
is not jeopardized in Lender's sole opinion. If the Collateral is
subjected to a lien which is not discharged within fifteen (15) days,
Grantor shall deposit with Lender cash, a sufficient corporate surety
bond or other security satisfactory to Lender in an amount adequate
to provide for the discharge of the lien plus any interest, costs,
attorneys' fees or other charges that could accrue as a result of
foreclosure or sale of the Collateral. In any contest Grantor shall
defend itself and Lender and shall satisfy any final adverse judgment
before enforcement against the Collateral. Grantor shall name Lender
as an additional obligee under any surety bond furnished in the
contest proceedings. Grantor further agrees to furnish Lender with
evidence that such taxes, assessments, and governmental and other
charges have been paid in full
and in a timely manner. Grantor may withhold any such payment or may
elect to contest any lien if Grantor is in good faith conducting an
appropriate proceeding to contest the obligation to pay and so long
as Lender's interest in the Collateral is not jeopardized.
Compliance with Governmental Requirements. Grantor shall comply
promptly with all laws, ordinances, rules and regulations of all
governmental authorities, now or hereafter in effect, applicable to
the ownership, production, disposition, or use of the Collateral.
Grantor may contest in good faith any such law, ordinance or
regulation and withhold compliance during any proceeding, including
appropriate appeals, so long as Lender's interest in the Collateral,
in Lenders opinion, is not jeopardized.
Hazardous Substances. Grantor represents and warrants that the
Collateral never has been, and never will be so long as this
Agreement remains a lien on the Collateral, used in violation of any
Environmental Laws or for the generation, manufacture, storage,
transportation, treatment, disposal, release or threatened release of
any Hazardous Substance. The representations and warranties contained
herein are based on Grantor's due diligence in investigating the
Collateral for Hazardous Substances, Grantor hereby (1) releases and
waives any future claims against Lender for indemnity or contribution
in the event Grantor becomes liable for cleanup or other costs under
any Environmental Laws, and (2) agrees to indemnify and hold harmless
Lender against any and all claims and losses resulting from a breach
of this provision of this Agreement. This obligation to indemnify
shall survive the payment of the indebtedness and the satisfaction of
this Agreement.
Maintenance of Casualty Insurance. Grantor shall procure and maintain
all risks insurance, including without limitation fire, theft and
liability coverage together with such other insurance as Lender may
require with respect to the Collateral, in form, amounts, coverages
and basis reasonably acceptable to Lender and issued by a company or
companies reasonably acceptable to Lender. Grantor, upon request of
Lender, will deliver to Lender from time to time the policies or
certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished
without at least ten (10) days' prior written notice to Lender and
not including any disclaimer of the insurer's liability for failure
to give such a notice. Each insurance policy also shall include an
endorsement providing that coverage in favor of Lender will not be
impaired in any way by any act, omission or default of Grantor or any
other person. In connection with all policies covering assets in
which Lender holds or is offered a Security Interest, Grantor will
provide Lender with such loss payable or other endorsements as Lender
may require. If Grantor at any time fails to obtain or maintain any
insurance as required under this Agreement, Lender may (but shall not
be obligated to) obtain such insurance as Lender deems appropriate,
including if Lender so chooses "single interest insurance;' which
will cover only Lender's interest in the Collateral.
Application of Insurance Proceeds. Grantor shall promptly notify
Lender of any loss or damage to the Collateral. Lender may make proof
of loss if Grantor fails to do so within fifteen (15) days of the
casualty. All proceeds of any insurance on the Collateral, including
accrued proceeds thereon, shall be held by Lender as part of the
Collateral. If Lender consents to repair or replacement of the
damaged or destroyed Collateral, Lender shall, upon satisfactory
proof of expenditure, pay or reimburse Grantor from the proceeds for
the reasonable cost of repair or restoration. If Lender does not
consent to repair or replacement of the Collateral, Lender shall
retain a sufficient amount of the proceeds to pay all of the
indebtedness, and shall pay the balance to Grantor. Any proceeds
which have not been disbursed within six (6) months after their
receipt and which Grantor has not committed to the repair or
restoration of the Collateral shall be used to prepay the
indebtedness.
