Document:

5/06 Amendment to Credit Agreement

EXHIBIT 10.2

 

 

5/06 AMENDMENT TO CREDIT AGREEMENT

effective as of May 5, 2006

 

amending the

8/05 AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT

dated as of August 1, 2005

 

by and among

 

HOMEBANC CORP.

and

HOMEBANC MORTGAGE CORPORATION

 

and

 

JPMORGAN CHASE BANK, N.A.

as Administrative Agent, Collateral Agent and a Lender,

and

the other Lender(s) parties thereto

 

KEYBANK NATIONAL ASSOCIATION

as Syndication Agent

 

COMMERZBANK, A.G., NEW YORK BRANCH and GRAND CAYMAN BRANCH,

U.S. BANK NATIONAL ASSOCIATION,

BNP PARIBAS

and

UNITED OVERSEAS BANK LIMITED, NEW YORK AGENCY

as Documentation Agents

 

J.P. MORGAN SECURITIES INC.

Sole Bookrunner

and Lead Arranger

 

$500,000,000 Senior Secured Revolving Credit

 

 

 

 

Index of Defined Terms

Page

 

 

 

	
            5/06 Amendment
 	
            1
 
	
            5/06 Amendment Effective Date
 	
            1
 
	
            8/05 Credit Agreement
 	
            1
 
	
            Agent
 	
            1
 
	
            Amendment
 	
            1
 
	
            Companies
 	
            1
 
	
            Company
 	
            1
 
	
            Current Credit Agreement
 	
            1
 
	
            HC
 	
            1
 
	
            HMC
 	
            1
 
	
            JPMorgan
 	
            1
 
	
            Lenders
 	
            1
 

 

Table of Contents

(continued)

Page

 

 

 

 

	
            1
 	
            DEFINITIONS
 	
            2
 
	
            7
 	
            COLLATERAL
 	
            2
 
	
            8
 	
            CONDITIONS PRECEDENT
 	
            2
 
	
            9
 	
            REPRESENTATIONS
 	
            3
 
	
            11
 	
            NEGATIVE COVENANTS
 	
            3
 
	
            16
 	
            MISCELLANEOUS
 	
            3
 

 

 

i

 

 

 

5/06 AMENDMENT TO CREDIT AGREEMENT

 

Preamble

 

This 5/06 Amendment to Credit Agreement (the “5/06 Amendment” or, within itself only, this “Amendment”) effective as of May 5, 2006 (the “5/06 Amendment Effective Date”) amending (for the third time) the 8/05 Amended and Restated Senior Secured Credit Agreement (the “8/05 Credit Agreement” and as it may be supplemented, amended or restated, the “Current Credit Agreement”), executed as of August 1, 2005, among:

 

(i)  HOMEBANC CORP., a Georgia corporation (“HC”), its wholly-owned subsidiary, HOMEBANC MORTGAGE CORPORATION, a Delaware corporation (“HMC” HC and HMC being sometimes referred to individually as a “Company” and together as the “Companies”), each having its principal office at 2002 Summit Boulevard, Suite 100, Atlanta, Georgia  30319;

 

(ii)  JPMORGAN CHASE BANK, N.A. (“JPMorgan”), a national banking association, acting herein as a Lender and agent and representative of the other Lenders (in that capacity JPMorgan is called the “Agent”); and

 

(iii)  such other Lenders as may from time to time be party to this Agreement (together with JPMorgan as a lender, the “Lenders”).

 HOUSTON: 007002.04171: 1084502v2

 

Each of the parties hereto recites and provides as follows:

 

Recitals

 

The Companies have asked the Lenders and the Agent to continue until the Maturity Date the covenant that HC maintain a leverage ratio no greater than 25:1, and the Lenders and the Agent have agreed to do so on the terms and subject to the conditions of this Amendment.

 

All capitalized terms used in the 8/05 Credit Agreement and used but not defined differently in this Amendment have the same meanings here as there.

 

The Sections of this Amendment are numbered to correspond with the numbers of the Sections of the 8/05 Credit Agreement amended hereby and are accordingly often nonsequential.

 

If there is any conflict or inconsistency between (i) these recitals and the following agreements; (ii) any of the terms or provisions of any of the other Facilities Papers and this Amendment; or (iii) any provision of this Amendment and any later supplement, amendment, restatement or replacement of it then in each case the latter shall govern and control.

 

Agreements

 

In consideration of the premises, the mutual agreements stated below and other good and valuable consideration paid by each party to each other party to this Amendment, the receipt and sufficiency of which each hereby acknowledges, the parties hereby agree as follows.

 

 

 

Index of Defined Terms

Page

 

 

 

1      DEFINITIONS

	
             
  	
            1.1.
 	
            Defined Terms.  Effective from and after the 5/06 Amendment Effective Date:
 

A.           The following new definitions are added to Section 1.2 of the Current Credit Agreement, in alphabetical order (except where otherwise specified).

 

“5/06 Amendment” means the 5/06 Amendment to Credit Agreement effective as of May 5, 2006, amending this Agreement.

 

“5/06 Amendment Effective Date” means May 5, 2006, the effective date of the 5/06 Amendment.

 

B.           Exhibit 5/06-E attached to this Amendment is hereby substituted for Exhibit 12/05-E to the 12/05 Amendment (which was substituted by the 12/05 Amendment for Exhibit E to the 8/05 Credit Agreement.)

 

7      COLLATERAL

 

The provisions of Section 7.1 of the 8/05 Credit Agreement are not otherwise amended hereby.  Cumulative of such existing provisions, as security for the payment of the Loan and for the payment and performance of all of the Obligations, each Company hereby GRANTS to the Agent (as agent and representative of the Lenders) a first priority security interest in all of such Company’s present and future estate, right, title and interest in and to the Collateral, in addition to and cumulative of the security interests in the Collateral granted to the Agent in the 8/05 Credit Agreement and in prior amendments, and the parties hereby declare and confirm that all such security interests were and are granted to and held by the Agent (as agent and representative of the Lenders.)

