Exhibit 10.66
 
Security Agreement

This Security Agreement made as of the day of April 14, 2011 by and between
Versant Funding LLC, a Delaware Limited Liability Company, having an office at
2200 Fletcher Avenue, 5th Floor, Fort Lee, New Jersey 07024 ("Versant") and
National Automation Services, Inc., a Nevada corporation, having a place of
business at 2470 Saint Rose Parkway, Suite 314, Henderson, Nevada 89074 (the
"Company").

WHEREAS:
 
A. The Company and Versant have entered or are about to enter into a Factoring
Agreement, of even date herewith (the "Factoring Agreement")  and intend, from
time to time after the date hereof, to enter into one or more Purchase and Sale
Agreements (the "Account Agreements")  pursuant to which Versant will purchase
certain accounts receivable billed to customers of the Company (such accounts
receivable, together with the proceeds thereof, being hereinafter referred to as
the "Accounts Receivable") on the basis of, and in reliance upon, the
representations, warranties and covenants of the Company contained in the
Account Agreements (the "Representations").
 
B. It is a condition precedent to the obligation of Versant to enter into the
Factoring Agreement and the Account Agreements and to purchase Accounts
Receivable pursuant thereto that the Company shall have entered into this
Security Agreement for the purpose of securing the performance of the
Representations.
 
NOW, THEREFORE, to induce Versant to enter into the Factoring Agreement and the
Account Agreements and to purchase Accounts Receivable pursuant thereto, and in
consideration thereof and for ten dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which being hereby acknowledged,
the parties hereto agree as follows:
 
1. Security Interest. The Company hereby grants to Versant and its successors
and assigns, a security interest (the "Security Interest") in all of the
following property now owned or at any time hereafter acquired by the Company or
in which the Company now has or at any time hereafter may acquire any right,
title or interest: Accounts (whether or not purchased by Versant pursuant to an
Account Agreement), Chattel Paper, Inventory, Equipment, Instruments, Investment
Property, General Intangibles, Documents, Contract Rights and proceeds and
products of the foregoing (including, without limitation, proceeds of
insurance)(the "Collateral"). Any term used in the Uniform Commercial Code
("UCC") and not defined in this Security Agreement shall have the meaning given
to the term in the UCC or in the Factoring Agreement.
 
2. Obligations. This Security Agreement and the Security Interest shall secure
the following obligations (the "Obligations"):
 
(a) Any and all obligations of the Company under the Account Agreements (but not
the payment of the Accounts Receivable purchased pursuant thereto) or under any
other agreement or instrument executed and delivered pursuant thereto; and
 
(b) Any and all other liabilities and obligations of every kind and nature
whatsoever of the Company to Versant, whether such liabilities and obligations
be direct or indirect, absolute or contingent, secured or unsecured, now
existing or hereafter arising or acquired, due or to become due.

3. Financing Statements and Other Action. The Company will do all lawful acts
which Versant deems necessary or desirable to protect the Security Interest or
otherwise to carry out the provisions of this Security Agreement, including, but
not limited to the procurement of waivers and disclaimers of interest in the
Collateral by the owners of any real estate on which the Collateral is located.
The Company irrevocably appoints Versant as its attorney-in-fact, coupled with
an interest, during the term of this Security Agreement to do all acts which it
may be required to do under this Security Agreement.
 
4. Authorization to File Financing Statements.
 
(a) The Company hereby irrevocably authorizes Versant at any time and from time
to time to file in any Uniform Commercial Code jurisdiction any initial
financing statements and amendments thereto that:
 
(i) indicate the Collateral as all assets of the Company or words of similar
effect, regardless of whether any particular asset comprised in the Collateral
falls within the scope of Article 9 of the UCC, or as being of an equal or
lesser scope or with greater detail;
 
 
 

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(ii) contain any other information required by part 5 of Article 9 of the UCC
for the sufficiency or filing office acceptance of any financing statement or
amendment, including (x) whether the Company is an organization, the type of
organization, and any organization identification number issued to the Company
and, (y) in the case of a financing statement filed as a fixture filing or
indicating Collateral as as-extracted collateral or timber to be cut, a
sufficient description of real property to which the Collateral relates;
 
(iii) contain a notification that the Company has granted a negative pledge to
Versant, and that any subsequent lien or may be tortiously interfering with
Versant's  rights; and
 
(iv) advises third parties that any notification of the Company's Account
Debtors will interfere with Versant's  collection rights.
 
(b) The Company agrees to furnish any of the foregoing information to Versant
promptly upon request.
 
(c) The Company ratifies its authorization for Versant to have filed any like
initial financing statements or amendments thereto if filed prior to the date
hereof.
 
(d) Versant may add any supplemental language to any such financing statement as
Versant may determine to be necessary or helpful in acquiring or preserving
rights against third parties.
 
5. Encumbrances. The Company warrants that it has title to the Collateral
purportedly owned by it and that there are no sums owed or claims, liens,
security interests or other encumbrances against the Collateral other than as
set forth in Exhibit A attached hereto and made a part hereof. The Company will
notify Versant of any lien, security interest or other encumbrance against the
Collateral securing any obligation of the Company, will defend the Collateral
against any claim, lien, security interest or other encumbrance adverse to
Versant, except for liens having priority there over as set forth on Exhibit A,
attached hereto and made a part hereof, and will not create, incur, assume, or
suffer to exist any lien, security interest or other encumbrances against the
Collateral, whether now owned or hereafter acquired, except:
 
(a) liens in favor of Versant and such other liens as are set forth on Exhibit A
attached hereto and made a part hereof;
 
(b) liens for taxes or assessments or other government charges or levies if not
yet due and payable or, if due and payable, if they are being contested in good
faith by appropriate proceedings and for which appropriate reserves have
previously been delivered by the Company to Versant;
 
(c) liens imposed by law, such as mechanics',  material men's,
landlords',  warehousemen's, and carriers' liens, and other similar liens,
securing obligations incurred in the ordinary course of business, which are not
past due for more than 30 days or which are being contested in good faith by
appropriate proceedings, and for which appropriate reserves have been previously
delivered to Versant;
 
(d) liens, deposits, or pledges to secure the performance of bids, tenders,
contracts (other than contracts for the payment of money), leases, public
statutory obligations, surety, stay, appeal, indemnity, performance, or other
similar bonds or other similar obligations arising in the ordinary course of
business;
 
(e) judgments and other similar liens arising in connection with court
proceedings, provided that the execution or other enforcement of such liens is
effectively stayed and the claims secured thereby are being actively contested
in good faith and by appropriate proceedings;
 
(f) easements, right-of-way restrictions, and other similar encumbrances which,
in the aggregate, do not materially interfere with the occupation, use, and
enjoyment by the Company of the property or assets encumbered thereby in the
normal course of its business or materially impair the value of the property
subject thereto; and

(g) purchase-money liens on any property hereafter acquired or the assumption of
any lien on property existing at the time of such acquisition (and not created
in contemplation of such acquisition), or a lien incurred in connection with any
conditional sale or other title retention agreement or a capital lease; provided
that:
 
(i) any property subject to any of the foregoing is acquired by the Company in
the ordinary course of its business and the lien on any such property attaches
to such asset concurrently or within 90 days after the acquisition thereof;
 
 
 

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(ii) the obligation secured by any lien so created, assumed, or existing shall
not exceed 100% of the lesser ofthe cost or the fair market value as of the time
of acquisition of the property covered thereby to the Company; and
 
(iii) each such lien shall attach only to the property so acquired and fixed
improvements thereon.
 
