Pixsys, Inc.
SECURITY AGREEMENT
FOR VALUE RECEIVED, as security for the obligations
defined below, the receipt and sufficiency of which is hereby
acknowledged, the undersigned Debtor, Pixsys, Inc., a Colorado
corporation hereby grants to ___________________ ("Secured Party")
a security interest in the following described property: All of
Debtor's inventory now owned or hereafter acquired; All of
Debtor's accounts, now existing or hereafter arising, together
with all interest of Debtor in any goods, the sale or lease of
which give rise to any of Debtor's accounts, and all chattel
paper, documents, and instruments relating to said accounts; All
of Debtor's general intangibles now owned or hereafter acquired;
All of Debtor's equipment now owned or hereafter acquired; All of
Debtor's fixtures on the real estate described in paragraph two
(2) below; and, All of Debtor's intellectual property, including
any patents, either applied for or issued, designs, processes,
trade secrets, licenses, copyrights, trademarks, service marks,
trade names or any other intangible rights of any nature
pertaining to a product or process (Without limiting the
foregoing, the term specifically includes a patent for a method
and apparatus for three dimensional non-contact shape sensing,
covered by application number 5,198,877 with the U.S. Patent
Office, filed March 30, 1993 and all other U.S. and foreign
patents held or issued to Debtor) now owned or hereafter acquired
together with the proceeds, products, increase, issue, accessions,
attachments, accessories, parts, additions, repairs, replacements
and substitutes of, to and for all of the foregoing. Debtor will
promptly deliver to Secured Party duly endorsed when necessary,
all such chattel paper, documents and instruments and related
guaranties now on hand or hereafter received. All such property
in which a security interest is granted is herein called the
"Collateral."
1. Obligations. The aforesaid security interests secure
payment of the following liabilities: Promissory Note executed
contemporaneously with the execution of this security agreement in
the amount of $ __________________ , together with all extensions,
interest, and costs associated with that obligation.
2. Real Estate. Any collateral attached to, or grown
upon, land will be grown upon or attached to the following
described real estate located in ______N/A______ County:____
______________________ not applicable _____________________
and the name of the record title owner of such real estate if
other than the Debtor is ___________________________________.
3. Filing. In the event a financing statement is not
filed, a carbon, photocopy or other reproduction of this Security
Agreement may be filed as a financing statement. If for fixtures,
timber or minerals, such a filing shall be filed of record in the
real estate records of the county wherein said collateral is
situated.
4. Debtors. Each of the undersigned debtors, if more than
one, execute this Security Agreement as his, her, its, or their
joint and several obligation and it shall be binding upon and
fully enforceable against either or both, or any or all of them,
and reference herein to "Debtor" shall in such case be deemed to
be plural provided however that nothing contained herein shall
extend personal liability under any of the Obligations as to which
such Debtor is not otherwise liable.
5. Collateral. Debtor represents, warrants and agrees:
a. All Collateral is bona fide and genuine and
Debtor is authorized to grant a security interest in said
Collateral free and clear of all liens and encumbrances, except
the security interest created herein and except potentially for
other security agreements which are the subject of a Parity
agreement, and which have equal priority to this agreement.
b. Debtor's principal place of operation is at
the address shown herein, and Debtor shall promptly give Secured
Party written notice of any change thereof, unless prior written
consent of Secured Party is obtained. All Collateral and all of
the Debtor's business records are now kept, and shall continue to
be kept, at such address.
Pixsys, Inc., Debtor _________________________
secured party
BY: _________________________ BY: _____________________
Paul Ray, President
5680-B Central Ave.
Boulder, Colorado
Date:_________________________
THIS AGREEMENT SPECIFICALLY INCLUDES ALL OF THE ADDITIONAL
PROVISIONS SET FORTH ON THE REVERSE SIDE HEREOF. DEBTOR
ACKNOWLEDGES RECEIPT OF A FULLY COMPLETED COPY OF THIS SECURITY
AGREEMENT.