 

8      CONDITIONS PRECEDENT

 

Section 8 of the 8/05 Credit Agreement is further amended by adding the following new Section 8.5 to the end of Section 8, viz.:

 

8.5          Borrowings After the 5/06 Amendment Effective Date.  In addition to the conditions precedent stated in Sections 8.1, 8.2, 8.3 and 8.4 above, the obligations of the Lenders to fund and the Agent to disburse any Advances under this Agreement after the 5/06 Amendment Effective Date are subject to the condition precedent that the Agent shall have received:

 

(a)          the 5/06 Amendment, duly executed by each Company, the Agent and the Required Lenders; 

 

 

2

 

 

Index of Defined Terms

Page

 

 

(b)          a certificate of each Company’s corporate secretary or assistant secretary (i) as to the incumbency of the officers of such Company executing the 5/06 Amendment and all other Facilities Papers executed or to be executed by or on behalf of such Company in connection with the 5/06 Amendment, (ii) as to the authenticity of their signatures (specimens of their signatures shall be included in such certificate or set forth on an exhibit attached to it, and the Agent and the Lenders shall be entitled to rely on that certificate until such Company has furnished a new certificate to the Agent) and (iii) that there have been no amendments to the Company’s certificate of incorporation or bylaws since March 31, 2006; and

 

	
             
  	
            (c)
 	
            such other documents, if any, as shall be specified by the Agent.
 

9      REPRESENTATIONS

 

Each Company hereby republishes its warranties and representations made in the 8/05 Credit Agreement effective (except as to those specified to relate only to a specific date) as of the 5/06 Amendment Effective Date.

 

11    NEGATIVE COVENANTS

 

	
             
 	
            Section 11.4 (c) is amended to henceforth read as follows:
 

 

11.4(c)  HC’s Total Liabilities to Adjusted Tangible Net Worth Ratio.  Permit the ratio of:

(x)          the Total Liabilities of HC and its Subsidiaries minus Qualified Subordinated Debt, on a consolidated basis;

 

to            (y)         the Adjusted Tangible Net Worth of HC and its Subsidiaries, on a consolidated basis;

 

as of the end of any calendar month or any of HC’s fiscal quarters or fiscal years to exceed the maximum ratio specified for such date in the following table:

 

	
            On and after this Date
 	
            the maximum ratio is
 
	
            Effective Date
 	
            20.00:1.00
 
	
            November 30, 2005
 	
            25.00:1.00
 

 

16    MISCELLANEOUS

 

A.          This Amendment will become effective if and when it shall have been executed (in one or more counterparts) by the Companies, the Agent and Required Lenders (even if not all Lenders execute it.)

 

3

 

 

Index of Defined Terms

Page

 

 

 

	
             
 	
            B.
 	
            Section 16.11 is amended to read as follows:
 

 

16.11     Notice Pursuant to Tex. Bus. & Comm. Code §26.02.  THE 8/05 CREDIT AGREEMENT, AS AMENDED BY THE 9/05 AMENDMENT, THE 12/05 AMENDMENT AND THE 5/06 AMENDMENT, AND THE OTHER FACILITIES PAPERS TOGETHER CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

(The remainder of this page is intentionally blank; signature pages follow.)

 

4

 

 

 

EXECUTED as of the 5/06 Amendment Effective Date.

 

HOMEBANC CORP.

 

By:        /s/ JAMES L. KRAKAU                                

Name:              James L. Krakau                                  

Title:                Senior Vice President                          

 

HOMEBANC MORTGAGE CORPORATION

 

By:        /s/ JAMES L. KRAKAU                                

Name:              James L. Krakau                                  

Title:                Senior Vice President                          

 

Unnumbered counterpart signature page to 5/06 Amendment to Credit Agreement among

 HomeBanc Corp., HomeBanc Mortgage Corporation, JPMorgan Chase Bank, N.A., et al.

 

 

 

JPMORGAN CHASE BANK, N.A.

as the Agent and as a Lender

 

 

By:        /s/ MICHAEL W. NICHOLSON                  

Name:              Michael W. Nicholson                        

Title:                Senior Vice President                          

 

Unnumbered counterpart signature page to 5/06 Amendment to Credit Agreement among

 HomeBanc Corp., HomeBanc Mortgage Corporation, JPMorgan Chase Bank, N.A., et al.

 

 

 

COMMERZBANK AKTIENGESELLSCHAFT

NEW YORK AND GRAND CAYMAN BRANCHES

	
             
 	
            as a Lender
 

 

 

By:        /s/ WILLIAM M. EASLEY                          

Name:              William M. Easley                              

Title:                Senior Vice President                          

 

 

By:        /s/ MICHAEL P. MCCARTHY                    

Name:              Michael P. McCarthy                          

Title:                Vice President                                    

 

Unnumbered counterpart signature page to 5/06 Amendment to Credit Agreement among

 HomeBanc Corp., HomeBanc Mortgage Corporation, JPMorgan Chase Bank, N.A., et al.

 

 

 

KEYBANK NATIONAL ASSOCIATION, 

as a Lender

 

 

By: /s/ PAUL HENSON                                          
    

Name: Paul Henson

Title: Executive Vice President

 

Unnumbered counterpart signature page to 5/06 Amendment to Credit Agreement among

 HomeBanc Corp., HomeBanc Mortgage Corporation, JPMorgan Chase Bank, N.A., et al.

 

 

 

U.S. BANK NATIONAL ASSOCIATION, 

as a Lender

 

 

By:        /s/ WILLIAM J. UMSCHEID                        

Name:  WILLIAM J. UMSCHEID                              

Title:                Vice President                                    

 

Unnumbered counterpart signature page to 5/06 Amendment to Credit Agreement among

 HomeBanc Corp., HomeBanc Mortgage Corporation, JPMorgan Chase Bank, N.A., et al.

 

 

 

BNP PARIBAS, 

as a Lender

 

By:                                          
                                      

Name:                                          
                                

Title:                                          
                                  

 

 

Unnumbered counterpart signature page to 5/06 Amendment to Credit Agreement among

 HomeBanc Corp., HomeBanc Mortgage Corporation, JPMorgan Chase Bank, N.A., et al.

 

 

 

UNITED OVERSEAS BANK LIMITED

NEW YORK AGENCY, 

as a Lender

 

 

By: /s/ WONG, KWONG YEW                                  

Name: Wong, Kwong Yew

Title: FVP & General Manager

 

By: /s/ MARIO SHENG                                          
    

Name: Mario Sheng

Title: AVP

 

 

Unnumbered counterpart signature page to 5/06 Amendment to Credit Agreement among

 HomeBanc Corp., HomeBanc Mortgage Corporation, JPMorgan Chase Bank, N.A., et al.

