EXHIBIT 10.29
SECURITY AGREEMENT
This Security Agreement (this "Agreement") is entered into as of July 24,
2003, by AURA SYSTEMS, INC. a Delaware corporation (the "Debtor"), for the
benefit of KOYAH LEVERAGE PARTNERS, L.P., a Delaware limited partnership in its
capacity as collateral agent for the Lenders referred to below (the "Secured
Party").
R E C I T A L S :
A. The Debtor has requested that KOYAH LEVERAGE PARTNERS, L.P. and KOYAH
PARTNERS, L.P. (collectively, the "Lenders") extend loans to the Debtor.
B. Such loans are to be evidenced by Convertible Promissory Notes dated the
date hereof made by the Debtor in favor of the Lenders (the "Notes").
C. The Lenders have required, as a condition of making such loans, that the
Debtor grant a security interest in all of its personal property to secure such
loans and any other present or future obligations of the Debtor to the Lenders.
D. In order to induce the Lenders to make such loans, the Debtor is willing
to grant such security interest as further provided herein.
NOW, THEREFORE, the Debtor hereby agrees with the Secured Party as follows:
ARTICLE I. DEFINITIONS
Unless otherwise defined herein, any terms used herein (whether or not
capitalized, such as "accounts," "inventory" and "equipment") which are defined
in the Uniform Commercial Code as enacted in the State of Washington, as amended
from time to time, shall have the meaning assigned to such term therein. Unless
otherwise defined herein, any capitalized terms used herein which are defined in
the Notes shall have the meaning assigned to them therein. In addition, the
following terms shall have the meaning set forth below:
"Collateral" means all of the Debtor's personal property and fixtures of
every nature (except in the case of (ii)(g) below which is limited to the
specific property set forth therein), whether tangible or intangible and whether
now owned or hereafter acquired, wherever located, including without limitation
the following:
(i) (a) All goods; (b) all inventory, merchandise, and personal
property held for sale or lease or furnished or to be furnished under
contracts of service, all raw materials, work in process, or materials used
or consumed in Debtor's business, wherever located and whether in the
possession of the Debtor, a warehouseman, a bailee, or any other person;
(c) all equipment, machinery, tools, office equipment, supplies,
furnishings, furniture, or other items used or useful, directly or
indirectly, in the Debtor's business, (d) all fixtures; and (e) all
substitutes and replacements therefor, all accessions, attachments, and
other additions thereto, all tools, parts and supplies used in connection
therewith, all packaging, manuals, warranties and instructions related
thereto, and all leasehold or equitable interests therein;
(ii) (a) All accounts, accounts receivable, contract rights, contracts
receivable, purchase orders, notes, drafts, acceptances, and other rights
to payment and receivables; (b) all chattel paper (whether tangible or
electronic), documents and instruments (including promissory notes); (c)
all money and deposit accounts; (d) all letter of credit rights (whether or
not the letter of credit is evidenced by a writing), rights under security,
guaranties or other supporting obligations, tort claims and proceeds,
insurance claims and proceeds, and tax refund claims and proceeds; (e) all
securities and other investment property; (f) all general intangibles and
payment intangibles, (g) all patents and patent applications and
registrations, trademarks and trademark applications and registrations,
service marks and service xxxx applications and registrations, trade names,
trade styles, goodwill, inventions, designs, methods, processes,
technology, know-how, intellectual property, drawings, specifications, blue
prints, confidential information, trade secrets, customer lists, supplier
lists, software and computer programs, mask works, and mask work
applications and registrations, copyrights and copyright applications and
registrations, goodwill, license agreements, franchise agreements and other
licenses, permits, franchises, and agreements of every kind and nature
pursuant to which the Debtor possesses, uses or has authority to possess or
use any property (whether tangible or intangible) of the Debtor or pursuant
to which others possess, use or have authority to possess or use any
property (whether tangible or intangible) of the Debtor, and infringement
and commercial tort claims which are related to the "AuraGen" based
technologies or products ("Patents, Trademarks and Copyrights"), including
without limitation the patents and patent applications, trademark and
trademark applications and copyrights and copyright applications listed on
Schedule 1 hereto; and (h) all business records, software, writings, plans,
specifications, schematics, and other recorded data in any form; and
(iii) All products and proceeds of the foregoing and all other
property received or receivable in disposition of or exchange of the
foregoing.
