EXHIBIT 10.15
SECURITY AGREEMENT #1
(this "Agreement")
Principal Amount : $3,000,000 November 24, 2004
Secured Party: Debtor:
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▇▇▇▇ ▇▇▇▇▇▇ INTEGRATED PERFORMANCE SYSTEMS, INC.
hereinafter, ("Secured Party") (collectively hereinafter "Debtor")
1. For value received, Debtor hereby grants to Secured Party a security
interest in the following Collateral, as that term is hereinafter defined:
(i) All of the stock of Best Circuit Boards, Inc.;
(ii) Any and all inventory, capital assets, accounts, accounts receivable,
receivables, contract rights, book debts, checks, notes, drafts,
instruments, chattel paper, acceptances, choses in action, any and all
amounts due to Debtor or other forms of obligations and receivables,
whether now existing or hereafter arising out of the business of Debtor,
as well as any and all of the cash or non-cash proceeds resulting from all
of the foregoing;
(iii) Any and all equipment, furniture, furnishings, and fixtures,
including, without limitation, all accessories and appurtenances to,
renewals or replacements of or substitutions for any of the foregoing;
(iv) Any and all copyright rights, copyright applications, copyright
registrations and like protections in each work or authorship and
derivative work thereof, whether published or unpublished and whether or
not the same also constitutes a trade secret, now or hereafter existing,
created, acquired or held (collectively, the "Copyrights");
(v) Any and all trade secrets, and any and all intellectual property
rights in computer software and computer software products now or
hereafter existing, created, acquired or held;
(vi) Any and all design rights which may be available to Debtor now or
hereafter existing, created, acquired or held;
(vii) All patents, patent applications and like protections including,
without limitation, improvements, divisions, continuations, renewals,
reissues, extensions and continuations-in-part of the same,
(viii) Any trademark and servicemark rights, whether registered or not,
applications to register and registrations of the same and like
protections, and the entire goodwill of the business of Debtor connected
with and symbolized by such trademarks (collectively, the "Trademarks");
(ix) Any and all claims for damages by way of past, present and future
infringement of any of the rights included above, with the right, but
not the obligation, to ▇▇▇ for and collect such damages for said use or
infringement of the intellectual property rights identified above;
(x) All licenses or other rights to use any of the Copyrights, Patents or
Trademarks, and all license fees and royalties arising from such use to
the extent permitted by such license or rights;
(xi) All amendment, renewals and extensions of any of the Copyrights,
Trademarks or Patents; and
(xii) All proceeds and products of the foregoing, including, without
limitation all payments under insurance or any indemnity or warranty
payable in respect of any of the foregoing (all of (i) through and
including (xi) above are referred to collectively as the "Assets").
The Assets are operated, used and are to be used only for business and
business purposes, other than farming operations, and are not for
personal, family, or household use.
2.
The term "Collateral" as used herein means the Assets, as
described or referred to in Paragraph 1 above, now owned or hereafter
acquired by Debtor, together with the invoices and profits received
therefrom, accessions, attachments, additions to, substitutes and replace-
ments for, improvements of such property, including, without limitation,
the Assets described above, whether now existing or hereafter made,
including the proceeds of all such above described property, and the
insurance payable by reason of loss or damage thereto, and all proceeds
of any policy of insurance required thereon by Secured Party, including
premium refunds.
3.
The Collateral is personal and/or intangible property, and is
located at Debtor's address/location stated at the top of this Agreement,
unless otherwise specifically provided in Schedule 1 attached hereto and
incorporated by this reference. The location of such assets, however,
will not affect the validity of a lien against any such assets described
in Paragraph 1 above.
4.
By its signature on this Agreement, Debtor hereby authorizes and
requests that the Register of Copyrights and the Commissioner of Patents
and Trademarks record this Security Agreement.
5.
