SECURITY AGREEMENT
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SECURITY AGREEMENT, dated as of February 12, 2002, among Vicon Industries,
Inc, a New York corporation (the "Borrower"), 00 Xxxxx Xxxxx, Xxxxxxxxx, Xxx
Xxxx 00000, each of the Domestic Subsidiaries of Borrower from time to time
party hereto (each, a "Guarantor" and collectively the "Guarantors") and
Washington Mutual Bank, FA (the "Lender"), 0000 Xxxxx Xxxxxxx, Xxxxxxxx, Xxx
Xxxx 00000.
Reference is made to the Credit Agreement dated as of July 20, 1998
between Borrower and Lender's predecessor, KeyBank National Association, as
amended on February 12, 2002, and as further amended, supplemented or otherwise
modified from time to time (the "Credit Agreement").
The Lender has agreed to make Loans, and otherwise extend credit to
Borrower pursuant to the Credit Agreement. Each of the Guarantors has
guaranteed, among other things, all the obligations of Borrower under the Loan
Documents. The obligations of Lender to make Loans and otherwise extend credit
are conditioned upon, among other things, the execution and delivery of this
agreement in the form hereof to secure the Obligations.
Accordingly, Borrower, the Guarantors and Lender hereby agree as follows:
Section 1. Definitions
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Unless the context otherwise requires, capitalized terms used herein
and not defined herein shall have the meanings assigned to such terms in the
Credit Agreement.
As used herein, the following terms shall have the following
meanings:
"Account Debtor": as defined in the NYUCC.
"Accounts": as defined in the NYUCC.
"Accounts Receivable": all Accounts and all right, title and
interest in any returned goods, together with all rights, titles, securities and
guarantees with respect thereto, including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary, in each case whether now existing or
owned or hereafter arising or acquired.
"Chattel Paper": as defined in the NYUCC.
"Collateral": with respect to any Grantor, all personal property of
every kind and nature, wherever located, whether now owned or hereafter acquired
or arising, and all Proceeds and products thereof, including, without
limitation, all (i) Accounts Receivable, (ii) Equipment, (iii) General
Intangibles, (iv) Inventory, (v) Instruments, (vi) Pledged Equity, (vii)
Documents, (xiii) Chattel Paper (whether tangible or electronic), (ix) Deposit
Accounts, (x) Letter of Credit Rights (whether or not the letter of credit is
evidenced in writing), (xi) Commercial Tort Claims, (xii) Supporting
Obligations, (xiii) any other contract rights or rights to the payment of money,
(xiv) insurance claims and proceeds, (xv) tort claims and (xvi) unless otherwise
agreed upon in writing by such Grantor and Lender, other property owned or held
by or on behalf of such Grantor that may be delivered to and held by Lender
pursuant to the terms hereof. Notwithstanding anything to the contrary in any
Loan Document, for purposes hereof, the term "Collateral" shall not include any
right under any General Intangible if the granting of a security interest
therein or an assignment thereof would violate any enforceable provision of such
General Intangible.
"Commercial Tort Claims": as defined in the NYUCC.
"Deposit Accounts": as defined in the NYUCC.
"Documents": as defined in the NYUCC.
"Equipment": as defined in the NYUCC, and shall include, without
limitation, all equipment, furniture and furnishings, and all tangible personal
property similar to any of the foregoing, including tools, parts and supplies of
every kind and description, and all improvements, accessions or appurtenances
thereto, that are now or hereafter owned by any Grantor.
"Equity Interests": with respect to (i) a corporation, the capital
stock thereof, (ii) a partnership, any partnership interest therein, including
all rights of a partner in such partnership, whether arising under the
partnership agreement of such partnership or otherwise, (iii) a limited
liability company, any membership interest therein, including all rights of a
member of such limited liability company, whether arising under the limited
liability company agreement of such limited liability company or otherwise or
(iv) any other firm, association, trust, business enterprise or other entity,
any equity interest therein or any other interest therein that entitles the
holder thereof to share in the net assets, revenue, income, earnings or losses
thereof or to vote or otherwise participate in any election of one or more
members of the managing body thereof, and all warrants and options in respect of
any of the foregoing and all other securities that are convertible or
exchangeable therefor.
