Exhibit 10.37 Security Agreement dated as of November 27, 2002 between
the Registrant and the secured parties named therein
SECURITY AGREEMENT
SECURITY AGREEMENT (this "Agreement"), dated as of November 27, 2002, by
and among Conectisys Corporation, a Colorado corporation ("Company"), and
the secured parties signatory hereto and their respective endorsees,
transferees and assigns (collectively, the "Secured Party").
W I T N E S S E T H:
WHEREAS, pursuant to a Securities Purchase Agreement, dated the date hereof
between Company and the Secured Party (the "Purchase Agreement"), Company
has agreed to issue to the Secured Party and the Secured Party has agreed
to purchase from Company certain of Company's 12% Secured Convertible
Debentures, due one year from the date of issue (the "Debentures"), which
are convertible into shares of Company's Common Stock, no par value (the
"Common Stock"). In connection therewith, Company shall issue the Secured
Party certain Common Stock purchase warrants dated as of the date hereof to
purchase the number of shares of Common Stock indicated below each Secured
Party's name on the Purchase Agreement (the "Warrants"); and
WHEREAS, in order to induce the Secured Party to purchase the Debentures,
Company has agreed to execute and deliver to the Secured Party this
Agreement for the benefit of the Secured Party and to grant to it a first
priority security interest in certain property of Company to secure the
prompt payment, performance and discharge in full of all of Company's
obligations under the Debentures.
NOW, THEREFORE, in consideration of the agreements herein contained and for
other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
1. Certain Definitions. As used in this Agreement, the following
terms shall have the meanings set forth in this Section 1. Terms used but
not otherwise defined in this Agreement that are defined in Article 9 of
the UCC (such as "general intangibles" and "proceeds") shall have the
respective meanings given such terms in Article 9 of the UCC.
(a) "Collateral" means the collateral in which the Secured Party is
granted a security interest by this Agreement and which shall include the
following, whether presently owned or existing or hereafter acquired or
coming into existence, and all additions and accessions thereto and all
substitutions and replacements thereof, and all proceeds, products and
accounts thereof, including, without limitation, all proceeds from the sale
or transfer of the Collateral and of insurance covering the same and of any
tort claims in connection therewith:
(i) All Goods of the Company, including, without limitations, all
machinery, equipment, computers, motor vehicles, trucks, tanks, boats,
ships, appliances, furniture, special and general tools, fixtures, test and
quality control devices and other equipment of every kind and nature and
wherever situated, together with all documents of title and documents
representing the same, all additions and accessions thereto, replacements
therefor, all parts therefor, and all substitutes for any of the foregoing
and all other items used and useful in connection with the Company's
businesses and all improvements thereto (collectively, the "Equipment");
and
(ii) All Inventory of the Company; and
(iii) All of the Company's contract rights and general intangibles,
including, without limitation, all partnership interests, stock or other
securities, licenses, distribution and other agreements, computer software
development rights, leases, franchises, customer lists, quality control
procedures, grants and rights, goodwill, trademarks, service marks, trade
styles, trade names, patents, patent applications, copyrights, deposit
accounts, and income tax refunds (collectively, the "General Intangibles");
and
(iv) All Receivables of the Company including all insurance proceeds,
and rights to refunds or indemnification whatsoever owing, together with
all instruments, all documents of title representing any of the foregoing,
all rights in any merchandising, goods, equipment, motor vehicles and
trucks which any of the same may represent, and all right, title, security
and guaranties with respect to each Receivable, including any right of
stoppage in transit; and
(v) All of the Company's documents, instruments and chattel paper,
files, records, books of account, business papers, computer programs and
the products and proceeds of all of the foregoing Collateral set forth in
clauses (i)-(iv) above.
(b) "Company" shall mean, collectively, Company and all of the
subsidiaries of Company, a list of which is contained in Schedule A,
attached hereto.
(c) "Obligations" means all of the Company's obligations under this
Agreement and the Debentures, in each case, whether now or hereafter
existing, voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly owed with
others, and whether or not from time to time decreased or extinguished and
later decreased, created or incurred, and all or any portion of such
obligations or liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly from the
Secured Party as a preference, fraudulent transfer or otherwise as such
obligations may be amended, supplemented, converted, extended or modified
from time to time.
