Exhibit 10.11
ASSIGNMENT AND SECURITY AGREEMENT
THIS ASSIGNMENT AND SECURITY AGREEMENT (hereinafter "Agreement") is entered
into as of the 23rd day of March, 1995, by Racom Systems, Inc., a corporation
organised under the laws of the State of Delaware, USA having its principal
place of business at 0000 Xxxxxxxxx Xxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxx
00000 (hereinafter "Racom") and Intag International Limited (ACN 009 270 188
a company organized under the laws of the State of New South Wales, Australia
having its principal place of business at 0xx Xxxxx, 00-00 Xxxxxxxxx Xxxxx,
Xxxxxx XXX 0000, Xxxxxxxxx (hereinafter "Intag")
RECITALS
A. As of the date of this Agreement, Intag has advanced to Racom certain
funds for use by Racom for operations and working capital.
B. The parties anticipate that Intag will make further advances to Racom in
the future for similar purposes.
C. To induce Intag to make further advances, the parties desire to secure
Racom's repayment of such past and future advances in the manner provided in
this Agreement.
NOW, THEREFORE, in consideration of the recitals set forth above and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
AGREEMENT
Section 1. ASSIGNMENT AND GRANT OF SECURITY, As security for the
payment of the Secured Moneys, Racom does hereby assign and pledge to Intag
and does hereby grant to Intag a continuing security interest in and lien
upon, all of the right, title and interest of Racom, in and to all of Racom's
personal property, rights and interests, whether tangible or intangible, now
owned or hereafter acquired, including without limitation, all "goods"
(including but not limited to "equipment" and "inventory"), "accounts",
"chattel paper", "documents", "instruments", "fixtures" and "general
intangibles" (including but not limited to contract and intellectual property
rights), as such terms are defined in Article 9 of the Uniform Commercial
Code as in effect in the State of Colorado from time to time and in all books
and records related thereto or which are otherwise necessary or helpful in
the collection thereof or realisation thereupon, and all renewals,
substitutions, replacements, additions, accessions, proceeds and products
thereof, specifically excluding, however, those assets described on Exhibit A
attached hereto and incorporated herein by this reference (hereinafter
referred to from time to time as the "Collateral"). For purposes of this
Agreement:
(a) the term "Secured Moneys" means all debts and monetary liabilities of
Racom to Intag, of any nature, irrespective of whether the debts or
liabilities are present or future; actual, prospective or contingent; owed or
incurred to or for the account of Racom alone or severally or jointly with
any other person; owed or incurred as principal, interest, fees, charges,
taxes, duties or other imposts, damages (whether for breach of contract or
tort or incurred on any ground), losses, costs or expenses or on any other
account, or comprising any combination of the foregoing and shall include
without limitation:
(i) all amounts advanced by Intag to Racom prior to the date of this
Agreement (collectively "OLD OBLIGATIONS") which total [US$2,433,797.98]
comprising Original Loans - $933,797.98; Working Capital Facility -
$700,000, License Amendment Loan - $400,000 and Additional Working Capital
Facility - $400,000, the details of which are particularised in Exhibit B;
and
(ii) certain secured promissory notes or working capital facility
advances issued or made concurrent with and subsequent to the date
of the Agreement ("SECURED PROMISSORY NOTES");
(b) the term Collateral shall also be deemed to incorporate all assets
acquired by Racom, in any manner whatsoever, subsequent to the date of this
Agreement.
SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS. Racom represents
and warrants to and covenants with Intag as follows:
(a) Racom is the legal and beneficial owner of all of the Collateral and has
not granted and there does not exist any other assignment, pledge, lien,
security interest, encumbrance or other right, title or interest of any
person in the Collateral except as specified on Exhibit C attached hereto and
Racom shall defend the Collateral against all claims and demands of all
persons at any time claiming the same or any interest therein adverse to
Intag's interests therein.
(b) Except as specified on Exhibit C attached hereto, there is no financing
statement or similar filing, registration, notice or assignment under the law
of any jurisdiction (collectively "Registrations") now existing, on file or
registered in any public office covering any interest of any kind in the
Collateral and so long as any Secured Money remains unpaid, Racom will not
execute or permit or suffer to exist any other, further or future
Registration relating to the Collateral, except Registrations filed in
respect of and covering the security interest of Intag in the Collateral
granted hereby.
