REVOLVING LOAN AND SECURITY AGREEMENT
Amount: up to $500,000 San Juan Capistrano, California
Date: December 28, 2004
FOR VALUE RECEIVED, the undersigned AUXILIO, INC., a Nevada corporation
("Company"), hereby promises to pay to Xxxxxxx X. Xxxxxxxxxx and any assigns
("Holder"), at such place as Holder may specify, in lawful money of the United
States of America, the principal amount advanced hereunder, which amount shall
be a maximum of $500,000 (the "Maximum Loan Amount"), on or before December 10,
2005 (the "Maturity Date"), plus interest on the principal amount outstanding
from time to time hereunder at a rate equal to the lesser of (i) the maximum
lawful rate or (ii) eight percent (8%) per year (such principal and interest
being referred to herein as the "Loan"). Interest shall be calculated in
arrears through the last day of each month and shall be due and payable on the
last day of each month.
1. Revolving Advances; Payments. From time to time after the date of
this Agreement and subject to the accuracy of Company's representations, Holder
will loan to Company an amount not to exceed the Maximum Loan Amount. Such
amount shall be net of any costs and expenses to be paid to Holder or its
counsel, including without limitation the finance fee set forth in Section 6 of
this Agreement), upon six (6) business days' advance written notice by Company
to the Holder.
All payments under this Agreement shall be applied first to fees and
expenses, then to accrued but unpaid interest and then to principal. Any
principal or interest payments on this Agreement outstanding after the
occurrence and during the continuance of a default under this Agreement shall
bear interest at a rate equal to the lesser of (i) the lawful legal rate or (ii)
five percent (5%) (computed annually) above the interest rate otherwise
applicable under this Agreement.
Company shall repay all amounts outstanding under this Agreement on or
before the Maturity Date, and shall repay on demand by Holder amounts advanced
in excess of the Borrowing Base, as recomputed from time to time.
2. Secured Agreement; Subordination.
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(a) Secured Agreement. To secure repayment of all obligations
evidenced by this Agreement and performance of all of Company's obligations
hereunder, Company grants Holder a security interest in all of Company's
inventory, accounts, equipment, cash, deposit accounts, securities, Intellectual
Property (as defined in Exhibit A hereto), chattel paper, general intangibles
and instruments, now existing or hereafter arising, and all proceeds thereof, as
such terms are defined in the California Uniform Commercial Code (the "UCC"),
whether now owned or hereafter acquired, or any value received in exchange for
any of the foregoing (collectively, the "Collateral") as set forth in Exhibit A.
Company shall take such actions as Holder reasonably requests from time to time
to perfect or continue the security interest granted hereunder including,
without limitation, filing UCC-1 financing statements in connection therewith.
(b) Subordination. Holder hereby subordinates payment by the Company of the
Loan to the payment to any future institutional lender to the Company (the
"Institutional Lender"), provided that such Institutional Lender shall loan the
Company at least $750,000 and at least 25% of the proceeds of such loan shall be
used to pay down the indebtedness existing under this Agreement. Holder agrees
to subordinate such Holder's lien on the Collateral to the lien on the
Collateral of such Institutional Lender.
3. Representations, Warranties and Covenants of Company.
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(a) Corporate Existence and Authority. Company is and will continue to be
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization. Company is and will continue
to be qualified and licensed to do business in all jurisdictions in which any
failure to do so would have a material adverse effect on Company. Company has
all requisite power to transact the business it transacts and proposes to
transact, to execute and deliver this Agreement, and all other documents and
agreements
contemplated by this Agreement, and to perform the provisions of this
Agreement and to consummate the transactions contemplated by this Agreement. The
execution, delivery and performance of this Agreement, and all other documents
and agreements contemplated by this Agreement, and the consummation of the
transactions contemplated by this Agreement, have been duly authorized and
approved by Company. This Agreement, and all other documents and agreements
contemplated by this Agreement have each been duly authorized, executed and
delivered by, and each is the valid and binding obligation of, Company
enforceable against Company in accordance with its terms, except as may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
other similar laws or by legal or equitable principles relating to or limiting
creditors' rights generally.