The security interest granted by this Agreement shall secure the
payment and performance of Debtor's Obligation, as the term is hereinafter
defined, to Secured Party. The term "Obligation", as used herein means
(i) all indebtedness of Debtor to Secured Party evidenced by that one
certain promissory note dated of even date herewith in the original
principal amount of THREE MILLION AND NO/100ths Dollars ($3,000,000.00),
executed by Debtor, and payable to the order of Secured Party, together
with any and all renewals and extensions of the same, or any part thereof
(the "Note"); (ii) all other indebtedness and liabilities of Debtor to
Secured Party, (iii) all future advances or other value given by Secured
Party to Debtor; and (iv) any and all other debts, liabilities and duties
of every kind and character of Debtor (or of any one or more of them, if
there be more than one) to Secured Party, whether now or hereafter
existing, and regardless of whether such present or future debts,
liabilities or duties are direct or indirect, primary or secondary, joint,
several, or joint and several, fixed or contingent, including, without
limitation, guaranteed indebtedness, and regardless of whether such
present or future debts, liabilities or duties may, prior to their
acquisition by Secured Party, be or have been payable to, or be or have
been in favor of, some other person or have been acquired by Secured Party
in a transaction with one other than Debtor (it being contemplated that
Secured Party may make such acquisitions from others), together with any
and all renewals and extensions of such debts, liabilities and duties, or
any part thereof. Any prior grant of a security interest by Debtor to
Secured Party is hereby renewed, extended and carried forward, and shall
remain in full force and effect.
6.
Debtor represents and warrants that: (i) Debtor is the sole
owner of the Collateral, except for non-exclusive licenses granted by
Debtor to its customers in the ordinary course of business, and it is in
Debtor's possession at the location specified above unless specifically
set forth on Schedule 1; (ii) to Debtor's knowledge, each of the Patents
is valid and enforceable, and no part of the Collateral has been judged
invalid or unenforceable, in whole or in part, and no unresolved claim
exists that any part of the Collateral violates the rights of any third
party; (iii) during the term of this Agreement, Debtor will not transfer
or otherwise encumber any interest in the Collateral, except for non-
exclusive licenses granted by Debtor in the ordinary course of business,
payments made by Debtor to its creditors in the ordinary course of
business or as set forth in this Agreement; (iv) Debtor shall promptly
advise Secured Party of any material change in the composition of the
Collateral, including, without limitation, any subsequent ownership right
of the Debtor in or to any Trademark, Patent or Copyright not specified
in this Agreement; (v) Debtor shall (a) protect, defend and maintain the
validity and enforceability of the Trademarks, Patents and Copyrights, (b)
use its best efforts to detect infringements of the Trademarks, Patents
and Copyrights and promptly advise Secured Party in writing to material
infringements detected and (c) not allow any Trademarks, Patents or
Copyrights to be abandoned, forfeited or dedicated to the public without
the written consent of Secured Party, which shall not be unreasonably
withheld unless Debtor determines that reasonable business practices
suggest that abandonment is appropriate; (vi) Debtor shall (a) register
or cause to be registered (to the extent not already registered) with the
United States Patent and Trademark Office or the United States Copyright
Office, as applicable, any and all Copyrights, Patents, Trademarks, within
thirty (30) days of the date of this Agreement, (b) register or cause to
be registered with the United States Patent and Trademark Office or
the United States Copyright Office, as applicable, those additional
intellectual property rights developed or acquired by Debtor from time to
time in connection with any product prior to the sale or licensing of such
product to any third party (including, without limitation, revisions or
additions to the intellectual property rights relating to any Copyright,
Patent, or Trademark), and (c) from time to time, execute and file such
other instruments, and take such further actions as Secured Party may
reasonably request from time to time to perfect or continue the perfection
of Secured Party's interest in the Collateral; (vii) to its knowledge,
except for, and upon, the filing with the United States Patent and
Trademark office with respect to the Patents and Trademarks and the
Register of Copyrights with respect to the Copyrights necessary to perfect
the security interests created hereunder and the filing of a financing
statement with the appropriate governmental authority with respect to
the Collateral, and except as has been already made or obtained, no
authorization, approval or other action by, and no notice to or filing
with, any governmental authority or governmental regulatory body is
required either (a) for the grant by Debtor of the security interest
granted herein or for the execution, delivery or performance of this
Agreement by Debtor or (b) for the perfection in or the exercise by
Secured Party of its rights and remedies hereunder; (viii) upon any
executive officer of Debtor obtaining actual knowledge thereof, Debtor
shall promptly notify Secured Party in writing of any event that
materially and adversely affects the value of any Collateral, the ability
of Debtor to dispose of any Collateral or the rights and remedies of
Secured Party in relation thereto, including, without limitation, the levy
of any legal process against any of the Collateral; (ix) the Collateral is
not being purchased or used for primarily personal, family or household
use; (x) the name of Debtor as it appears at the top of this Agreement
is Debtor's name as it appears in its legal formation documents; (xi)
Debtor's name as it appears at the top of this Agreement is not the
assumed or business name of Debtor unless otherwise indicated; (xii)
Debtor has taken all corporate action necessary to authorize the execution
and delivery of this Agreement and the legal agent who may be executing
this Agreement on behalf of Debtor has authority to execute and deliver
this Agreement; (xiii) The statements above concerning the location of
Debtor's place of business (or chief executive office), residence, mailing
address and use and location of the Collateral are true and correct; (xiv)
except as disclosed to Secured Party on Schedule 2, attached hereto and
incorporated herein by this reference, no financing statement covering the
Collateral or any part thereof has been made, and no security interest,
other than the one herein created, has attached or been perfected in the
Collateral or in any part thereof, other than as set forth on Schedule 2;
(xv) no dispute, right of setoff, counterclaim or defenses exist with
respect to any part of the Collateral; (xvi) all statements in the
documents pertaining to this transaction provided or to be provided by
Debtor to Secured Party are true and correct; and (xvii) this Agreement
constitutes the legal, valid, and binding obligation of the Debtor,
enforceable in accordance with its terms.