(d) "UCC" means the Uniform Commercial Code, as currently in effect in
the State of New York.
2. Grant of Security Interest. As an inducement for the Secured Party
to purchase the Debentures and to secure the complete and timely payment,
performance and discharge in full, as the case may be, of all of the
Obligations, the Company hereby, unconditionally and irrevocably, pledges,
grants and hypothecates to the Secured Party, a continuing security
interest in, a continuing first lien upon, an unqualified right to
possession and disposition of and a right of set-off against, in each case
to the fullest extent permitted by law, all of the Company's right, title
and interest of whatsoever kind and nature in and to the Collateral (the
"Security Interest").
3. Representations, Warranties, Covenants and Agreements of the
Company. The Company represents and warrants to, and covenants and agrees
with, the Secured Party as follows:
(a) The Company has the requisite corporate power and authority to
enter into this Agreement and otherwise to carry out its obligations
thereunder. The execution, delivery and performance by the Company of this
Agreement and the filings contemplated therein have been duly authorized by
all necessary action on the part of the Company and no further action is
required by the Company. This Agreement constitutes a legal, valid and
binding obligation of the Company enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creidtor's rights generally.
(b) The Company represents and warrants that it has no place of
business or offices where its respective books of account and records are
kept (other than temporarily at the offices of its attorneys or
accountants) or places where Collateral is stored or located, except as set
forth on Schedule A attached hereto;
(c) Except as set forth on Schedule C, the Company is the sole owner of
the Collateral (except for non-exclusive licenses granted by the Company in
the ordinary course of business), free and clear of any liens, security
interests, encumbrances, rights or claims, and is fully authorized to grant
the Security Interest in and to pledge the Collateral. Except as set forth
on Schedule C, there is not on file in any governmental or regulatory
authority, agency or recording office an effective financing statement,
security agreement, license or transfer or any notice of any of the
foregoing (other than those that have been filed in favor of the Secured
Party pursuant to this Agreement or a security agreement executed prior to
the date hereof) covering or affecting any of the Collateral. So long as
this Agreement shall be in effect, the Company shall not execute and shall
not knowingly permit to be on file in any such office or agency any such
financing statement or other document or instrument (except to the extent
filed or recorded in favor of the Secured Party pursuant to the terms of
this Agreement or a security agreement executed prior to the date hereof),
except as set forth on Schedule C.
(d) No part of the Collateral has been judged invalid or unenforceable.
No written claim has been received that any Collateral or the Company's use
of any Collateral violates the rights of any third party. There has been no
adverse decision to the Company's claim of ownership rights in or exclusive
rights to use the Collateral in any jurisdiction or to the Company's right
to keep and maintain such Collateral in full force and effect, and there is
no proceeding involving said rights pending or, to the best knowledge of
the Company, threatened before any court, judicial body, administrative or
regulatory agency, arbitrator or other governmental authority.
(e) The Company shall at all times maintain its books of account and
records relating to the Collateral at its principal place of business and
its Collateral at the locations set forth on Schedule A attached hereto and
may not relocate such books of account and records or tangible Collateral
unless it delivers to the Secured Party at least 30 days prior to such
relocation (i) written notice of such relocation and the new location
thereof (which must be within the United States) and (ii) evidence that
appropriate financing statements and other necessary documents have been
filed and recorded and other steps have been taken to perfect the Security
Interest to create in favor of the Secured Party valid, perfected and
continuing first priority liens in the Collateral.
(f) This Agreement creates in favor of the Secured Party a valid
security interest in the Collateral securing the payment and performance of
the Obligations and, upon making the filings described in the immediately
following sentence, a perfected first priority security interest in such
Collateral. Except for the filing of financing statements on Form-1 under
the UCC with the jurisdictions indicated on Schedule B, attached hereto,
no authorization or approval of or filing with or notice to any
governmental authority or regulatory body is required either (i) for the
grant by the Company of, or the effectiveness of, the Security Interest
granted hereby or for the execution, delivery and performance of this
Agreement by the Company or (ii) for the perfection of or exercise by the
Secured Party of its rights and remedies hereunder.