"Event of Default" means any default in payment or performance of the
Obligations.
"Obligations" means any and all obligations and liabilities of every nature
of the Debtor to the Lenders or the Secured Party, whether now existing or
hereafter incurred, including without limitation those arising out of or in
connection with the Notes, this Agreement or any other agreements with the
Lenders or the Secured Party. The Obligations shall specifically include any and
all principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy, would accrue on such obligations), fees,
expenses, indemnities or other obligations or liabilities, whether 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 increased, created, or
incurred, as well as any and all of such obligations or liabilities that are
paid, to the extent such payment is avoided or recovered directly or indirectly
from the Lenders or the Secured Party as a preference, fraudulent transfer, or
otherwise, together with any and all amendments, modifications, extensions or
renewals of the foregoing.
ARTICLE II. GRANT OF SECURITY INTEREST
To secure the payment and performance of the Obligations, the Debtor hereby
grants a continuing security interest in the Collateral, and assigns the
Collateral to, the Secured Party.
ARTICLE III. COVENANTS OF THE DEBTOR
The Debtor shall fully perform each of the covenants set forth below.
3.1 Further Documentation
Promptly upon request of the Secured Party and at the Debtor's expense, the
Debtor (a) shall prepare, execute, deliver and file any financing statement, any
filing with the Patent and Trademark Office, Copyright Office or other
applicable office, and any renewal, substitution or correction thereof or any
other document and shall take any such further action as the Secured Party may
require in perfecting or protecting the security interested granted by the
Debtor under this Agreement or in otherwise obtaining the full benefits of this
Agreement and (b) authorizes the Secured Party to prepare, execute, deliver and
file any such documents and to take any such actions on behalf of the Debtor.
3.2 Patents, Trademarks and Copyrights
Schedule 1 lists all Patents, Trademarks and Copyrights currently owned by
the Debtor. Promptly upon any change in the Patents, Trademarks and Copyrights
owned by the Debtor, the Debtor shall provide the Secured Party with an updated
Schedule 1 listing all Patents, Trademarks and Copyrights then owned by the
Debtor. Schedule 2 lists all Patents, Trademarks and Copyrights currently
licensed to the Debtor. Promptly upon any change in the Patents, Trademarks and
Copyrights licensed to the Debtor by third parties, the Debtor shall provide the
Secured Party with an updated Schedule 2 listing all Patents, Trademarks and
Copyrights then licensed to the Debtor.
3.3 Pledges
Promptly upon request of the Secured Party and at Debtor's expense, the
Debtor shall deliver and pledge to the Secured Party, endorsed or accompanied by
instruments of assignment or transfer satisfactory to the Secured Party, any
Collateral consisting of instruments, investment property, documents, general
intangibles or chattel paper.
3.4 Control
Promptly upon request of the Secured Party and at Debtor's expense, the
Debtor shall cooperate with the Secured Party in obtaining control with respect
to any Collateral consisting of deposit accounts, investment property, letter of
credit rights and electronic chattel paper.
3.5 Maintenance of Records
The Debtor shall keep and maintain satisfactory and complete records of the
Collateral including but not limited to a record of all payments received and
all credits granted with respect to the Collateral and all other dealings with
the Collateral. The Debtor shall xxxx its books and records pertaining to the
Collateral to evidence this Agreement and the security interest granted herein.
Promptly upon request of the Secured Party, the Debtor shall deliver and turn
over to the Secured Party all books and records pertaining to the Collateral at
any time after the occurrence of an Event of Default.
3.6 Liens
Except for existing licenses of Patents, Trademarks and Copyrights by the
Debtor to third parties set forth on Schedule 3 to this Agreement, the Debtor
owns the Collateral free and clear of liens, charges, pledges, security
interests, encumbrances or other claims or interests in the Collateral, and the
Debtor will neither create nor permit the existence of any of the foregoing
without the prior written consent of the Secured Party.
3.7 Disposition of Collateral
The Debtor shall not sell, license, lease, transfer or otherwise dispose of
any of the Collateral without the prior written consent of the Secured Party,
except for sales of inventory, collection of rights to payment, and disposition
of equipment or inventory which is obsolete or being replaced, all in the
ordinary course of business in accordance with past practices.