6. Maintenance of Collateral. The Company shall preserve the Collateral for the
benefit of Versant. Without limiting the generality of the foregoing, the
Company shall:
 
(a) make all such repairs, replacements, additions and improvements to its
equipment as in its judgment are necessary to permit such business to be
properly and advantageously conducted at all times;

(b) maintain and preserve its inventory except as sold in the ordinary course of
business;
 
(c) preserve all beneficial contract rights to the extent commercially
reasonable;

(d) in conjunction with, and at the direction of, Versant, take commercially
reasonable steps to collect all Accounts; and
 
(e) pay all taxes, assessments or other charges on the Collateral when due,
unless the amount or validity of such taxes, assessments or charges is being
contested in good faith by appropriate proceedings and reserves with respect
thereto in conformity with generally accepted accounting principles have been
provided on the books of the Company.
 
Nothing contained herein shall be construed to prohibit the Company from buying
and selling equipment and inventory in the ordinary course of business;
provided, however, that the Company will not sell equipment where either the
adjusted basis of such equipment determined in accordance with generally
accepted accounting principles or the sales price of such equipment exceeds, for
any 12 month period, $5,000 in any individual transaction or $20,000 in the
aggregate.
 
7. Additional Provisions Concerning the Collateral.

(a) The Company irrevocably appoints Versant as its attorney-in-fact (such power
of attorney being coupled with an interest) and proxy, with full authority in
the place and stead of the Company and in its name or otherwise, from time to
time in Versant's discretion, to take any action or execute any instrument which
Versant may deem necessary or advisable to accomplish the purposes of this
Security Agreement, including, without limitation: (i) to obtain and adjust
insurance required to be paid to Versant pursuant to Section 8 hereof; (ii) to
ask, demand, collect, sue for, recover, compound, receive, and give acquittance
and receipts for moneys due and to become due under or in respect of any of the
Collateral; (iii) to receive, endorse, and collect any checks, drafts or other
instruments, documents, and chattel paper in connection with clause (i) or
clause (ii) above; (iv) to sign the Company's name on any invoice or bill of
lading relating to any Account, on drafts against customers, on schedules and
assignment of Accounts, on notices of assignments, financing statements and
other public records, on verification of Accounts and on notices to customers
(including notices directing customers to make payment directly to Versant); (v)
if a Default (as hereinafter defined) has occurred and is continuing, to notify
the postal authorities to change the address for delivery of its mail to an
address designated by Versant, to receive, open and process all mail addressed
to the Company, to send requests for verification of Accounts to customers; and
(vi) to file any claims or take any action or institute any proceeding which
Versant may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of Versant with respect to any of
the Collateral. The Company ratifies and approves all acts of such attorney; and
so long as such attorney acts in good faith and without gross negligence, such
attorney shall have no liability to the Company for any act or omission there
as.

(b) If the Company fails to perform any agreement contained herein, Versant may
itself perform, or cause performance of, such agreement or obligation, and the
costs and expenses of Versant incurred in connection therewith shall be payable
by the Company and shall be fully secured hereby.

(c) The powers conferred upon Versant hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon Versant to
exercise any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by Versant hereunder,
Versant shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.

 
 

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(d) Anything herein to the contrary notwithstanding, (i) the Company shall
remain liable under any contracts and agreements relating to the Collateral, to
the extent set forth therein, to perform all of its obligations thereunder to
the same extent as if this Security Agreement had not been executed; (ii) the
exercise by Versant of any of its rights hereunder shall not release the Company
from any of its obligations under the contracts and agreements relating to the
Collateral; and (iii) Versant shall not have any obligation or liability by
reason of this Security Agreement under any contracts and agreements relating to
the Collateral, nor shall Versant be obligated to perform any of the obligations
or duties ofthe Company thereunder or to take any action to collect or enforce
any claim for payment assigned hereunder.

8. Insurance.

The Company shall maintain insurance covering the Collateral with financially
sound and reputable insurers satisfactory to Versant against such risks as are
customarily insured by a business in the same or similar industry and similarly
situated for an amount not less than the full replacement value of such
Collateral. All such insurance policies covering property on and after the date
such property becomes subject to the Security Interest shall name Versant on a
Lender's Loss Payable Endorsement. At the request of Versant, all insurance
policies covering property subject to the Security Interest shall be delivered
to and held by Versant. If, while any Obligations are outstanding, any proceeds
in excess of $5,000 with respect to any casualty loss are paid to Versant under
such policies on account of such casualty loss, and there is no breach by the
Company of any representations, or default by the Company in the performance of
any covenant herein or in the Factoring Agreement contained (any of the
foregoing being hereinafter referred to as an "Event of Default") which is
continuing, Versant will pay over such proceeds in whole or in part to the
Company, for the purpose of repairing or replacing the Collateral destroyed or
damaged, any such repaired or replaced Collateral being secured hereby. If an
Event of Default has occurred and is continuing, Versant may apply the proceeds
in its discretion to any of the Obligations. All proceeds less than or equal to
$5,000 with respect to any casualty loss shall be paid to the Company, to be
used by the Company to replace or repair the Collateral destroyed or damaged,
except that if an Event of Default shall have occurred, then Versant shall apply
the proceeds in its discretion to any of the Obligations. Versant is hereby
appointed during the term of this Agreement as irrevocable attorney-in-fact to
collect the proceeds of such insurance, to settle any claims with the insurers
in the event of loss or damage, to endorse settlement drafts and, upon an Event
of Default under this Agreement, to cancel, assign or surrender any insurance
policies.
 
9. Fixtures. It is the intention of the parties hereto that none of the
equipment, machinery or other property securing the Obligations hereunder shall
become or constitute fixtures.

10. Default. (a) (i) If breach or default shall be made in the due performance
or observance of any provision of this Security Agreement and such breach or
default shall continue for a period of 5 days after written notice thereof shall
have been received by the Company from Versant; or (ii) an Event of Default, as
defined in Section 8, shall have occurred and shall continue for a period of 5
days after written notice thereof shall have been received by the Company from
Versant (each of the foregoing being hereinafter referred to as a
"Default"),  then upon the occurrence of any such Default or at any time or
times thereafter, unless such Default shall have been cured within any
applicable grace period, or waived in writing by Versant, Versant shall have all
of the rights and remedies of a secured party under the Uniform Commercial Code
and shall have full power and authority to sell or otherwise dispose of the
Collateral or any part thereof. Any such sale or other disposition, subject to
the provisions of applicable law, may be by public or private proceedings and
may be made by one or more contracts, as a unit or in parcels, at such time and
place, by such method, in such manner and on such terms as Versant may
determine. Except as required by law, such sale or other disposition may be made
without advertisement or notice of any kind or to any third party or third
person. In the event any consent, approval or authorization of any governmental
agency shall be necessary to effectuate any such sale or sales, the Company
shall execute, as necessary, all applications or other instruments as may be
required.
 
