CONTRACT OF SALE AND
SECURITY AGREEMENT
This Contract of Sale and Security Agreement (the "Agreement") is made
effective January 22, 2004 between Xxxxxxxxxxx Velagio, Inc., an Oregon
corporation formerly known as Xxxxxxxxxxx Technology Services, Inc.
("Borrower"), and Destination Capital, LLC, an Oregon limited liability company
("Destination Capital"), agree as follows:
PURPOSE OF AGREEMENT:
1. BORROWER desires to obtain short-term financing by selling to
Destination Capital ALL Accounts. Destination Capital agrees to purchase
BORROWER's Accounts from time to time at a discount below face value, utilizing
an advance formula for the purchase of ALL Accounts based upon advances against
Acceptable/Eligible Accounts. It is clearly understood by both parties that ALL
Accounts of BORROWER are to be sold to Destination Capital.
2. BORROWER and Destination Capital acknowledge that BORROWER has
previously entered into a similar arrangement with CAPCO Financial Company
("CAPCO") and that this Agreement is subject and subordinate to any rights of
CAPCO in and to BORROWER'S Accounts and BORROWER'S obligations to CAPCO under
such agreement. Destination Capital and CAPCO have also entered into a
subordination agreement. This Agreement shall be appropriately construed and
interpreted by taking into account CAPCO's rights (and BORROWER'S obligations)
under the CAPCO agreement and the subordination agreement and, where the terms
of the CAPCO agreement are inconsistent with the terms of this Agreement, the
terms of the CAPCO agreement shall control. To the extent that any Account has
been sold to CAPCO and is not available for sale to Destination Capital,
advances hereunder by Destination Capital pursuant to the Advance Formula shall
be considered a loan by Destination Capital to BORROWER and may be evidenced by
a promissory note in form and substance satisfactory to Destination Capital.
DEFINITIONS:
3. "Account" means any right of payment for goods sold or leased,
and delivered, or services rendered, any specific transaction, or any right of
payment, not otherwise sold to CAPCO pursuant to the CAPCO agreement.
4. "Advance Formula" means the maximum amount available to
BORROWER from Destination Capital for the purchase of ALL Accounts will not
exceed fifteen percent (15%) of Acceptable/Eligible Accounts.
5. "Acceptable/Eligible Account" means an Account conforming to
the Warranties and terms set forth herein that has not been outstanding for more
than ninety (90) DAYS from the date of invoice, has been underwritten and
approved by CAPCO or Destination Capital, and has not been reduced from the
original amount billed by credit memo, offset, adjustment of any kind, or
partial payment subsequent to invoice date. Eligible Accounts will not include
any Account which is subject to vendor offset.
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6. "CAPCO agreement" means the revolving invoice funding
agreement with CAPCO.
7. "Customer" means BORROWER's Customer or the Account debtor.
8. "BORROWER" means the seller of All Accounts.
9. "Collateral" means the intangible or tangible property given
as security to Destination Capital by BORROWER for any obligations and
liabilities of BORROWER to Destination Capital under this Agreement.
10. "Warrant" means to guarantee as a material element of this
Agreement.
11. "Credit Problem" means a Customer is unable to pay its debts
because of problems or insolvency.
12. "Customer Dispute" means any claim by a Customer against
BORROWER of any kind whatsoever, valid or invalid, that reduces the amount
collectible from a Customer by Destination Capital.
BORROWER COVENANTS:
13. Subject to the CAPCO agreement, BORROWER agrees to sell to
Destination Capital ALL Accounts Receivable (Accounts), mechanic's lien(s), and
rights to payment under any stop notice(s) or bonded stop notice(s), securing
payment of those Accounts created by BORROWER in the course of its business,
existing as of the date of this Agreement or thereafter created during the term
of this Agreement, subject to approval and verification by Destination Capital.
Destination Capital is not obligated to advance funds for the purchase of All
Accounts from BORROWER. When BORROWER notifies Destination Capital of its
Accounts, BORROWER shall provide at Destination Capital's request the original
assigned Account (Invoice) together with one copy thereof, a copy of the xxxx of
lading contract, purchase order, purchase order number, and/or any other
requisite supporting documentation corresponding to said Accounts and
appropriate to the business of BORROWER.