3.8 Limitations on Amendments, Modifications, Terminations, Waivers and
Extensions of Contracts and Agreements Giving Rise to Accounts
Without the prior written consent of Secured Party, the Debtor will not (a)
amend, modify, terminate, waive or extend any provision of any agreement giving
rise to an account, general intangible, instrument, chattel paper or other right
to payment, licensing any Patents, Trademarks or Copyrights to the Debtor or by
the Debtor or otherwise relating to the Collateral, in any manner that could
reasonably be expected to have a material adverse effect on the value of any
Collateral or (b) fail to exercise promptly and diligently every material right
that it may have under each such agreement, other than any right of termination
(which shall only be exercised with the prior written consent of the Secured
Party).
3.9 Indemnification
The Debtor agrees to pay, and to indemnify the Secured Party and hold the
Secured Party harmless from, all liabilities, costs and expenses (including
legal fees and expenses) in connection with protecting or realizing on the
Collateral, enforcing any rights or remedies of the Secured Party or otherwise
arising out of this Agreement. In any suit, proceeding or action brought by the
Secured Party under any account or other right to payment to enforce payment of
any sum owing thereunder or to enforce any provisions of any account or other
right to payment, the Debtor will indemnify the Secured Party and hold the
Secured Party harmless from all expense, loss or damage suffered by reason of
any defense, setoff, counterclaim, recoupment, reduction or liability whatsoever
of any account debtor thereunder arising out of a breach by the Debtor of any
obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of such account debtor or its
successors from the Debtor.
3.10 Further Identification of Collateral
The Debtor will furnish to the Secured Party from time to time statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Secured Party may request, all
in reasonable detail.
3.11 Notices
The Debtor will advise the Secured Party promptly in reasonable detail of
any lien, charge, pledge, security interest, encumbrance or other claim or
interest asserted against any of the Collateral and (b) of the occurrence of any
other event that could reasonably be expected to have a material adverse effect
on the Collateral.
3.12 Changes in Locations, Name, Etc.
The Debtor will not (a) change its state of organization, (b) change the
location of its chief executive office/chief place of business or remove its
books and records from the locations set forth in Schedule 4 to this Agreement
or (c) change its name, identity or structure to such an extent that any
financing statement filed by the Secured Party in connection with this Agreement
would become ineffective or seriously misleading, unless it shall have given the
Secured Party at least 30 days prior written notice thereof.
3.13 Further Assurances
The Debtor agrees to take all actions which the Secured Party may request
to perfect or maintain the perfection of, or to otherwise protect, the security
interest granted herein and the Debtor authorizes the Secured Party to take such
actions on behalf of the Debtor, including without limitation (a) filing
(including electronic or facsimile filing) financing statements describing the
Collateral, which may include descriptions broader than as set forth in this
Agreement and (b) filing any documents with the Patent and Trademark Office,
Copyright Office or any other applicable office. The Debtor agrees that where
allowed by law, a carbon, photographic or other reproduction of a financing
statement or this Agreement is sufficient as a financing statement.
3.14 Insurance
The Debtor (a) will keep the Collateral continuously insured at its expense
against fire, theft, and other hazards in amounts and with insurers as shall be
sufficient to fully protect the Collateral, as reasonably approved by the
Secured Party, (b) will include in such policies of insurance to the Secured
Party clauses making any loss payable to the Secured Party as its interest may
appear and agreeing to notify Secured Party of any cancellation or threatened
cancellation not less than 30 days prior to the effective date of such
cancellation and (c) will deliver copies of such policies of insurance to the
Secured Party upon request.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
The Debtor hereby makes the following representations and warranties:
4.1 Title to Collateral
The Debtor has good and marketable title to all of the Collateral, free and
clear of all liens, charges, pledges, security interests, encumbrances or other
claims or interests.
4.2 No Impairment of Collateral
None of the Collateral shall be impaired or jeopardized because of the
security interest granted herein.
4.3 Other Agreements
The execution and delivery of this Agreement, the consummation of the
transactions provided for herein, and the fulfillment of the terms hereof will
not result in the breach of any of the terms, conditions, or provisions of, or
constitute a default under, or conflict with or cause any acceleration of any
obligation under any agreement or other instrument to which the Debtor is a
party or by which the Debtor is bound or result in the violation of any
applicable law.
4.4 No Approvals
No approvals of any governmental entity or third party are required in
connection with the security interest herein granted.
