SECURITY AGREEMENT
EXHIBIT
10.6
THIS
SECURITY AGREEMENT,
dated
as of the ____ day of July, 2006 (the “Agreement”),
is
entered into by and among Xxxx Xxxxxxx (the “Secured
Party”),
and
Tactical Air Defense Services, Inc., a Nevada corporation (the “Obligor”).
All
capitalized terms not otherwise defined herein, shall have the meanings set
forth in the Asset Purchase Agreement (as hereinafter defined).
WITNESSETH:
WHEREAS,
concurrently herewith, the Obligor and its Subsidiaries entered into an Asset
Purchase Agreement with AeroGroup Incorporated, a Utah corporation (“Sellers”)
(the “Asset
Purchase Agreement”),
pursuant to which, the Obligor agreed to assume all of the obligations of
Sellers under the Secured Promissory Notes issued to the Secured Party, in
the
aggregate principal amount of $1,100,000 (the “Promissory
Note”);
and
WHEREAS,
in
order to induce Sellers to enter into the Asset Purchase Agreement the Obligor
and the Subsidiary Purchasers have agreed to execute and deliver to the Secured
Party this Agreement for the benefit of the Secured Party and to grant him
a
security interest in certain property of the Obligor, to secure the prompt
payment, performance and discharge in full of all of the obligations of the
Obligor under the Promissory Note.
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 Obligor, including, without limitations, all machinery, equipment,
computers, motor vehicles, aircraft, aircraft parts, avionics, 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 Obligor’s businesses and
all improvements thereto (collectively, the “Equipment”);
and
(ii) All
Inventory of the Obligor; and
(iii) All
of
the Obligor’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 Obligor 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 Obligor’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) “Obligations”
means
all of the Obligor’s obligations under the Promissory Note, 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.
(c) “UCC”
means
the Uniform Commercial Code, as currently in effect in the State of New York;
provided,
however,
that in
the event, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of the Secured Party’s security interest in
any Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term “UCC” shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes
of
the provisions hereof relating to such attachment, perfection of priority and
for purposes of definitions related to such provisions.
2. Grant
of Security Interest.
(a) As
an
inducement for the Secured Party to enter into the Asset Purchase Agreement
and
to cause Sellers to enter into the Asset Purchase Agreement, and to secure
the
complete and timely payment, performance and discharge in full, as the case
may
be, of all of the Obligations, except for Permitted Liens (as hereinafter
defined), the Obligor hereby, unconditionally and irrevocably, pledge, grant
and
hypothecate to the Secured Party, a continuing security interest in, a
continuing 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 Obligor’s right, title and interest of whatsoever kind and nature in
and to the Collateral (the “Security
Interest”).
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(b) In
the
event that the Obligor materially breaches any of the terms and provisions
of
this Security Agreement, or should any Event of Default (as that term is defined
herein) occur, the respective positions of each Secured Party with respect
to
the Collateral shall be in accordance with its respective participations
therein.
3. Representations,
Warranties, Covenants and Agreements of the Obligor.
The
Obligor represents and warrant to, and covenant and agrees with, the Secured
Party as follows:
(a) The
Obligor has the requisite corporate power and authority to enter into this
Agreement and otherwise to carry out its obligations hereunder. The execution,
delivery and performance by the Obligor of this Agreement and the filings
contemplated herein have been duly authorized by all necessary action on the
part of the Obligor and no further action is required by the Obligor. This
Agreement constitutes a legal, valid and binding obligation of the Obligor
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditor’s rights generally.
(b) The
Obligor represents and warrants that it has no place of business or offices
where their respective books of account and records are kept (other than
temporarily at the offices of its attorneys or accountants), except as set
forth
on Schedule
A
attached
hereto;
(c) Except
as
to those liens existing as of the date hereof that were disclosed to the Secured
Party by the Obligor and are set forth on the attached Schedule
B
(the
“Permitted
Liens”),
the
Obligor is the sole owner of the Collateral (except for non-exclusive licenses
granted by the Obligor in the ordinary course of business), free and clear
of
any liens, security interests, encumbrances, rights or claims, and are fully
authorized to grant the Security Interest in and to pledge the Collateral.
Except as to the Permitted Liens, 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) covering or affecting any of the Collateral. Except
as to the Permitted Liens, so long as this Agreement shall be in effect, the
Obligor 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).
(d) No
part
of the Collateral has been judged invalid or unenforceable. No written claim
has
been received that any Collateral or the Obligor’s use of any Collateral
violates the rights of any third party. There has been no adverse decision
to
the Obligor’s claim of ownership rights in or exclusive rights to use the
Collateral in any jurisdiction or to the Obligor’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 Obligor, threatened before
any court, judicial body, administrative or regulatory agency, arbitrator or
other governmental authority.