14. BORROWER shall prepare and give to Destination Capital at its
request proper written assignments of Accounts and mechanic's lien(s) on forms
provided by Destination Capital. The execution of said assignments shall
transfer to Destination Capital all of BORROWER's right, title and ownership to
ALL Accounts. BORROWER or Destination Capital, by this Agreement, will properly
xxxx Accounts, as assigned and sold to Destination Capital, and Destination
Capital is authorized to notify the Customer of said sale and assignment.
15. BORROWER represents and Warrants to Destination Capital that:
a. BORROWER is the sole and absolute owner of any and
all Accounts and mechanic's liens and rights to payment under any stop notices
or bonded stop notices sold and assigned hereunder, and BORROWER has full legal
right to make said sale, assignment and/or transfer;
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b. All Accounts sold to Destination Capital are an
accurate statement of a bona fide sale, delivery and acceptance of merchandise,
or performance of service by BORROWER to/for the Account-debtor. Accounts are
not contingent upon the fulfillment by BORROWER and each Account-debtor's
business is believed to be solvent. The terms for payment of said Accounts are
thirty (30) days or as expressly set forth on the face of said sold and assigned
Accounts, and the payment of said Accounts are not contingent upon the
fulfillment by BORROWER of any further performance of any nature whatsoever.
BORROWER shall accept no returns and shall grant no allowances or credits to any
old and assigned Account of any Account-debtor without the prior written
approval of Destination Capital;
c. There are no known setoffs, Customer Disputes,
adverse claims, defenses and/or liens whatsoever against the payment of
Accounts, and the Accounts and mechanic's liens have not been previously
assigned or encumbered by BORROWER in any manner whatsoever except in favor of
CAPCO. BORROWER will, immediately upon sale of Accounts to Destination Capital,
make proper entries on its books and records disclosing the absolute sale of
Accounts to Destination Capital and BORROWER will post no payment unless it is
reflected in a payment report from Destination Capital or CAPCO;
d. BORROWER will promptly notify Destination Capital in
writing of any proposed change in BORROWER's place of business, name, legal
entity, corporate structure, record-keeping location, and/or as to any
additional place of business, or expiration of any special license(s), or
transfer of assets or technology to a third party, or proposed change in
ownership in excess of twenty-five percent (25%) of outstanding shares;
e. BORROWER does not own, control, manage, participate
in management, or have any involvement and/or association whatsoever with the
business of any Account-debtor related to any Accounts sold and assigned
hereunder;
f. There are no financing statements now on file in any
public office governing any Account, inventory or work in process of BORROWER in
which BORROWER is named in or has signed as the debtor, except the financing
statement or statements filed or to be filed in respect to this Agreement, or
those statements now on file that have been disclosed in writing by BORROWER to
Destination Capital. BORROWER will not execute any financing statements pledging
Accounts receivables, inventory or work in process in favor of any other person
or entity, excepting Destination Capital, for the term of this Agreement;
g. BORROWER's taxes are not delinquent nor has BORROWER
been subject to a tax levy by any governmental entity nor are there now on file
in any public office tax liens affecting BORROWER other than those
delinquencies, levies and/or liens which have been disclosed by BORROWER to
Destination Capital;
h. All records, statements, books, or other documents
shown to Destination Capital by BORROWER at any time, either before or after the
signing of this Agreement, are true and accurate;
i. BORROWER has served or caused to be served any and
all preliminary 10-day notices required by law to perfect or enforce any
mechanic's lien for All Accounts to
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ensure perfection of ownership for Destination Capital and the information
contained on those preliminary 10-day notices is true, correct and properly
recorded, to Seller's knowledge and belief;
j. Waivers and releases for all labor, services,
equipment or material of BORROWER and others will be submitted on Destination
Capital's form concurrent with Accounts.
16. BORROWER and Destination Capital agree that Destination
Capital will have FULL RECOURSE against BORROWER and BORROWER shall be liable to
repay to Destination Capital any amount paid by Destination Capital to BORROWER
in consideration for the sale, transfer and assignment of Accounts or in
consideration of any other advance to BORROWER hereunder.
17. All Accounts shall be the sole property of Destination
Capital, subject to any rights of CAPCO, but if for any reason a payment owing
on said Accounts shall be paid to BORROWER, BORROWER shall promptly notify
Destination Capital of such payment, shall hold any check, draft or money so
received in trust and for the benefit of Destination Capital, and shall pay over
such check, draft in-kind or money, to Destination Capital promptly and without
delay. All of BORROWER's invoices shall bear the address of CAPCO's or
Destination Capital's lockbox as the "REMIT TO" address, and BORROWER agrees
that ALL remittances for payment on ALL Accounts shall be made to the CAPCO or
Destination Capital lockbox or other repository authorized in writing by CAPCO
or Destination Capital.