(c) This Agreement has been duly authorised by all necessary legal action
and by Racom's Board of Directors and constitutes the duly authorised, legal,
valid and binding obligation of Racom enforceable in accordance with its
terms.
SECTION 3. SPECIAL PROVISIONS CONCERNING COLLATERAL. Racom agrees
to cause all payments received by Racom for the sale of any of the Collateral
to be made directly to Intag. To the extent that Racom shall receive any
such payments for the sale of Collateral directly, such payments shall be
held in trust for the benefit of Intag and Racom will promptly forward all
proceeds so received by it directly to Intag.
SECTION 4. REGISTRATIONS; DOCUMENTARY STAMP TAXES. Racom agrees at
any time and from time to time to execute and deliver to Intag such
Registrations, in form acceptable to Intag, as may be necessary or
appropriate, as determined by Intag in its discretion, to establish and
maintain a valid, enforceable, perfected security interest in the Collateral.
Racom will pay any applicable filing fees, documentary stamp taxes and
related expenses in connection with the filing of such Registrations.
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SECTION 5. EVENTS OF DEFAULT
Each of the following shall constitute an event of default under
this Agreement:
(a) Failure by Racom to repay any of the Secured Moneys when due
and payable.
(b) Failure by Racom to comply with or to perform any other term,
obligation, covenant or condition contained in this Agreement or in any of
the documents referred to in Exhibit B.
(c) The appointment of a receiver for any part of Racom's
property, any assignment for the benefit of creditors, any type of creditor
workout, or the commencement of the proceeding under any bankruptcy laws by
or against Racom.
Section 6. SPECIAL PROVISIONS CONCERNING REMEDIES AND SALE. In
addition to any rights and remedies now or hereafter granted under applicable
law and not by way of limitation, Intag shall at all times have all of the
rights and remedies, in law or equity, of a secured party under Colorado law
in addition to the rights and remedies provided herein, including, without
limitation, all rights and remedies of a secured party under Article 9 of the
Uniform Commercial Code as in effect in the State of Colorado from time to
time. Intag is hereby appointed Racom's attorney-in-fact, at Intag's option,
to take such action with respect to Racom's accounts as Intag is authorised
by law or this Agreement to take. The power granted hereunder, being coupled
with an interest, shall be irrevocable so long as any of the Secured Money
remains unpaid. After final payment in full of the Secured Moneys, any
Collateral held by Intag shall be turned over to Racom and any and all
security interests held by Intag on the Collateral shall be deemed
automatically terminated without any further representations, warranties or
agreements of any kind, and Intag shall timely perform and undertake at the
request of Racom all actions necessary for the release of such security
interests in the Collateral.
Section 7. MISCELLANEOUS
(a) Any notice or demand upon either party shall be deemed to have
been sufficiently given mailed if, postage prepaid, by registered or
certified air mail, five (5) days after deposit in the mails, or if telexed,
when sent, with an answer-back received, or if delivered by hand, when
delivered, in each case to the address set forth in the first paragraph
hereof or to such other address as either party may designate in writing.
(b) No delay on the part of Intag in exercising any of its rights,
remedies, powers and privileges hereunder or any partial or single exercise
thereof shall constitute a waiver thereof. None of the terms and conditions
of this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by Racom and Intag. No notice to or
demand on Racom in any case shall entitle Racom to any other or further
notice or demand in similar or other circumstances or constitute a waiver of
any of the rights of Intag to any other or further action in any
circumstances without notice or demand.
(c) The Secured Promissory Notes and Old Obligations shall remain
in full force and effect without regard to, and shall not be impaired by (i)
any exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement, any other agreement or
instrument relating to the Secured Promissory Notes and Old Obligations, any
guaranty, or any other security for any of the Secured
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Promissory Notes and Old Obligations; or (ii) any amendment to or
modification or extension of, any agreement, document or instrument
evidencing or relating to the Secured Promissory Notes and/or Old
Obligations, the Secured Promissory Notes and/or Old Obligations themselves
or any security or guaranty for any of the Secured Promissory Notes and/or
Old Obligations, whether or not Racom shall have notice or knowledge of any
of the foregoing. The rights and remedies of Intag herein provided are
cumulative and not exclusive of any rights or remedies which Intag would
otherwise have.