ADDITIONAL PROVISIONS
1. Representations and Agreements. Debtor represents and
agrees as follows:
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a. If a corporation or other business entity,
Debtor is duly organized, existing and is qualified in good
standing in all states in which it is doing business, and the
execution, delivery and performance of this Security Agreement are
within Debtor's powers, having been duly authorized, and are not
in contravention of law or the terms of Debtor's charter, bylaws,
if any, or any indenture, agreement, or undertaking to which
Debtor is a party, or by which it is bound. If an individual,
Debtor is of legal age. Debtor will not change his, her or its
name, or identity unless written notice is given in advance to
Secured Party.
b. Debtor shall maintain insurance upon the
Collateral which is tangible property against all customarily
insured risks for the full insurable value thereof (and furnish
Secured Party with duplicate policies if Secured Party so
requests), loss to be payable to Debtor and Secured Party as their
respective interests may appear. In the event of any loss or
damage to any Collateral, Debtor will give Secured Party written
notice thereof forthwith, promptly file proof of loss with the
appropriate insurer and take all other steps necessary or
appropriate to collect such insurance. If Secured Party so
elects, Secured Party shall have full authority to collect all
such insurance and to apply any amount collected to amounts owed
hereunder, whether or not matured. Secured Party shall have no
liability for any loss which may occur by reason of the omission
or the lack of coverage of any such insurance.
c. Debtor shall at all times maintain Collateral
which is tangible property in good condition and repair, defend at
Debtor's expense all Collateral from all adverse claims and shall
not use any of the Collateral for any illegal purpose.
d. Debtor shall (i) keep such books and records
pertaining to the Collateral and to Debtor's business operations
as shall be satisfactory to Secured Party; (ii) permit
representatives of Secured Party at any time to inspect the
Collateral and inspect and make abstracts from Debtor's books and
records; and (iii) furnish to Secured Party such information and
reports regarding the Collateral and Debtor's business operations
and its financial status, as Secured Party may from time to time
reasonably require. Secured Party is hereby authorized to request
confirmation of such information or additional information of any
kind whatsoever.
e. Debtor shall give such notice in writing
(including but not limited to notice of assignment or notice to
pay Secured Party directly) as Secured Party may require at any
time to any or all account debtors, with respect to accounts which
are Collateral, and, if Secured Party shall so request, deliver to
Secured Party copies of any and all such notices.
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f. Debtor shall promptly transmit to Secured
Party all information that it may have or receive with respect to
Collateral or with respect to any account debtor which might in
any way affect the value of the Collateral or Secured Party's
rights or remedies with respect hereto.
g. Unless in default under this Agreement,
Debtor may sell inventory in the ordinary course of business and
consume any raw materials or supplies, the use and consumption of
which are necessary to carry on Debtor's business. Debtor shall
not otherwise consume, assign or transfer any Collateral without
prior written consent of Secured Party. The provision of this
Agreement granting a security interest in proceeds shall not be
construed to mean that Secured Party consents to any sale or
disposition of any Collateral.
h. Debtor shall pay when due all taxes,
assessments, and any other governmental levy which is, or may be,
levied against any Collateral, and shall otherwise maintain the
Collateral free of all liens, charges, and encumbrances (except
liens set forth herein and the security interest created hereby).
i. Debtor shall not store any Collateral with
any warehouseman without Secured Party's consent.
j. Debtor shall promptly, unless Secured Party
shall waive such requirement in writing, deliver to Secured Party
all certificates of title, if any, (or any other documents
evidencing title) to all Collateral with such proper notations,
assignments, or endorsements as may be necessary or appropriate to
create, preserve or protect Secured Party's security interest in
the Collateral.
k. Debtor shall, at its cost and expense,
execute, deliver, file or record, in any such manner or form as
the Secured Party may require, any assignment, financing statement
or other paper that may be necessary or desirable, or that Secured
Party may request, in order to create, preserve or perfect any
security interest granted hereby or to enable Secured Party to
exercise and enforce its rights hereunder or under any Collateral.
Secured Party is further granted the power, coupled with an
interest, to sign on behalf of Debtor as attorney-in-fact and to
file one or more financing statements under the Uniform Commercial
Code naming Debtor as debtor and Secured Party as secured party
and describing the Collateral herein specified.