Insurance Reserves. Lender may require Grantor to maintain with
Lender reserves for payment of insurance premiums, which reserves
shall be created by monthly payments from Grantor of a sum estimated
by Lender to be sufficient to produce, at least fifteen (15) days
before the premium due date, amounts at least equal to the insurance
premiums to be paid. If fifteen (15) days before payment is due, the
reserve funds are insufficient, Grantor shall upon demand pay any
deficiency to Lender. The reserve funds shall be held by Lender as a
general deposit and shall constitute a non-interest-bearing account
which Lender may satisfy by payment of the insurance premiums
required to be paid by Grantor as they become due. Lender does not
hold the reserve funds in trust for Grantor, and Lender is not the
agent of Grantor for payment of the insurance premiums required to be
paid by Grantor. The responsibility for the payment of premiums shall
remain Grantor's sole responsibility.
Insurance Reports. Grantor, upon request of Lender, shall furnish to
Lender reports on each existing policy of insurance showing such
information as Lender may reasonably request including the following:
(1) the name of the insurer; (2) the risks insured; (3) the amount of
the policy; (4) the property insured (5) the then current value on
the basis of which insurance has been obtained and the manner of
determining that value; and (6) the expiration date of the policy. In
addition, Grantor shall upon request by Lender (however not more
often than annually) have an independent appraiser satisfactory to
Lender determine, as applicable, the cash value or replacement cost
of the Collateral.
GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and except
as otherwise provided below with respect to accounts and above in the paragraph
titled "Transactions Involving Collateral", Grantor may have possession of the
tangible personal property and beneficial use of all the Collateral and may use
it in any lawful manner not inconsistent with this Agreement or the Related
Documents, provided that Grantor's right to possession and beneficial use shall
not apply to any Collateral where possession of the Collateral by Lender is
required by law to perfect Lender's Security Interest in such Collateral. Until
otherwise notified by Lender, Grantor may collect any of the Collateral
consisting of accounts. At any time and even though no Event of Default exists,
Lender may exercise its rights to collect the accounts and to notify account
debtors to make payments directly to Lender for application to the indebtedness.
If Lender at any time has possession of any Collateral, whether before or after
an Event of Default, Lender shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral if Lender takes such action for
that purpose as Grantor shall request or as Lender, in Lender's sole discretion,
shall deem appropriate under the circumstances, but failure to honor any request
by Grantor shall not of itself be deemed to be a failure to exercise reasonable
care. Lender shall not be required to take any steps necessary to preserve any
rights in the Collateral against prior parties, nor to protect, preserve or
maintain any Security Interest given to secure the indebtedness.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Grantor fails to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Grantor's failure to discharge or pay when due any amounts
Grantor is required to discharge or pay under this Agreement or any Related
Documents, Lender on Grantor's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, Security Interests, encumbrances and
other claims, at any time levied or placed on the Collateral and paying all
costs for insuring, maintaining and preserving the Collateral. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Grantor. All such expenses will become a part
of the indebtedness and, at Lender's option, will (A) be payable on demand; (B)
be added to the balance of the Note and be apportioned among and be payable with
any installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C) be,
treated as a balloon payment which will be due and payable at the Note's
maturity. The Agreement also will secure payment of these amounts. Such right
shall be in addition to all other rights and remedies to which Lender may be
entitled upon Default.
DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:
Payment Default. Grantor falls to make any payment when due under the
indebtedness.
Other Defaults. Grantor falls to comply with or to perform any other
term, obligation, covenant or condition contained in this Agreement
or in any of the Related Documents or to comply with or to perform
any term, obligation, covenant or condition contained in any other
agreement between Lender and Grantor.
False Statements. Any warranty, representation or statement made or
furnished to Lender by Grantor or on Grantor's behalf under this
Agreement or the Related Documents is false or misleading in any
material respect, either now or at the time made or furnished or
becomes false or misleading at any time thereafter.
