You are here: Agreements > Security Agreement > LOAN AND SECURITY AGREEMENT

Try our advanced search >>
CLAUSES Search Contract Clauses >>
Browse Contract Clause Library>>

Loan And Security Agreement

Security Agreement

Legal Documents
You are currently viewing:

 This Security Agreement involves


. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Governing Law: Texas     Date: 6/9/2010
Industry: Communications Services     Sector: Services

join now
50 of the Top 250 law firms use our Products every day





San Antonio, TX


Date: March 16, 2010


FOR VALUE RECEIVED, the undersigned ATSI COMMUNICATIONS, INC., a Nevada corporation (“ Company ), hereby promises to pay to ATV Texas Ventures III, LP., a Delaware limited partnership (“ Lender ”), at such place as Lender may specify, in lawful money of the United States of America, the principal amount of $50,000 (the “ Principal Amount ”) on the earlier of: (i) a Mandatory Payment Event (as hereinafter defined), or (ii) According to the attached Payback Schedule (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) Twelve percent (12%) per annum.  Interest shall be calculated in arrears through the last day of each month and shall be due and payable on the first day of the each month, as more fully set forth below in Section 1 .


1.            Advances; Payments .  On the date of this Loan and Security Agreement (the “ Agreement ”) and subject to the accuracy of Company’s representations and the conditions set forth in Section 3 herein, Lender will deliver to Company in immediately available funds the Principal Amount specified above (the “ Loan ”).  All payments under this Agreement shall be applied first to fees and expenses, then to interest and then to reduction of the Principal Amount.  Any Principal Amount outstanding after the occurrence and during the continuance of an Event of Default under this Agreement shall bear interest at a rate equal to the lesser of (i) the lawful legal rate or (ii) seven percent (7%) above the interest rate otherwise applicable under this Agreement.


2.            Secured Agreement .


2.1          General.   To secure repayment and performance of all Obligations hereunder, Company grants Lender a security interest in the Company’s accounts receivable (other than accounts factored with Wells Fargo),  ATSI’s ownership in ATSICOM, whether now owned or hereafter acquired, or any value received in exchange for any of the foregoing including, without limitation, all proceeds of insurance covering the same and all tort claims in connection therewith (collectively, the “ Collateral ”).  For purposes of this Agreement and the other Loan Documents, “ Obligations ” means and includes all loans, debts, liabilities, obligations, covenants and duties owing by the Company to the Lender of any kind or nature, present or future, whether or not evidenced by any note, guaranty or other instrument, which may arise under, out of, or in connection with, this Agreement, the other Loan Documents or any other agreement executed in connection herewith or therewith, whether or not for the payment of money, whether arising by reason of a loan, guaranty, indemnification or in any other manner, whether direct or indirect (including those acquired by assignment, purchase, discount or otherwise), whether absolute or contingent, due or to become due, and however acquired.  The term includes, without limitation, all interest, charges, expenses, reasonable attorneys’ fees, and any other sum properly chargeable to the Company under this Agreement, the Note, the other Loan Documents or any other agreement executed in connection herewith or therewith.


As further security for the Obligations, and to provide other assurances to the Lender, the Lender shall receive, among other things:


(a)         This Agreement shall constitute a security agreement for purposes of the UCC.


2.3         Recourse to Security .  Recourse to security shall not be required for any Obligation hereunder and the Company hereby waives any requirement that the Lender exhausts any right or take any action against any of the Collateral before proceeding to enforce the Obligations against the Company.






2.4          Special Provisions Relating to Receivables .


(a)            Records, Collections, Etc .  The Company shall report all customer credits, disputes and discrepancies in calls and minutes in each case with a value in excess of $100,000 to the Lender.  Such report shall include a general description of each such dispute and resolution.  The Company shall not settle or adjust any dispute or claim, or grant any discount (except ordinary trade discounts), credit or allowance or accept any disputes, except in the ordinary course of its business, without the Lender’s consent.  Upon the occurrence and during the continuance of an Event of Default, the Lender may (i) settle or adjust disputes or claims directly with account debtors for amounts and upon terms which it considers advisable and (ii) notify account debtors on the Company’s receivables that such receivables have been assigned to the Lender, and that payments in respect thereof shall be made directly to the Lender.  Where Company receives collateral of any kind or nature by reason of transactions between itself and its customers or account debtors, the Company will hold the same on the Lender’s behalf, subject to the Lender’s instructions, and as property forming part of the Company’s Receivables.  If the Company sells goods or services to a customer which also sells goods or services to it or which may have other claims against it, the Company will so advise the Lender immediately to permit the Lender to establish a reserve therefore.