(b) Upon the occurrence of a Default and at any time or times thereafter,
subject to the provisions of applicable law, Versant may commence proceedings in
any court of competent jurisdiction for the appointment of a receiver (which
term shall include a receiver-manager) of the Collateral or of any part thereof
or may by instrument in writing appoint any person to be receiver of the
Collateral or any part thereof and may remove any receiver so appointed by
Versant and appoint another in his stead; and any such receiver appointed by
instrument in writing shall have the power (i) to take possession of the
Collateral or any part thereof, (ii) to carry on the business of the Company,
(iii) to borrow money on the security of the Collateral in priority to this
Security Agreement required for the maintenance, preservation or protection of
the Collateral or any part thereof or for the carrying on of the business of the
Company, and (iv) to sell, lease or otherwise dispose of the whole or any part
of the Collateral at public auction, by public tender or by private sale, either
for cash or upon credit, at such time and upon such terms and conditions as the
receiver may determine; provided that any such receiver shall be deemed the
agent of the Company and Versant shall not be in any way responsible for any
misconduct or negligence of any such receiver except for willful misconduct or
gross negligence.
 
 
 

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11. Standards for Exercising Remedies. To the extent that applicable law imposes
duties on Versant to exercise remedies in a commercially reasonable manner, the
Company acknowledges and agrees that it is not commercially unreasonable for
Versant:
 
(a) to not incur expenses to prepare Collateral for disposition or otherwise to
complete raw material or work in process into finished goods or other finished
products for disposition;
 
(b) to fail to obtain third party consents for access to Collateral to be
disposed of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of;
 
(c) to fail to exercise collection remedies against Account Debtors or other
persons obligated on Collateral or to remove liens or encumbrances on any
adverse claims against Collateral;
 
(d) to exercise collection remedies against Account Debtors and other persons
obligated on Collateral directly or through the use of collection agencies and
other collection specialists;

(e) to advertise dispositions of Collateral through publications or media of
general circulation, whether or not the Collateral is of a specialized nature;

(f) to hire one or more professional auctioneers to assist in the disposition of
Collateral, whether or not the collateral is of a specialized nature;
 
(g) to dispose of Collateral by using Internet sites that provide for the
auction of assets of the types included in the Collateral or that have the
reasonable capability of doing so, or that match buyers and sellers of assets;

(h) to dispose of assets in wholesale rather than retail markets;

(i) to disclaim all disposition warranties; or

(j) to purchase insurance or credit enhancements to insure Versant against risks
of loss, collection or disposition of Collateral or to provide to Versant a
guaranteed return from the collection or disposition of Collateral.

The Company acknowledges that the purpose of this Section 11 is to provide
non-exhaustive indications of what actions or omissions by Versant would not be
commercially unreasonable in Versant's exercise of remedies against the
Collateral and that other actions or omissions by Versant shall not be deemed
commercially unreasonable solely on account of not being indicated in this
Section 11. Without limitation upon the foregoing, nothing contained herein
shall be construed to grant any rights to the Company or to impose any duties on
Versant that would not have been granted or imposed by this Security Agreement
or by applicable law in the absence of this Section 11.

12. Payment of Taxes, Charges. Versant, at its option, after notice to the
Company, may discharge any taxes, charges, assessments, security interests,
liens or other encumbrances (except those permitted by Section 5 of this
Security Agreement) upon the Collateral or otherwise protect the value thereof.
All such expenditures incurred by Versant shall become payable by the Company to
Versant upon demand, shall bear interest at the rate of 18% per annum from the
date incurred to the date of payment, and shall be secured by the Collateral.

13. Duties with Respect to Collateral. Versant shall have no duty to the Company
with respect to the Collateral other than the duty to use reasonable care in the
safe custody of any of the Collateral in its possession. Without limiting the
generality of the foregoing, Versant, although it may do so at its option, shall
be under no obligation to the Company to take any steps necessary to preserve
rights in the Collateral against other parties.

14. Proceeds and Expenses of Dispositions. The Company shall pay to Versant on
demand any and all expenses, including reasonable attorneys' fees and
disbursements, incurred or paid by Versant in protecting, preserving or
enforcing its rights under or in respect of any of the Obligations or any of the
Collateral. After deducting all of said expenses, the residue of any proceeds of
collection or sale of the Collateral shall, to the extent actually received in
cash, be applied to the payment of the Obligations in such order or preference
as Versant may determine, and notwithstanding contrary instructions received by
Versant from the Company or any other third party.
 
 
 

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15. No Lien Termination without Release.  In recognition of Versant's right to
have its attorneys'  fees and other expenses incurred in connection with this
Security Agreement secured by the Collateral, notwithstanding payment in full of
all Obligations by the Company, Versant shall not be required to terminate any
Uniform Commercial Code Financing Statements filed in its favor against the
Company relating to the Collateral unless and until the Company and all entities
which are secondarily liable on the Obligations have executed and delivered to
Versant a general release, covering claims both known and unknown, in a form
reasonably satisfactory to Versant. Company understands that this provision
constitutes a waiver of its rights under §9-513 of the UCC.

16. Waivers. To the extent permitted by law, the Company hereby waives demand
for payment, notice of dishonor or protest and all other notices of any kind in
connection with the obligations except notices required hereby, by law or by any
other agreement between the Company and Versant. Versant may release, supersede,
exchange or modify any Collateral or security which it may from time to time
hold and may release, surrender or modify the liability of any third party
without giving notice hereunder to the Company. Such modifications, changes,
renewals, releases or other actions shall in no way affect any of the
Obligations or the Company’s obligations hereunder.
 
17. Transfer Expenses. The Company will pay, indemnify and hold harmless Versant
from and against all costs and expenses (including taxes, if any) arising out of
or incurred in connection with any transfer of Collateral into or out of the
name of Versant and all reasonable costs and expenses, including reasonable
legal fees, of Versant arising out of or incurred in connection with this
Security Agreement; provided, however, that the Company shall not be responsible
for expenses arising out of or incurred as a result of willful misconduct by
Versant.

18. Modification. This Agreement may not be modified or amended without the
prior written consent of each of the parties hereto.
 
19. Notices. Except as otherwise provided in this Security Agreement, all
notices and other communications hereunder shall be deemed to have been
sufficiently given when mailed, postage prepaid, by certified or registered
mail, sent by courier or telefaxed, return receipt requested, or confirmation of
receipt requested in the case of a telefax, and the sender shall have received
such return receipt or confirmation, such notices or communications to be,
addressed as follows:
 
To Versant:
Versant Funding LLC
 
2200 Fletcher Avenue, 5th floor
 
Fort Lee, New Jersey
 
Attn: Mark D Weinberg, Esq.
 