7.
Debtor further represents and warrants that (i) the Collateral
and the Debtor's use thereof comply with all applicable laws, rules, and
regulations, and Debtor has obtained any consents necessary to execute,
deliver and perform its obligations under this Agreement; (ii) neither the
execution or delivery by the Debtor of this Agreement nor the performance
by Debtor of its obligations hereunder violates, conflicts with, results
in a breach of, or constitutes a default under, or will result in the
creation or imposition of any lien against or upon the Collateral of the
Debtor, except as expressly stated herein, pursuant to, or results in a
change in any material term of (a) the Articles of Incorporation or
Bylaws, as amended, of any Debtor, (b) any provision of statutory law or
regulation, (c) any judgment, decree or order of any court or any other
agency of the government or (d) any material agreement to which any Debtor
is a party or by which Debtor's Collateral is bound; (iii) all of Debtor's
filings with the Securities and Exchange Commission made pursuant to
Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended, are true and correct as of the date hereof; and (iv) Debtor has
been represented by separate legal counsel in the negotiation and
execution of this Agreement.
8.
So long as any part of the Obligation remains unpaid, Debtor
covenants and agrees to: (i) use the Collateral with reasonable care,
skill and caution; (ii) keep the Collateral properly sheltered and not
permit it to be damaged or injured; (iii) pay, before delinquent, all
taxes and other assessments lawfully levied against the Collateral; (iv)
from time to time promptly execute and deliver to Secured Party all such
other assignments, certificates, supplemental documents, and financing
statements and do all other acts or things as Secured Party may reasonably
request in order to more fully evidence and perfect the security interest
herein created; (v) punctually and properly perform all of Debtor's
covenants, duties, and liabilities under any other security agreement,
collateral pledge agreement or contract of any kind now or hereafter
existing as security for or in connection with payment of the Obligation,
or any part thereof; (vi) pay the Obligation in accordance with the terms
of the promissory note or other documents evidencing the Obligation, or
any part thereof; (vii) promptly furnish Secured Party with any
information or documents which Secured Party may reasonably request
concerning the Collateral; (viii) allow Secured Party to inspect the
Collateral and all records of Debtor relating thereto or to the
Obligation, and to make and take away copies of such records; (ix)
promptly notify Secured Party of any change (other than a change requiring
advance notice provided for herein) in any fact or circumstances warranted
or represented by Debtor in this Agreement or in any other document
furnished by Debtor to Secured Party in connection with the Collateral
or the Obligation; (x) give prior written notice to Secured Party of any
change in Debtor's place of business or chief executive office such notice
to be given not less than fifteen (15) days before such change is made and
to specify the address, county and state to which Debtor is moving; (xi)
promptly notify Secured Party of any claim, action or proceeding affecting
title to the Collateral or any part thereof or the security interest
herein, and, at the request of Secured Party, appear in and defend, at
Debtor's expense, any such action or proceeding; (xii) except as otherwise
provided in any note or other instrument evidencing the Obligation,
promptly, after being requested by Secured Party, pay to Secured Party
all amounts actually incurred by Secured Party as court costs and/or
attorney's fees incurred by Secured Party in enforcing this security
interest and the reasonable costs actually expended for repossession,
storing, preparing for sale, or selling any of the Collateral; and (xiii)
promptly furnish Secured Party with financial statements of Debtor upon
request of Secured Party in form and content satisfactory to Secured
Party.