 

 

 

FIRST COMMERCIAL BANK, 

NEW YORK AGENCY,

as a Lender

 

 

By: /s/ BRUCE JU                                          
            

Name:  Bruce Ju

Title:  VP & General Manager

 

 

Unnumbered counterpart signature page to 5/06 Amendment to Credit Agreement among

 HomeBanc Corp., HomeBanc Mortgage Corporation, JPMorgan Chase Bank, N.A., et al.

 

 

 

BANK HAPOALIM B.M.,

as a Lender

 

 

By:        /s/ JAMES P. SURLESS                                

Name:              JAMES P. SURLESS                          

Title:                VICE PRESIDENT                            

 

By:        /s/ LENROY HACKETT                              

Name:              LENROY HACKETT                        

Title:                FIRST VICE PRESIDENT                

 

 

Exhibits

 

	
            Exhibit 5/06-E
 	
            -
 	
            Form of Officer’s Certificate
 

 

Unnumbered counterpart signature page to 5/06 Amendment to Credit Agreement among

 HomeBanc Corp., HomeBanc Mortgage Corporation, JPMorgan Chase Bank, N.A., et al.

 

 

 

EXHIBIT 5/06-E

TO 8/05 CREDIT AGREEMENT

 

Form of Officer’s Certificate with computations

to show compliance or non-compliance with

certain financial covenants

(form revised by 5/06 Amendment)

 

OFFICER’S CERTIFICATE

 

 

	
            AGENT:
 	
            JPMORGAN CHASE BANK, N.A.
 

 

	
            COMPANY:
 	
            HOMEBANC CORPORATION (“HC”)
 

 

	
            SUBJECT PERIOD:
 	
                                       ended                         , 200    
 

 

	
            DATE:
 	
                                                  , 200    
 

 

 

This certificate is delivered to the Agent under the 8/05 Amended and Restated Senior Secured Credit Agreement dated as of August 1, 2005 (as supplemented, amended or restated from time to time, the “Current Credit Agreement”), among HC, its Subsidiary, HomeBanc Mortgage Corporation, the Agent and the financial institutions now or hereafter parties thereto (the “Lenders”).  Unless they are otherwise defined in this request, terms defined in the Current Credit Agreement have the same meanings here as there.

 

The undersigned officer of HC certifies to the Agent and the Lenders that on the date of this certificate that:

 

1.            The undersigned is an incumbent officer of HC, holding the title stated below the undersigned’s signature below.

 

2.            HC’s financial statements that are attached to this certificate were prepared in accordance with GAAP (except that interim — i.e., other than annual — financial statements exclude notes to financial statements and statements of changes to stockholders’ equity and are subject to year-end adjustments) and (subject to the aforesaid proviso as to interim financial statements) present fairly the financial position and results of operations of HC and its Subsidiaries, on a consolidated basis, as of                                 and for the (check, as applicable) o  month o one, o two or o three quarter(s) of HC’s fiscal year, as the case may be, ending on the last day of that period (the “Subject Period”).

 

3.            The undersigned officer of HC supervised a review of the activities of HC and its Subsidiaries during the Subject Period in respect of the following matters and has determined the 

 

 

following:  (a) to undersigned officer’s best knowledge, except to the extent that (i) a representation or warranty speaks to a specific date or (ii) the facts on which a representation or warranty is based have changed by transactions or conditions contemplated or expressly permitted by the Facilities Papers, the representations and warranties of the Companies in Section 9 of the Current Credit Agreement are true and correct in all material respects, other than for the changes, if any, described on the attached Annex A; (b) the Companies have complied with all of their obligations under the Facilities Papers, other than for the deviations, if any, described on the attached Annex A; (c) no Event of Default has occurred that has not been declared by the Agent in writing to have been cured or waived, and no Default has occurred that has not been cured before it became an Event of Default, other than those Events of Default and/or Defaults, if any, described on the attached Annex A; and (d) compliance by HC with certain financial covenants in Section 11 of the Current Credit Agreement is accurately calculated on the attached Annex A.

 

HOMEBANC CORP.

 

By:                                          
                                      

Name:                                          
                                

Title:                                          
                                  

 

 

 

 

ANNEX A TO OFFICER’S CERTIFICATE

 

1.            Describe deviations from compliance with obligations, if any  —  clause 3(b) of attached Officer’s Certificate  —  if none, so state:

 

 

 

 

 

2.            Describe Defaults or Events of Default, if any  —  clause 3(c) of attached Officer’s Certificate  —  if none, so state:

 

 

 

 

 

3.            Calculate compliance with covenants in Section 11  —  clause 3(d) of attached Officer’s Certificate:

 

(a)          Section 11.4(a).  HC’s Adjusted Tangible Net Worth as of ________ is $__________________ (the minimum under Section 11.4(a) is $225,000,000 plus 85% of the net proceeds realized by HC from equity offerings after its initial public offering.)

 

(b)          Section 11.4(b).  HC’s Total Recourse Liabilities to Adjusted Tangible Net Worth ratio as of ___________ is _____:1.00 (the limit under Section 11.4(b) is 8.0:1:00.)

 

(c)          Section 11.4(c).  HC’s Total Liabilities minus Qualified Subordinated Debt to Adjusted Tangible Net Worth ratio as of ___________ is ______:1.00 (the limit under Section 11.4(c) is as follows:)

 

	
            On and after this Date
 	
            the maximum ratio is
 
	
            Effective Date
 	
            20.00:1.00
 
	
            November 30, 2005
 	
            25.00:1.00
 

 

(d)          Section 11.4(d).  HC’s Liquidity is $______________.  (The minimum under Section 11.4(d) is $35,000,000.)

 

 

 

 

(e)          Section 11.4(e).  HMC’s Adjusted Tangible Net Worth as of ________ is $__________________ (the minimum under Section 11.4(e) is $10,000,000.)