Fax: (201) 482-0283
   
To Company:                                      
National Automation Services, Inc.
 
2470 Saint Rose Parkway, Suite 314
 
Henderson, Nevada 89074
 
Attn: Robert Chance
 
Fax: (480) 892-1085

 
or at such other address or telefax number, as the case may be, as the party to
whom such notice or demand is directed may have designated in writing to the
other party hereto by notice as provided in this Section 19. Each of the parties
hereto shall have the right to rely on as an original any notice given hereunder
by telefax as aforesaid.
 
20. Rights; Merger. No course of dealing between the Company and Versant, nor
any delay in exercising, on the part of Versant, any right, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies hereunder are cumulative and are in addition to, and not
exclusive of, any rights or remedies provided by law or in equity, including,
without limitation, the rights and remedies of a secured party under the Code.
It is understood and agreed that all understandings and agreements heretofore
had between the parties, if any, with respect to the subject matter hereof are
merged into this Security Agreement, which alone fully and completely expresses
their agreement.
 
21. Governing Law, Binding Effect.  This Security Agreement and the rights and
obligations of the parties hereunder shall be construed in accordance with and
governed by the laws of the State of New Jersey. This Security Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, including any other holder or holders of any
obligations and may be executed in two or more counterparts, each of which shall
together constitute one and the same agreement.
 
 
 

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22. Severability.  The invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other provision
hereof.
 
IN WITNESS WHEREOF, the parties hereto have executed this Security Agreement as
of the day and year first above written.
 
 
For:
National Automation Services, Inc.
   
By:
/s/ Robert Chance
 
Robert Chance, President  & CEO
       
For:
Versant Funding, LLC
   
By:
/s/ Mark Weinberg
 
Mark D Weinberg, Chief Executive Officer

 
 

 

 
 

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Performance Guaranty
 
This Performance Guaranty made as of the 14 day of April, 2011 by and between
Versant Funding LLC, a Delaware Limited Liability Company, having an office at
2200 Fletcher Avenue, 51 Floor, Fort Lee, New Jersey 07024 ("Versant") and
Robert Chance ("Guarantor").

WHEREAS:

A. National Automation Services, Inc. (the "Company") and Versant have or are
about to enter into a Factoring Agreement, of even date herewith (the
"Factoring  Agreement") and, from time to time after the date hereof, intend to
enter into Purchase and Sale Agreements (collectively, the "Account
Agreements"), pursuant to which Versant will purchase certain accounts
receivable billed to customers of the Company ("Accounts Receivable") on the
basis of, and in reliance upon, the representations, warranties and covenants of
the Company contained in the Account Agreements (collectively, the
"Representations").
 
B. Guarantor is the President  & CEO of the Company and owns 2.43% of the issued
and outstanding shares of the Company.
 
C. It is a condition precedent to the obligation of Versant to enter into the
Factoring Agreement and the Account Agreements and to purchase Accounts
Receivable pursuant thereto that Guarantor shall have entered into this
Performance Guaranty for the purpose of guaranteeing performance by the Company
of the Representations.
 
NOW, THEREFORE, in order to induce Versant to enter into the Factoring Agreement
and the Account Agreements and to purchase Accounts Receivable pursuant thereto,
and for ten dollars ($10.00) and other good and valuable consideration, the
receipt and sufficiency of which being hereby acknowledged, Guarantor hereby
agrees as follows:
 
1. Guaranteed Obligations. Guarantor hereby irrevocably and unconditionally
guarantees (a) the due and punctual performance by the Company of the
Representations, (b) the payment (and not merely the collectability) of any
loss, liability or expense incurred by Versant in the event any one or more of
the Representations  is untrue in any respect or fail to be performed, and (c)
the payment (and not merely the collectability) of any other obligation owed by
the Company to Versant of any nature that arises hereafter: (i) under the
Factoring Agreement or any Account Agreement; (ii) pursuant to any modification
or amendment thereof; or (iii) pursuant to any new, amended, modified or
superseding Factoring Agreement executed hereafter by Versant and the Company
(the "Guaranteed  Obligations"). This Performance Guaranty is a continuing
guaranty of the Guaranteed Obligations for the duration of the term of any such
Factoring Agreement and Account Agreements and shall be fully enforceable until
each of the Guaranteed Obligations has been fully and completely satisfied. If
the Company, or any of its successors and assigns, shall fail to perform all or
any of the Representations and/or fail to duly and punctually pay the amounts
set forth in subdivisions (a), (b), and (c) above, or any of them, Guarantor
shall forthwith pay the same on demand.
 
2. Demand by Versant. The liabilities and obligations of Guarantor hereunder in
respect of the Guaranteed Obligations shall become due and payable by Guarantor
to Versant immediately after demand hereunder is made upon Guarantor by Versant
in writing. Any such demand may be delivered concurrently with any notice of
default. Versant shall be entitled to exercise its rights hereunder one or more
times and no failure to exercise any such rights shall constitute a waiver
thereof or of the right thereafter to seek payment hereunder on account thereof
or otherwise.
 
3. Primary Obligation. The liability of Guarantor hereunder shall be primary,
direct and immediate, and not conditional or contingent upon pursuit by Versant
of any remedies it may have against the Company or any other party with respect
to the Guaranteed Obligations. Any one or more successive and/or concurrent
actions may be brought against Guarantor either in the same action or
proceeding, if any, brought against the Company, or in separate actions, as
Versant in its sole discretion may deem advisable.
 
4. Subrogation. Guarantor shall become subrogated to the rights of Versant
against the Company for any amounts actually paid by Guarantor to Versant
hereunder only upon the payment or discharge in full of all of the Guaranteed
Obligations. Such rights of subrogation shall be shared with other guarantors,
if any, pari passu and in proportion to the payments any such guarantors have
made to Versant under any like performance guaranty. Versant shall be entitled
to exercise any and all remedies to which it may be entitled against any
collateral pledged by the Company as if no such rights of subrogation exist.
 
 
 

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5. Waiver of Demands, Notices, Diligence. Guarantor hereby consents, to the
extent permitted by applicable law, to all the terms and conditions of the
Guaranteed Obligations and waives (a) demand for payment of the Guaranteed
Obligations or of any claim therefore; (b) notice of the occurrence of a default
or of an event of default of any of the Guaranteed Obligations; (c) protest of
the nonpayment of any of the Guaranteed Obligations; (d) notice of presentment,
demand and protest; (e) notice of acceptance of any guaranty herein provided for
or of the terms and provisions thereof or hereof by Versant; (f) notice of any
indulgences or extensions granted to the Company or to any other person or
entity which shall have succeeded to or assumed the obligations of the Company;
(g) any requirement of diligence or promptness on Versant's  part in the
enforcement of any of its rights hereunder; (h) any enforcement of any of the
Guaranteed Obligations; (i) any right which Guarantor might have to require
Versant to proceed against any other guarantor of the Guaranteed Obligations or
to realize on any collateral security therefore; and G) any and all notices of
every kind and description which may be required to be given by any statute or
rule of law in any jurisdiction. The waivers hereinabove set forth shall be
effective in all events and shall survive any liquidation, merger or
consolidation of the Company or if the Company otherwise ceases to exist.
 