9.
So long as any part of the Obligation remains unpaid, Debtor
covenants and agrees that, without the prior written consent of Secured
Party, Debtor will not: (i) lease, sell, assign, furnish under any
contract of service, transfer or otherwise dispose of the Collateral, or
any part thereof, other than in the ordinary course of business; (ii)
create any other security interest in, or otherwise encumber the
Collateral or any part thereof or permit the same to be or become subject
to any lien, attachment, execution, sequestration or other legal or
equitable process, or any encumbrance of any kind or character, except the
security interest herein created or set forth on Schedule 2; (iii) allow
the Collateral or any part thereof to become an accession to other goods,
other than in the ordinary course of business; (iv) allow the Collateral
or any part thereof to be affixed or attached to any real estate except as
specifically described above; or (v) cause or permit the Collateral to be
removed from the location specified above other than in the ordinary
course of business. Debtor further covenants not to use the Collateral
or permit the same to be used for any unlawful purpose or in any manner
inconsistent with the provisions or requirement of any policy of insurance
thereon. Should any covenant, duty or agreement of Debtor (except
Debtor's covenants as to insurance) fail to be performed in accordance
with its terms hereunder, Secured Party may, but shall never be obligated
to perform or attempt to perform such covenant, duty or agreement on
behalf of Debtor, and any amount expended by Secured Party in such
performance shall become a part of the Obligation (unless such amount is
not a charge authorized by applicable law), and, at the request of Secured
Party, Debtor agrees to pay such amount to Secured Party on demand.
10.
In the event of Debtor's default with respect to payment of the
Obligation, each person, firm or corporation obligated to make any payment
to Debtor with respect to any part of the Collateral (hereafter referred
to as the "Account Debtor") is hereby authorized and directed by Debtor to
make payment directly to Secured Party upon notice from Secured Party
giving the Account Debtor notice of this assignment and directing the
Account Debtor to make payment directly to Secured Party. The receipt
issued by Secured Party and evidencing money received by Secured Party
from any Account Debtor shall be a full and complete release, discharge
and acquittance to such person, firm or corporation to the extent of any
amount so paid to Secured Party. Secured Party is authorized and
empowered on behalf of Debtor, to endorse the name of Debtor upon any
check, draft or other instrument payable to Debtor evidencing payment upon
the Collateral, or any part thereof, and to receive and apply the proceeds
therefrom in accordance with the terms hereof. All payments received by
Debtor or Secured Party with respect to the Collateral or any part
thereof, at Secured Party's option, shall be deposited in a special
account by Secured Party in the name of Debtor styled "Cash Collateral
Account" and shall be applied by Secured Party as provided in Paragraph 14
hereof. The security interest created herein shall cover all funds in the
Cash Collateral Account to secure payment of the Obligation.
If any Account Debtor of all or any part of the Collateral fails or
refuses to make payment thereof when due, Secured Party is authorized, in
its discretion, either in its own name or in the name of Debtor, to take
such action, including, without limitation, the institution of legal
action as Secured Party shall deem appropriate for the collection of the
Collateral and any proceeds thereof with respect to which a delinquency
exists. Regardless of any other provision hereof, however, Secured Party
shall never be liable for its failure to collect, or for its failure to
exercise diligence in the collection of any of the Collateral or any
proceeds thereof, nor shall it be under any duty whatever to anyone except
to account for the funds that it shall actually receive hereunder.
Furthermore, Secured Party shall have no duty to fix or preserve the
rights against prior parties, if any, to the Collateral.
11.
Debtor represents and warrants that Debtor has full right, title
and ownership to all of the Collateral described herein. Debtor further
covenants that it will not cause any of the Collateral to be sold,
assigned or otherwise transferred to any subsidiary of Debtor or to any
other third party for so long as this Agreement is in effect without the
written consent of Secured Party at its sole discretion.
12.
Debtor further covenants and agrees to keep the Collateral
insured in such amounts, against such risks and with such insurers (i) as
set forth in any note or other document evidencing the Obligation; or (ii)
if no such note or other document provides for insurance, then such
insurance as Secured Party reasonably requires, provided, however, if the
Obligation is subject in whole or in part to the Federal Truth In Lending
Act or applicable state law, such insurance will be required by Secured
Party only in compliance with such law. All such policies of insurance
shall be written for the benefit of Secured Party and Debtor, as their
interest may appear, and shall provide for at least ten (10) days' prior
written notice of cancellation to Secured Party. At the request of
Secured Party, Debtor shall promptly furnish to Secured Party evidence
of such insurance in form and content satisfactory to Secured Party.