(b)            Receivables Covenants .  During the term of this Agreement, the Company shall always maintain current unfactored receivables greater than or equal to the Principal Amount.  The Company shall notify the Lender promptly of:  any material delay in the Company’s performance of any of its obligations to any account debtor or the assertion of any claims, offsets, defenses or counterclaims by any account debtor or any disputes with account debtors or any settlement, adjustment or compromise thereof, all material adverse information relating to the financial condition of any account debtor and any event or circumstance which, to the Company’s knowledge, could be reasonably expected to cause an Event of Default.  The Lender shall have the right at any time or times, in the Lender’s name or in the name of a nominee of Lender, to verify the validity, amount or any other matter relating to any account or other Collateral, by mail, telephone, facsimile transmission or otherwise.


2.5         Continuation of Liens, Etc .  The Company shall defend the Collateral against all claims and demands of all persons at any time claiming any interest therein, other than claims relating to liens permitted by this Agreement and the other Loan Documents.  The Company agrees to comply with the requirements of all state and federal laws to grant to the Lender valid and perfected security interests in the Collateral and shall obtain a Deposit Account Control Agreement or Control Agreement from any securities intermediary or depository bank in possession of any of the Company’s investment property or deposit accounts.  The Lender is hereby authorized by the Company to sign the Company’s name on any document or instrument as may be necessary or desirable to establish and maintain the liens covering the Collateral and the priority and continued perfection thereof or file any financing or continuation statements or similar documents or instruments covering the Collateral whether or not the Company’s signature appears thereon.  The Company agrees, from time to time, at the Lender’s request, to file notices of liens, financing statements, similar documents or instruments, and amendments, renewals and continuations thereof, and cooperate with the Lender’s representatives, in connection with the continued perfection (and the priority status thereof) and protection of the Collateral and the Lender’s liens thereon.  The Company agrees that the Lender may file a carbon, photographic or other reproduction of this Agreement (or any financing statement related hereto) as a financing statement.


2.7         Power of Attorney .  In addition to all of the powers granted to the Lender hereunder, the Company hereby irrevocably designates and appoints the Lender (and all persons designated by the Lender) as the Company’s true and lawful attorney-in-fact, and authorizes the Lender (and its designees), in the Company’s or the Lender’s name, to, at any time an Event of Default exists or has occurred and is continuing (i) demand payment on receivables or other Collateral, (ii) enforce payment of receivables by legal proceedings or otherwise, (iii) exercise all of the Company’s rights and remedies to collect any receivable or other Collateral, (iv) sell or assign any receivable or other Collateral upon such terms, for such amount and at such time or times as the Lender deems advisable, (v) settle, adjust, compromise, extend or renew any receivable, (vi) discharge and release any receivable, (vii) prepare, file and sign the Company’s name on any proof of claim in bankruptcy or other similar document against an account debtor or other obligor in respect of any receivables or other Collateral, (viii) notify the post office authorities to change the address for delivery of remittances from account debtors or other obligors in respect of receivables or other proceeds of Collateral to an address designated by the Lender, and open and dispose of all mail addressed to the Company and handle and store all mail relating to the Collateral; (ix) make any payment or take any action necessary or desirable to protect or preserve any Collateral; and (x) do all acts and things which are necessary, in the Lender’s determination, to fulfill the Company’s Obligations under this Agreement and the other Loan Documents.  The Company hereby releases the Lender and each Lender and their respective officers, employees and designees from any liabilities arising from any act or acts under this power of attorney and in furtherance thereof, whether of omission or commission, except as a result of the Lender’s or any of its officer’s, employee’s or designee’s own gross negligence or willful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction.  The Lender’s authority hereunder shall include, without limitation, the authority to execute and give receipt for any certificate of ownership or any document, to transfer title to any item of Collateral and to take any other actions arising from or incident to the powers granted to the Lender under this Agreement.  This power of attorney is coupled with an interest and is irrevocable until the Obligations are repaid in full.