 

(f)           Section 11.4(f).  HC and its Subsidiaries have not incurred any Debt other than (i) Debt to the Lenders under the Current Credit Agreement, (ii) Debt under warehousing, repurchase or other mortgage-related asset agreements to finance the Companies’ inventory of Mortgage Loans and other mortgage-related assets, (iii) accounts payable incurred in the ordinary course of business with standard payment terms, (iv) Debt of up to Twenty Million Dollars ($20,000,000) incurred in the ordinary course of business (for purposes of this provision, junior subordinated debt to support trust common securities issued by HC or HMC concurrently and in connection with the issuance of junior subordinate debentures issued by HC or HMC shall be deemed debt incurred
in the ordinary course of business), (v) Debt of one Company owed to the other Company, so long as such inter-company Debt is subordinated, in form acceptable to the Agent, to the Debt under this Facility and (vi) Debt of up to One Hundred Fifty Million Dollars ($150,000,000) issued by HC or HMC to support the issuance of Qualified Trust Preferred Securities by any and all Capital Trust Entities.

 

(g)          Section 11.4(g).  HC has not declared or paid any dividend or made any distribution directly or indirectly to its shareholders when, or after the payment of which, (i) any Default or Event of Default described in Sections 12.1(a), 12.1(b), or non-payment of any fee described in 12.1(c) exists or (ii) when any Default or Event of Default other than those described in Sections 12.1(a), 12.1(b), or non-payment of any fee described in 12.1(c) exists, except to the extent necessary to avoid the loss of HC’s federal tax status as a real estate
investment trust.

 

(h)          Section 11.4(h).  The Companies have not directly or indirectly made any advance to (or declined or deferred any payment due from) any stockholder where at the time of or immediately after such action (x) the Companies’ Adjusted Tangible Net Worth was or would be less than the minimum specified in clause (d) above or (y) any Default or Event of Default existed or would exist[, except for the aggregate sum of $_____________ advanced by HMC to HC which was necessary to enable HC to fund payment of a dividend the nonpayment of which would result in the loss of HC’s federal tax status as a real estate investment trust].

 

(a)          Section 11.4(i).  The percentage of the aggregate principal balances of all of the Companies’ Serviced Loans that are In Default as of __________________ is __________% (the maximum permitted under Section 11.4(i) is 5%.)EXHIBIT 10.20
                                  -------------

                             MASTER SALES AGREEMENT

     This MASTER SALES AGREEMENT ("Agreement") is made and entered into as of
this 1st day of May 2006 (the "Effective Date") by and between DynaSig
Corporation, an Arizona Corporation, with its principal place of business at
1711 W. Greentree Dr., Suite 116, Tempe, Arizona, 85284 ("DYNASIG") and Delta
Resources LLC, an Arizona limited liability company, with a place of business at
12402 E. Saddle Horn Trail, Scottsdale, AZ 85259 ("DELTA").

                                    RECITALS

A.   DYNASIG develops and markets products for security identification and
     private personal verification and it wishes to expand its sales
     opportunities.

B.   DELTA has assembled a team of sales representatives, each of whom wishes to
     act as a sales representative to sell DYNASIG's products within specified
     United States and Canadian geographic markets.

C.   DYNASIG desires to appoint DELTA to act as its sales agency with respect to
     the sale of its products using sales representatives selected by DELTA all
     upon the terms set forth in this Agreement.

                                   AGREEMENTS

     NOW, THEREFORE, in consideration of the foregoing and the promises,
representations and warranties set forth below, DYNASIG and DELTA agree as
follows:

                            ARTICLE 1. - DEFINITIONS
                            ------------------------

     For purposes of this Agreement, the following terms shall have the meaning
and definition set forth below:

     1.1     "Products" shall mean and refer collectively, to those products
listed on Exhibit A to this Agreement, as may be specifically updated from time
to time by DYNASIG in writing in its sole discretion.

     1.2     "Territory" shall mean and include those geographic areas of United
States, as listed on the attached Exhibit B, and other areas that are mutually
agreed to in writing from time to time and will be shown on a separate addendum
to this Agreement.  DELTA may solicit product sales on behalf of DYNASIG within
appointed territory.  The Territory is broken down in to sub-territories
(individually a "Sub-Territory" and collectively "Sub-Territories") for the
purpose of defining territories for sub agents appointed by DELTA.

     1.3     "Confidential Information" shall mean all data and information
deemed by either party to this Agreement to be of a confidential nature,
including price lists, know how, and trade secrets relating to the business, the
affairs, the Products, any development projects or other materials or services
of either party.  Confidential Information may be communicated orally, in
writing or in any other recorded or tangible form.  In addition to the
foregoing, data and information shall be considered to be Confidential
Information: (i) if either party has marked
<PAGE>
them as such, (ii) if either party, orally or in writing, has advised the other
of their confidential nature, or (iii) if, due to their character or nature, a
reasonable person in a like position and under like circumstances as each party
would treat them as secret and confidential.  Notwithstanding the foregoing, the
customer lists of the parties that are shared pursuant to this Agreement shall
not be deemed to be "Confidential Information" solely as between the parties for
all purposes of this Agreement.

1.4     "Intellectual Property Rights" shall mean and include all patents,
copyrights, trademarks, service marks, trade names and other proprietary rights
or applications therefore which DYNASIG may at any time own, adopt, use, or
register with respect to the Products or the business of DYNASIG.

1.5     "Person" shall mean and include any individual, corporation, trust,
estate, partnership, joint venture, company, association, league, governmental
bureau or agency, or any other entity regardless of the type or nature thereof.

     1.6     "DYNASIG Trademarks" shall mean and include those trademarks and
service marks owned by DYNASIG and used on or in connection with the Products
from time to time and all trademarks, service marks and logos developed for
DYNASIG'S products during the commission of this DELTA contract and or any
extension thereof.

     1.7     "Actual Sales Price" shall mean and include the price stated in a
sales confirmation issued by DYNASIG in response to an order, exclusive of tax,
duties, shipping, insurance, discounts and similar charges.

     1.8     "DELTA Floor Price" shall mean and include the price for each of
the Products as set forth in Exhibit A attached to this Agreement.