(b) No Conflicts. The consummation of the transactions contemplated by this
Agreement and the performance of the terms and provisions of this Agreement, and
any other documents or agreements contemplated by this Agreement will not (i)
contravene, result in any breach of, or constitute a default under any
indenture, mortgage, deed of trust, bank loan or credit agreement, corporate
charter, by-laws or other material agreement or instrument to which Company is a
party or by which Company or any of its properties or the Collateral is bound,
(ii) conflict with or result in a breach of any of the terms, conditions or
provisions of any order of any court, arbitrator or Federal, State, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (collectively, "Governmental Person")
applicable to Company or (iii) violate any material provision of any statute or
other rule or regulation of any Governmental Person applicable to Company, which
could have a material adverse effect on Company.
(c) Place of Business; Location of Collateral. The address set forth
in Section 8(c) of this Agreement is Company's chief executive office. Company
will give Holder prior written notice before opening any additional place of
business or changing its chief executive office. Portions of the Collateral are
located in the field and are moved from time to time. The Company will
cooperate with Holder in (i) perfecting the security interests granted hereunder
in all Collateral and (ii) in providing Holder, at Holder's request, with
current information regarding the whereabouts of the Collateral from time to
time.
(d) Title to Collateral; Permitted Liens. Company is now, and will
at all times in the future be, the sole owner of all the Collateral, except for
items of equipment which are leased by Company. The Collateral now is and will
remain free and clear of any and all liens, charges, security interests,
encumbrances and adverse claims, except for purchase money or lessor security
interests in certain equipment, contractual rights of set off under bank
agreements, and the liens in favor of the other parties to the Intercreditor
Agreement. Holder now has, and will continue to have, a first-priority
perfected and enforceable security interest in all of the Collateral, subject
only to the purchase money or lessor security interests, contractual rights of
set off under bank agreements, and the liens in favor of the other parties to
the Intercreditor Agreement, and Company will at all times defend Holder and the
Collateral against all claims of others (subject to the rights of holders of
purchase money or lessor security interests in certain equipment, contractual
rights of set off under bank agreements, and the liens in favor of the other
parties to the Intercreditor Agreement). So long as the loan is outstanding,
none of the Collateral now is or will be affixed to any real property in such a
manner, or with such intent, as to become a fixture. Company is not and will
not become a lessee under any real property lease pursuant to which the lessor
may obtain any rights in any of the Collateral and no such lease now prohibits,
restrains, impairs or will prohibit, restrain or impair Company's right to
remove any Collateral from the leased premises (subject to statutory rights of
landlords). Whenever any Collateral is located upon premises in which any third
party has an interest (whether as owner, mortgagee, beneficiary under a deed of
trust, lien or otherwise), Company shall, whenever requested by Holder, use its
best efforts to cause such third party to execute and deliver to Holder, in form
acceptable to Holder, such waivers and subordinations as Holder shall specify,
so as to ensure that Holder's rights in the Collateral are, and will continue to
be, superior to the rights of any such third party. Company will keep in full
force and effect, and will comply with all the terms of, any lease of real
property where any of the Collateral now or in the future may be located.
(e) Maintenance of Collateral. Company will maintain the Collateral
in good working condition, ordinary wear and tear excepted, and Company will not
use the Collateral for any unlawful purposes. Company will immediately advise
Holder in writing of any material loss or damage to the Collateral.
(f) Books and Records. Company has maintained and will maintain at
Company's chief executive office complete and accurate books and records,
comprising an accounting system in accordance with generally accepted accounting
principles.
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(g) Financial Condition, Statements and Reports. All financial
statements now or in the future delivered to Holder have been, and will be,
prepared in conformity with generally accepted accounting principles and now and
in the future will completely and fairly reflect the financial condition of
Company, at the times and for the periods therein stated. Between the last date
covered by any such statement provided to Holder and the date hereof, there has
been no material adverse change in the financial condition or business of
Company. Company is now and will continue to be solvent.
(h) Compliance with Law. Company has complied, and will comply, in
all material respects, with all provisions of all applicable laws and
regulations, including, but not limited to, those relating to Company's
ownership of real or personal property, the conduct and licensing of Company's
business, and all environmental matters.