2.8           Perfection of Security Interests .


(a)           The Company irrevocably and unconditionally authorizes the Lender to file at any time and from time to time such financing statements and similar instruments with respect to the Collateral naming the Lender or its designee as the secured party and the Company as debtor, as the Lender may require, and including any other information with respect to the Company or otherwise required by the Uniform Commercial Code of such jurisdiction as the Lender may determine, together with any amendment and continuations with respect thereto, which authorization shall apply to all financing statements and similar instruments filed on, prior to or after the date hereof.  The Company hereby ratifies and approves all financing statements naming the Lender or its designee as secured party and the Company as debtor with respect to the Collateral (and any amendments with respect to such financing statements and similar instruments) filed by or on behalf of the Lender prior to the date hereof and ratifies and confirms the authorization of the Lender to file such financing statements and similar instruments (and amendments, if any).  The Company hereby authorizes the Lender to adopt on behalf of the Company any symbol required for authenticating any electronic filing.  In no event shall the Company at any time file, or permit or cause to be filed, any correction statement or termination statement with respect to any financing statement or similar instrument (or amendment or continuation with respect thereto) naming the Lender or its designee as secured party and the Company as debtor, without the prior written consent of the Lender.


(b)           The Company does not have any chattel paper (whether tangible or electronic) or instruments as of the date hereof.  In the event that any Company shall be entitled to or shall receive any chattel paper or instrument after the date hereof, the Company shall promptly notify the Lender thereof in writing.  Promptly upon the receipt thereof, the Company shall deliver, or cause to be delivered to the Lender, all tangible chattel paper and instruments that the Company has or may at any time acquire, accompanied by such instruments of transfer or assignment duly executed in blank as the Lender may from time to time specify, in each case except as the Lender may otherwise agree.  At the Lender’s option, the Company shall, or the Lender may at any time on behalf of the Company, cause the original of any such instrument or chattel paper to be conspicuously marked in a form and manner acceptable to the Lender with the following legend referring to chattel paper or instruments as applicable: “This [chattel paper][instrument] is subject to the security interest of, ATV Texas Ventures III, LP as Lender, and any sale, transfer, assignment or encumbrance of this [chattel paper][instrument] violates the rights of such secured party.”


 (c)           The Company does not have any deposit accounts, except for Wells Fargo, as of the date hereof., The Company shall not, directly or indirectly, after the date hereof open, establish or maintain any deposit account unless each of the following conditions is satisfied: (i) the Lender shall have received not less than one (1) Business Days prior written notice of the intention of the Company to open or establish such account which notice shall specify in reasonable detail and specificity reasonably acceptable to the Lender the name of the account, the owner of the account, the name and address of the bank or other financial institution at which such account is to be opened or established, the individual at such bank or other financial institution with whom the Company is dealing and the purpose of the account and (ii) on or before the opening of such deposit account, the Company shall as the Lender may specify either (A) deliver to the Lender a Deposit Account Control Agreement with respect to such deposit account of the Company duly authorized, executed and delivered by the Company and the bank at which such deposit account is opened and maintained or (B) arrange for the Lender to become the customer of the bank with respect to such deposit account of the Company on terms and conditions acceptable to the Lender.  The terms of this subsection (C) shall not apply to deposit accounts specifically and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of any Company’s salaried employees.






(d)           The Company shall take any other actions reasonably requested by the Lender from time to time to cause the attachment and perfection of, and the ability of the Lender to enforce, the security interest of the Lender in any and all of the Collateral, including, without limitation, (i) executing, delivering and, where appropriate, filing financing statements and similar instruments and amendments relating thereto under the UCC or other applicable law, to the extent, if any, that the Company’s signature thereon is required therefore, (ii) causing the Lender’s name to be noted as secured party on any certificate of title for a titled good if such notation is a condition to attachment, perfection or priority of, or ability of the Lender to enforce, the security interest of the Lender in such Collateral, (iii) complying with any provision of any statute, regulation or treaty of the United States as to any Collateral if compliance with such provision is a condition to attachment, perfection or priority of, or ability of the Lender to enforce, the security interest of the Lender in such Collateral, (iv) obtaining the consents and approvals of any Governmental Person or third party, including, without limitation, any consent of any licensor, lessor or other person obligated on Collateral, and taking all actions required by any earlier versions of the UCC or by other law, as applicable in any relevant jurisdiction.


