LOAN AGREEMENT
EFFECTIVE September 30, 2008, this loan
agreement (the “Agreement”) is made and entered into by and between SECUREALERT,
INC., a Utah corporation having an address at 000 Xxxx Xxxxx Xxxxxx Xxxxx, Xxxxx
000, Xxxxx, Xxxx 00000 (the “Borrower”), and VOLU-SOL REAGENTS CORPORATION, a
Utah corporation having an address at 0000 Xxxx 0000 Xxxxx, Xxxx Xxxxxx Xxxx, XX
00000 (the “Lender”).
WHEREAS, the Lender and Borrower has
transferred and will transfer monies between the Borrower and the Lender prior
to and subsequent to this date; and
WHEREAS, the Lender and Borrower desire
to enter into a Loan Agreement to reflect such lending. This Agreement
supersedes and replaces, in their entirety, any previous Loan Agreements in
writing or verbally entered into prior to the executed date of this
Agreement.
WHEREAS, the Borrower owes the Lender
$598,793 as of September 30, 2008.
NOW, THEREFORE, in consideration of the
mutual conditions and agreements set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower and the lender agree as follows.
TERMS
1. Loan. The Lender hereby agrees
to make loans to the Borrower (the “Loan”), pursuant to the terms of the Loan
Agreement. All sums advanced pursuant to the terms of this Agreement shall
become part of the principal of the Loan. The Loan shall be due and payable as
set forth in the Loan Agreement. The term “Loan Documents”, as used herein,
shall mean this Agreement and any documents related to the transaction provided
for in this Agreement. All amounts advanced hereunder shall be repaid, with
interest thereon as provided in this Agreement, by 5:00 PM, September 30, 2009
or upon demand by the Lender whichever comes first.
2. Advances. The proceeds of
advances hereunder may be used only to finance the working capital needs of the
Borrower. There is no limit to the amount of advances that may been made between
the Lender and the Borrower.
3. Interest. All sums advanced
pursuant to this Agreement after the date hereof shall bear interest from the
date each advance is made until paid in full at an interest rate equal
8%.
4. Fees. The Borrower will pay
all attorney’s fees, and all other fees and costs incurred by the Lender in
connection with the preparation of the Loan Documents.
5. Conditions Precedent. The
Lender shall not be required to make any advance hereunder unless and
until:
(a) All
of the documents required by the Lender have been duly executed and delivered to
the Lender and shall be in full force and effect.
(b) The
representations and warranties contained in this Agreement are then true with
the same effect as though the representations and warranties had been made at
such time. The request for an advance by the Borrower shall constitute a
representation and warranty by it to the Lender that all of the conditions
specified herein exist as of that time.
(c) There
are no existing conditions events, or acts which constitute a default hereunder,
or with the passing of time or giving of notice would constitute a default
hereunder.
6. Representations and
Warranties. In order to induce the Lender to enter into this Agreement
and to make the advances provided for herein, the Borrower represent and
warrants to the Lender as follows:
(a) The
Borrower is a Utah corporation duly organized, validly existing, and in good
standing under the laws of the State of Utah with the power to own its assets
and to transact business in Utah.
(b) The
Borrower has the authority and power to execute and deliver any document
required hereunder and to perform any condition or obligation imposed under the
terms of such documents.
7. Affirmative Covenants. So long
as any amounts due hereunder remain unpaid, the Borrower covenants and agrees
that it shall do the following:
(a) The
Borrower shall furnish the Lender with such financial statements, balance
sheets, and profit and loss statements as the Lender may require. In that
connection, the Borrower shall provide such information, which includes the
following (i) within thirty (30) days after the close of the second quarter of
the Borrower’s fiscal year, a financial statement, (ii) within thirty (30) days
after the close of the Borrower’s fiscal year, a financial statements, and (iii)
within sixty (60) days of the end of a calendar year or the date of filing, as
the case may be, the Borrower’s tax returns and accompanying
schedules.
(b) The
Borrower shall keep proper books of records and accounts in which full, true,
and correct entries will be made of all dealings or transactions relating to its
business and activities.
8. Negative Covenants. So long as
any amounts due hereunder remain unpaid, the Borrower covenants that is shall
not do any of the following except with the prior written consent of the
Lender:
(a) The
Borrower shall not enter into any transaction of merger or consolidation or to
sell substantially all of its assets or business or to acquire substantially all
of the assets or business or assume substantially all of the liabilities of a
person or other entity without notifying the Lender in writing 30 days prior to
the transaction.
(b) The
Borrower acknowledges that the Lender is making the Loan to it, in part, because
of the skills, abilities, expertise, and capabilities of its directors and
executive management. The Borrower shall not make any change in its direction,
executive management, or make any change in its structure, as the case may
be.