                            ARTICLE 2. - APPOINTMENT
                            ------------------------

     2.1     Sale of Products.  Subject to the further terms and conditions of
this Agreement, DYNASIG hereby appoints DELTA as a non-exclusive sales agent to
solicit orders for the Products in the Territory, and DELTA hereby accepts such
appointment.  In furtherance of such appointment, DYNASIG also agrees that:

          a) DELTA shall be permitted to appoint individual Sales Agents for a
     Sub-Territory as defined by Article 1.2 herein (individually a "Sales
     Agent" and collectively "Sales Agents");

          b) Solicit on behalf of DYNASIG persons or businesses to become direct
     distributors from DYNASIG of the Products in particular territories ("New
     Distributors"). All potential Distributors must be pre-approved by DYNASIG
     before solicitation.

     2.2     Relationship Between Parties.  DELTA and each Sales Agent will act
as an independent contractor under the terms of this Agreement and not as a
legal representative of DYNASIG for any purpose whatsoever.  The Sales Agents
are listed on the attached Exhibit B, and any additions or changes must be
approved by DYNASIG.  The copies of all agreements between DELTA and Sales
Agents shall be made available to DYNASIG for verification.

                                  Page 2 of 11
<PAGE>
Nothing in this Agreement shall be construed:  (i) to give either party the
power to direct or control the daily activities of the other party, or (ii) to
constitute the parties, DELTA and DYNASIG as principal and agent, employer and
employee, franchisor and franchisee, partners, joint ventures, co-owners, or
otherwise as participants in a joint undertaking.  DYNASIG and DELTA understand
and agree that, except as specifically provided for in this Agreement, DYNASIG
does not grant DELTA or any Sales Agent power or authority to make or give any
agreement, statement, representation, warranty or other commitment, on behalf of
DYNASIG, or to enter into any contract or otherwise incur any liability or
obligation, express or implied, on behalf of DYNASIG, or to transfer, release or
waive any right, title or interest of DYNASIG.  However, nothing in this
Agreement shall prevent either DELTA or any Sales Agent from soliciting orders
for the sale of the Products in the Territory or from making statements about
the Products or the warranty for the Products which statements are consistent
with the warranty provisions published by DYNASIG or in concurrence with the
advertising and promotional materials DYNASIG supplies in relationship to the
products.

     2.3     DYNASIG.  DYNASIG will have the right to license manufacturers when
DYNASIG deems necessary.  If any licensed manufacturer is located in the
Territory of and is one of DELTA's customers, then DYNASIG will pay a commission
to the DELTA (to be negotiated and agreed between the parties) for those units
manufactured by and consumed by the licensed manufacturer.   This clause only
applies to prospective manufacturers, which have been pursued and delivered to
DYNASIG by DELTA's Sales Agents.

                          ARTICLE 3. - DUTIES OF DELTA
                          ----------------------------

     3.1     General Conduct.  DELTA shall use its best efforts to diligently
promote the sale of and to solicit orders for the Products, at its own expense,
in the Territory.  DELTA will conduct its business in a manner that will reflect
favorably on DYNASIG and the Products and will not engage in any deceptive,
misleading, illegal or unethical business practice.

     3.2     Sales Agents.  DELTA shall appoint Sales Agents adequate to market
the Products in the Territory.  The appointment of a Sales Agent for any
Sub-Territory shall be subject to the approval of DYNASIG.  An initial list of
Sales Agents for approval is set forth in Exhibit B.

     3.4     Compliance with Laws and Obligations.  DELTA shall at all times
during the term of this Agreement strictly comply with all applicable regulatory
laws and other obligations of DELTA governing the distribution and sale of the
Products in the Territory.  Such compliance shall include, but shall not be
limited to, the following duties:

          a) DELTA shall keep DYNASIG generally informed of the regulatory
     requirements imposed by the laws of the Territory and shall comply with all
     those requirements that affect performance of its duties under this
     Agreement. However, DYNASIG shall be solely responsible for ensuring that
     the Products comply with all regulatory and licensing requirements of the
     jurisdictions within the Territory

          b) Each party shall disclose promptly to the other party all reports
     and any information which become available to it relating to the efficacy,
     side effects, toxicity or any instances of adverse or deleterious
     physiological effects caused by or related to the Products;

                                  Page 3 of 11
<PAGE>
          Both parties
     acknowledge that such reports shall be considered Confidential Information
     and neither party shall disclose such reports or information referred to
     herein to any third party without the written consent of the other party,
     unless such disclosure is required by law;

          c) DELTA and its Sales Agents shall promptly make available to DYNASIG
     any information which comes to their attention which may have an adverse
     impact on DELTA's ability to perform its obligations hereunder, including,
     but not limited to, correspondence from or demands made by any governmental
     or regulatory authority or any other Person concerning DELTA's conduct of
     its business;

     3.5     Monthly Sales Reports.  For the term of this Agreement, no less
than monthly, DELTA shall provide DYNASIG with a report of sales solicited by
each Sales Agent of the Products during the previous month and identify sales
prospects, all in a format approved by DYNASIG.

     3.6     Record Keeping.  DELTA shall, at all times during the term of this
Agreement, maintain or make available accurate books of account and records with
regard to its activities under this Agreement.  Upon reasonable notice, DELTA
shall grant DYNASIG access during normal business hours to such books and
records in order that DYNASIG may verify compliance by DELTA with its
obligations under this Agreement.

     3.7     Possession and Delivery.  Nothing in this Agreement shall obligate
DELTA to take delivery or possession of the Products or to maintain any
inventory of the Products.  Products sold pursuant to an order solicited by
DELTA or any Sales Agent shall be delivered to the customer according to the
terms applicable to a particular sale.

                           ARTICLE 4. - TERMS OF SALE
                           --------------------------

     4.1     General.  DELTA and each Sales Agent shall solicit orders for the
sale of Products on behalf of DYNASIG at DYNASIG's published prices and
according to standard terms and conditions of sale published by DYNASIG.  The
prices and standard terms and conditions of sale published as of the date of
this Agreement are those set forth in Exhibit A.  Such terms and conditions may
be varied or amended by DYNASIG at its discretion at any time and from time to
time upon 30 days written notice to DELTA.   Notwithstanding the generality of
the foregoing, all orders placed by DELTA and each Sales Agent shall be subject
to written approval by DYNASIG.