2.9          Right to Cure .  The Lender may, at its option, (a) upon notice to the Company, cure any default by the Company under any material agreement with a third party that affects the Collateral, its value or the ability of the Lender to collect, sell or otherwise dispose of the Collateral or the rights and remedies of the Lender therein or the ability of the Company to perform its Obligations hereunder or under the other Loan Documents, (b) pay or bond on appeal any judgment entered against the Company, (c) discharge taxes, liens, security interests or other encumbrances at any time levied on or existing with respect to the Collateral and (d) pay any amount, incur any expense or perform any act which, in the Lender’s good faith judgment, is necessary or appropriate to preserve, protect, insure or maintain the Collateral and the rights of the Lender with respect thereto.  The Lender may add any amounts so expended to the Obligations, such amounts to be repayable by the Company on demand.  The Lender shall be under no obligation to effect such cure, payment or bonding and shall not, by doing so, be deemed to have assumed any obligation or liability of the Company.  Any payment made or other action taken by the Lender under this Section shall be without prejudice to any right to assert an Event of Default hereunder and to proceed accordingly.


3.            Representations, Warranties and Covenants of Company .


3.1          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.


3.2          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.


3.3          Place of Business; Location of Collateral .  The address set forth in Section 9.3 of this Agreement is Company’s chief executive office and the Collateral is located only at such location and at such other location or locations listed herein.  Company will give Lender prior written notice before opening any additional place of business, changing its chief executive office, or moving any of the Collateral to a location other than Company’s chief executive office.






3.4          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, other than Permitted Liens.  Lender now has, and will continue to have, a perfected and enforceable security interest in all of the Collateral subject only to Permitted Liens, and Company will at all times defend Lender and the Collateral against all claims of others (subject to the rights of holders of the Permitted Liens).  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 Lender, use its best efforts to cause such third party to execute and deliver to Lender, in form acceptable to Lender, such waivers and subordinations as Lender shall specify, so as to ensure that Lender’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.


As used in this Agreement, “ Permitted Liens ” shall mean (a) the lien, charges, security interests in favor of the Lender (b) liens, charges, security interests, licenses, leases, and other encumbrances 4 attached hereto and made a part hereof, (c) liens, charges, security interests, and other encumbrances arising under or relating to the sale of accounts receivable under that certain Account Transfer Agreement with Wells Fargo Business Credit and any renewal, extension or replacement thereof; (d) liens for taxes or assessments or other charges by a Governmental Person that are not yet due and payable or, if due and payable, are being contested in good faith by appropriate proceedings and for which appropriate reserves are maintained; (e) mechanics’ materialmen’s, landlords’, warehousemen’s, carrier’s and other similar liens imposed by law and securing obligations incurred in the ordinary course of business which are not past due for more than thirty (30) days or which are being diligently contested in good faith by appropriate proceedings and for which appropriate reserves have been established; (f) liens under workers’ compensation, unemployment insurance, Social Security and other similar legislation’ (g) liens, deposits, or pledges securing the performance of contracts, leases, public or statutory obligations, surety, stay, appeal and performance bonds and other similar obligations incurred in the ordinary course of business; (h) liens securing capital lease obligations or the payment of the purchase price of any asset; and (i) with respect to real property, easements, restrictive covenants, rights-of-way and other similar liens and encumbrances that do not impair the continued use of such real property.


3.5          Maintenance of Collateral .  Company will maintain the Collateral in good working condition, ordinary wear and tear accepted, and Company will not use the Collateral for any unlawful purposes.  Company will immediately advise Lender in writing of any material loss or damage to the Collateral as more fully set forth in Section 3.29(c) .  The Company will not directly or indirectly, in any fiscal year, sell, transfer or otherwise dispose of any of the Collateral (other than sales of inventory in the ordinary course of business), or grant any option.


3.6          Books and Records .  Company has maintained and will maintain at Company’s chief executive or chairman’s office at the address set forth in Section 9.3 complete and accurate books and records, comprising an accounting system in accordance with generally accepted accounting principals.  The Company shall, (i) maintain books and records (including computer records and programs) of account pertaining to the assets, liabilities and financial transactions of the Company in such detail, form and scope as is consistent with good business practice and (ii) provide the Lender access to the premises of the Company at any time and from time to time, during normal business hours and upon reasonable notice under the circumstances, but in all events at least one (1) Business Day notice, and at any time after the occurrence and during the continuance of an Event of Default, for the purposes of (A) inspecting and verifying the Collateral, (B) inspecting and copying (at the Company’ expense) any and all records pertaining thereto, and (C) discussing the affairs, finances and business of the Company with any officer or director thereof, all of whom are hereby authorized to disclose to the Lender all financial statements, work papers, and other information relating to such affairs, finances or business.