9. Events of Default. An event of
default shall occur if any of the following events shall occur:
(a) Failure
to pay any principal or interest hereunder within the ten (10) days after the
same becomes due.
(b) Any
representations or warranty made by the Borrower in this Agreement or in
connection with any borrowing or request for an advance hereunder or in any
certificate, financial statement, or other statements furnished by the Borrower
to the Lender is untrue in any material respect at the time when
made.
(c) Default
by the Borrower in the observance or performance of any of the covenants or
agreements contained in this Agreement.
(d) Default
by the Borrower in the observance or performance of any other covenant or
agreement contained herein and the continuance of the same unremedied for a
period of thirty (30) days after notice thereof is given to the
Borrower.
(e) Any
of the documents executed and delivered in connection herewith shall for any
reason cease to be valid or in full force and effect.
(f) The
Lender otherwise in good xxxxx xxxxx itself to be insecure or the prospect of
timely payment or performance to be impaired.
10. Remedies. Upon default by the
Borrower as defined in Paragraph 9, above, the Lender may declare the entire
unpaid principal balance, together with accrued interest thereon, to be
immediately due and payable without presentment, demand, protest or other notice
of any kind. The Lender may terminate any obligation it may have hereunder to
make additional advances. The attorney’s fees, including such expense incurred
before legal action or bankruptcy proceedings, during the pendency thereof and
continuing to all such expenses in connection with any appeal to higher courts
arising out of matters associated herewith.
11. Miscellaneous
Provisions
(a) Notices.
All demands, notices, and other communications to be give hereunder, if any,
shall be in writing and shall be sufficient for all purpose if personally
delivered, sent by facsimile, sent by nationally-recognized courier service, or
if sent by registered or certified United States mail, return receipt requested,
postage prepaid, and addressed to the respective party at the postal address set
forth below or to such other address or addresses as such party may hereafter
designate in writing to the other party as herein provided. The present
addresses of the parties hereto are as follows:
If to the Lender:
Volu-Sol Reagents
Corporation
0000 Xxxx 0000 Xxxxx
Xxxx Xxxxxx Xxxx, XX
00000
Attention: Chief Financial
Officer
If to the Borrower:
SecureAlert, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxx
Xxxxx
000
Xxxxx, XX 00000
Attention: Chief Financial
Officer
If personally delivered, notice under
this Agreement shall be deemed to have been given and received and shall be
effective when personally delivered. Notice by facsimile and nationally
recognized courier service shall be deemed to have been given when received.
Notice by mail shall be deemed effective and complete two (2) days after deposit
in the United States mail.
(b) Binding
Agreement. This Agreement shall be binding upon and inure to the benefit
of the respective parties hereto, their heirs, legal representatives,
successors, and assigns.
(c) Entire
Agreement. This Agreement contains the entire agreement between the
parties. No promise, representation, warranty, or covenant not included in this
Agreement has been or is relied upon by either party.
(d) Interpretation.
Unless otherwise provided, all terms shall have the meaning given them in the
ordinary English usage and as customarily used. Words in any gender shall
include both other genders. Whenever the context requires, the singular shall
include the plural, the plural shall include the singular, and the whole shall
include any part thereof.
(e) Time of
Essence. It is expressly stipulated and agreed that time shall be of the
essence of this Agreement.
(f) Invalidity.
The invalidity or unenforceability of any particular provision of this Agreement
shall not effect the other provision hereof, and the Agreement shall be
construed in all respects as if such invalid provision were
omitted.
(g) Headings.
The paragraph and other headings contained in this Agreement are for purposes of
reference only shall not limit, expand, or otherwise affect the construction of
any of the provisions of this Agreement.
(h) Counterparts. This Agreement may be
executed in any number of counterparts, each of which when executed and
delivered shall be deemed to be an original, and all of which shall together
constitute one and the same instrument.
(i) Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of Utah as applied to agreements made and wholly
performable in Utah between Utah residents.
(j) Facsimile
Signatures. The parties hereto agree that transmission to the other party
of this Agreement with its facsimile signatures shall bind the party
transmitting this Agreement by facsimile in the same manner as if such party’s
original signature had been delivered. Without limiting the foregoing, each
party who transmits the Agreement with its facsimile signature covenants to
deliver the original thereof to the other party as soon as possible
thereafter.
IN WITNESS WHEREOF, the parties have
caused this Agreement to be executed as of the date first above written by the
respective officers duly authorized on their behalf.
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The
Borrower:
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SECUREALERT,
INC., a Utah corporation
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By
_______________________________
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Xxxxx
X. Xxxxx, Chief Financial Officer
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The
Lender:
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VOLU-SOL
REAGENTS CORPORATION,
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a
Utah corporation
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By
_______________________________
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Its _______________________________
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