     4.2     Procedure and Payment.   Purchases by customers shall be initiated
by delivery to DYNASIG of an order duly executed by customer.  Such orders may
be submitted directly by a Sales Agent.  The orders shall not be binding until
accepted in writing by DYNASIG. Customers shall pay for all products in United
States Dollars (USD), pursuant to arrangements approved in advance by DYNASIG.
Title and risk of loss to all Products shall pass to customers upon receipt by
the common carrier at DYNASIG's plant.

4.3     Commissions, Warrants and Fees.

          a) DYNASIG shall pay DELTA a cash commission ("Cash Commission"),
     which shall be calculated as the difference between the Actual Sales Price
     and the DELTA Floor

                                  Page 4 of 11
<PAGE>
     Price. The Cash Commission shall be paid to DELTA by
     DYNASIG within 15 days after the receipt of payment by DYNASIG. DELTA shall
     specify the amount of Cash Commission to be paid to each of DELTA's Sales
     Agents (if any), which is in DELTA's sole discretion. DYNASIG may at its
     option act as DELTA's paying agent but in no way shall such act imply any
     contractual relationship between such Sales Agents and the Company. In
     cases where the customer has made special arrangements for payment, which
     must be approved in advance by DYNASIG, in its sole discretion, DYNASIG
     may, also in its sole discretion, advance Cash Commissions to the DELTA
     even before the customer has paid for product. Any non payment under such
     terms will be fully adjusted from DELTA's compensation. DELTA shall be
     solely responsible for compensating each Sales Agent and shall indemnify
     and hold harmless DYNASIG from any and all claims and/or liability in
     respect of any claim for Cash Commission or otherwise made against DYNASIG
     by a Sales Agent arising or resulting from this Agreement.

          b) DYNASIG shall pay DELTA an additional commission in the form of
     warrants (the "Commission Warrants") to purchase the common stock of
     DYNASIG's parent company, Dynamic Biometric Systems, Inc. ("DBSI"). These
     Commission Warrants will take the form of Exhibit C. DELTA shall specify
     the number of Commission Warrants to be issued to DELTA and each of DELTA's
     Sales Agents, which allocation is in DELTA's sole discretion. However, once
     issued, the Commission Warrants are the property of the receiving party.
     Any party receiving Commission Warrants will be required to make investment
     representations regarding each issuance, which DBSI will be entitled to
     rely on.

     The  total  number  of  Commission  Warrants  to  be issued to DELTA or its
     Sales  Agents  for  each period will be determined by a calculation whereby
     the  "Value  of  the Sale" (calculated as the difference between the Actual
     Sales  Price and the DELTA Floor Price) is divided by the exercise price of
     a  Commission Warrant established for the period in question. Such Exercise
     Price shall be the market value of the shares to be acquired upon exercise.
     The  initial  Commission Warrant exercise price shall be $0.75. DYNASIG, in
     its  sole discretion, shall determine such market value at the beginning of
     each  of  DYNSIG's  fiscal  quarters.

     DYNASIG  shall  accumulate  and  issue  the  Commission  Warrants  to DELTA
     and  its  Sales  Agents  quarterly.  All  Commission Warrants shall have an
     expiration of not less than two years from their date of issue. DELTA shall
     be solely responsible for compensating each Sales Agent and shall indemnify
     and  hold  harmless  DYNASIG  from  any  and all claims and/or liability in
     respect  of  any  claim  for  Commission Warrants or otherwise made against
     DYNASIG  by  a  Sales  Agent  arising  or  resulting  from  this Agreement.

     DELTA  shall  and  shall  cause  its  Sales  Agents  to  execute  whatever
     investment  documentation  necessary  to make allow for the issuance of the
     Commission  Warrants  under  state  and  federal  securities  laws.

          c) To be eligible for a commission, a sale must result primarily from
     the direct sales efforts of DELTA or its Sales Agents.

          d) Management fees. Management fees of four thousand dollars (US) per
     month ($4,000/month) shall be paid, upon commencement of this Agreement, at
     the beginning of each month and prorated for a partial month. Fees for the
     first two months shall be accrued by DYNASIG with DELTA accepting deferred
     payment. The deferred payments shall be repaid at

                                  Page 5 of 11
<PAGE>
          the rate of two thousand
     dollars per month ($2,000/month) for four months in addition to the normal
     monthly fees.

     4.4     Returns.  In the event that the return to DYNASIG of any Product by
a customer solicited pursuant to this Agreement shall result in the refund of
the purchase price or any part thereof in respect of such Product, there shall
be deducted from the payment of future Cash Commissions hereunder any commission
previously paid to DELTA in respect of such returned Product.  Commission
Warrants related to such transactions already issued shall be surrendered back
to the Company and be partially or fully cancelled depending on the
circumstances of their original issuance.

     4.5     Record Keeping.  DYNASIG shall, at all times during the term of
this Agreement, maintain or make available accurate books of account and records
with regard to sales made by it to customers solicited by DELTA or its Sales
Agents under this Agreement and commissions payable thereon.  Upon reasonable
notice, DYNASIG shall grant DELTA access during normal business hours to such
books and records in order that DELTA may verify compliance by DYNASIG with its
obligations under this Agreement.

                        ARTICLE 5. - TRAINING AND SUPPORT
                        ---------------------------------

     5.1     Training and Support.   Upon DELTA's reasonable request, DYNASIG
will provide DELTA and its Sales Agents with training related to the Products
and the use of the Products.  The timing and extent of such training shall be
mutually agreed upon by DYNASIG and DELTA.  In addition, upon the reasonable
request of DELTA, DYNASIG will cooperate and assist DELTA in performing any
training or support with any customers to whom Products are sold as a result of
this Agreement. DYNASIG also agrees to provide DELTA and its Sales Agents with
demonstration systems, copies of all advertising and promotional materials
related to the Products.

                       ARTICLE 6. - COOPERATION BY DYNASIG
                       -----------------------------------

     6.1     Cooperation by DYNASIG.  DYNASIG agrees to cooperate with DELTA and
to provide it and its Sales Agents with reasonable assistance in the sale of
Products under this Agreement.

                    ARTICLE 7. - INTELLECTUAL PROPERTY RIGHTS
                    -----------------------------------------

     7.1     Acknowledgment.  DELTA acknowledges and shall cause its Sales
Agents to acknowledge that DYNASIG has exclusive rights, title and interest in
and to any and all Intellectual Property Rights.