6. Obligations of Guarantor. The obligations of Guarantor under this Guaranty
shall be unconditional, irrespective of the validity, regularity or
enforceability of any of the Guaranteed Obligations. Such obligations shall not
be affected by any action taken under any Guaranteed Obligations in the exercise
of any right or remedy therein conferred; by any failure or omission on
Versant's  part to enforce any right granted there under or hereunder or any
remedy conferred thereby or hereby; by any waiver of any term, covenant,
agreement or condition of any of the Guaranteed Obligations or this Guaranty; by
any release of any security or any other guaranty at any time existing for the
benefit of Versant; by the merger or consolidation of the Company, or by any
sale, lease or transfer by the Company to any person or entity of any or all of
its properties; by any action of Versant granting indulgence or extension to or
waiving or acquiescing in any default by the Company or by an successor to the
Company or by any other person or entity which shall have assumed its
obligations; by reason of any disability or other defense of the Company or of
any successor to the Company; by any modification, or amendment of any agreement
between the Company and Versant, or by the execution of any new, amended,
modified or superseding Factoring Agreement between Versant and the Company or
by any circumstance whatsoever (with or without notice to or knowledge of
Guarantor) which may or might in any manner or to any extent vary or increase
the risk of the Guarantor hereunder, it being the purpose and intent of
Guarantor that the obligations of Guarantor shall be absolute and unconditional
under any and all circumstances and shall not be discharged except by payment or
performance as provided herein, and then only to the extent of such payment or
performance.

7. Notices. All notices, demands, requests and other communications  required or
permitted hereunder shall be deemed to have been sufficiently given or made if
in writing and delivered by hand personally to, or mailed by registered or
certified mail, return receipt requested, or by overnight courier, or telefaxed
with confirmation of receipt requested, to:
 
To Versant:
Versant Funding LLC
 
2200 Fletcher Avenue, 5th floor
 
Fort Lee, New Jersey
 
Attn: Mark D Weinberg, Esq.
 
Fax: (201) 482-0283
   
To Guarantor:                                   
Robert Chance
 
384 Desert Cove
 
Henderson, Nevada 89012
 
Fax: (480) 892-1085

or at such other address as the party to whom such notice or demand is directed
may have designated in writing to the other parties hereto by notice as provided
in this section.
 
8. Survival of Guaranty. This Performance Guaranty shall inure to the benefit of
and be binding upon Guarantor and Versant and their respective heirs, successors
and assigns, including any subsequent holder or holders of any Guaranteed
Obligations, and the term "Versant" shall include any such holder or holders
whenever the context permits. Guarantor hereby expressly consents and agrees
that this Performance Guaranty shall continue in full force and effect
notwithstanding: (a) the modification, amendment or change in any way, of the
terms and conditions of the relationship between Versant and the Company; (b)
any increase or change in Guarantor's risk resulting from any such modification,
amendment or change in any of the terms and conditions of the relationship
between Versant and the Company and/or (c) the execution of a new or superseding
Factoring Agreement between Versant and the Company.
 
9. Independent Obligation. Versant may proceed against Guarantor under this
Performance Guaranty without first proceeding against the Company, against any
other guarantor or any other person or any security held by Versant and without
pursuing any other remedy.
 
 
 

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10. Counterparts. This Performance Guaranty may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of the
counterparts shall together constitute one and the same instrument.
 
11. Successors, Governing Law, Consent to Jurisdiction, Waiver of Service,
Waiver of Jury Trial. This Performance Guaranty shall inure to the benefit of
and be binding upon the successors and assigns of the parties hereto. This
Performance Guaranty shall be governed by and construed in accordance with the
laws ofthe State of New Jersey applicable to agreements made and to be performed
exclusively within such state. The parties hereto mutually agree that any legal
action relating to or arising from this Performance Guaranty or relating in any
way to the factoring relationship between Versant and the Seller and
Guarantor(s), shall be maintained only in (a) the Superior Court of the State of
New Jersey, County of Bergen, (b) the federal courts in and for the District of
New Jersey, Newark vicinage, (c) the Supreme Court of the State of New York,
County of New York, or (d) the federal courts in and for the Southern District
of New York (the "Courts of Jurisdiction"), and the parties hereto expressly
consent and agree, and waive any objection, to the jurisdiction of the Courts of
Jurisdiction over any such legal action, and over the parties hereto, and to the
laying of venue in any of the Courts of Jurisdiction. The parties expressly
agree that no legal action may be maintained between or among the parties hereto
other than in the Courts of Jurisdiction, however, nothing in this paragraph
shall be construed to limit the rights of the parties to domesticate, or
otherwise pursue, any judgment obtained in the Courts of Jurisdiction in any
other court, state, territory or nation. Furthermore, the parties hereto
expressly agree to waive all otherwise applicable statutes, rules, or other
requirements relating to the service of legal process, including, but not
limited to, the service of a summons and/or complaint, and hereby agree to
accept service of process in any such legal action pursuant solely to the notice
provisions contained herein. Any such service of legal process made pursuant to
the notice provisions hereof shall be deemed to be good and valid service,
without regard for any contrary or inconsistent statute, rule or provision. The
parties hereto do hereby waive any and all right to a trial by jury in an action
or proceeding arising out of this Performance Guaranty or any of the Factoring
Documents.
 
IN WITNESS WHEREOF, the Guarantor has executed this Performance Guaranty as of
the day and year first above written.
 
For:
GUARANTOR
   
By:
/s/ Robert Chance
 
Robert Chance, Individually

 
 
 

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Factoring Agreement
 
This Factoring Agreement made as of the 14 day of April, 2011 by and between
Versant Funding LLC, a Delaware Limited Liability Company, having an office at
2200 Fletcher Avenue, 51 Floor, Fort Lee, New Jersey 07024 ("Versant") and
Robert Chance ("Guarantor").
 
WHEREAS:
 
A. Seller has requested that Versant purchase from Seller, from time to time,
all of Seller's right, title and interest in and to certain accounts receivable
due to Seller from its customers; and
 
B. Versant has agreed to purchase certain of such accounts receivable from
Seller, from time to time, upon the terms and subject to the conditions set
forth in this Factoring Agreement.
 