18. BORROWER will pay all costs of documentation and any other
direct expenses incurred by Destination Capital in connection with this
Agreement.
19. BORROWER will furnish Destination Capital periodic statements,
accounts receivable agings, journals, bank records and other information as
requested by Destination Capital from time to time.
20. Destination Capital shall be a third-party beneficiary of any
Validity Guaranty provided to CAPCO by BORROWER's officers.
21. BORROWER will not pledge the credit of BORROWER to any other
person or business for any purpose whatsoever.
22. BORROWER is properly licensed and authorized to operate its
business under the trade name of Xxxxxxxxxxx Technology Services and Xxxxxxxxxxx
Electrical Services and BORROWER's trade name(s) has been properly filed and
published as required by the laws of the State of Oregon.
23. BORROWER will not sell Accounts or pledge Accounts to any
party except CAPCO or Destination Capital for the period of this Agreement
unless specific Accounts are subordinated and released by Destination Capital in
writing.
24. BORROWER will not cause or permit the Advance Formula under
the CAPCO agreement to exceed eighty-five percent (85%) of Acceptable/Eligible
Accounts and
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BORROWER will not otherwise agree to amend or modify the CAPCO agreement without
the prior written consent of Destination Capital which shall not be unreasonably
withheld or delayed.
25. BORROWER will not transfer, pledge or give a security interest
in the assets sold or Collateral granted to Destination Capital to any other
party.
26. BORROWER will not change or modify the terms of the original
sold-and-assigned Account with a Customer unless Destination Capital first
consents to such change in writing. Destination Capital agrees to provide a
prompt response to a BORROWER request for modification or change with respect to
an assigned Account. For example, BORROWER may not extend credit to a Customer
beyond thirty (30) days or the time set forth on the face of the
sold-and-assigned Account without prior written consent from Destination
Capital.
27. NOTICE OF DISPUTE: BORROWER must immediately notify
Destination Capital of Customer Disputes greater than $400.00 in total for any
one Customer.
28. POWER OF ATTORNEY: In order to carry out this Agreement and
avoid unnecessary notification of Customers, BORROWER irrevocably appoints
Destination Capital, or any person designated by Destination Capital, as its
special attorney in fact, or agent, with power to:
a. Strike out BORROWER's address on all Accounts mailed
to Customers and insert Destination Capital's address.
b. Receive, direct and forward, open and dispose of all
mail addressed to BORROWER, or to BORROWER's fictitious trade name(s), via
Destination Capital's address.
c. Endorse the name of BORROWER, or BORROWER's
fictitious trade name(s), on any checks or other evidences of payment that may
come into the possession of Destination Capital on Accounts purchased by
Destination Capital and on any other documents relating to any of the Accounts
or to assigned Collateral.
d. In BORROWER's name or otherwise, demand, xxx for,
collect and give release for any and all monies due or to become due on Accounts
sold and assigned hereunder.
e. Do any and all things necessary and proper to carry
out the purpose intended by this Agreement.
f. Execute any documents necessary to perfect or to
continue any Security Interest and without further authorization from BORROWER
file a carbon, photograph, facsimile or other reproduction of any financing
statement for use as a financing statement.
The authority granted Destination Capital shall remain in full force
and effect until all Accounts are paid in full and any indebtedness of BORROWER
to Destination Capital is discharged.
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DESTINATION CAPITAL COVENANTS:
29. Destination Capital reserves the sum of Six Hundred Thousand
Dollars ($600,000.00) for the purchase of ALL of BORROWER's Accounts. These
funds are available daily at BORROWER's option, subject to restriction as
governed by the Advance Formula.
30. This Agreement shall have an initial term ending with the
first full six (6) calendar months and unless terminated by either party giving
not less than thirty (30) days prior written notice.
31. Statement of Acceptance/Eligible Accounts: At such time as the
CAPCO agreement is no longer in effect, Destination Capital shall identify in
writing all Acceptable/Eligible Accounts and provide to BORROWER, upon request,
a written statement thereof (Weekly Aging Report).