     7.2     Notices, Marks, Legends and Name.  DYNASIG hereby grants to DELTA
and to its Sales Agents the right to use the DYNASIG Trademarks, but only in
connection with the solicitation of sales of the Products in the Territory and
subject to DYNASIG's prior approval in writing of any advertising or promotion
of the Products.  DELTA and its Sales Agents shall use the DYNASIG Trademarks
with respect to all sales solicitations respecting the Products in the
Territory.  Notwithstanding anything to the contrary herein, DYNASIG may
immediately terminate this Agreement if DELTA or any Sales Agent uses the
DYNASIG Trademarks in

                                  Page 6 of 11
<PAGE>
violation of this Agreement.  Neither DELTA nor any Sales Agent shall market or
solicit sales for the Products under any name, sign or logo other than the
DYNASIG Trademarks.  DELTA also agrees that neither during the term of this
Agreement nor at any time thereafter will it or any Sales Agent register with
any government authority or use any of DYNASIG's Trademarks or trade names or
any word, symbol or design similar or confusingly similar thereto.  DELTA and
its Sales Agents shall confine the distribution of literature, brochures, and
other printed matter describing the Products to customers or potential customers
in the Territory and they will not distribute any of such items, which have not
been approved by DYNASIG.  DELTA agrees for itself and each Sales Agent not to
make any representations concerning Products except as expressly authorized and
approved in advance by DYNASIG and agrees to indemnify and hold DYNASIG and its
officers, directors, and shareholders harmless from any claim by any third party
arising out of alleged representations made by DELTA, its Sales Agents or any of
its employees and other agents.

     7.3     Assistance.  DELTA shall promptly notify DYNASIG (i) of any claims
or objections that its or its Sales Agents' use of the Intellectual Property
Rights in connection with the marketing or sale of the Products may or will
infringe the patent, copyright, trademarks, trade names, or other proprietary
rights or another Person; (ii) of any and all infringements, imitations, illegal
use, misuse, by any Person, of the Intellectual Property Rights which come to
its or their attention.  Further, DELTA shall render to DYNASIG, at DYNASIG's
expense, all reasonable assistance that DYNASIG may reasonably require in
connection with any matter pertaining to the protection of the Intellectual
Property Rights, whether in the courts, administrative agencies, or otherwise.

             ARTICLE 8. - NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
             -------------------------------------------------------

     8.1     Non-Disclosure Obligations.  During the term of this Agreement,
each party may disclose certain Confidential Information to the other solely to
permit the other to perform its obligations under this Agreement.  Each party
shall refrain from using or exploiting any and all Confidential Information for
any purposes or activities other than those specifically authorized in this
Agreement.  Each party undertakes with the other that it will keep such
Confidential Information secret during the term of this Agreement and at any
time after the expiration hereof.  Each party shall implement effective security
procedures in order to avoid disclosure or misappropriate of such Confidential
Information.

     8.2     Ownership of Materials.  All files, lists, records, documents,
drawings and specifications which incorporate or refer to all or a portion of
the Confidential Information shall remain the sole property of the party who's
Confidential Information it is.  Such materials shall be promptly returned (i)
upon the owning party's reasonable request, or (ii) in accordance to Article
10.2 of this Agreement upon termination of this Agreement, whichever is earlier.

                        ARTICLE 9. - TERM AND TERMINATION
                        ---------------------------------

     9.1     Terms and Renewal.  This Agreement shall commence on the Effective
Date and shall continue for a period of twelve months from the Effective Date,
unless terminated as provided under this Agreement.  At the end of the fixed
term, this Agreement shall be automatically renewed on the same terms and
conditions for an additional twelve month period unless earlier terminated under
the provisions hereof.

                                  Page 7 of 11
<PAGE>
     9.2     Termination.  In addition to any other rights of termination
herein, this Agreement may be terminated:

          a) at any time by mutual consent

          b) Upon notice by either party in the event of breach of this
     Agreement by the other party which remains uncured for 15 days after
     written notice of breach is given to the breaching party.

          c) by either party without notice if any proceedings in bankruptcy, a
     reorganization or arrangement, the appointment of a trustee or any other
     proceedings for the relief of creditors shall be instituted by or against
     the other or the other shall make an assignment for the benefit of
     creditors.

          d) by either party upon 30 days written notice. DELTA shall be
     entitled to receive Commissions (including Commission Warrants) on written
     orders actually received by DYNASIG within 90 days of termination, which
     were direct result of DELTA sales activities or leads. Such Commissions
     will be paid only after payment on such orders is actually received and in
     accordance with this Agreement.

              ARTICLE 10. - RIGHTS AND OBLIGATIONS UPON TERMINATION
              -----------------------------------------------------

     10.1     Cessation of Rights.  Upon non-renewal or termination
(collectively, "Termination") of this Agreement for any reason whatsoever, all
rights and obligations of the parties hereunder shall cease, except as provided
in Articles 10, 11.4 and 12 of this Agreement; provided, however, that
Termination of this Agreement shall not relieve the parties hereto of any
obligations accrued prior to said Termination.

     10.2     Return of Products and Sales Materials.  Upon Termination, DELTA
shall promptly return to DYNASIG all Confidential Information in written,
recorded or other tangible form in DELTA's possession, which was supplied by
DYNASIG to assist or promote the sale of the Products.  DYNASIG shall promptly
return to DELTA all Confidential Information in written recorded or other
tangible form in DYNASIG's possession, which was supplied by DELTA to DYNASIG.
In addition, DYNASIG shall have the right to purchase all of DELTA's sales
materials (if any) related to the Products at DELTA's cost for such materials
(excluding freight and handling).

     10.3     Survival of Non-Disclosure Obligation.  Notwithstanding the
Termination of this Agreement, each party shall continue to abide by the terms
of its non-disclosure obligations with respect to Confidential Information under
Article 8 of this Agreement.

     10.4     Remedies.  In the event of a breach of this Agreement or any term
hereof by either party, the other shall have all rights and remedies available
at law, in equity, or under the terms of this Agreement, including, without
limitation, the right to seek injunctive relief and specific performance of any
party's obligations hereunder.  All rights and remedies of any party hereto
shall be cumulative and the exercise of any right or remedy by any party shall
not be deemed a waiver, relinquishment or abandonment of any other right or
remedy, and shall not

                                  Page 8 of 11
<PAGE>
affect or limit in any way the future assertion of the same, or any other right
or remedy, except to the extent otherwise expressly provided in this Agreement.