(i) Litigation. There is no claim, suit, litigation, proceeding or
investigation pending or (to the best of Company's knowledge) threatened by or
against or affecting Company in any court or before any governmental agency (or
any basis therefor known to Company) which could normally or reasonably be
expected to result, either separately or in the aggregate, in any material
adverse change in the financial condition or business of Company, or in any
material impairment in the ability of Company to carry on its business in
substantially the same manner as it is now being conducted. Company will
promptly inform Holder in writing of any claim, proceeding, litigation or
investigation in the future threatened or instituted by or against Company.
(j) Use of Proceeds. All proceeds of the loan shall be used solely
for lawful business purposes.
(k) Intellectual Property. Company possesses all material licenses,
permits, franchises, authorizations, patents, copyrights, trademarks and trade
names and any other tangible or intangible or intellectual property rights, or
rights thereto, required to conduct its business substantially as now conducted
and as currently proposed to be conducted, without actual knowledge of conflict
with the rights of others.
(l) Indebtedness. Except for the loan evidenced by this Agreement and the
indebtedness identified on Schedule 3(l) or as otherwise disclosed in Company's
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financial statements, as of September 30, 2004, previously delivered to Holder,
Company has no outstanding indebtedness of any kind (including contingent
obligations, tax assessments and unusual forward or long-term commitments).
(m) Disclosure. No representation or other statement made by Company
to Holder contains any untrue statement of a material fact or omits to state a
material fact necessary to make any statements made to Holder not misleading.
(n) Performance. Company shall pay the principal of and interest on the
loan evidenced by this Agreement in the manner provided in this Agreement. The
obligation of Company described in the preceding sentence is absolute and
unconditional, irrespective of any tax or accounting treatment of such
obligation including without limitation any documentary stamp, transfer, ad
valorem or other taxes assessed by any jurisdiction in connection with this
transaction.
(o) Stay, Extension and Usury Laws. Company agrees (to the extent it may
lawfully do so) that it will not at any time insist upon, plead or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury law or other law that would prohibit or forgive Company from paying
all or a portion of the principal of, finance fee, or interest on the loan
contemplated by this Agreement, wherever enacted, now or at any time hereinafter
in force, or that may materially affect the covenants or the performance of this
Agreement in any manner inconsistent with the provisions of this Agreement.
Company expressly waives all benefit or advantage of any such law. If a court
of competent jurisdiction prescribes that Company may not waive its rights to
take the benefit or advantage of any stay or extension law or any usury law or
other law in accordance with the prior sentence, then the obligation to pay
interest on the principal shall be reduced to the maximum legal limit under
applicable law governing the interest payable in connection with this Agreement,
and any amount of interest paid by Company that is deemed illegal shall be
deemed to have been a prepayment of principal on the loan.
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(p) Taxes. Company shall make all necessary tax filings and reports and
pay prior to delinquency all taxes, assessments and governmental levies that may
be imposed upon Company, except as contested in good faith and by appropriate
proceedings.
(q) Limitations on Indebtedness. Without Holder's prior written consent,
Company shall not, directly or indirectly, create, incur, assume, suffer to
exist or otherwise in any manner become liable or commit to become liable for
any indebtedness other than Company's obligations to Holder under this Agreement
and indebtedness incurred in the ordinary course of business not in excess of
US$10,000 in the aggregate.
(r) Insurance. Company shall maintain insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which Company operates.
(s) Reports. Company will provide Holder with monthly
company-prepared financial statements within 45 days after the end of each month
and such additional financial and other information as Holder may reasonably
request from time to time.
(t) Insurance. Company will maintain insurance on the Collateral
that includes a lender's loss payable endorsement in favor of Holder as an
additional loss payee. Company will maintain insurance in a form acceptable to
Holder relating to the Collateral and Company's business in amounts and of a
type that are customary to businesses similar to Company's.
(u) Consolidation. Company will not merge or consolidate with any
person or entity, or make any investments, or dispose of any substantial portion
of its assets without Holder's prior written consent.