NOW, THEREFORE, in order to induce Versant to purchase such accounts receivable,
and for ten dollars ($10.00) and other good and valuable consideration, the
receipt and sufficiency of which being hereby acknowledged, the parties hereto
agree as follows:
 
1. Sale and Purchase of Accounts Receivable. Seller will tender to Versant
certain of Seller's  invoices to be rendered to Seller's  customers ("Account
Debtors") with respect to goods sold and delivered to, or services performed
for, such Account Debtors by Seller (individually, an "Account Receivable" and
collectively, the "Accounts Receivable"). Such invoices shall be forwarded by
Versant to the respective Account Debtors, in accordance with the standard
billing procedures of Versant, together with or after notice from Seller and/or
Versant to such Account Debtors of the irrevocable assignment to Versant of
payment there under. Versant will conduct such examination and verification of
the invoices so tendered, and such credit investigation of such Account Debtors,
as Versant considers necessary or desirable, and will notify Seller as to which
of the individual Accounts Receivable so tendered, if any, Versant elects to
purchase. Versant shall at all times have the absolute right in its sole
discretion to reject any or all of the Accounts Receivable, whether or not
Versant has previously purchased Accounts Receivable from Seller or previously
purchased Accounts Receivable of any particular Account Debtor.
 
2. Account Agreements. The Accounts Receivable that Versant elects to purchase
from Seller shall be purchased upon the terms and subject to the conditions of
separate Purchase and Sale Agreements, between Seller and Versant, the form of
which has heretofore been provided to Seller (the "Account Agreements"). Versant
shall advance against the Purchase Price (as defined in the Account Agreements)
for the Accounts Receivable Versant elects to purchase pursuant to the
provisions hereof, Seventy-Five (75%) Percent of the face amount of such
Accounts Receivable purchased. Versant shall pay the balance of the Purchase
Price, as calculated pursuant to the applicable Account Agreement, pursuant to
the further provisions of this Section 2. For the purposes hereof, the term
"Schedule Closure Date" shall mean, with respect to each of the schedules or
batches of Accounts Receivable purchased pursuant to each Account Agreement (a
"Schedule"), the date with respect to each Schedule on which the applicable
Account Debtors have either paid all such Accounts Receivable in the Schedule
or, a Chargeback (as defined in the Account Agreements) has been taken there
against; provided, however, that Seller may, at its election, repurchase any
such Accounts Receivable from Versant, for a price equal to the face amount of
such Account Receivable, in which event such Account Receivable shall be deemed
duly paid for the purposes of determining the Schedule Closure Date.
Notwithstanding anything to the contrary herein contained, the Accounts
Receivable purchased by Versant pursuant to an Account Agreement, may be
aggregated and administered as a single Account Receivable, or as several
discreet Accounts Receivable, in the discretion of Versant (each, an "Aggregate
Receivable" or Schedule as previously defined). Periodically, from and after
each Schedule Closure Date, the balance of the Purchase Price, if any, payable
in respect of the Accounts Receivable purchased pursuant to each Account
Agreement (the "Purchase Price Balance") shall be aggregated with the Purchase
Price Balance, if any, from all other Schedules in respect of which there has
occurred other Schedule closures (the "Aggregate Purchase Price Balance"), and
Versant shall credit to Seller's  reserve account, the positive amount, if any,
of such Aggregate Purchase Price Balance. Chargebacks from all Account
Agreements shall be debited against the Seller's  reserve account and the net
credit balance, if any, shall be rebated to the Seller in accordance with
Versant's  standard rebate practices. Capitalized terms not herein defined shall
have the respective meanings attributed thereto in the Account Agreement. In the
event of any conflict between the provisions of an Account Agreement and this
Factoring Agreement, the provisions of this Factoring Agreement shall govern and
control. Notwithstanding the first sentence of this Section 2, if either Seller
or Versant shall fail to execute an Account Agreement with respect to a
particular Account Receivable tendered by Seller to Versant, and Versant shall
nevertheless pay an Advance Amount to Seller for such Account Receivable,
Versant shall be presumed conclusively to have purchased, and Seller shall be
presumed conclusively to have sold, such Account Receivable pursuant to an
Account Agreement, and such Account Receivable shall be governed by the terms
and conditions (including, without limitation, Seller's  representations,
warranties and covenants to Versant contained therein) set forth in the Account
Agreement in the form heretofore provided to Seller.
 
 
 

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3. Conditions Precedent. Versant shall not be required to purchase any Accounts
Receivable pursuant to an Account Agreement unless and until each of the
following conditions shall have been satisfied:
 
(a) Versant and Seller shall have entered into a Security Agreement in the form
heretofore provided to Seller (the "Security Agreement"), to secure the
performance by Seller of certain representations, warranties and covenants set
forth in the Account Agreements (the "Representations") (but not the payment of
the Accounts Receivable purchased thereby);

(b) Robert Chance shall have executed and delivered to Versant a Performance
Guaranty in the form heretofore provided to Seller (the
"Performance  Guaranty"), to guarantee Seller's  performance of the
Representations (but not the payment of the Accounts Receivable purchased
thereby);
 
(c) Seller shall have authorized Versant to file Uniform Commercial Code
financing statements with the appropriate filing officer or officers in each
jurisdiction where, in the reasonable opinion of Versant, such filing is
necessary or desirable to perfect the security interests granted pursuant to the
Security Agreement and to provide notice of the factoring arrangement; and
 
(d) Seller shall have executed and delivered to Versant an Account Agreement in
the form heretofore provided to Seller, together with the schedule of proposed
Accounts Receivable attached thereto as Schedule A, which Schedule A shall be
duly executed and dated by Seller.
 
Versant's  failure to require the satisfaction of any one or more of these
conditions precedent shall not be deemed a waiver thereof, nor shall such
failure in any way alter, modify or vitiate Seller's  obligations hereunder or
any guarantor's obligations under the respective Performance Guaranties.
 
4. Cross-Collateralization. If a Default (as defined in the Security Agreement)
shall have occurred, Versant shall have the right, which may be exercised in its
sole and absolute discretion at any time and from time to time during the
continuance of such Default, to apply all amounts collected with respect to
Accounts Receivable, as follows, before any payment from such collections shall
be made to Seller: (i) first, against the unreimbursed balance of the Advance
Amounts made by Versant to Seller with respect to Accounts Receivable purchased
from Seller under one or more Account Agreements; (ii) next, to the payment of
all fees and expense reimbursements (as described in the Account Agreements)
accrued with respect to Accounts Receivable purchased by Versant from Seller,
whether or not such fees have become due and payable pursuant to the terms of
the Account Agreements; and (iii) the balance, if any, to the payment of any and
all other liabilities and obligations of Seller to Versant pursuant to this
Factoring Agreement, the Security Agreement, the Account Agreements and any
other agreement entered into between Versant and Seller concurrently or in
connection herewith.
 