(g) On the date of execution of this Agreement, the Company will
deliver to the Secured Party one or more executed UCC financing statements
on Form-1 with respect to the Security Interest for filing with the
jurisdictions indicated on Schedule B, attached hereto and in such other
jurisdictions as may be requested by the Secured Party.
(h) The execution, delivery and performance of this Agreement does not
conflict with or cause a breach or default, or an event that with or
without the passage of time or notice, shall constitute a breach or
default, under any agreement to which the Company is a party or by which
the Company is bound. No consent (including, without limitation, from
stock holders or creditors of the Company) is required for the Company to
enter into and perform its obligations hereunder.
(i) The Company shall at all times maintain the liens and Security
Interest provided for hereunder as valid and perfected first priority liens
and security interests in the Collateral in favor of the Secured Party
until this Agreement and the Security Interest hereunder shall terminate
pursuant to Section 11. The Company hereby agrees to defend the same
against any and all persons. The Company shall safeguard and protect all
Collateral for the account of the Secured Party. At the request of the
Secured Party, the Company will sign and deliver to the Secured Party at
any time or from time to time one or more financing statements pursuant to
the UCC (or any other applicable statute) in form reasonably satisfactory
to the Secured Party and will pay the cost of filing the same in all public
offices wherever filing is, or is deemed by the Secured Party to be,
necessary or desirable to effect the rights and obligations provided for
herein. Without limiting the generality of the foregoing, the Company shall
pay all fees, taxes and other amounts necessary to maintain the Collateral
and the Security Interest hereunder, and the Company shall obtain and
furnish to the Secured Party from time to time, upon demand, such releases
and/or subordinations of claims and liens which may be required to maintain
the priority of the Security Interest hereunder.
(j) The Company will not transfer, pledge, hypothecate, encumber,
license (except for non-exclusive licenses granted by the Company in the
ordinary course of business), sell or otherwise dispose of any of the
Collateral without the prior written consent of the Secured Party.
(k) The Company shall keep and preserve its Equipment, Inventory and
other tangible Collateral in good condition, repair and order and shall not
operate or locate any such Collateral (or cause to be operated or located)
in any area excluded from insurance coverage.
(l) The Company shall, within ten (10) days of obtaining knowledge
thereof, advise the Secured Party promptly, in sufficient detail, of any
substantial change in the Collateral, and of the occurrence of any event
which would have a material adverse effect on the value of the Collateral
or on the Secured Party's security interest therein.
(m) The Company shall promptly execute and deliver to the Secured Party
such further deeds, mortgages, assignments, security agreements, financing
statements or other instruments, documents, certificates and assurances and
take such further action as the Secured Party may from time to time request
and may in its sole discretion deem necessary to perfect, protect or
enforce its security interest in the Collateral including, without
limitation, the execution and delivery of a separate security agreement
with respect to the Company's intellectual property ("Intellectual Property
Security Agreement") in which the Secured Party has been granted a security
interest hereunder, substantially in a form acceptable to the Secured
Party, which Intellectual Property Security Agreement, other than as stated
therein, shall be subject to all of the terms and conditions hereof.
(n) The Company shall permit the Secured Party and its representatives
and agents to inspect the Collateral at any time, and to make copies of
records pertaining to the Collateral as may be requested by the Secured
Party from time to time.
(o) The Company will take all steps reasonably necessary to diligently
pursue and seek to preserve, enforce and collect any rights, claims, causes
of action and accounts receivable in respect of the Collateral.
(p) The Company shall promptly notify the Secured Party in sufficient
detail upon becoming aware of any attachment, garnishment, execution or
other legal process levied against any Collateral and of any other
information received by the Company that may materially affect the value of
the Collateral, the Security Interest or the rights and remedies of the
Secured Party hereunder.
(q) All information heretofore, herein or hereafter supplied to the
Secured Party by or on behalf of the Company with respect to the Collateral
is accurate and complete in all material respects as of the date furnished.
(r) Schedule A attached hereto contains a list of all of the
subsidiaries of Company.