(v) Capitalization. Schedule 3(v) sets forth the capitalization of
Company on a fully diluted basis.
4. Prepayments. Company may, from time to time, prepay the loan
evidenced hereby, in whole or in part, so long as Company has given Holder two
(2) or more business days' written notice of such optional prepayment. Any such
optional prepayment of principal shall be without premium or penalty. Each
prepayment of principal under this Section shall be accompanied by all interest
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then accrued and unpaid on the principal so prepaid. Any principal prepaid
pursuant to this Section shall be in addition to, and not in lieu of, all
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payments otherwise required to be paid under this Agreement at the time of such
prepayment.
5. Optional Conversion.
(a) At Holder's option and upon the occurrence of one of the following
events: (i) funding of the next Succeeding Financing of Company, or (ii) the
sale and purchase of substantially all of the assets or stock of Company, the
outstanding principal balance and all accrued interest under the loan evidenced
by this Agreement shall be convertible, without the payment of any additional
consideration by Holder and at the option of Holder, into equity securities of
Company of the class and series offered by the Company in the Succeeding
Financing described in (i) above or the sale and purchase of the assets or stock
of Company described in (ii) above (the "ConversionSecurities"). Holder's
option to convert will expire 60 days after the occurrence of one of the events
described in subsections (i) and (ii) above, provided, that Company has given
Holder at least 15 days' prior written notice of such event. In the event
Holder elects to convert upon a funding of the Succeeding Financing described in
(i) above, Company shall issue the Conversion Securities to Holder at a price
per share equal to the average price per share paid by all third party investors
in the Succeeding Financing or, in the event the Holder elects to convert upon a
sale of the assets or stock of Company described in (ii) above, Company shall
issue common stock at a price per share equal to (y) the average price per share
paid by all third parties who acquire all or substantially all of the stock of
the Company or (z) the book value of the common stock determined after giving
effect to the purchase price of the assets, in each case by converting
outstanding principal balance and all accrued interest under the loan evidenced
by this Agreement into such equity. The outstanding principal shall continue to
accrue interest, and Company shall be obligated to pay such interest, according
to the terms and conditions of this Agreement until the Conversion Date (as
defined below).
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For purposes of this Section 5, "Succeeding Financing" means a sale of the
Company of its debt or equity securities in a transaction that results in
aggregate net proceeds to the Company in an amount in excess of $1,000,000.
(b) In order for the Holder to convert all amounts owing under this
Agreement into equity, Holder shall deliver a written notice to Company that
Holder elects to convert. Any conversion made at the election of Holder shall be
deemed to have been made immediately prior to the close of business on the date
Company is deemed to have received such notice, and the Holder or its nominee or
nominees entitled to receive the equity shall be treated for all such purposes
as the record holder or holders of such equity on such date (the "Conversion
Date"). Company shall have no obligation to issue any fractional shares upon
conversion. Any fractional shares shall be rounded up to the nearest whole
share.
6. Fees and Expenses. Each party hereto shall pay its own costs and
expenses, including reasonable attorney's fees, incurred in the preparation of
this Agreement and the other documents executed in connection with this
Agreement. Company shall also have delivered to Holder a warrant to purchase
stock, in form reasonably acceptable to Holder ("Warrant", together with this
Agreement, the Intercreditor Agreement and any other documents delivered in
connection with this Agreement, the "Loan Documents"). Company shall pay all
reasonable and actual costs that Holder incurs in enforcing this Agreement or
exercising any rights with respect to the collateral, including without
limitation reasonable attorneys' fees and expenses.