(d) This Agreement shall be binding upon Racom and its successors
and assigns and shall inure to the benefit of Intag and its successors and
assigns, except that Racom may not transfer or assign any of its obligations,
rights or interests hereunder without the prior written consent of Intag. All
agreements, representations and warranties made herein shall survive the
execution and delivery of this Agreement.
(e) The descriptive headings of the several sections of this
Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provisions hereof.
(f) Any provisions hereof which are prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
(g) It is expressly agreed, notwithstanding anything herein or in
any other agreement to the contrary, that Racom shall be and remain liable to
perform all of its obligations (including without limitation, its obligations
to preserve, protect and maintain the Collateral, and to collect payments due
under the Collateral) with respect to the Collateral and Intag shall not have
any obligations or liabilities with respect to the Collateral by reason of or
arising out of this Agreement, nor shall Intag be required or obligated in
any manner to perform or fulfil any of the obligations of Racom under or
pursuant to the Collateral.
(h) This Agreement and the rights and obligations of the parties
hereunder shall be construed in accordance with and be governed by the laws
of the State of Colorado.
(i) The parties acknowledge that the Secured Promissory Notes and
the promissory notes evidencing the Old Obligations currently have or may
have in the future certain provisions whereunder the debt evidenced by such
promissory notes may be converted into Racom common stock. In the event that
Intag exercises its rights under such notes and converts all or a portion of
the debt evidenced by such notes into Racom common stock, the parties agree
that the Secured Moneys shall be reduced by an amount equal to the amount of
debt evidenced by such promissory notes which in converted into Racom common
stock on the date any such conversion takes effect.
Section 8. VARIATION OF AGREEMENT. Following the date hereof, this
Agreement may be varied, by a writing signed by both parties on terms
acceptable to Intag and Racom, to accommodate Racom's capital raising
proposals.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and delivered as of the date first written above.
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Racom Systems, Inc. by order of its Board of Directors:
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
Intag International Limited
By:
----------------------------------------------
Name:
Title:
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EXHIBIT A
NONE
EXHIBIT B
LOAN SUMMARY
As of March 23, 1995
ORIGINAL LOANS: $933,797.98
WORKING CAPITAL FACILITY: $700,000.00
LICENSE AMENDMENT LOAN: $400,000.00
SECURED PROMISSORY NOTES: $400,000.00
-----------
TOTAL $2,433,797.98
*The above represents principle only and does not include accrued interest
payable.
ORIGINAL LOANS
ORIGINAL OUTSTANDING
DATE AMOUNT BALANCE
---- ----------- -----------
September 2, 1993 85,000.00
October 5, 1993 120,000.00
November 1, 1993 120,000.00
December 1, 1993 120,000.00
December 23, 1993 15,000.00
December 31, 1993 28,797.98
January 11, 1994 50,000.00
January 21, 1994 50,000.00
February 2, 1994 50,000.00
February 18, 1994 60,000.00
March 10, 1994 50,000.00
March 22, 1994 25,000.00
March 24, 1994 10,000.00
March 30,1994 100,000.00
April 11, 1994 50,000.00
-----------
Total $933,797.98 $933,797.98
WORKING CAPITAL FACILITY
ORIGINAL OUTSTANDING
DATE AMOUNT BALANCE
---- ----------- -----------
April 21, 1994 $50,000.00
April 26, 1994 50,000.00
October 11, 1994 100,000.00
October 11, 1994 100,000.00
October 14, 1994 300,000.00
November 3, 1994 300,000.00
December 13, 1994 100,000.00
December 22, 1994 (200,000.00)
December 29, 1994 (100,000,00)
-----------
Total $700,000.00 $700,000.00
SECURED PROMISSORY NOTES
ORIGINAL OUTSTANDING
DATE AMOUNT BALANCE
---- ----------- -----------
February 22, 1995 $150,000.00
February 28, 1995 60,000.00
March 6, 1995 90,000.00
March 15,1995 100,000.00
-----------
Total $400,000.00 $400,000.00
March 29, 1995 50,000.00
March 31, 1995 50,000.00 $500,000.00
-----------
500,000.00
EXHIBIT C
Various operating leases on office equipment including copiers, fax machines
and computers.