2. Expenses. Debtor upon demand shall pay to Secured
Party forthwith the amounts of all expenses, including reasonable
attorney's fees and legal expenses, incurred by Secured Party, in
seeking to collect any sums secured hereunder or to enforce any
rights in the Collateral. Such amounts shall be secured hereby,
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and if not paid on demand shall bear interest at the highest rate
payable on any of the Obligations.
3. Collection Authority on Accounts. Debtor hereby
irrevocably appoints Secured Party its true and lawful attorney,
with full power of substitution, in Secured Party's name, Debtor's
name or otherwise, for Secured Party's sole use and benefit, but
at Debtor's cost and expense, to exercise, if Secured Party shall
elect after an event of default has occurred (whether or not
Secured Party then elects to exercise any other of its rights
arising upon default) all or any of the following powers with
respect to all or any Accounts which are Collateral:
a. To execute on Debtor's behalf assignments of
any or all Accounts which are Collateral to Secured Party, and to
notify account debtors thereunder to make payments directly to
Secured Party;
b. To demand, sue for, collect, receive, and
give acquittance for any and all moneys due or to become due upon
or by virtue thereof;
c. To receive, take, endorse, assign and deliver
any and all checks, notes, drafts, documents and other negotiable
and non-negotiable instruments and chattel paper taken or received
by Secured Party in connection therewith;
d. To settle, compromise, compound, prosecute or
defend any action or proceeding with respect thereto;
e. To sell, transfer, assign or otherwise deal
in or with the same or the proceeds thereof or the relative goods,
as fully and effectually as if Secured Party were the absolute
owner thereof; and
f. To extend the time or payment of any or all
thereof and to make any allowance and other adjustments with
reference thereto.
Any funds collected pursuant to such powers shall be applied to
the payment of the Obligations. The exercise by Secured Party of,
or failure to so exercise, any of the foregoing authority, shall
in no manner affect Debtor's liability to Secured Party on any of
the Obligations. Secured Party shall be under no obligation or
duty to exercise any of the powers hereby conferred upon it and it
shall be without liability for any act or failure to act in
connection with the collection of or the preservation of any
rights under any such accounts. Secured Party shall not be bound
to take any steps necessary to preserve rights in any instrument
or other chattel paper against prior parties.
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4. Set-Off. In the event of default hereunder, Secured
Party at its option at any time, and without notice to Debtor, may
apply against the Obligations any property of Debtor held by
Secured Party. As additional security for payment of the
Obligations, Debtor hereby grants to Secured Party a security
interest in any funds or property of Debtor now or hereafter in
possession of Secured Party and with respect hereto Secured Party
will have all rights and remedies herein specified.
5. Waiver. Debtor waives protest, notice of dishonor, and
presentment of all commercial paper at any time held by Secured
Party on which Debtor is in any way liable, notice of non-payment
at maturity of any account or chattel paper, and notice of any
action taken by Secured Party except where notice is expressly
required by this Agreement or cannot by law be waived.
6. Default. Debtor will be in default upon the occurrence
of any of the following events: (a) failure to make payment when
due and payable, of any of the Obligations; (b) failure of the
performance of any obligation or covenant contained or referred to
herein, after failing to cure same upon 15 days notice; (c) any
warranty, representation or statement made or furnished to Secured
Party by or on behalf of Debtor proves to have been false in any
material respect when made or furnished; (d) any event which
results in the acceleration of the maturity of the indebtedness of
Debtor or any guarantor or co-maker of any of the Obligations to
others under any indenture, agreement or undertaking; (e) loss,
theft, damage, destruction or encumbrance to, or of, the
Collateral or the making of any levy, seizure of attachment
thereof or thereon; (f) death of, dissolution of, termination of
existence of, insolvency of, business failure of, appointment of a
receiver of any part of the property of, assignment for the
benefit of creditors by, or the commencement of any proceeding
under any bankruptcy or insolvency law by or against, Debtor or
any guarantor or co-maker of any of the Obligations; (g) the
occurrence or nonoccurrence of any event or events which causes
the Secured Party, in good faith, to deem itself insecure for any
reason whatsoever.
In any such event Secured Party may at its option declare any
or all of the Obligations to be due and payable and such sums
shall then be due and payable immediately, without notice or
demand.