7. Events of Default; Remedies.
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(a) Events of Default Defined; Acceleration of Maturity. If any of the
following events ("Events of Default") shall occur and be continuing (for any
reason whatsoever and whether it shall be voluntary or involuntary or by
operation of law or otherwise):
(i) default shall be made in the payment of the principal of, or
interest on, the loan when and as the same shall become due and payable, whether
at stated maturity, by acceleration, upon a mandatory prepayment due date, in
the repayment of amounts advanced in excess of the Borrowing Base, or
otherwise; or
(ii) default shall be made in the performance or observance of any
covenant, agreement or condition contained in this Agreement or in any of the
other Loan Documents, and such default shall have continued for a period of five
(5) business days; or
(iii) Company shall (1) apply for or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property and assets, (2) be
generally unable to pay its debts as such debts become due, (3) make a general
assignment for the benefit of its creditors, (4) commence a voluntary case under
the United States Bankruptcy Code or similar law or regulation (as now or
hereafter in effect), (5) file a petition seeking to take advantage of any other
law providing for the relief of debtors, (6) fail to controvert in a timely or
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under the United States Bankruptcy Code or other law or
regulation, (7) dissolve, (8) take any corporate action under any applicable law
analogous to any of the foregoing, or (9) take any corporate action for the
purpose of effecting any of the foregoing; or
(iv) a proceeding or case shall be commenced, without the application
or consent of Company in any court of competent jurisdiction, seeking (1) the
liquidation, reorganization, dissolution, winding up or composition or
readjustment of its debts, (2) the appointment of a trustee, receiver,
custodian, liquidator or the like of it or for all or any substantial part of
its assets, or (3) similar relief in respect of Company, under any law providing
for the relief of debtors, and such proceeding or case shall continue
undismissed, or unstayed and in effect, for a period of sixty (60) days; or an
order for relief shall be entered in an involuntary case under the United States
Bankruptcy Code or other similar law or regulation, against Company; or action
under the laws of any jurisdiction affecting Company analogous to any of the
foregoing shall be taken with respect to Company and shall continue unstayed and
in effect for any period of sixty (60) days; or
(v) final judgment for the payment of money shall be rendered by a
court of competent jurisdiction against Company and Company shall not discharge
the same or provide for its discharge in accordance
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with its terms, or procure a
stay of execution thereof within sixty (60) days from the date of entry thereof
and within said period of sixty (60) days, or such longer period during which
execution of such judgment shall have been stayed, appeal therefrom and cause
the execution thereof to be stayed during such appeal, and such judgment
together with all other such judgments shall exceed in the aggregate US$50,000;
or
(vi) any representation or warranty made by Company in this
Agreement, or any other documents or agreements contemplated hereby and thereby
or in any certificate or other instrument delivered hereunder or pursuant hereto
or in connection with any provision hereof shall be false or incorrect in any
material respect on the date as of which made;
then (x) upon the occurrence of any Event of Default described in Section
7(a)(iii) or (iv), the unpaid principal amount of the loan, together with the
interest accrued thereon and all other amounts payable by Company under this
Agreement, shall automatically become immediately due and payable, without
presentment, demand, protest, notice of acceleration or intent to accelerate or
other requirements of any kind, all of which are hereby expressly waived by
Company or (y) upon the occurrence of any other Event of Default, Holder may, by
notice to Company, declare the unpaid principal amount of the loan to be, and
the same shall forthwith become, due and payable, together with the interest
accrued thereon and all other amounts payable by Company hereunder. Failure by
Holder to indicate any Event of Default in any one notice shall not preclude
Holder from indicating such omitted Event or Events of Default in future notices
and shall not relieve Company of any liability under this Agreement, nor
constitute a waiver of Holder's rights under this Agreement.
(b) Suits for Enforcement. If any Event of Default shall have occurred
and be continuing, Holder may proceed to protect and enforce its rights against
Company, subject to the terms of the Intercreditor Agreement, either by suit in
equity or by action at law, or both, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the exercise of
any power granted in this Agreement, or Holder may proceed to enforce the
payment by Company of all sums due under this Agreement or to enforce any other
legal or equitable right of Holder including without limitation all rights of a
secured party under the UCC.
Company covenants that, if it shall default in the making of any payment
due hereunder or in the performance or observance of any agreement contained in
this Agreement, it will pay to Holder such further amounts, to the extent
lawful, to cover any reasonable costs and expenses of collection or of otherwise
enforcing Holder's rights, including without limitation the reasonable counsel
fees and costs and expenses incurred in connection with any restructuring,
negotiation, refinancing, workout, bankruptcy or other similar transaction or
proceeding. The obligations set forth in this paragraph shall survive the
payment in full of the loan.