4.5 Authority
The Debtor has full power and authority to grant to the Secured Party a
security interest in the Collateral.
4.6 Location of Records
The address(es) of the office where the books and records of the Debtor are
kept concerning the Collateral is set forth on Schedule 4 to this Agreement.
4.7 State of Organization
The Debtor's state of organization is set forth on Schedule 4 to this
Agreement.
4.8 Chief Executive Office
The Debtor's chief executive office and chief place of business is located
at the address set forth on Schedule 4 to this Agreement.
4.9 Trade Names
The Debtor conducts its business only under its legal name except for any
additional trade names set forth on Schedule 4 to this Agreement.
ARTICLE V. THE SECURED PARTY'S RIGHTS WITH RESPECT TO THE COLLATERAL
5.1 No Duty on the Secured Party's Part
The Secured Party and the Lenders shall not be required to realize upon any
Collateral, except at their option upon the occurrence of any Event of Default;
collect the principal, interest or payment due thereon or exercise any rights or
options of the Debtor pertaining thereto; make presentment, demand or protest;
give notice of protest, nonacceptance or nonpayment; or do any other thing for
the protection, enforcement or collection of any Collateral. The powers
conferred on the Secured Party and the Lenders hereunder are solely to protect
the Secured Party's and the Lenders' interests in the Collateral and shall not
impose any duty upon the Secured Party or the Lenders to exercise any such
powers. The Secured Party and the Lenders shall be accountable only for amounts
that they actually receive as a result of the exercise of such powers; and
neither the Secured Party nor the Lenders shall be responsible to the Debtor for
any act or failure to act hereunder.
5.2 Negotiations with Account Debtors
Upon the occurrence of any Event of Default, the Secured Party may, in its
sole discretion, extend or consent to the extension of the time of payment or
maturity of any instruments, accounts, chattel paper, general intangibles or
other rights to payment.
5.3 Right to Assign
The Secured Party and the Lenders may assign or transfer the whole or any
part of the Obligations and may transfer therewith as collateral security the
whole or any part of the Collateral; and all obligations, rights, powers and
privileges herein provided shall inure to the benefit of the assignee and shall
bind the successors and assigns of the parties.
5.4 Duties Regarding Collateral
Beyond the safe custody thereof, the Secured Party shall not have any duty
as to any Collateral in its possession or control, or as to any preservation of
any rights of or against other parties.
5.5 Collection From Account Debtors
Upon the occurrence of any Event of Default, the Debtor shall, upon demand
by the Secured Party (and without any grace or cure period), notify all account
debtors to make payment to the Secured Party of any amounts due or to become
due. The Debtor authorizes the Secured Party to contact the account debtors for
the purpose of having all or any of them pay their obligations directly to the
Secured Party. Upon demand by the Secured Party, the Debtor shall enforce
collection of any indebtedness owed to it by account debtors.
5.6 Inspection
The Secured Party and its designees, from time to time at reasonable times,
may inspect, audit and make copies of and extracts from all records and all
other papers in the possession of the Debtor in connection with the Collateral.
ARTICLE VI. THE SECURED PARTY'S RIGHTS AND REMEDIES
6.1 Acceleration; Remedies
(a) Upon the occurrence of any Event of Default, the Secured Party and the
Lenders shall have all rights and remedies available to it under the Notes, this
Agreement, and any other documents or agreements or available at law or in
equity, including without limitation the Uniform Commercial Code. The Secured
Party and the Lenders may proceed to enforce any or all of such rights and
remedies or realize on any or all security or guaranties for the Obligations in
any manner or order it deems expedient without regard to any equitable principes
of marshaling or otherwise. No failure or delay on the part of the Secured Party
or the Lenders in exercising any right, power or privilege hereunder and no
course of dealing shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any right, power or privilege.
The rights and remedies of the Secured Party and the Lenders are cumulative and
not exclusive of any rights or remedies that the Secured Party or the Lenders
would otherwise have. No notice to or demand on the Debtor, in any case, shall
entitle the Debtor to any other or further notice or demand in similar or other
circumstances or shall constitute a waiver of the right of the Secured Party or
the Lenders to any other or further action in any circumstances without notice
or demand.
6.2 Notice of Sale
The Debtor hereby acknowledges and agrees that written notice mailed to the
Debtor at the address designated herein ten days prior to the date of public or
private sale of any of the Collateral shall constitute commercially reasonable
notice.