4. Defaults. The following events shall be "Events of Default":
(a) The occurrence of an Event of Default (as defined in the
Debentures) under the Debentures;
(b) Any representation or warranty of the Company in this Agreement or
in the Intellectual Property Security Agreement shall prove to have been
incorrect in any material respect when made; and
(c) The failure by the Company to observe or perform any of its
obligations hereunder or in the Intellectual Property Security Agreement
for ten (10) days after receipt by the Company of notice of such failure
from the Secured Party.
5. Duty To Hold In Trust. Upon the occurrence of any Event of Default
and at any time thereafter, the Company shall, upon receipt by it of any
revenue, income or other sums subject to the Security Interest, whether
payable pursuant to the Debentures or otherwise, or of any check, draft,
note, trade acceptance or other instrument evidencing an obligation to pay
any such sum, hold the same in trust for the Secured Party and shall
forthwith endorse and transfer any such sums or instruments, or both, to
the Secured Party for application to the satisfaction of the Obligations.
6. Rights and Remedies Upon Default. Upon occurrence of any Event of
Default and at any time thereafter, the Secured Party shall have the right
to exercise all of the remedies conferred hereunder and under the
Debentures, and the Secured Party shall have all the rights and remedies of
a secured party under the UCC and/or any other applicable law (including
the Uniform Commercial Code of any jurisdiction in which any Collateral is
then located). Without limitation, the Secured Party shall have the
following rights and powers:
(a) The Secured Party shall have the right to take possession of the
Collateral and, for that purpose, enter, with the aid and assistance of any
person, any premises where the Collateral, or any part thereof, is or may
be placed and remove the same, and the Company shall assemble the
Collateral and make it available to the Secured Party at places which the
Secured Party shall reasonably select, whether at the Company's premises or
elsewhere, and make available to the Secured Party, without rent, all of
the Company's respective premises and facilities for the purpose of the
Secured Party taking possession of, removing or putting the Collateral in
saleable or disposable form.
(b) The Secured Party shall have the right to operate the business of
the Company using the Collateral and shall have the right to assign, sell,
lease or otherwise dispose of and deliver all or any part of the
Collateral, at public or private sale or otherwise, either with or without
special conditions or stipulations, for cash or on credit or for future
delivery, in such parcel or parcels and at such time or times and at such
place or places, and upon such terms and conditions as the Secured Party
may deem commercially reasonable, all without (except as shall be required
by applicable statute and cannot be waived) advertisement or demand upon or
notice to the Company or right of redemption of the Company, which are
hereby expressly waived. Upon each such sale, lease, assignment or other
transfer of Collateral, the Secured Party may, unless prohibited by
applicable law which cannot be waived, purchase all or any part of the
Collateral being sold, free from and discharged of all trusts, claims,
right of redemption and equities of the Company, which are hereby waived
and released.
7. Applications of Proceeds. The proceeds of any such sale, lease or
other disposition of the Collateral hereunder shall be applied first, to
the expenses of retaking, holding, storing, processing and preparing for
sale, selling, and the like (including, without limitation, any taxes, fees
and other costs incurred in connection therewith) of the Collateral, to the
reasonable attorneys' fees and expenses incurred by the Secured Party in
enforcing its rights hereunder and in connection with collecting, storing
and disposing of the Collateral, and then to satisfaction of the
Obligations, and to the payment of any other amounts required by applicable
law, after which the Secured Party shall pay to the Company any surplus
proceeds. If, upon the sale, license or other disposition of the
Collateral, the proceeds thereof are insufficient to pay all amounts to
which the Secured Party is legally entitled, the Company will be liable for
the deficiency, together with interest thereon, at the rate of 15% per
annum (the "Default Rate"), and the reasonable fees of any attorneys
employed by the Secured Party to collect such deficiency. To the extent
permitted by applicable law, the Company waives all claims, damages and
demands against the Secured Party arising out of the repossession, removal,
retention or sale of the Collateral, unless due to the gross negligence or
willful misconduct of the Secured Party.