ACCOUNTING & FEES:
32. Funds advanced by Destination Capital to BORROWER are subject
to a daily fee of U.S. Bank Prime Rate + 14.00%/360 (equivalent to a monthly
discount fee of U.S. Bank Prime Rate + 14.00%/12) calculated on the daily
balance (as reported on the BORROWER Liability Detail Report) owing to
Destination Capital. This period will usually be one (1) calendar day except for
weekends and/or weeks where holidays or other non-operating days prevent the fee
from being taken on a daily basis. The fee will be payable weekly by BORROWER on
each Tuesday (unless another day is specified by Destination Capital) for
outstanding advances due through Sunday of the prior week.
33. In order to obtain an advance, BORROWER will provide to
Destination Capital, via fax, an advance and availability request accompanied by
the Borrower's Certificate in the form prepared for CAPCO. This request must be
received by Destination Capital no later than 11:30 a.m. if a deposit or wire
transfer is to be made on the same date as the request form was issued by
BORROWER to Destination Capital.
34. PAYMENT PROCESSING: BORROWER will authorize CAPCO to remit
directly to Destination Capital an amount equal to fifteen percent (15%) of
daily collections for the prior business day. All payments received by
Destination Capital will be applied to BORROWER's Outstanding Balance daily
following a three (3) business day hold to allow for the application of
collected funds.
35. REPORTING: BORROWER will provide Destination Capital with the
following: BORROWER's certificate with each advance, or as requested, as
calculated for CAPCO; weekly accounts receivable aging; weekly accounts payable
aging including all related-party and inter-company payables; timely copies of
all financial reports provided to CAPCO; a daily management borrowings summary
report; a cash flow forecast as and when prepared for BORROWER's management
personnel; and such other documents or information, including information
regarding BORROWER's or any guarantor's financial condition and business
operations (subject to a mutually acceptable nondisclosure agreement), as
Destination Capital may reasonably request. Destination Capital may disclose to
its investors and/or lenders any information provided by BORROWER and BORROWER
agrees to meet with such investors or
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lenders to discuss such information upon request, subject to a mutually
acceptable nondisclosure agreement.
36. DISPUTED ACCOUNT: BORROWER will immediately notify Destination
Capital of any Account subject to a Customer Dispute of any kind whatsoever and
said Account shall be removed as an Acceptable/Eligible Account.
37. INVOICING ERRORS: Mistaken, incorrect and/or erroneous
invoicing submitted by BORROWER to Destination Capital may, at Destination
Capital's discretion, be deemed a Customer Disputed sold-and-assigned Account
and shall be removed as an Acceptable/Eligible Account.
38. WARRANTS: In addition to the fee set forth above, BORROWER
will cause to be provided to Destination Capital a warrant or warrants to
purchase common shares of BORROWER's parent, Microfield Group, Inc. ("MICG"),
subject to MICG shareholder approval (at the next annual meeting) to increase
the authorized capital of MICG. The warrant(s) will be assignable and will
entitle Destination Capital to purchase, for a period of 5 years, that number of
MICG shares equivalent to (i) the number of months (or portion thereof, but not
to exceed 6 months in total) that amounts advanced under this Agreement are
outstanding, multiplied by (ii) one percent (1%) of all MICG shares which are
outstanding (calculated on a fully-diluted basis) during such 6 month period.
The exercise price will be the lesser of $0.42 per share or the price applicable
to any shares, warrants or options issued by MICG during such 6 month period.
COLLATERAL:
39. As Collateral for the payment of any indebtedness now owing,
or in the future owing, by BORROWER to Destination Capital, BORROWER hereby
grants to Destination Capital a security interest (subordinate to CAPCO's
interest) in the following property (the "Collateral"):
All accounts receivable, contract rights, chattel paper, documents,
instruments and general intangibles now owned or hereafter acquired and proceeds
thereof. All right, title and interest in inventory, raw materials, work in
progress, finished goods, personal property, cash, securities, investments,
furnishings, fixtures, trade fixtures, equipment, machinery, deposits, motor
vehicles and all other property, assets or rights of whatever nature now owned
or hereafter acquired and products and proceeds thereof.
40. BORROWER will maintain such insurance covering BORROWER's
business and/or the property of BORROWER's Customers as is customary for
businesses similar to the business of BORROWER.
41. BORROWER shall complete any and all documents required to
provide Destination Capital a perfected security interest/lien (subordinate to
CAPCO's interest) in the Collateral pledged to Destination Capital.