Defective Collateralization, This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of
any collateral document to create a valid and perfected Security
Interest or lien) at any time and for any reason under any bankruptcy
or insolvency laws by or against Grantor.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Grantor or by
any governmental agency against any collateral securing the
indebtedness. This includes a garnishment of any of Grantor's
accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by
Grantor as to the validity or reasonableness of the claim which is
the basis of the creditor or forfeiture proceeding and if Grantor
gives Lender written notice of the creditor or forfeiture proceeding
and deposits with Lender monies or a surety bond for the creditor or
forfeiture proceeding, in an amount determined by Lender, in its sole
discretion, as being an adequate reserve or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with
respect to guarantor, endorser, surety, or accommodation party of any
of the indebtedness or guarantor, endorser, surety, or accommodation
party dies or becomes incompetent or revokes or disputes the validity
of, or liability under, any Guaranty of the indebtedness.
Adverse Change. A material adverse change occurs in Grantor's
financial condition, or Lender believes the prospect of payment or
performance of the indebtedness is impaired.
Insecurity. Lender in good faith believes itself insecure.
Cure Provisions. If any default, other than a default in payment is
curable and if Grantor has not been given a notice of a breach of the
same provision of this Agreement within the preceding twelve (12)
months, it may be cured (and no event of default will have occurred)
if Grantor, after receiving written notice from Lender demanding cure
of such default: (1) cures the default within fifteen (15) days; or
(2) if the cure requires more than fifteen (15) days, immediately
initiates steps which Lender deems in Lender's sole discretion to be
sufficient to cure the default and thereafter continues and completes
all reasonable and necessary steps sufficient to produce compliance
as soon as reasonably practical.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party under the Oregon Uniform Commercial Code. In addition and without
limitation, Lender may exercise any one or more of the following rights and
remedies:
Accelerate Indebtedness. Lender may declare the entire indebtedness,
including any prepayment penalty which Grantor would be required to
pay, immediately due and payable, without notice of any kind to
Grantor.
Assemble Collateral. Lender may require Grantor to deliver to Lender
all or any portion of the Collateral and any and all certificates of
title and other documents relating to the Collateral. Lender may
require Grantor to assemble the Collateral and make it available to
Lender at a place to be designated by Lender. Lender also shall have
full power to enter upon the property of Grantor to take possession
of and remove the Collateral: if the Collateral contains other goods
not covered by this Agreement at the time of repossession, Grantor
agrees Lender may take such other goods, provided that Lender makes
reasonable efforts to return them to Grantor after repossession.
Sell the Collateral. Lender shall have full power to sell, lease,
transfer, or otherwise deal with the Collateral or proceeds thereof
in Lender's own name or that of Grantor. Lender may sell the
Collateral at public auction or private sale. Unless the Collateral
threatens to decline speedily in value or is of a type customarily
sold on a recognized market, Lender will give Grantor, and other
persons as required by law, reasonable notice of the time and place
of any public sale, or the time after which any private sale or any
other disposition of the Collateral is to be made. However, no notice
need be provided to any person who, after Default occurs, enters into
and authenticates an agreement waiving that person's right to
notification of sale. The requirements of reasonable notice shall be
met if such notice is given at least ten (10) days before the time of
the sale or disposition. All expenses relating to the disposition of
the Collateral, including without limitation the expenses of
retaking, holding, insuring, preparing for sale and selling the
Collateral, shall become a part of the indebtedness secured by this
Agreement and shall be payable on demand, with interest at the Note
rate from date of expenditure until repaid.
Appoint Receiver. Lender shall have the right to have a receiver
appointed to take possession of all or any part of the Collateral,
with the power to protect and preserve the Collateral, to operate the
Collateral preceding foreclosure or sale, and to collect the Rents
from the Collateral and apply the proceeds, over and above the cost
of the receivership, against the indebtedness. The receiver may serve
without bond if permitted by law. Lender's right to the appointment
of a receiver shall exist whether or not the apparent value of the
Collateral exceeds the indebtedness by a substantial amount.
Employment by tender shall not disqualify a person from serving as a
receiver.