8. Costs and Expenses. The Company agrees to pay all out-of-pocket
fees, costs and expenses incurred in connection with any filing required
hereunder, including without limitation, any financing statements,
continuation statements, partial releases and/or termination statements
related thereto or any expenses of any searches reasonably required by the
Secured Party. The Company shall also pay all other claims and charges
which in the reasonable opinion of the Secured Party might prejudice,
imperil or otherwise affect the Collateral or the Security Interest
therein. The Company will also, upon demand, pay to the Secured Party the
amount of any and all reasonable expenses, including the reasonable fees
and expenses of its counsel and of any experts and agents, which the
Secured Party may incur in connection with (i) the enforcement of this
Agreement, (ii) the custody or preservation of, or the sale of, collection
from, or other realization upon, any of the Collateral, or (iii) the
exercise or enforcement of any of the rights of the Secured Party under the
Debentures. Until so paid, any fees payable hereunder shall be added to the
principal amount of the Debentures and shall bear interest at the Default
Rate.
9. Responsibility for Collateral. The Company assumes all liabilities
and responsibility in connection with all Collateral, and the obligations
of the Company hereunder or under the Debentures shall in no way be
affected or diminished by reason of the loss, destruction, damage or theft
of any of the Collateral or its unavailability for any reason.
10. Security Interest Absolute. All rights of the Secured Party and
all Obligations of the Company hereunder, shall be absolute and
unconditional, irrespective of: (a) any lack of validity or enforceability
of this Agreement, the Debentures or any agreement entered into in
connection with the foregoing, or any portion hereof or thereof; (b) any
change in the time, manner or place of payment or performance of, or in any
other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Debentures or any other
agreement entered into in connection with the foregoing; (c) any exchange,
release or nonperfection of any of the Collateral, or any release or
amendment or waiver of or consent to departure from any other collateral
for, or any guaranty, or any other security, for all or any of the
Obligations; (d) any action by the Secured Party to obtain, adjust, settle
and cancel in its sole discretion any insurance claims or matters made or
arising in connection with the Collateral; or (e) any other circumstance
which might otherwise constitute any legal or equitable defense available
to the Company, or a discharge of all or any part of the Security Interest
granted hereby. Until the Obligations shall have been paid and performed
in full, the rights of the Secured Party shall continue even if the
Obligations are barred for any reason, including, without limitation, the
running of the statute of limitations or bankruptcy. The Company expressly
waives presentment, protest, notice of protest, demand, notice of
nonpayment and demand for performance. In the event that at any time any
transfer of any Collateral or any payment received by the Secured Party
hereunder shall be deemed by final order of a court of competent
jurisdiction to have been a voidable preference or fraudulent conveyance
under the bankruptcy or insolvency laws of the United States, or shall be
deemed to be otherwise due to any party other than the Secured Party, then,
in any such event, the Company's obligations hereunder shall survive
cancellation of this Agreement, and shall not be discharged or satisfied by
any prior payment thereof and/or cancellation of this Agreement, but shall
remain a valid and binding obligation enforceable in accordance with the
terms and provisions hereof. The Company waives all right to require the
Secured Party to proceed against any other person or to apply any
Collateral which the Secured Party may hold at any time, or to marshal
assets, or to pursue any other remedy. The Company waives any defense
arising by reason of the application of the statute of limitations to any
obligation secured hereby.
11. Term of Agreement. This Agreement and the Security Interest shall
terminate on the date on which all payments under the Debentures have been
made in full and all other Obligations have been paid or discharged. Upon
such termination, the Secured Party, at the request and at the expense of
the Company, will join in executing any termination statement with respect
to any financing statement executed and filed pursuant to this Agreement.
12. Power of Attorney; Further Assurances.
(a) The Company authorizes the Secured Party, and does hereby make,
constitute and appoint it, and its respective officers, agents, successors
or assigns with full power of substitution, as the Company's true and
lawful attorney-in-fact, with power, in its own name or in the name of the
Company, to, after the occurrence and during the continuance of an Event of
Default, (i) endorse any notes, checks, drafts, money orders, or other
instruments of payment (including payments payable under or in respect of
any policy of insurance) in respect of the Collateral that may come into
possession of the Secured Party; (ii) to sign and endorse any UCC financing
statement or any invoice, freight or express xxxx, xxxx of lading, storage
or warehouse receipts, drafts against debtors, assignments, verifications
and notices in connection with accounts, and other documents relating to
the Collateral; (iii) to pay or discharge taxes, liens, security interests
or other encumbrances at any time levied or placed on or threatened against
the Collateral; (iv) to demand, collect, receipt for, compromise, settle
and xxx for monies due in respect of the Collateral; and (v) generally, to
do, at the option of the Secured Party, and at the Company's expense, at
any time, or from time to time, all acts and things which the Secured Party
deems necessary to protect, preserve and realize upon the Collateral and
the Security Interest granted therein in order to effect the intent of this
Agreement and the Debentures, all as fully and effectually as the Company
might or could do; and the Company hereby ratifies all that said attorney
shall lawfully do or cause to be done by virtue hereof. This power of
attorney is coupled with an interest and shall be irrevocable for the term
of this Agreement and thereafter as long as any of the Obligations shall be
outstanding.