(e) The
Obligor shall at all times maintain their books of account and records relating
to the Collateral at its principal place of business and may not relocate such
books of account and records unless it delivers to the Secured Party at least
thirty (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 liens in the Collateral.
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(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
security interest in such Collateral. Except for the filing of financing
statements on Form-1 under the UCC with the jurisdictions indicated on
Schedule
C,
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 Obligor of, or the effectiveness of, the Security Interest granted hereby
or for the execution, delivery and performance of this Agreement by the Obligor,
or (ii) for the perfection of or exercise by the Secured Party of their rights
and remedies hereunder.
(g) The
Obligor hereby irrevocably authorize the Secured Party at any time and from
time
to time to file in any Uniform Commercial Code jurisdiction any initial
financing statements and amendments thereto that (i) indicate the Collateral
regardless of whether any particular asset comprised in the Collateral falls
within the scope of Article 9 of the Uniform Commercial Code of the State of
New
York as amended from time to time (“NYUCC”),
or
any other Uniform Commercial Code jurisdiction; and (ii) contain any other
information required by part 5 of Article 9 of the NYUCC for the sufficiency
or
filing office acceptance of any financing statement or amendment, including
whether the Obligor is an organization, the type of organization and any
organization identification number issued to the Obligor. The Obligor agrees
to
furnish any such information to the Secured Parties promptly upon request.
The
Obligor also ratifies its authorization for the Secured Party to have filed
in
any Uniform Commercial Code jurisdiction any like initial financing statements
or amendments thereto if filed prior to the date hereof with respect to the
Collateral.
(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
Obligor is a party or by which Obligor is bound. No consent (including, without
limitation, from stockholders or creditors of the Obligor) is required for
the
Obligor to enter into and perform its obligations hereunder.
(i) The
Obligor shall at all times maintain the liens and Security Interest provided
for
hereunder as valid and perfected liens and security interests in the Collateral
in favor of the Secured Party until this Agreement and the Security Interest
hereunder shall be terminated pursuant to Section 11. The Obligor hereby agrees
to defend the same against any and all persons. The Obligor shall safeguard
and
protect all Collateral for the account of the Secured Party. At the request
of
the Secured Party, the Obligor will pay the cost of filing one or more financing
statements pursuant to the UCC (or any other applicable statute) in form
reasonably satisfactory to the Secured Party 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 Obligor shall pay all fees, taxes and other
amounts necessary to maintain the Collateral and the Security Interest
hereunder, and the Obligor 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.
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(j) So
long
as the Obligor shall have any obligations under the Promissory Note, the Obligor
shall not, without the Secured Party’s written consent, transfer, pledge,
hypothecate, encumber, license (except for non-exclusive licenses granted by
the
Obligor in the ordinary course of business), sell (except for sales of inventory
in the ordinary course of business) or otherwise dispose of any of the
Collateral.
(k) The
Obligor shall keep and preserve their 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
Obligor 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
Obligor 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.
(n) The
Obligor shall permit the Secured Party and their 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
Obligor 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
Obligor 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
Obligor 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 Obligor with respect to the Collateral is accurate and complete
in all material respects as of the date furnished.
4. Defaults.
The
following events shall be “Events
of Default”:
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(a) A
breach
by Obligor or any of the Purchasers of their material obligations under any
of
the Promissory Note, the Asset Purchase Agreement, the Guaranty and failure
to
cure such breach for ten (10) days after receipt by such Obligor of notice
of
such breach from the Secured Party;
(b) Any
representation or warranty of the Obligor or in this Agreement and/or or any
Purchaser in (i) the Asset Purchase Agreement, or (ii) any other agreement,
guaranty or other document relating to the Asset Purchase Agreement to which
such Purchaser is a party, shall prove to have been incorrect in any material
respect when made; and
(c) The
material failure by an Obligor to observe or perform any of its material
obligations hereunder for ten (10) days after receipt by such Obligor 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 Obligor
shall, upon receipt by it of any revenue, income or other sums subject to the
Security Interest, whether payable pursuant to the Promissory Note, or
otherwise, or of any check, draft, debenture, 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 Obligation.
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 Promissory Notes, 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 Obligor shall assemble the Collateral and make it available to
the
Secured Party at places which the Secured Party shall reasonably select, whether
at the Obligor’s premises or elsewhere, and make available to the Secured Party,
without rent, all of the Obligor’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 Obligor 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 Obligor or right of redemption
of
the Obligor, 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 Obligor, which are hereby waived and
released.