Collect Revenues, Apply Accounts. Lender, either itself or through a
receiver, may collect the payments, rents, income, and revenues from
the Collateral. Lender may at any time in Lender's discretion
transfer any Collateral into Lender's own name or that of Lender's
nominee and receive the payments, rents, income, and revenues
therefrom and hold the same as security for the indebtedness or apply
it to payment of the indebtedness in such order of preference as
Lender may determine. Insofar as the Collateral consists of accounts,
general intangibles, insurance policies, instruments, chattel paper,
chosen in action, or similar property, Lender may demand, collect,
receipt for, settle, compromise, adjust, xxx for, foreclose, or
realize on the Collateral as Lender may determine, whether or not
indebtedness or Collateral is then due. For these purposes. Lender
may, on behalf of and in the name of Grantor, receive, open and
dispose of mail addressed to Grantor; change any address to which
mail and payments are to be sent; and endorse notes, checks, drafts,
money orders, documents of title, instruments and items pertaining to
payment, shipment, or storage of any Collateral. To facilitate
collection, Lender may notify account debtors and obligors on any
Collateral to make payments directly to Lender.
Obtain Deficiency. If Lender chooses to sell any or all of the
Collateral. Lender may obtain a judgment against Grantor for any
deficiency remaining on the indebtedness due to Lender after
application of all amounts received from the exercise of the rights
provided in this Agreement. Grantor shall be liable for a deficiency
even if the transaction described in this subsection is a sale of
accounts or chattel paper.
Other Rights and Remedies. Lender shall have all the rights and
remedies of a secured creditor under the provisions of the Uniform
Commercial Code, as may be amended from time to time. In addition,
Lender shall have and may exercise any or all other rights and
remedies it may have available of law, in equity, or otherwise.
Election of Remedies. Except as may be prohibited by applicable law,
all of Lender's rights and remedies, whether evidenced by this
Agreement, the Related Documents, or by any other writing, shall be
cumulative and may be exercised singularly or concurrently. Election
by Lender to pursue any remedy shall not exclude pursuit of any other
remedy, and an election to make expenditures or to take action to
perform an obligation of Grantor under this Agreement, after
Grantor's failure to perform, shall not affect Lender's right to
declare a default and exercise its remedies.
CHOICE OF VENUE. If there is a lawsuit, you (borrower) agree upon our request to
submit to the jurisdiction of the courts of the State of Oregon in Multnomah
County, and that venue is proper in such courts.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as
to the matters set forth in this Agreement. No alteration of or
amendment to this Agreement shall be effective unless given in
writing and signed by the party or parties sought to be charged or
bound by the alteration or amendment.
Arbitration. Grantor and Lender agree that all disputes, claims and
controversies between them whether individual, joint, or class in
nature, arising from this Agreement or otherwise, including without
limitation contract and tort disputes, shall be arbitrated pursuant
to the Rules of the American Arbitration Association in effect at the
time the claim is filed, upon request of either party. No act to take
or dispose of any Collateral shall constitute a waiver of this
arbitration agreement or be prohibited by this arbitration agreement,
This includes, without limitation, obtaining injunctive relief or a
temporary restraining order; foreclosing by notice and sale under any
deed of trust or mortgage; obtaining a writ of attachment or
imposition of a receiver; or exercising any rights relating to
personal property, including taking or disposing of such property
with or without judicial process pursuant to Article 9 of the Uniform
Commercial Code. Any disputes, claims, or controversies concerning
the lawfulness or reasonableness of any act, or exercise of any
right, concerning any Collateral, including any claim to rescind,
reform, or otherwise modify any agreement relating to the Collateral,
shall also be arbitrated, provided however that no arbitrator shall
have the right or the power to enjoin or restrain any act of any
party. Judgment upon any award rendered by any arbitrator may be
entered in any court having jurisdiction. Nothing in this Agreement
shall preclude any party from seeking equitable relief from a court
of competent jurisdiction. The statute of limitations, estoppel,
waiver, laches, and similar doctrines which would otherwise be
applicable in an action brought by a party shall be applicable in any
arbitration proceeding, and the commencement of an arbitration
proceeding shall be deemed the commencement of an action for these
purposes. The Federal Arbitration Act shall apply to the
construction, interpretation, and enforcement of this arbitration
provision.