If Debtor fails to perform or observe any applicable covenants as to
insurance on the Collateral contained or referred to herein, Secured Party
may at its option obtain insurance on only Secured Party's interest in the
Collateral with any premium thereby paid by Secured Party to become a part
of the Obligation and to bear interest at Maximum Rate as defined in the
Note, such rate to be charged from the date Secured Party advances funds
to pay such premium until the amount of such premium is paid by Debtor to
Secured Party. In the event Secured Party maintains such substitute
insurance, the additional premium for such insurance shall be due and
payable by Debtor to Secured Party in accordance with specific written
notification delivered to Debtor by Secured Party or sent by Secured Party
to Debtor. The obligation of Debtor to pay any such additional premium
and any interest accruing thereon shall be secured by and entitled to
all of the benefits of this Agreement. In the event Debtor should
subsequently provide Secured Party with satisfactory evidence of
maintenance by Debtor of required insurance, such substitute insurance
obtained by Secured Party shall be cancelled, and appropriate adjustments
and/or refunds shall be made by Secured Party in favor of Debtor. Debtor
hereby grants Secured Party a security interest in any refunds of unearned
premiums in connection with any cancellation, adjustment or termination of
any policy of insurance required by Secured Party and in all proceeds of
such insurance, and hereby appoints Secured Party its attorney-in-fact to
endorse any check, or document that may be payable to Debtor in order to
collect such refunds or proceeds. Any such sums collected by Secured
Party shall be credited, except to the extent applied to the purchase
by Secured Party of similar insurance, to any amounts then owing on the
Obligation, and the balance, if any, shall be promptly refunded to Debtor.
13.
The term "default" as used herein, means the occurrence of any
of the following events: (i) the failure of Debtor to timely pay the
Obligation or any part thereof; (ii) the default or other failure of
Debtor to perform any covenant, condition, obligation or agreement of
Debtor under this Agreement or any other security document of any kind
securing or assuring payment of the Obligation, securing the collateral
or any part thereof; (iii) the insolvency of Debtor; (iv) the levy against
the Collateral or any part thereof of any execution, attachment,
sequestration or other writ; (v) the appointment of a receiver of Debtor
or of the Collateral or any part thereof; (vi) the adjudication of Debtor
as a bankrupt; (vii) the filing, by way of petition or answer of any
petition or other pleading seeking adjudication of Debtor as a bankrupt,
an adjustment of Debtor's debts or any other relief under any bankruptcy
reorganization, debtor's relief or insolvency laws now or hereafter
existing; (viii) when Secured Party in good faith believes that the
prospect of payment of the Obligation or performance by Debtor of any of
Debtor's covenants, agreements or other duties hereunder, is impaired;
(ix) the receipt by Secured Party of information establishing that any
representation or warranty made by Debtor herein or in any other document
delivered by Debtor to Secured Party in connection herewith is false,
misleading or erroneous; (x) any action by Debtor, without the prior
written consent of Secured Party, in creating in favor of anyone, other
than Secured Party, any other security interest in the Collateral or any
part thereof or otherwise encumbering or permitting the same to become
subject to any lien, attachment, execution, sequestration or other legal
or equitable process; (xi) failure by Debtor to pay any other indebtedness
to Secured Party when due; and/or (xii) an Event of Default under the
Note.
14.