6.3 Disposition of Collateral
In addition to all other rights and remedies available to the Secured Party
and the Lenders upon the occurrence of an Event of Default, the Secured Party
may dispose of any of the Collateral at public or private sale in its then
present condition or following such preparation and processing as the Secured
Party deems commercially reasonable. Such sale may include licensing of the
Collateral on an exclusive or non-exclusive basis, on a worldwide or
geographically limited basis and on an all-uses or limited uses basis. For the
purpose of enabling the Secured Party to exercise its rights and remedies
hereunder, the Debtor hereby grants to the Secured Party an irrevocable,
non-exclusive license (exercisable without payment of royalty or other
compensation to the Debtor) to use, license or sub-license any of the
Collateral, including in such license access to all media in which any of the
Collateral may be recorded or stored and to all computer software and programs
used for the compilation or printout thereof. The Secured Party has no duty to
prepare or process the Collateral prior to sale. The Secured Party may disclaim
warranties of title, possession, quiet enjoyment and the like. Such actions by
the Secured Party shall not affect the commercial reasonableness of the sale.
Further, the Secured Party may comply with any applicable state or federal law
requirements in connection with a disposition of the Collateral and compliance
will not be considered adversely to affect the commercial reasonableness of any
sale of the Collateral.
ARTICLE VII. APPOINTMENT OF COLLATERAL AGENT
The Lenders hereby appoint KOYAH LEVERAGE PARTNERS, L.P. as their
collateral agent to act as the Secured Party hereunder for all purposes in
obtaining, maintaining, protecting and enforcing the security interest in the
Collateral and hereby authorize KOYAH LEVERAGE PARTNERS, L.P., in its sole
discretion, to enter into all such agreements and to take all such actions as
KOYAH LEVERAGE PARTNERS, L.P. in its sole discretion, deems necessary or
advisable in connection therewith. In so acting as collateral agent, KOYAH
LEVERAGE PARTNERS, L.P. shall act for the ratable benefit of the Lenders and any
amounts realized or costs incurred by the Secured Party in connection with this
Agreement shall be ratably allocated between the Lenders.
ARTICLE VIII. GENERAL PROVISIONS
8.1 The Secured Party's Appointment as Attorney-in-Fact
(a) The Debtor hereby irrevocably constitutes and appoints the Secured
Party and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of the Debtor and in the name of the Debtor or in its own
name, from time to time in the Secured Party's discretion, for the purpose of
carrying out the terms of this Agreement, to take any and all appropriate action
and to execute any and all documents and instruments that may be necessary or
desirable to accomplish the purposes of this Agreement; and without limiting the
generality of the foregoing, the Debtor hereby gives the Secured Party the power
and right, on behalf of the Debtor, without consent by or notice to the Debtor,
to do the following:
(i) upon the occurrence of any Event of Default, to transfer to the
Secured Party or to any other person all or any of the Collateral, to
endorse any instruments pledged to the Secured Party and to fill in blanks
in any transfers of Collateral, powers of attorney or other documents
delivered to the Secured Party;
(ii) to pay or discharge taxes and liens levied or placed on or
threatened against the Collateral;
(iii) upon the occurrence of any Event of Default, (A) to take
possession of, endorse and collect any checks, drafts, notes, acceptances
or other instruments for the payment of moneys due under any account,
instrument or general intangible or with respect to any other Collateral
and (B) to file any claim or to take any other action or proceeding in any
court of law or equity or otherwise deemed appropriate by the Secured Party
for the purpose of collecting all such moneys due under any account,
financial assets, instrument, investment property, or general intangible or
with respect to any other Collateral whenever payable; and
(iv) upon the occurrence of any Event of Default, (A) to direct any
party liable for any payment under any of the Collateral to make payment of
all moneys due or to become due thereunder directly to the Secured Party or
as the Secured Party shall direct; (B) to ask for, demand, collect and
receive payment of and receipt for, any and all moneys, claims and other
amounts due or to become due at any time in respect of or arising out of
any Collateral; (C) to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents in
connection with any of the Collateral; (D) to commence and prosecute any
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any thereof and to enforce any
other right in respect of any Collateral; (E) to defend any suit, action or
proceeding brought against the Debtor with respect to any Collateral; (F)
to settle, compromise or adjust any suit, action or proceeding described in
clause (E) above and, in connection therewith, to give such discharge or
releases as the Secured Party may deem appropriate; and (G) generally, to
sell, transfer, pledge and make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the
Secured Party were the absolute owner thereof for all purposes; and to do,
at the Secured Party's option and the Debtor's expense, at any time or from
time to time, all acts and things that the Secured Party deems necessary to
protect, preserve or realize upon the Collateral and the Secured Party's
security interest therein and to effect the intent of this Agreement, all
as fully and effectively as the Debtor might do.