(c) Remedies Cumulative. No remedy herein conferred upon Holder is
intended to be exclusive of any other remedy and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.
(d) Remedies Not Waived. No course of dealing between Company and
any other person and no delay or failure in exercising any rights hereunder or
under the loan in respect thereof shall operate as a waiver of Holder's rights.
8. Miscellaneous.
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(a) Reliance on and Survival of Representations. All representations,
warranties, covenants and agreements of Company herein shall be deemed to be
material and to have been relied upon by Holder and shall survive the execution
and delivery of this Agreement and of the securities, for so long as the loan
remains outstanding.
(b) Successors and Assigns. This Agreement shall bind and inure to the
benefit of and be enforceable by Company, Holder and each of their respective
successors and assigns, and, in addition, shall inure to the benefit of and be
enforceable by each person who shall from time to time be a holder of the loan.
Holder shall be permitted to transfer the securities being sold hereunder in
accordance with their terms and in accordance with applicable restrictions under
applicable federal and state securities laws.
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(c) Notices. All notices and other communications provided for in this
Agreement shall be in writing and delivered by registered or certified mail,
postage prepaid, or delivered by overnight courier (for next business day
delivery) or telecopied, addressed as follows, or at such other address as any
of the parties hereto may hereafter designate by notice to the other parties
given in accordance with this Section:
1) if to Company:
00000X Xxxxx Xxxxxx #0000
Xxx Xxxx Xxxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
2) if to Holder:
Xxxxxxx X. Xxxxxxxxxx
0000 Xxxxx Xxxxx Xxxx 00
Xxxx, Xxxx 00000
(000) 000-0000
Any such notice or communication shall be deemed to have been duly given on
the fifth day after being so mailed, the next business day after delivery by
overnight courier, when received when sent by telecopy or upon receipt when
delivered personally.
(d) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Signatures may be
exchanged by telecopy, with original signatures to follow. Each of the parties
hereto agrees that it will be bound by its own telecopied signature and that it
accepts the telecopied signatures of the other parties to this Agreement. The
original signature pages shall be forwarded to Holder or its counsel and Holder
or its counsel will provide all of the parties hereto with a copy of the entire
Agreement.
(e) Amendments. This Agreement may only be amended by a writing duly
executed by the parties hereto.
(f) Severability. If any term or provision of this Agreement or any other
document executed in connection herewith shall be determined to be illegal or
unenforceable, all other terms and provisions hereof and thereof shall
neverthe-less remain effective and shall be enforced to the fullest extent
permitted by applicable law.
(g) Governing Law; Submission to Process. THIS AGREEMENT AND ALL
AMENDMENTS, SUPPLEMENTS, WAIVERS AND CONSENTS RELATING HERETO OR THERETO SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE COMPANY HEREBY
IRREVOCABLY SUBMITS ITSELF TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND
FEDERAL COURTS SITTING IN THE STATE OF CALIFORNIA AND AGREES AND CONSENTS THAT
SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL PROCEEDINGS RELATING HERETO
BY ANY MEANS ALLOWED UNDER CALIFORNIA OR FEDERAL LAW. THE COMPANY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH PROCEEDING BROUGHT
IN SUCH COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
(h) Entire Agreement. This Agreement and the other Loan Documents contain
the entire Agreement of the parties hereto with respect to the transactions
contemplated hereby and supersedes all previous oral and written, and all
previous contemporaneous oral negotiations, commitments and understandings.
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(i) Further Assurances. Company agrees promptly to execute and deliver
such documents and to take such other acts as are reasonably necessary to
effectuate the purposes of this Agreement.
(j) Headings. The headings contained herein are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
(k) Assignments and Participations. Company may not assign its
rights or obligations hereunder or under the loan without the prior written
consent of Holder. Subject to compliance with applicable Federal and State
Securities laws, Holder may assign all or any portion of the loan or Warrant
without the prior consent of Company. Holder may sell or agree to sell to one
or more other persons a participation in all or any part of any of the loan or
Warrant without the prior consent of Company. Upon surrender of the loan or
Warrant, Company shall execute and deliver one or more substitute notes,
warrants or other securities in such denominations and of a like aggregate
unpaid principal amount or other amount issued to Holder and/or to Holder's
designated transferee or transferees. Holder may furnish any information in the
possession of Holder concerning Company, or any of its respective subsidiaries,
from time to time to assignees and participants (including prospective assignees
and participants).