Upon the occurrence of a default, in addition to any and all
other rights and remedies which Secured Party may then have hereunder or
under the applicable provision of the Uniform Commercial Code as adopted
and enacted in Texas, as amended (the "Code") or other applicable law or
agreements, Secured Party at its option may (i) declare the entire unpaid
balance of principal of and all earned interest on the Obligation
immediately due and payable, without notice of any kind, including,
without limitation, notice of intent to accelerate and notice of
acceleration, demand, or presentment, which are hereby waived, except as
otherwise expressly provided herein; (ii) require Debtor to assemble the
Collateral and deliver it to Secured Party at a place to be designated by
Secured Party which is reasonably convenient to both parties; (iii) render
unusable any equipment which may be part of the Collateral; (iv) reduce
its claim to judgment, foreclose or otherwise enforce its security
interest in all or any part of the Collateral by any available judicial
procedure; (v) sell, lease, or otherwise dispose of, at the office of
Secured Party, on the premises of Debtor or elsewhere, as chosen by
Secured Party, all or any part of the Collateral, in its then condition or
following any commercially reasonable preparation or processing, and any
such sale or other disposition may be as a unit or in parcels by public or
private proceedings, and by way of one or more contracts (it being agreed
that the sale of any part of the Collateral shall not exhaust Secured
Party's power of sale, but sales may be made from time to time until all
of the Collateral has been sold or until the Obligation has been paid in
full), and at any such sale it shall not be necessary to exhibit the
Collateral; (vi) at Secured Party's discretion, retain the Collateral in
satisfaction of a promissory note or notes or other document evidencing
the Obligation whenever the circumstances are such that Secured Party is
entitled to do so under the Code; (vii) apply by appropriate judicial
proceedings for appointment of a receiver for the Collateral or any part
thereof and Debtor hereby consents to any appointment; and/or (viii) buy
the Collateral at any public sale or private sale as permitted by the Code
and/or applicable law. Secured Party shall be entitled to apply the
proceeds of any sale or other disposition of the Collateral in the
following order: first to the payment of all of its reasonable expenses
actually incurred in collecting such proceeds, including, without
limitation, the reasonable costs actually expended for repossessing,
foreclosing, storing, preparing for sale or selling the Collateral,
reasonable attorney's fees, and legal expenses incurred by Secured Party
in collection, provided, however, that should the Debtor's payment of such
charges be prohibited by law, those charges shall not be a part hereof;
and next toward payment of the balance of the Obligation in such order and
manner as Secured Party in its discretion may deem advisable. Secured
Party shall account to Debtor for any surplus. If the proceeds are not
sufficient to pay the Obligation in full, Debtor shall remain liable for
any deficiency.
In the event of a default hereunder, in addition to, and without
limitation against all other remedies available to Secured Party, Secured
Party shall have the right to enter upon the premises where the Collateral
is located, take possession of the Collateral and remove the same with or
without judicial process (if such taking without judicial process can be
done lawfully and without breach of the peace), and Debtor does hereby
expressly waive any right to any notice, legal process or judicial hearing
prior to such taking of possession by Secured Party. Debtor understands
that the right to prior notice and hearing is a valuable right and agrees
to the waiver thereof as a part of the consideration for and as an
inducement to Secured Party to enter the Note and this Agreement.
15.
Reasonable notification of the time and place of any public sale
of the Collateral or reasonable notification of the time after which any
private sale or other intended disposition of the Collateral is to be made
shall be sent to Debtor and to any other person entitled under the Code to
notice; provided, that if the Collateral is perishable, threatens to
decline speedily in value, or is of a type customarily sold on a
recognized market, Secured Party may sell or otherwise dispose of the
Collateral without notifications, advertisement or other notice of any
kind. It is agreed that notice mailed or given not less than ten (10)
calendar days prior to the taking of the action to which the notice
relates is reasonable notification and notice for the purposes of this
Paragraph 15.
16.
Should any part of the Collateral come into the possession of
Secured Party, whether before or after default, Secured Party may use or
operate the Collateral for the purpose of preserving it or its value
pursuant to the order of a court of appropriate jurisdiction or in
accordance with any other rights held by Secured Party in respect of the
Collateral. Debtor covenants to promptly reimburse and pay to Secured
Party, at Secured Party's request, the amount of all reasonable expenses
incurred by Secured Party in connection with its custody, preservation,
use or operation of the Collateral, provided, however, that should the
Debtor's payment of such charges be prohibited by law, those charges
shall not be a part hereof; and all such expenses shall be a part of the
Obligation. It is agreed, however, that the risk of accidental loss or
damage to the Collateral is on Debtor, and Secured Party shall have no
liability whatever for failure to obtain or maintain insurance or to
determine whether any insurance ever in force is adequate as to amount
or as to the risk insured.
17.