5. Collection of Accounts Receivable. Seller will instruct all of the Account
Debtors obligated with respect to the Accounts Receivable assigned to Versant to
mail or deliver payments on such Accounts Receivable directly to Versant at its
address herein above set forth or at such other address as Versant may specify
in a written notice to Seller. Such instructions shall not be rescinded or
modified without Versant's prior written consent. If, despite such instructions,
Seller shall receive any collections or other proceeds of the Accounts
Receivable assigned to Versant, Seller shall as soon as practicable, but in no
event later than two (2) business days after such receipt, deliver such
payments, in the exact form received, to Versant. Failure to deliver such
payments to Versant as provided herein shall be deemed a default under the
Factoring Agreement and under the Security Agreement and shall, in addition to
any and all other amounts due, cause Seller to be obligated to pay to Versant, a
charge of fifteen (15%) percent of the amount of any such payment which has been
received by Seller and not delivered in kind to Versant as provided herein. All
payments received by Versant shall be applied as provided in Section 4 above.
Versant shall have no liability to Seller for any mistake in the application of
any payment received with respect to any Account Receivable, provided Versant
shall have acted in good faith and without gross negligence in respect thereof.
 
 
 

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6. Payment of Expenses and Taxes.  Seller will (a) pay or reimburse Versant for
all of Versant's out-of­ pocket costs and expenses incurred in connection with
the preparation and execution of, and any amendment, supplement or modification
to this Factoring Agreement, the Security Agreement, any of the Account
Agreements and any other documents prepared in connection herewith or therewith,
and the consummation of the transactions contemplated hereby and thereby,
including, without limitation, the fees and disbursements of counsel to Versant
(whether or not such counsel is affiliated with Versant); (b) pay or reimburse
Versant for all its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Factoring Agreement, the
Security Agreement, the Account Agreements and such other documents, and the
verification of the Accounts Receivable and the creditworthiness of the Account
Debtors, including, without limitation, fees and disbursements of counsel to
Versant (whether or not such counsel is affiliated with Versant); (c) pay,
indemnify, and hold harmless from and against any and all recording and filing
fees and any and all liabilities with respect to, or resulting from, any delay
in paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation of, any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of
this Factoring Agreement, the Security Agreement, the Account Agreements and any
such other documents; and (d) pay, indemnify, and hold Versant harmless from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement and
performance of this Factoring Agreement, the Security Agreement, the Account
Agreements and such other documents (all of the foregoing being hereinafter
collectively referred to as the "indemnified  liabilities"); provided, however,
that Seller shall have no obligation hereunder to Versant with respect to
indemnified liabilities arising from (i) the gross negligence or willful
misconduct of Versant, (ii) salaries and other amounts payable by Versant to its
employees in the ordinary course of business or (iii) expenses incurred by
Versant (other than those specifically enumerated in clauses (a), (b) and (c)
above) in the ordinary course of business in connection with the performance of
its obligations hereunder. In recognition of Versant's right to have its
attorneys' fees and other expenses incurred in connection with this Factoring
Agreement secured by the collateral pledged by Seller pursuant to the Security
Agreement, notwithstanding payment in full of all obligations by Seller, Versant
shall not be required to record any terminations or satisfactions of any of
Versant's  liens on the collateral unless and until Seller has executed and
delivered to Versant, a general release in a form reasonably satisfactory to
Versant. Seller understands that this provision constitutes a waiver of its
rights under section 9-513 of the Uniform Commercial Code. The agreements in
this Section 6 shall survive the termination of this Factoring Agreement.
 
7. Amendments.  The provisions of this Factoring Agreement may be modified or
amended only by a written instrument duly executed on behalf of Versant and
Seller by their respective duly authorized representatives and no such amendment
or modification hereof will in any way release or diminish any guarantor's
obligations under the respective Performance Guaranties.
 
8. Termination. This Factoring Agreement shall begin on the date hereof and,
unless sooner terminated as herein provided, terminate at 11:59 p.m. on the day
immediately preceding the second year anniversary of the date hereof (the
"Scheduled Term"), except that the Representations, warranties and covenants of
Seller and the remedies of Versant for a breach of such Representations,
warranties and/or covenants shall survive the termination of this Factoring
Agreement. Such termination shall not affect the rights of Versant in enforcing
its remedies against Seller or any collateral upon any default by Seller
hereunder or upon a Default under the Security Agreement. This Factoring
Agreement shall be deemed automatically renewed from year to year (the
"Rescheduled  Term") unless Seller shall deliver written notice of cancellation
to Versant at least 60 days but not more than 90 days prior to the expiration
date then in effect hereunder.
 
9. Fee. The fee to be earned by Versant for the purchase of Accounts Receivable
from Seller as set forth in the Fee and Reimbursements Schedule attached to the
Account Agreements (the "Fee") has been established after negotiation between
the parties based upon the delivery by Seller of not less than $200,000.00  per
quarter of approved Accounts Receivable for each of the first two (2) quarters
that this Factoring Agreement is in effect and $250,000.00  per month of
approved Accounts Receivable for each month thereafter (the "Committed  Base
Sales Amount") to Versant during each 90 day period of the first 180 days that
this Factoring Agreement is in effect and during each 30 day period thereafter
(a "Term Period") of the Scheduled Term or Rescheduled Term as
applicable.  Seller expressly acknowledges that Versant has agreed to the Fee in
reliance upon Seller's  agreement during each Term Period to deliver at least
the Committed Base Sales Amount and that Versant would have required an
increased Fee in the event a lesser volume of approved Accounts Receivable had
been agreed upon in any Term Period. Consequently, if the aggregate amount of
approved Accounts Receivable delivered by Seller to Versant during any Term
Period, whether by reason of Seller's  premature termination, reduced level of
sales, or otherwise, shall be less than the Committed Base Sales Amount, then
Seller shall pay to Versant an adjustment fee on account of such Term Period
equal to (a) the product of(i) the actual aggregate fees earned by Versant from
the purchase of Accounts Receivable from Seller for the applicable Term Period
(or then expired portion thereof) (the "Partial Fee") and (ii) a fraction, the
numerator of which is the Committed Base Sales Amount and the denominator of
which is the actual aggregate amount of Accounts Receivable theretofore
delivered by Seller in such Term Period, less (b) the Partial Fee, provided,
however if, in any Term Period, Seller shall deliver no Accounts Receivable to
Versant, then Seller shall pay to Versant in respect of such Term Period an
adjustment fee equal to the product of (c) the Committed Base Sales Amount and
(d) a fraction, the numerator of which is the aggregate Fees theretofore earned
by Versant pursuant to this Factoring Agreement and the denominator of which is
the actual aggregate amount of Accounts Receivable theretofore purchased by
Versant pursuant to this Factoring Agreement (the "No Delivery Fee"). If Seller
shall deliver no Accounts Receivable whatsoever to Versant under this Factoring
Agreement, then Seller shall pay to Versant an adjustment fee equal to the
product of (e) the minimum Discount as set forth in the Fee and Reimbursement
Schedule of the Purchase and Sale Agreement and (f) the total amount of Accounts
Receivable committed by Seller to be delivered to Versant under this Factoring
Agreement (also a ''No Delivery Fee"). Notwithstanding anything to the contrary
herein contained, this Factoring Agreement may be terminated by Versant, in
Versant's sole discretion on three (3) days written notice to Seller if, for a
period of forty five (45) days, Seller shall deliver no Accounts Receivable to
Versant for purchase as herein provided (a "No Delivery Termination"). Upon any
such No Delivery Termination, Seller shall pay to Versant the No Delivery Fee
calculated as above-provided, for each and every unexpired Term Period remaining
in the Scheduled Term or Rescheduled Term, as applicable.
 