Attorneys' Fees; Expenses. Grantor agrees to pay upon demand all of
Lender's costs and expenses, including Lender's attorneys' fees and
Lender's legal expenses, incurred in connection with the enforcement
of this Agreement. Lender may hire or pay someone else to help
enforce this Agreement, and Grantor shall pay the costs and expenses
of such enforcement. Costs and expenses include Lender's attorneys'
fees and legal expenses whether or not there is a lawsuit, including
attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. Grantor also shall pay all court
costs and such additional fees as may be directed by the court.
Caption Headings. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or
define the provisions of this Agreement.
Governing Law. This Agreement will be governed by, construed and
enforced in accordance with federal law and the laws of the State of
Oregon. This Agreement has been accepted by Lender in the State of
Oregon.
Preference Payments. Any monies Lender pays because of an asserted
preference claim in Grantor's bankruptcy will become a part of the
indebtedness and, at Lender's option, shall be payable by Grantor as
provided in this Agreement.
No Waiver by Lender. Lender shall not be deemed to have waived any
rights under this Agreement unless such waiver is given in writing
and signed by Lender. No delay or omission on the part of Lender in
exercising any right shall operate as a waiver of such right or any
other right. A waiver by Lender of a provision of this Agreement
shall not prejudice or constitute a waiver of Lender's right
otherwise to demand strict compliance with that provision or any
other provision of this Agreement. No prior waiver by Lender, nor any
course of dealing between Lender and Grantor, shall constitute a
waiver of any of Lender's rights or of any of Grantor's obligations
as to any future transactions. Whenever the consent of Lender is
required under this Agreement, the granting of such consent by Lender
in any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such
consent may be granted or withheld in the sole discretion of Lender.
Notices. Any notice required to be given under this Agreement shall
be given in writing, and shall be effective when actually delivered,
when actually received by telefacsimile (unless otherwise required by
law), when deposited with a nationally recognized overnight courier,
or, if mailed, when deposited in the United States mail, as first
class, certified or registered mail postage prepaid, directed to the
addresses shown near the beginning of this Agreement. Any party may
change its address for notices under this Agreement by giving formal
written notice to the other parties, specifying that the purpose of
the notice is to change the party's address. For notice purposes,
Grantor agrees to keep Lender informed at all times of Grantor's
current address. Unless otherwise provided or required by law, if
there is more than one Grantor, any notice given by Lender to any
Grantor is deemed to be notice given to all Grantors.
Power of Attorney. Grantor hereby appoints Lender as Grantor's
irrevocable attorney-in-fact for the purpose of executing any
documents necessary to perfect, amend, or to continue the Security
Interest granted in this Agreement or to demand termination of
filings of other secured parties. Lender may at any time, and without
further authorization from Grantor, file a carbon, photographic or
other reproduction of any financing statement or of this Agreement
for use as a financing statement. Grantor will reimburse Lender for
all expenses for the perfection and the continuation of the
perfection of Lender's Security Interest in the Collateral.
Waiver of Co-Obligor's Rights. If more than one person is obligated
for the indebtedness, Grantor irrevocably waives, disclaims and
relinquishes all claims against such other person which Grantor has
or would otherwise have by virtue of payment of the indebtedness or
any part thereof, specifically including but not limited to all
rights of indemnity, contribution or exoneration.
Severability. If a court of competent jurisdiction finds any
provision of this Agreement to be illegal, invalid, or unenforceable
as to any circumstance, that finding shall not make the offending
provision illegal, invalid, or unenforceable as to any other
circumstance. If feasible, the offending provision shall be
considered modified so that it becomes legal, valid and enforceable.
If the offending provision cannot be so modified, it shall be
considered deleted from this Agreement. Unless otherwise required by
law, the illegality, invalidity, or unenforceability of any provision
of this Agreement shall not affect the legality, validity or
enforceability of any other provision of this Agreement.