(b) The Debtor hereby ratifies all that such attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power coupled
with an interest and shall be irrevocable.
(c) The Debtor also authorizes the Secured Party, at any time and from time
to time, to execute, in connection with the sale provided for in Article VI
hereof, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral.
(d) The powers conferred on the Secured Party hereunder are solely to
protect the Secured Party's interests in the Collateral and shall not impose any
duty upon the Secured Party or the Lenders to exercise any such powers. The
Secured Party and the Lenders shall be accountable only for amounts that they
actually receive as a result of the exercise of such powers, and neither it nor
any of its officers, directors, employees or agents shall be responsible to the
Debtor for any act or failure to act hereunder.
(e) The Debtor shall pay or reimburse the Secured Party for all costs and
expenses, including attorneys fees, incurred by the Secured Party while acting
as the Debtor's attorney-in-fact hereunder.
8.2 Termination of Agreement
This Agreement shall remain in full force and effect until the Obligations
have been fully and finally discharged.
8.3 Severability
If any provision of this Agreement is for any reason and to any extent
determined by a court of competent jurisdiction to be invalid or unenforceable,
the remainder of this Agreement will be unaffected and interpreted so as best to
reasonably effect the intent of the parties hereto. Such void or unenforceable
provision of this Agreement shall be replaced with a valid and enforceable
provision so as to achieve, to the greatest extent possible, the economic,
business and other purposes of the void or unenforceable provision.
8.4 Waiver
No waiver by any party of any breach of any provision hereof shall
constitute a waiver of any other breach of that or any other provision hereof.
8.5 Assignment
All rights, powers, privileges and immunities herein granted to the Secured
Party and the Lenders shall extend to their successors and assigns and any other
legal holder of the Obligations or this Agreement, with full right by the
Secured Party and the Lenders to assign and/or sell the same.
8.6 Successors
The rights and obligations of the parties hereto shall inure to the benefit
of, and be binding and enforceable upon, the respective successors and assigns
of the parties.
8.7 Entire Agreement
This Agreement constitutes the entire agreement of the parties hereto
concerning the subject matter hereof, all prior discussions, proposals,
negotiations and understandings having been merged herein. This Agreement or any
provision hereof may be (i) modified or amended, but only by a writing signed by
all parties at such time or (ii) waived (either generally or in a particular
instance, either retroactively or prospectively, either for a specified period
of time or indefinitely, either with or without consideration), but only by a
writing signed by the party granting such waiver.
8.8 Governing Law; Jurisdiction; Venue; Jury Trial
This Agreement shall be governed by, and interpreted under, the laws of the
State of Washington applicable to contracts made and to be performed therein,
without giving effect to the principles of conflicts of law. The parties hereby
(i) agree that any legal suit, action or proceeding arising out of or relating
to this Agreement must be instituted in a federal or state court located in the
County of Spokane, State of Washington, (ii) irrevocably submit to the
jurisdiction of any such court and waive any objection to the laying of venue
in, or the inconvenience of, such forum and (iii) irrevocably waives all rights
to trial by jury in any action, suit or proceeding arising out of or related to
this Agreement, the Notes or any other agreement or document between the Debtor
and the Secured Party or the Lenders.
8.9 Notices
All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally or by commercial messenger or
courier service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with acknowledgment of complete transmission)
to each party at the address (or at such other address for a party as shall be
specified by like notice) set forth below; provided, however, that notices sent
by mail will not be deemed given until received.
Aura Systems, Inc.
0000 Xxxxxx Xxxxxx
Xx Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
Fax: (000) 000-0000
Koyah Leverage Partners, L.P.
c/o ICM Asset Management, Inc.
000 Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx XX, 00000
Attn: Xxxxxx Xxx
Fax: (000) 000-0000
Koyah Partners, L.P.
c/o ICM Asset Management, Inc.