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DEFAULT:
42. Any one or more of the following shall constitute an event of
default:
a. If BORROWER shall fail to pay any amount of
indebtedness to Destination Capital within five (5) days after notice;
b. If BORROWER shall be in breach of any term,
provision, Warranty or representation under this Agreement or any other
agreement related hereto, including the CAPCO agreement. Destination Capital has
the right, but not the obligation, to cure a default under the CAPCO agreement
by making an advance under this Agreement to CAPCO in which case BORROWER shall
repay the advance immediately upon demand;
c. If BORROWER is in default under one or more of the
agreements with Xxxxxxxxxxx Leasing Company, LLC ("CLC") or Xxxxxxxxxxx
Electric, Inc. ("CE") listed below and such default is not cured within five (5)
days after demand. The parties acknowledge that BORROWER has not made payments
as required under the following agreements with CLC and CE: (i) Master Vehicle
Lease Agreement dated September 1, 2003; (ii) Equipment Lease Agreement dated
September 1, 2003; (iii) Sublease dated August 1, 2002, as amended (Xxxxxxx
Building); (iv) Sublease dated September 1, 2003 (Swan Island); (v) Sublease
dated September 1, 2003 (Bend); (vi) Sublease dated September 1, 2003 (Xxxxxx);
(vii) Sublease dated September 1, 2003 (Crown Plaza); (viii) Sublease dated
September 1, 2003 (Xxxx yard); (ix) Sublease dated September 1, 2003 (Xxxxxxxxxx
Park); (x) Management Services Agreement dated September 11, 2003; and (xi)
Employee Leasing Agreement dated September 15, 2003. For purposes of this
provision, no default will be deemed to exist under these agreements provided
BORROWER continues to make interim minimum payments of $25,000 per week to
CLC/CE and BORROWER and Destination Capital mutually agree upon and document a
restructuring agreement within seven (7) days of the date of this Agreement.
d. If bankruptcy or insolvency proceedings shall be
instituted by or against BORROWER or any guarantor;
e. If the Collateral shall be attached, levied upon or
seized in any legal proceeding, and not released within five (5) working days
thereof;
f. If BORROWER or any guarantor shall cease doing
business and there shall exist any indebtedness or commitments by BORROWER to
Destination Capital;
g. Any Accounts, documents, statements or other writings
submitted by BORROWER to Destination Capital prove to be false or inaccurate in
any material respect;
h. If BORROWER has contributed to or aggravated an
Account debtor's problem or insolvency, and/or said Account debtor's ability
and/or willingness to pay any Accounts;
i. If any unpaid judgment or tax lien exists again
BORROWER or any guarantor;
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j. If Destination Capital, with reasonable cause and in
good faith, determines that its purchase of assets or Collateral is impaired for
any reason whatsoever;
k. If BORROWER terminates this Agreement prior to the
end of the initial term;
l. Any change in BORROWER's place of business, name,
legal entity, corporate structure, record-keeping location, and/or as to any
additional place of business, or expiration of any special license(s), or any
transfer of assets or technology to a third party, or proposed change in
ownership in excess of twenty-five percent (25%) of BORROWER's or MICG's
outstanding shares (excluding a parent-subsidiary merger).
REMEDIES AFTER DEFAULT:
43. In the event of any default, and subject to the rights of
CAPCO, Destination Capital may do any one or more of the following:
a. Declare any indebtedness secured hereby immediately
due and payable;
b. Notify any and all Customers and take possession of
the Accounts and Collateral and collect any receivables or funds paid to
BORROWER, all without judicial process;
c. Require BORROWER to assemble the Collateral and the
records pertaining to receivables or other assets pledged as collateral, and
make them available to Destination Capital, at a place designated by Destination
Capital;
d. Enter the premises of BORROWER and take possession of
the Collateral and of the records pertaining to the Accounts and any other
Collateral;
x. Xxxxx extensions, compromise claims and settle
receivables for less than face value, all without prior notice to BORROWER;
f. Use, in connection with any assembly or disposition
of the Collateral, any trademark, trade name, trade style, copyright, patent
right or technical process used or utilized by BORROWER;
g. Return any surplus realized to BORROWER after
deduction of reasonable expenses, attorney's fees, attorney's fees on appeal,
collection costs, independent third party auditors, incurred by Destination
Capital in resolving said default;
h. Hold BORROWER liable for any deficiency.
i. Establish a reserve from the collection of Accounts
to meet reasonable legal expenses associated with a future defense resulting
from an action brought against Destination Capital by BORROWER, BORROWER's
Customer, or other third party, as a result of an action of default.