7. Rights and Remedies on Default. After the occurrence
of any event of default, Secured Party may exercise at any time
and from time to time any rights and remedies available to it
under applicable law, including but not limited to the right to
sell, lease or otherwise dispose of the collateral, and the right
to take possession of the Collateral. For that purpose, Secured
Party may enter upon any premises on which the Collateral or any
part thereof may be situated and remove it. Secured Party may
require Debtor to
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assemble the Collateral and make it available at a place to be designated by
Secured Party which is reasonable convenient to both parties. If at the time of
repossession any of the Collateral contains other personal property not included
in the Collateral, Secured Party may take such personal property into
custody and store it at the risk and expense of Debtor. Debtor agrees to notify
Secured Party within forty-eight (48) hours after repossession of the Collateral
of any such other personal property claimed, and failure to do so will release
Secured Party and its representatives from any liability for loss or damage
thereto. Any notice or of intended disposition of any of the Collateral
required by law shall be deemed reasonable if such notice is given at least
seven (7) days before the time of such disposition. Any proceeds of any
disposition by Secured Party of any of the Collateral may be applied by it to
the payment of expenses in connection with the Collateral, including but not
limited to repossession expenses and reasonable attorney fees and legal
expenses, and any balance of such proceeds shall be then applied against the
Obligations and other amounts secured hereby in such order of application as
Secured Party may elect.
8. General Provisions.
a. Secured Party may, at its option, pay any
tax, assessment, or other Governmental levy, or insurance premium
or any other expense or charge relating to Collateral which is
payable by Debtor and not timely paid by it, and further may pay
any filing or recording fees. Any amount or amounts so pay, with
interest thereon at the highest rate payable on any of the
Obligations from the date of payment until repaid shall be secured
hereby and shall be payable upon demand.
b. Secured Party shall not be deemed to have
waived any of its rights hereunder or under any other agreement,
instrument, or paper signed by Debtor unless such waiver be in
writing and signed by Secured Party. No delay or omission on the
part of Secured Party in exercising any right shall operate as a
waiver of such right or any other right. A waiver on any one
occasion shall not be construed as a bar to, or waiver of, any
right or remedy on any future occasion.
c. Any note, if mailed, shall be deemed
reasonable and given when mailed postage prepaid, addressed to the
Debtor at the address shown above, or at any other address of
Debtor appearing on Secured Party's records.
d. Covenants, representations, warranties and
agreements herein set forth shall be binding upon Debtor, its
legal representatives, successors, and assigns. This Agreement
may be assigned by Secured Party and all rights and privileges of
Secured
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Party under this Agreement shall then inure to the benefit
of its successors and assigns.
e. If any provision of this Agreement shall be
for any reason held to be invalid or unenforceable, such
invalidity or unenforceability shall not effect any other
provisions hereof, but this Agreement shall be construed as if
such invalid or unenforceable provision had never been contained
herein.
f. If Debtor is a guarantor, endorser, co-maker,
or an accommodation party with respect to the Obligations, Debtor
hereby waives the benefit of any and all defenses and claims of
damage which are dependant upon Debtor's character as a party
other than the maker. Each party to any of the Obligations hereby
consents to and waives notice of (1) any and all extensions,
whether or not for longer than the original period, granted as to
the time of payment of any or all of the Obligations, and (2) any
renewal of any or all of the Obligations.
g. This Agreement and all rights and duties
hereunder, including but not limited to all matters of
construction, validity, and performance shall be governed by the
law of the State of Iowa and any suit hereon may be instituted in
Des Moines, Polk County, Iowa.
h. Unless otherwise defined or the context
otherwise requires, all terms used herein which are defined in the
Iowa Uniform Commercial Code shall have the meanings therein
stated. The rights and remedies herein conferred upon Secured
Party shall be in addition to, and not in substitution or in
derogation of, rights and remedies conferred by the Iowa Uniform
Commercial Code and other applicable law.
i. All words and phrases used herein shall be
construe as in the singular or plural number, and as masculine,
feminine or neuter gender, as the context may require. Captions
are inserted for convenience only and shall not be taken as
altering the text.
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