 
 

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10. Notices. All notices and other communications hereunder shall be deemed to
have been sufficiently given when mailed, postage prepaid, by certified or
registered mail, sent by courier or telefaxed, return receipt requested, or
confirmation of receipt requested in the case of a telefax, and the sender shall
have received such return receipt or confirmation, addressed to the party
intended to receive the same at the address herein above set forth. Each of the
parties hereto shall have the right to rely on as an original any notice given
hereunder by telefax as aforesaid.
 
11. Successors, Governing Law, Consent to Jurisdiction, Waiver of Service, Jury
Trial Waiver. This Factoring Agreement shall inure to the benefit of and be
binding upon the successors and assigns of the parties hereto, except that this
Factoring Agreement may not be assigned by Seller without the prior written
consent of Versant. This Factoring Agreement shall be governed by and construed
in accordance with the laws of the State of New Jersey applicable to agreements
made and to be performed exclusively within such state. The parties hereto
mutually agree that any legal action relating to or arising from the Factoring
Agreement, the Security Agreement, the Account Agreements or the Performance
Guaranty (or Guaranties), if any, or relating in any way to the factoring
relationship between Versant and the Seller and Guarantor(s), shall be
maintained only in (a) the Superior Court of the State of New Jersey, County of
Bergen, (b) the federal courts in and for the District of New Jersey, Newark
vicinage, (c) the Supreme Court of the State of New York, County of New York, or
(d) the federal courts in and for the Southern District of New York (the "Courts
of Jurisdiction"), and the parties hereto expressly consent and agree, and waive
any objection, to the jurisdiction of the Courts of Jurisdiction over any such
legal action, and over the parties hereto, and to the laying of venue in any of
the Courts of Jurisdiction. The parties expressly agree that no legal action may
be maintained between or among the parties hereto other than in the Courts of
Jurisdiction, however, nothing in this paragraph shall be construed to limit the
rights of the parties to domesticate, or otherwise pursue, any judgment obtained
in the Courts of Jurisdiction in any other court, state, territory or nation.
Furthermore, the parties hereto expressly agree to waive all otherwise
applicable statutes, rules, or other requirements relating to the service of
legal process, including, but not limited to, the service of a summons and/or
complaint, and hereby agree to accept service of process in any such legal
action pursuant solely to the notice provisions contained herein. Any such
service of legal process made pursuant to the notice provisions hereof shall be
deemed to be good and valid service, without regard for any contrary or
inconsistent statute, rule or provision. The parties hereto do hereby waive any
and all right to a trial by jury in any action or proceeding arising out of this
Factoring Agreement or any of the other Factoring Documents.
 
12. Nonconforming Receivables. If any one or more of the Accounts Receivable is
not paid by the Account Debtor(s) within 100 days from the invoice date of such
Account Receivable and such failure to pay is not the result of the insolvency
or other financial inability to pay of the Account Debtor or, if any Account
Debtor asserts that it is entitled to a deduction or otherwise asserts a
dispute, contingency, set-off or counterclaim with respect to any Account
Receivable, Seller shall reimburse Versant on demand for the Advance Amount (as
defined in the Account Agreement) with respect to such Account
Receivable.  Seller shall be obligated to pay and Versant shall have the right
to retain all applicable fees earned by Versant with respect to the Account
Receivable notwithstanding Seller’s obligation to reimburse Versant as set forth
in this section 12.  For the purposes hereof, (i) any failure of an Account
Debtor to pay all or any portion of an invoice shall be deemed to have been for
other than the insolvency or financial inability to pay of such Account Debtor
unless Seller provides evidence to the contrary acceptable to Seller, and even
if Seller provides such evidence under clause (i) above, any failure of an
Account Debtor to pay all or part of an invoice shall be deemed to have been for
a reason other than the insolvency or financial inability of such Account Debtor
if such Account Debtor has asserted any defense, dispute, contingency,
deduction, or set off, regardless of the financial condition of such Account
Debtor and therefore shall be presumed to be the result of a breach by the
Seller of one or more of the Representations set forth in section 2 of the
Account Agreement.
 
 
 

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13. Bankruptcy. The parties expressly agree that in the event Seller voluntarily
files for protection pursuant to any provision of the United States Bankruptcy
Code or, in the event an involuntary petition in bankruptcy is filed against the
Seller, (a) this Factoring Agreement shall automatically terminate upon such
filing, and (b) Seller's obligations under this Factoring Agreement, the
Security Agreement, the Account Agreements and the Performance Guaranties, if
any, shall be automatically accelerated and all sums due under any provision of
the aforementioned documents shall be immediately due and payable. Following
either of the aforementioned bankruptcy filings, Versant may elect to offer
financing to the debtor-in­ possession, but nothing in this paragraph shall
obligate Versant to offer or provide such financing.
 
14. Merger. It is understood and agreed that all understandings and agreements
heretofore had between the parties, if any, with respect to the subject matter
hereof are merged into this Factoring Agreement and the related Account
Agreements, Security Agreement and Performance Guaranties (collectively the
"Factoring Documents") which alone fully and completely express their agreement.
 
15. Audit. Versant shall be entitled in its sole discretion, upon at least two
(2) business days’ notice to Seller, to conduct or cause to be conducted an
audit of Seller's books and records and Seller hereby agrees to make available
all invoices, bills, bank books and account statements, cancelled checks,
accounts receivable and payable ledgers, tax returns and like financial
information, and otherwise fully to cooperate with Versant or its designated
representative, in connection therewith. Seller shall pay upon demand as set
forth in the Account Agreement(s) the cost of not more than two (2) such audits
performed in any twelve (12) month period; provided, however, that if there
shall occur a Default and this Agreement shall not be terminated by Versant,
Seller shall thereafter pay the cost of any and all such audits conducted or
caused to be conducted by Versant.
 
16. No Waiver. No course of dealing between Versant and Seller, nor any failure
or delay by Versant to exercise any right, power or remedy under this Factoring
Agreement or under any of the other Factoring Documents shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder.  The rights and remedies provided
in the Factoring Documents are cumulative and are not exclusive of any other
rights, powers or remedies now or hereafter existing at law or in equity or
otherwise.
 
17. Headings. The section headings set forth in bold type throughout the
Factoring Documents are included in the Factoring Documents for the convenience
of reference only and shall not constitute a part of the Factoring Documents for
any other purpose.
 

IN WITNESS WHEREOF, the parties hereto have executed this Factoring Agreement as
of the day and year first above written.

For:
National Automation Services, Inc.
   
By:
/s/ Robert Chance
 
Robert Chance, President  & CEO
       
For:
Versant Funding, LLC
   
By:
/s/ Mark Weinberg
 
Mark D Weinberg, Chief Executive Officer

 
 
 

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