                  ARTICLE 11. - COMPLIANCE AND APPLICABLE LAWS
                  --------------------------------------------

     11.1     Application of U.S. Laws.  In the performance of its obligations
under this Agreement each party shall, at all times, strictly comply with all
laws, regulations and orders of the United States, including but not limited to
the Foreign Corrupt Practices Act, 15 U.S.C.A. Section 78dd-1, et seq.

     11.2     Authorizations.  DELTA shall, at its own expense, make, obtain,
and maintain in force at all times during the term of this Agreement, all
filings, registrations, reports, licenses, permits and authorizations
(collectively "Authorizations") required under applicable law, regulation or
order in order for DELTA to perform its obligations under this Agreement.
DYNASIG shall provide DELTA with such reasonable assistance as DELTA may request
in making or obtaining any such Authorizations.

     11.3     Compliance With Local Law.  Each party hereby represents and
agrees that neither it nor any person or firm connected with it has participated
or will participate in any action in violation of any law, regulation, decree,
order, policy or other directive of the lawful government.

     11.4     Indemnification.  Each party hereby indemnifies and agrees to pay,
              ---------------
defend, and hold harmless the other, its affiliated entities, and each of their
respective officers, directors, shareholders, members, managers, partners,
employees, agents from and against any loss, liability, cost, claim, demand,
penalty, order, judgment, or expense arising out of or relating in any manner to
its failure to comply with any provision of this Agreement or any laws,
regulations or orders of any lawful government of the Territory or of the United
States including but not limited to the Foreign Corrupt Practices Act, 15
U.S.C.A. Sec. 78dd 1, et seq.

                        ARTICLE 12. - GENERAL PROVISIONS
                        --------------------------------

     12.1     Entire Agreement and Amendments.  This Agreement constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersede all prior agreements between the parties, whether written or oral,
relating to the same subject matter.  No modification, amendments or supplements
to this Agreement shall be effective for any purpose unless in writing, signed
by each party, approvals or consents hereunder of a party shall also be in
writing.

     12.2     Force Majeure.  Neither party shall be liable to the other party
for any delay or omission in the performance of any obligation under this
Agreement, other than the obligation to pay monies, where the delay or omission
is due to any cause or condition beyond the reasonable control of the party
obliged to perform, including, but not limited to, strikes or other labor
difficulties, acts of God, earthquakes, acts of government (in particular with
respect to the refusal to issue necessary import or export licenses), war,
riots, embargoes, or inability to obtain supplies ("Force Majeure").  If Force
Majeure prevents or delays the performance by a party of any obligation under
this Agreement, then the party claiming Force Majeure shall promptly notify the
other party thereof in writing.

                                  Page 9 of 11
<PAGE>
     12.3     Notices.  All notices required or permitted by this Agreement
shall be in writing and in English and shall be effective when delivered
personally or five (5) days after sent by U.S. Mail, commercial courier, or air
mail, return receipt requested with proper postage, addressed as set forth
above.

     12.4     Invalid Provisions.  If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws effective
during the term of this Agreement, the legality, validity and enforceability of
the remaining provisions of this Agreement shall not be affected thereby.

     12.5     Binding Nature of Agreement; Assignment.  This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, personal representatives, successors and permitted assigns.

     12.6     Incorporation of Exhibits.  All Exhibits attached to this
Agreement are incorporated herein by reference and are made part of the
covenants of this Agreement whether or not the Exhibits are executed by any or
all of the parties.

     12.7     Incorporation of Recitals.  The prefatory language and Recitals
made and stated above are hereby incorporated by reference into, and made a part
of, this Agreement.

     12.8     No Other Parties to Benefit.  This Agreement is made for the sole
benefit of the parties hereto and their successors and permitted assigns.
Except as expressly provided herein, no other person or entity is intended to or
shall have any rights or benefits hereunder, whether as third-party
beneficiaries or otherwise.

     12.9     Arbitration.  Any controversy or claim arising out of or relating
to this Agreement shall be settled by arbitration in Tempe, Arizona in
accordance with the rules, then obtaining, of the American Arbitration
Association, and judgment upon the award rendered may be entered in any court
having jurisdiction.

     12.10     Governing Law and Venue.  The substantive laws of the United
States and the State of Arizona shall govern the interpretation and enforcement
of this Agreement.  Any disputes shall be heard by courts of competent
jurisdiction located in Maricopa County, Arizona.  Any agreements between DELTA
and its Sales Agents shall have similar provisions as to law and venue.

     12.11     Modification and Waiver.  No provision of this Agreement shall be
amended, waived or modified except by an instrument in writing signed by the
parties hereto.

     12.12     Materiality.  All covenants, agreements, representations and
warranties made herein shall be deemed to be material and to have been relied on
by the parties in entering into this Agreement and shall survive the execution
and delivery of this Agreement.

     12.13     Integration; Time of the Essence.  This Agreement constitutes and
embodies the full and complete understanding and agreement of the parties hereto
and supersedes all prior understandings, whether oral or written.  Time is of
the essence in all matters associated with this

                                  Page 10 of 11
<PAGE>
Agreement.  No representation, promise, inducement or statement of intention has
been made by any party hereto which is not embodied in this Agreement, and no
party hereto shall be bound by or liable for any alleged misrepresentation,
promise, inducement or statement of intention not so set forth.

     12.14     Authority.  By execution of this Agreement, the signatories
hereto represent and warrant their authority to act in the capacity stated.  By
execution of this Agreement each party represents and warrants its right, power
and authority to enter into and to perform its obligations under this Agreement.

     The  parties  have  signed  this  Agreement effective on the date first set
forth  above.

     "DYNASIG"

     DYNASIG  CORPORATION,

     By:     /s/  Richard  C.  Kim
             ---------------------
     Richard  Kim
     President

     Date:          May  4,  2006
                    -------------

     "DELTA"

     DELTA  RESOURCES,  LLC

     By:     /s/  James  L.  Thomas
             ----------------------
     James  L.  Thomas
     President

     Date:          May  4,  2006
                    -------------

                                  Page 11 of 11

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