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j. Obtain an injunction against BORROWER taking any
action with regard to the Accounts or Collateral
k. Receive, direct and forward, open, and dispose of all
mail addressed to BORROWER at any address used by BORROWER to receive mail.
GENERAL:
44. After termination, BORROWER remains fully responsible to
Destination Capital for any indebtedness existing, or which may yet arise, in
connection with Accounts that remain unpaid.
45. If, during the term hereof, BORROWER fails to make any payment
as and when required hereunder, Destination Capital may, at its discretion and
after notice to BORROWER, pay the same and charge BORROWER therefor.
46. BORROWER will not, under any circumstances, or in any manner
whatsoever, interfere with any of Destination Capital's rights under this
Agreement.
47. TAX COMPLIANCE: BORROWER will furnish Destination Capital,
upon request, satisfactory proof of payment and/or compliance with all federal,
state and/or local tax requirements.
48. NOTICE OF LEVY: BORROWER will promptly notify Destination
Capital of any attachment or any other legal process levied against BORROWER.
49. LEGAL FEES: The losing party will pay any and all legal
expenses and reasonable attorney's fees (including fees in any appellate or
bankruptcy proceeding), paralegal fees, staff overtime expense, travel costs,
costs on appeal, or other reasonable collection costs, that the prevailing party
may incur as a result of either BORROWER or Destination Capital enforcing this
Agreement or pursuing collection of amounts owing hereunder.
50. HOLD HARMLESS: BORROWER shall hold Destination Capital
harmless against any liability, damages, loss, attorney's fees and costs of any
type due to any action by a Customer arising from Destination Capital's
collecting or attempting to collect any Accounts so long as these collections
are performed in a commercially reasonable manner and in compliance with all
applicable laws, rules and regulations. BORROWER maintains the primary
responsibility for collections efforts until the occurrence of an event of
default.
51. BINDING ON FUTURE PARTIES: This Agreement inures to the
benefit of and is binding upon the heirs, executors, administrators, successors
and assigns of the parties thereto.
52. CUMULATIVE RIGHTS: All rights, remedies and power granted to
Destination Capital in this Agreement, or in any note or other agreement given
by BORROWER to Destination Capital, are cumulative and may be exercised
singularly or concurrently with such other rights as Destination Capital may
have. These rights may be exercised from time to time as to all or any part of
the pledged Collateral as Destination Capital in its discretion may determine.
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53. WRITTEN WAIVER: Destination Capital may not waive its rights
and remedies unless the waiver is in writing and signed by Destination Capital.
A waiver by Destination Capital of a right or remedy under this Agreement on one
occasion is not a waiver of the right or remedy on any subsequent occasion.
54. OREGON LAW: This Agreement shall be governed by and construed
in accordance with the laws of the State of Oregon. BORROWER hereby consents to
the exclusive jurisdiction of the State of Oregon in any dispute arising
hereunder or related hereto. Venue for any actions shall be in Multnomah County,
Oregon.
55. INVALID PROVISIONS: If any provision of this Agreement shall
be declared illegal or contrary to law, it is agreed that such provision shall
be disregarded and this Agreement shall continue in force as though such
provision had not been incorporated herein.
56. ENTIRE AGREEMENT: This instrument contains the entire
Agreement between the parties as to the subject matter hereof. Any addendum or
modification hereto must be signed by both parties and attached hereto.
57. EFFECTIVE: This Agreement becomes effective when it is
accepted and executed by the authorized officers of Destination Capital.
58. COUNTERPARTS: Execution of this document may contain multiple
signature pages; each shall be considered, when combined, as one signed and
executed document.
Executed effective January 22, 2004 at Portland, Oregon.
Xxxxxxxxxxx Velagio, Inc.
By: /s/ XXXXXX X. XXXXXX
---------------------------------------
Title: President and CEO
Destination Capital, LLC
Accepted effective January 22, 2004, at
Portland, Oregon.
By: JMW Capital Partners, Inc., Manager
By: /s/ XXXXXX XXXXXXX
----------------------------------------
Title: President and CEO
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