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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 their 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 Obligor 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
are legally entitled, the Obligor will be liable for the deficiency, together
with interest thereon, at the rate of 18% 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 Obligor 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.
All
ordinary costs and expenses incurred by any Secured Party in collection of
the
Obligations shall be borne exclusively by the Obligor including, without
limitation, any costs, expenses, fees or disbursements incurred by outside
agencies or attorneys retained by the Secured Party to effect collections of
the
Obligations or any Collateral securing the Obligations. The provisions of this
paragraph shall not apply to any suits, actions, proceedings or claims of the
nature referred to herein or otherwise which are based upon or related to the
repayment of, or the taking of security for, any loans and/or advances made
by
Secured Party to the Obligor that do not arise under the Promissory Note, and
the party making such loans and/or advances shall be exclusively responsible
for
such suits, actions, proceedings or claims and the payment of all such expenses
in connection therewith.
8. Costs
and Expenses.
The
Obligor agrees to pay all reasonable 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 Obligor 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 Obligor 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 Promissory Note. Until so paid, any fees payable
hereunder shall be added to the principal amount of the Promissory Note, and
shall bear interest at the Default Rate.
9. Responsibility
for Collateral.
The
Obligor assume all liabilities and responsibility in connection with all
Collateral, and the obligations of the Obligor hereunder or under the Promissory
Note 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.
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10. Security
Interest Absolute.
All
rights of the Secured Party and all Obligations of the Obligor hereunder, shall
be absolute and unconditional, irrespective of: (a) any lack of validity or
enforceability of this Agreement, the Promissory Note, 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 Promissory Notes, 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 Obligor, 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 Parties shall
continue even if the Obligations are barred for any reason, including, without
limitation, the running of the statute of limitations or bankruptcy. The Obligor
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 Obligor’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 Obligor 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 Obligor 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 earlier of: (i)
the
repayment of all amounts due the Secured Party under the Promissory Note. Upon
such termination, the Secured Party, at the request and at the expense of the
Obligor, 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
Obligor authorizes the Secured Party, and does hereby make, constitute and
appoint him and his respective agents, heirs or assigns with full power of
substitution, as the Obligor’s true and lawful attorney-in-fact, with power, in
its own name or in the name of the Obligor, to, after the occurrence and during
the continuance of an Event of Default, (i) endorse any debentures, 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 Obligor’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 Promissory Note, all as fully and effectually
as the Obligor might or could do; and the Obligor 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.
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(b) On
a
continuing basis, the Obligor 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
C,
attached hereto, and with the Federal Aviation Administration, 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
Obligor hereby irrevocably appoints the Secured Party as the Obligor’s
attorney-in-fact, with full authority in the place and stead of the Obligor
and
in the name of the Obligor, from time to time at the discretion of the Secured
Party, 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 Obligor 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
Obligor, to:
0000
Xxxxxxx Xxxxx
Xxxxxxx,
Xxxxx 00000
Attention:
Xxxx X. Xxxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
9
with
a
copy to:
Xxxxxxx
Xxxx LLP
00
X.
00xx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxx, Esq.
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
If
to
Secured Party, to:
Xxxx
X.
Xxxxxxx
0000
XXX
Xxxx.
Xxxx
Xxxxx Xxxxxxx, XX 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
with
a
copy to:
Xxxxxxx
Xxxx LLP
00
X.
00xx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxx, Esq.
Telephone:
(000) 000-0000
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 Parties shall have the
right, in their 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 Obligor and the Secured Party, nor any failure to
exercise, nor any delay in exercising, on the part of the Secured Parties,
any
right, power or privilege hereunder or under the Promissory Note 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 Promissory Note, or by any other
agreements, instruments or documents or by law shall be cumulative and may
be
exercised singly or concurrently.
10
(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
New
York 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 non conveniens.
(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 WAIVED 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.
11
(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.
[THE
REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY]
12
COUNTERPART
SIGNATURE PAGE TO SECURITY AGREEMENT, DATED AS OF JULY __,
2006.
IN
WITNESS WHEREOF,
the
parties hereto, intending to be bound hereby, have caused this Security
Agreement to be executed the day and year first above written.
| OBLIGOR: | ||
| TACTICAL AIR DEFENSE SERVICES, INC. | ||
| |
|
|
| By: | ||
|
Name:
|
||
|
Title:
|
||
| SECURED PARTY: | ||
| |
|
|
| By: | ||
|
Xxxx
X. Xxxxxxx
|
||
| Title | ||
13
SCHEDULE
A
Principal
Offices
SCHEDULE
B
Permitted
Liens
SCHEDULE
C
Jurisdictions
Utah
Texas
Ukraine
British
Columbia