(l) Waivers; Indemnity. Company waives presentment and demand for
payment, notice of dishonor, protest of this Agreement, notice of acceleration
or intent to accelerate, and shall pay all costs of collection when incurred,
including reasonable attorneys' fees, costs and expenses. Company shall
indemnify and hold harmless from any claim, obligation or liability (including
without limitation reasonable attorneys fees and expenses) arising out of this
Agreement or the transactions contemplated under the Loan Documents.
(m) JURY WAIVER. HOLDER AND COMPANY EACH WAIVES ANY RIGHT TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF THE LOAN DOCUMENTS OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREIN.
(n) Interest Payments. Interest on the debt evidenced by this
Agreement will not exceed the maximum rate or amount of non-usurious interest
that may be contracted for, taken, reserved, charged, or received under law.
Any interest in excess of that maximum amount will be credited on the principal
amount or, if the principal amount has been paid, refunded. On any acceleration
or required or permitted prepayment, any excess interest above the maximum
lawful amount will be canceled automatically as of the acceleration or
prepayment, or, if the excess interest has already been paid, credited on the
principal amount, or, if the principal amount has been paid, refunded. This
provision overrides any conflicting provisions in this Agreement and all other
instruments concerning the debt.
[Signature page follows.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year set forth above.
COMPANY:
AUXILIO, INC.
a Nevada corporation
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
Title: CEO
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: CFO
HOLDER:
/s/ Xxxxxxx X. Xxxxxxxxxx
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Xxxxxxx X. Xxxxxxxxxx
EXHIBIT A
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The Collateral shall consist of all right, title and interest of Company in
and to the following:
(a) All goods and equipment now owned or hereafter acquired, including,
without limitation, all machinery, fixtures, vehicles (including motor vehicles
and trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;
(b) All inventory, now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Company's custody or possession or in transit
and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above, and
Company's books relating to any of the foregoing;
(c) All contract rights and general intangibles now owned or hereafter
acquired, including, without limitation, all leases, license agreements,
franchise agreements, blueprints, drawings, purchase orders, customer lists,
route lists, infringements, claims, computer programs, computer discs, computer
tapes, literature, reports, catalogs, design rights, income tax refunds,
payments of insurance and rights to payment of any kind, all copyrights,
copyright registrations and applications, copyright renewals or extensions,
patents and patent applications, all reissues, divisions, continuations,
renewals, extensions and continuations-in-part of all patents or patent
applications, all trademarks, trade names, trade styles, service marks, logos,
together with product lines and goodwill of the business connected with the use
of, or otherwise symbolized by, each such trade name, trademark and service
xxxx, trademark and service xxxx registrations and applications for trademark
and service xxxx registrations, all renewals and extensions of any trademarks,
trade names, trade styles, and service marks, all trade secret rights, including
all rights to unpatented inventions, know-how, operating manuals, license rights
and agreements and confidential information, all mask work or similar rights
available for the protection of semiconductor chips, and all rights in the
foregoing intellectual property to income, royalties, damages, and other
payments, and all rights to xxx for all past, present and future infringements,
and all rights otherwise accruing under or pertaining to any of the foregoing
throughout the world ("Intellectual Property");
(d) All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to Company
arising out of the sale or lease of goods, the licensing of technology or the
rendering of services by Company, whether or not earned by performance, and any
and all credit insurance, guaranties, and other security therefor, as well as
all merchandise returned to or reclaimed by Company and Company's books relating
to any of the foregoing;
(e) All documents, cash, deposit accounts, securities, letters of
credit, certificates of deposit, instruments and chattel paper now owned or
hereafter acquired and Company's books relating to the foregoing; and
(f) Any and all claims, rights and interests in any of the above and
all substitutions for, additions and accessions to and proceeds thereof.