Successors and Assigns. Subject to any limitations stated in this
Agreement on transfer of Grantor's interest, this Agreement shall be
binding upon and inure to the benefit of the parties, their
successors and assigns. If ownership of the Collateral becomes vested
in a person other than Grantor, Lender, without notice to Grantor,
may deal with Grantor's successors with reference to this Agreement
and the indebtedness by way of forbearance or extension without
releasing Grantor from the obligations of this Agreement or liability
under the indebtedness.
Survival of Representations and Warranties. All representations,
warranties, and agreements made by Grantor in this Agreement shall
survive the execution and delivery of this Agreement, shall be
continuing in nature, and shall remain in full force and effect until
such time as Grantor's indebtedness shall be paid in full.
Time is of the Essence. Time is of the essence in the performance of
this Agreement.
Waive Jury. All parties to this Agreement hereby waive the right to
any jury trial in any action, proceeding, or counterclaim brought by
any party against any other party.
DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Agreement. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such forms in the Uniform Commercial Code:
Account. The word "Account" means a trade account, account
receivable, other receivable, or other right to payment for goods
sold or services rendered owing to Grantor (or to a third party
grantor acceptable to Lender).
Agreement. The word "Agreement" means this Commercial Security
Agreement, as this Commercial Security Agreement may be amended or
modified from time to time, together with all exhibits and schedules
attached to this Commercial Security Agreement from time to time.
Borrower. The word "Borrower" means microHelix, Inc., and all other
persons and entities signing the Note in whatever capacity.
Collateral. The word "Collateral" means all of Grantor's right, title
and interest in and to all the Collateral as described in the
Collateral Description ' section of this Agreement.
Default. The word "Default" means the Default set forth in this
Agreement in the section Oiled "Default".
Environmental Laws. The words "Environmental Laws" mean any and all
state, federal and local statutes, regulations and ordinances
relating to the protection of human health or the environment,
including without limitation the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986, Pub. L. No. 99-499 ("XXXX"), the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et
seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901, et seq., or other applicable state or federal laws, rules, or
regulations adopted pursuant thereto or intended to protect human
health or the environment.
Event of Default. The words "Event of Default" mean any of the events
of default set forth in this Agreement in the default section of this
Agreement
Grantor. The word "Grantor" means microHelix, Inc..
Guaranty, The word "Guaranty" means the guaranty from guarantor,
endorser, surety, or accommodation party to Lender, including without
limitation a guaranty or all or part of the Note.
Hazardous Substances. The words "Hazardous Substances" mean materials
that, because of their quantity, concentration or physical, chemical
or infectious characteristics, may cause or pose a present or
potential hazard to human health or the environment when improperly
used, treated, stored, disposed of, generated, manufactured,
transported or otherwise handled. The words "Hazardous Substances"
are used in their very broadest sense and include without limitation
any and all hazardous or toxic substances, materials or waste as
defined by or listed under the Environmental Laws. The term
"Hazardous Substances" also includes, without limitation, petroleum,
including crude oil and any fraction thereof and asbestos.
Indebtedness. The word "Indebtedness" means the indebtedness
evidenced by the Note or Related Documents, including all principal
and interest together with all other indebtedness and costs and
expenses for which Grantor is responsible under this Agreement or
under any of the Related Documents.
Lender. The word "Lender" means WEST COAST BANK, its successors and
assigns.
Note. The word "Note" means the Note executed by microHelix, Inc. In
the principal amount of $2,000,000.00 dated December 21, 2001,
together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of, and substitutions for the note or
credit agreement.
Related Documents. The words "Related Documents" mean all promissory
notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security
deeds, collateral mortgages, and all other instruments, agreements
and documents, whether now or hereafter existing, executed in
connection with the indebtedness.
GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED DECEMBER 21, 2001.
GRANTOR:
MICROHELIX, INC.
By: /s/ By: /s/
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Xxxxxxx X. Xxxx, President of microHelix, Inc. Xxxx X. Xxxxxx, Treasurer of microHelix, Inc.