(b) On a continuing basis, the Company will make, execute, acknowledge,
deliver, file and record, as the case may be, in the proper filing and
recording places in any jurisdiction, including, without limitation, the
jurisdictions indicated on Schedule B, attached hereto, all such
instruments, and take all such action as may reasonably be deemed necessary
or advisable, or as reasonably requested by the Secured Party, to perfect
the Security Interest granted hereunder and otherwise to carry out the
intent and purposes of this Agreement, or for assuring and confirming to
the Secured Party the grant or perfection of a security interest in all the
Collateral.
(c) The Company hereby irrevocably appoints the Secured Party as the
Company's attorney-in-fact, with full authority in the place and stead of
the Company and in the name of the Company, from time to time in the
Secured Party's discretion, to take any action and to execute any
instrument which the Secured Party may deem necessary or advisable to
accomplish the purposes of this Agreement, including the filing, in its
sole discretion, of one or more financing or continuation statements and
amendments thereto, relative to any of the Collateral without the signature
of the Company where permitted by law.
13. Notices. All notices, requests, demands and other communications
hereunder shall be in writing, with copies to all the other parties hereto,
and shall be deemed to have been duly given when (i) if delivered by hand,
upon receipt, (ii) if sent by facsimile, upon receipt of proof of sending
thereof, (iii) if sent by nationally recognized overnight delivery service
(receipt requested), the next business day or (iv) if mailed by first-class
registered or certified mail, return receipt requested, postage prepaid,
four days after posting in the U.S. mails, in each case if delivered to the
following addresses:
If to the Company: Conectisys Corporation 00000 Xxxxxx Xxxxxxxx Xxxxx
000 Xxxxxxxx, Xxxxxxxxxx 00000 Attention: Chief Executive Officer
Facsimile: 000-000-0000
With copies to:
Xxxxx & Xxxxxx, LLP 000 Xxxxx Xxxxxxxxx Xxxxx 0000 Xxxxx Xxxx, Xxxxxxxxxx
00000 Attention: Xxxxx Xxxxxxx, Esq. Telephone: 000-000-0000 Facsimile:
000-000-0000 Email: xxxxxxxx@xxxxx.xxx
If to the Secured Party:
AJW Partners, LLC AJW Offshore, Ltd. AJW Qualified Partners, LLC 0000
Xxxxxxxx Xxxxxxxxx Xxxxx 000 Xxxxxx, XX 00000 Attention: Xxxxx Xxxxxxxx
Facsimile: 000-000-0000
With copies to:
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP 0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 Attention: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: 000-000-0000
14. Other Security. To the extent that the Obligations are now or
hereafter secured by property other than the Collateral or by the
guarantee, endorsement or property of any other person, firm, corporation
or other entity, then the Secured Party shall have the right, in its sole
discretion, to pursue, relinquish, subordinate, modify or take any other
action with respect thereto, without in any way modifying or affecting any
of the Secured Party's rights and remedies hereunder.
15. Miscellaneous.
(a) No course of dealing between the Company and the Secured Party, nor
any failure to exercise, nor any delay in exercising, on the part of the
Secured Party, any right, power or privilege hereunder or under the
Debentures shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or thereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
(b) All of the rights and remedies of the Secured Party with respect to
the Collateral, whether established hereby or by the Debentures or by any
other agreements, instruments or documents or by law shall be cumulative
and may be exercised singly or concurrently.