All rights and remedies of Secured Party hereunder are
cumulative of each other and of every other right or remedy which Secured
Party may otherwise have at law or in equity or under any other contract
or document for the enforcement of the security interest herein or the
collection of the Obligation, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent
exercise of other rights or remedies. The failure of Secured Party at any
time to assert or exercise any rights granted by this Agreement shall not
render the Secured Party liable to any person concerned herein or deprive
Secured Party of any rights granted herein. All rights of Secured Party
hereunder may be assigned or transferred in whole or in part by Secured
Party, as it deems advisable, and the rights of Secured Party hereunder
shall inure to the benefit of its successors and assigns. All obligations
of Debtor hereunder shall bind the heirs, legal representatives,
successors and assigns of Debtor.
18.
Should any part of the Obligation be payable in installments,
the acceptance by Secured Party at any time and from time to time of part
payment of the aggregate amount of all installments then matured shall not
be deemed to be a waiver of the default then existing. No waiver by
Secured Party of any default shall be deemed to be a waiver of any other
subsequent default, nor shall any such waiver by Secured Party be deemed
to be a continuing waiver. No delay or omission by Secured Party in
exercising any right or power hereunder, or under any other documents
executed by Debtor as security for or in connection with the Obligation,
shall impair any such right or power or be construed as a waiver thereof
or any acquiescence therein, nor shall any single or partial exercise of
any such right or power preclude other or further exercise thereof, or the
exercise of any other right or power of Secured Party hereunder or under
such other documents.
19.
If the Obligation or any part thereof is given in renewal or
extension or applied toward the payment of indebtedness secured by a
pledge, security agreement or other lien, Secured Party shall be, and is
hereby, subrogated to all of the rights, titles, security interests and
other liens securing the indebtedness so renewed, extended or paid.
20.
No provision of this Agreement or any note, instrument or
document executed by Debtor evidencing the Obligation is intended to or
shall require or permit the holder to take, receive, collect, contract for
or reserve, directly or indirectly, in money, goods or things in action,
or in any other way, any greater interest, sum or value in excess of the
maximum rate of interest permitted by the law in effect in the State of
Texas, federal law, or the governing laws of any other jurisdiction, at
the applicable date. In the event that any such excess shall be
nevertheless provided for, Debtor shall not be obligated to pay such
excess, but, if paid, then the excess shall be applied against the unpaid
balance of the principal sum of the Obligation or to the extent that the
principal sum of the Obligation has been paid in full by reason of such
application or otherwise, such excess shall be remitted to Debtor.
21.
This Agreement shall be not severable or divisible in any way
but, it is specifically agreed that, if any provision should be invalid,
the invalidity shall not affect the validity of the remainder of this
Agreement. Secured Party and Debtor agree that the validity of this
Agreement and all agreements and documents executed in connection with
this Agreement shall, to the extent possible be governed by the laws of
the State of Texas.
22.
Debtor hereby irrevocably appoints Secured Party as Debtor's
attorney-in-fact, with full authority in the place and stead of Debtor
and in the name of Debtor, from time to time in Secured Party's sole and
absolute discretion, to take any action and to execute any instrument
which Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation, (i) to modify,
in its sole discretion, this Security Agreement without first obtaining
Debtor's approval of or signature to such modification by amending the
definitions of Copyright, Patent, and/or Trademark, as appropriate, to
include reference to any right, title or interest in any Copyrights,
Patents or Trademarks acquired by Debtor after the execution hereof or to
delete any reference to any right, title or interest in any Copyrights,
Patents or Trademarks in which Debtor no longer has or claims any right,
title or interest, (ii) to file, in its sole discretion, one or more
financing or continuation statements and amendments thereto, relative to
any of the Collateral without the signature of Debtor where permitted by
law and (iii) after the occurrence of a default, to transfer the
Collateral into the name of Secured Party or a third party to the extent
permitted under the Texas Uniform Commercial Code, or applicable United
States law, as the case may be.
23.
All written notices permitted or required to be given pursuant
to this Agreement shall be effective if mailed or delivered to the party
at the address shown at the top of this Agreement or at such other address
previously designated in writing by a party hereto.
24.
A carbon, photographic or other reproduction of this Agreement
or of any financing statement executed in connection with this transaction
may be filed as a financing statement with any filing officer authorized
to accept such filings under the Uniform Commercial Code as adopted in
Texas or any other state in the United States.
Executed as of this the 24th day of November, 2004.
Secured Party: Debtor:
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/S/ ▇▇▇▇ ▇▇▇▇▇▇ /S/ D. ▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇ INTEGRATED PERFORMANCE SYSTEMS, INC.
By: D. ▇▇▇▇▇▇ ▇▇▇▇▇
Its: President/Chairman