000 Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx XX, 00000
Attn: Xxxxxx Xxx
Fax: (000) 000-0000
8.10 Costs and Expenses
The Debtor hereby agrees to pay to the Secured Party and the Lenders upon
demand all costs and expenses, including attorney's fees, incurred in connection
with the administration of this Agreement, including without limitation all
filings or other actions required by the Secured Party in connection with
perfecting or otherwise protecting the security interest granted hereunder. In
addition, the Borrower hereby agrees to pay to the Secured Party upon demand all
costs and expenses, including attorney's fees, incurred in connection with the
enforcement of this Agreement, collection of the Obligations and the protection,
preservation, collection or sale of or other realization upon the Collateral,
including without limitation in any out-of-court workout, any court action, any
appeal or any bankruptcy proceeding.
8.11 Counterparts
This Agreement may be executed in any number of counterparts, each of each
of which will be an original, but all of which together will constitute one and
the same instrument.
8.12 Title and Subtitles
The titles of the sections of this Agreement are for convenience of
reference only and are not to be considered in construing this Agreement.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the Debtor, the Secured Party and the Lenders have
caused this Agreement to be duly executed as of the day and year first above
written.
"Debtor"
AURA SYSTEMS, INC.
By: /s/ Xxxx X. Xxxxxx
----------------------------------------------------------
Name: Xxxx X. Xxxxxx
----------------------------------------------------------
Title: Chairman & Chief Executive Officer
----------------------------------------------------------
"Secured Party" and "Lender"
KOYAH LEVERAGE PARTNERS, L.P.
By: Koyah Ventures LLC, its general partner
By: /s/ Xxxxxx X. Law
------------------------------------------------------
Name: Xxxxxx X. Law
Title: Vice President
"Lender"
KOYAH PARTNERS, L.P.
By: Koyah Ventures LLC, its general partner
By: /s/ Xxxxxx X. Law
------------------------------------------------------
Name: Xxxxxx X. Law
Title: Vice President
SCHEDULE 1
Patents and Patent Applications,
Trademark and Trademark Applications
and
Copyrights and Copyright Applications
1. Patents.
-------
Any and all domestic and foreign patent registrations, patent applications,
patentable invention rights or patent-related rights to current and future
interests owned by Debtor or assigned to Debtor, related to the "AuraGen" based
technologies, including but not restricted to the following patent registrations
and patent applications:
5,734,217 Induction Machine using Ferromagnetic Conducting Material in Rotor
6,157,175 Mobile Power Generation System
Pending Mobile Power Generation System
Pending Switched Reluctance Motor Delivering Constant Torque From Three
Phase Sinusoidal Voltages
Pending Bi-Directional Power Supply Circuit
2. Trademarks.
----------
Any and all domestic and foreign trademark registrations, trademark
applications, trade and service xxxx rights, or other trademark-related rights
to current and future interests owned by Debtor or assigned to Debtor, relating
generally to "AuraGen" based products, including but not restricted to the
following trademark registrations and trademark applications:
Serial Number Reg. Number Word Xxxx
75977693 2202313 AURAGEN
-------- ------- -------
75594235 2477031 AURAGEN POWER. ON THE GO.
-------- ------- -------------------------
75559987 2372115 AURA
-------- ------- ----
75237652 AURAGEN OF POWER
-------- ----------------
75141345 AURAGEN
-------- -------
75141344 AURAPOWER
-------- ---------
74472095 1991593 AURA
-------- ------- ----
74369064 2196818 AURA
-------- ------- ----
3. Copyrights.
----------
Any and all domestic and foreign copyright registrations, copyright applications
or other copyright-related rights to current and future interests owned by
Debtor or assigned to Debtor, relating to the "AuraGen" based technologies or
"AuraGen" products.
[Remainder of page intentionally left blank]
SCHEDULE 2
Patents and Patent Applications, Trademarks and Trademark Applications
and
Copyrights and Copyright Applications Licensed to the Debtor
None
SCHEDULE 3
Patents and Patent Applications
Trademarks and Trademark Applications,
And Copyrights and Copyright Applications
Licensed By the Debtor
None
SCHEDULE 4
Debtor Information
State of organization: Delaware
Address of
chief executive office: Aura Systems, Inc.
0000 Xxxxxx Xxxxxx
Xx Xxxxxxx, XX 00000
Address(es) where
books and records are kept: Same
Additional trade names: None