(c) This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof and is intended to supersede all prior
negotiations, understandings and agreements with respect thereto. Except
as specifically set forth in this Agreement, no provision of this Agreement
may be modified or amended except by a written agreement specifically
referring to this Agreement and signed by the parties hereto.
(d) In the event that any provision of this Agreement is held to be
invalid, prohibited or unenforceable in any jurisdiction for any reason,
unless such provision is narrowed by judicial construction, this Agreement
shall, as to such jurisdiction, be construed as if such invalid, prohibited
or unenforceable provision had been more narrowly drawn so as not to be
invalid, prohibited or unenforceable. If, notwithstanding the foregoing,
any provision of this Agreement is held to be invalid, prohibited or
unenforceable in any jurisdiction, such provision, as to such jurisdiction,
shall be ineffective to the extent of such invalidity, prohibition or
unenforceability without invalidating the remaining portion of such
provision or the other provisions of this Agreement and without affecting
the validity or enforceability of such provision or the other provisions of
this Agreement in any other jurisdiction.
(e) No waiver of any breach or default or any right under this
Agreement shall be considered valid unless in writing and signed by the
party giving such waiver, and no such waiver shall be deemed a waiver of
any subsequent breach or default or right, whether of the same or similar
nature or otherwise.
(f) This Agreement shall be binding upon and inure to the benefit of
each party hereto and its successors and assigns.
(g) Each party shall take such further action and execute and deliver
such further documents as may be necessary or appropriate in order to carry
out the provisions and purposes of this Agreement.
(h) This Agreement shall be construed in accordance with the laws of
the State of New York, except to the extent the validity, perfection or
enforcement of a security interest hereunder in respect of any particular
Collateral which are governed by a jurisdiction other than the State of New
York in which case such law shall govern. Each of the parties hereto
irrevocably submit to the exclusive jurisdiction of any New York State or
United States Federal court sitting in Manhattan county over any action or
proceeding arising out of or relating to this Agreement, and the parties
hereto hereby irrevocably agree that all claims in respect of such action
or proceeding may be heard and determined in such New York State or Federal
court. The parties hereto agree that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law. The parties hereto further waive any objection to venue in the State
of New York and any objection to an action or proceeding in the State of
New York on the basis of forum nonconveniens.
(i) EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A
JURY TRAIL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL
ENCOMPASSING OF ANY DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE
TO THE SUBJECT MATER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON
LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER
IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THIS WAIVER IN ENTERING
INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY ON THIS
WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND
THAT SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO A JURY
TRIAL FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING
THAT, NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT. IN THE EVENT OF A LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
(j) This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original and, all of
which taken together shall constitute one and the same Agreement. In the
event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing
(or on whose behalf such signature is executed) the same with the same
force and effect as if such facsimile signature were the original thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed on the day and year first above written.
CONECTISYS CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx Chief
Executive Officer
AJW PARTNERS, LLC By: SMS Group, LLC
By: /s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx Manager
AJW OFFSHORE, LTD.
By: First Street Manager II, LLC
By: /s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx Manager
AJW QUALIFIED PARTNERS, LLC
By: AJW Manager, LLC
By: /s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx Manager
SCHEDULE A
Principal Place of Business of the Company:
00000 Xxxxxx Xxxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx 00000
Locations Where Collateral is Located or Stored:
00000 Xxxxxx Xxxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx 00000
List of Subsidiaries of the Company:
TechniLink Technology Manufacturing, Inc. (conditionally dissolved)
xXxxxxxXxxxxxx.xxx
United Telemetry Company
SCHEDULE B Jurisdictions:
Conectisys Corp. (California)
Conectisys Corp. (Colorado)
TechniLink Technology Manufacturing, Inc. (conditionally dissolved)(California)
eEnergy Xxxxxxx.xxx (Nevada)
eEnergy Xxxxxxx.xxx (California)
United Telemetry Company (Nevada)
SCHEDULE C
The Company has granted a security interest in its assets to AJW Partners,
LLC, New Millennium Capital Partners II, LLC, AJW Offshore, Ltd. (formerly
AJW/New Millennium Offshore, Ltd.) and AJW Qualified Partners, LLC
(formerly Pegasus Capital Partners, LLC) pursuant to a Security Agreement
dated as of March 29, 2002.