3.7          Financial Condition, Statements and Reports .  All financial statements now or in the future delivered to Lender have been, and will be, prepared in conformity with generally accepted accounting principles (“ GAAP ”) 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 Lender and the date hereof, the Company represents that there has been no material adverse change in the financial condition or business of Company.  The Company will not at any time make or permit any material change in accounting policies or reporting practices, except as required by GAAP.






3.8          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.


3.9          Litigation .  Except as disclosed, 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 Person (or any basis therefore 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 Lender in writing of any claim, proceeding, litigation or investigation in the future threatened or instituted by or against Company.


3.10        Use of Proceeds .  All proceeds of the Loan shall be used solely in accordance with this Agreement.  In no event shall the Company (i) use any portion of the proceeds of the Loan for the purpose of purchasing or carrying any “margin stock” (as defined in Regulation U of the Federal Reserve Board) in any manner which violates the provisions of Regulation T, U or X of the Federal Reserve Board or for any other purpose in violation of any applicable statute or regulation, or of the terms and conditions of this Agreement, or (ii) take, or permit any person acting on its behalf to take, any action which could reasonably be expected to cause this Agreement or any document or instrument delivered pursuant hereto to violate any regulation of the Federal Reserve Board.


3.11        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, and such rights do not infringe any material intellectual property rights of others in any material respect and no claim or litigation is pending, or, to the best of the Company’s knowledge, threatened against the Company that contests its right to sell or use any such product, process, method, substance, part or other material.  The Company shall do and cause to be done all things necessary to preserve and keep in full force and affect all of its material registrations of intellectual property, including without limitation all trademarks, service marks and other marks, trade names and other trade rights.


3.12        Indebtedness .  Except as set forth on the Debt Schedule and as reported in the Company’s SEC filings, Company has no outstanding indebtedness of any kind.


3.13        Disclosure .  No representation or other statement made by Company to Lender contains any untrue statement of a material fact or omits to state a material fact necessary to make any statements made to Lender not misleading.


3.14        No Actual or Pending Material Modification of Business .  There exists no actual or, to the best of the Company’s knowledge after due inquiry, threatened termination, cancellation or limitation of, or any modification or change in, the business relationship of the Company with any customer or group of customers which individually or in the aggregate could reasonably be expected to have a material adverse effect.


3.15        No Broker’s or Finder’s Fees .  No broker or finder brought about the obtaining, making or closing of the Loan or financial accommodations afforded hereunder or in connection herewith by the Lender or any of its affiliates.


3.16        Investment Company .  Company is not an “investment company,” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.  Neither the making of the Loan or the application of the proceeds or repayment thereof by the Company, nor the consummation of the other transactions contemplated by this Agreement or the other Loan Documents, will violate any provision of such Act or any rule, regulation or order of the Securities and Exchange Commission there under.






3.17        Solvency .  Company is Solvent and will be Solvent upon the completion of all transactions contemplated to occur on or before the making of the Loan by the Lender.  For purposes of this Agreement “ Solvent ” means, that as of the date as to which the Company’s solvency is to be measured:


(a)           it has sufficient capital to conduct its business; and


(b)           it is able to meet its debts as they mature.


3.18        Affiliate Transactions .  Except as specified in herein , the Company is not a party to or bound by any agreement or arrangement (whether oral or written) to which any affiliate of the Company is a party except (i) in the ordinary course of and pursuant to the reasonable requirements of the business of the Company and (ii) upon fair and reasonable terms no less favorable to the Company than it could obtain in a comparable arm’s-length transaction with an unaffiliated person.


3.19        Performance .  Company shall pay the Principal Amount 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.


3.20        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 Amount 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 Amount 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 the Principal Amount on the Loan.


3.21        Taxes .  The Company has properly completed and timely filed all income tax returns it is required to file. The information filed within such tax returns is complete and accurate in all material respects.  All deductions taken in such income tax returns are appropriate and in accordance with applicable laws and regulations, except deductions that may have been disallowed but are being challenged in good faith and for which adequate reserves have been established in accordance with GAAP.  All taxes, assessments, fees and other governmental charges for periods beginning prior to the date hereof have been timely paid (or, if not yet due, adequate reserves therefore have

continue to document