"General Intangibles": as defined in the NYUCC, and shall include,
without limitation, all corporate or other business records, indemnification
claims, contract rights (including rights under leases, whether entered into as
lessor or lessee, interest rate protection agreements and other agreements),
goodwill, registrations, franchises, tax refund claims, guarantee, claim,
security interest or other security held by or granted to any Grantor to secure
payment by an Account Debtor of any of the Accounts Receivable.
"Grantor" or "Grantors" means individually Borrower and each
Domestic Subsidiary, each Subsidiary which becomes a party hereto, and
collectively all of them.
"Inventory": as defined in the NYUCC, and shall include, without
limitation, all goods of any Grantor, whether now owned or hereafter acquired,
held for sale or lease, or furnished or to be furnished by any Grantor under
contracts of service, or consumed in any Grantor's business, including raw
materials, intermediates, work in process, packaging materials, finished goods,
semi-finished inventory, scrap inventory, manufacturing supplies and spare
parts, and all such goods that have been returned to or repossessed by or on
behalf of any Grantor.
"Letter of Credit Rights": as defined in the NYUCC.
"NYUCC": the UCC as in effect from time to time in the State of
New York.
"Obligations": (i) the due and punctual payment of (x) principal of
and premium, if any, and interest (including interest accruing during the
pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, under the Credit Agreement or the other Loan Documents, when and as
due, whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise, and (y) all other monetary obligations, including
specifically but without limitation loans to Borrower secured by mortgages on
its real property located at 00 Xxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx ("Mortgage
Debt"), all other fees, commissions, costs, expenses and indemnities, whether
primary, secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of Borrower or any Guarantor to Lender and (ii)
the due and punctual performance of all covenants, agreements, obligations and
liabilities of Borrower or any Guarantor to Lender under or pursuant to the
Credit Agreement and the other Loan Documents, the Mortgage Debt or otherwise.
"Pledged Equity" means, with respect to any Grantor, all right,
title and interest of such Grantor in any Equity Interests, whether now or
hereafter acquired or arising in the future, including specifically and with
limitation Borrower's ownership of Equity in the other Grantors.
"Proceeds": as defined in the NYUCC, and shall include, without
limitation, any consideration received from the sale, exchange, license, lease
or other disposition of any asset or property that constitutes Collateral, any
value received as a consequence of the possession of Collateral and any payment
received from any insurer or other person or entity as a result of the
destruction, loss, theft, damage or other involuntary conversion of whatever
nature of any asset or property that constitutes Collateral, including (i)
subject to Section 6, all rights and privileges with respect to, and all
payments of principal or interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of, in exchange for or upon the conversion of, any of the Pledged Equity
and (ii) any and all other amounts from time to time paid or payable under or in
connection with the Collateral.
"Security Interest": as defined in Section 2(a).
"Supporting Obligations": as defined in the NYUCC.
"UCC": with respect to any jurisdiction, the Uniform Commercial
Code as from time to time in effect in such jurisdiction.
Section 2. Grant of Security Interest; No Assumption of Liability
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(a) As security for the payment or performance, as applicable, in
full of the Obligations, each of the Grantors hereby bargains, sells, conveys,
assigns, sets over, pledges, hypothecates and transfers to Lender, and hereby
grants to Lender a security interest in, all of the right, title and interest of
such Grantor in, to and under the Collateral (the "Security Interest"). Without
limiting the foregoing, Lender is hereby authorized to file one or more
financing statements, continuation statements, recordation filings or other
documents for the purpose of perfecting, confirming, continuing, enforcing or
protecting the Security Interest granted by each of the Grantors, without the
signature of any Grantor, and naming any Grantor or the Grantors, as applicable,
as debtors and Lender as secured party.
(b) The Security Interest is granted as security only and shall not
subject Lender to, or in any way alter or modify, any obligation or liability of
any Grantor with respect to or arising out of the Collateral.
Section 3. Delivery of the Collateral
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Each of the Grantors agrees promptly to deliver or cause to be
delivered to Lender any and all certificates, ledger sheets and documents
covering, evidencing, representing or relating to any of the Pledged Equity, or
any other amount that becomes payable under or in connection with any other
Collateral owned or held by or on behalf of such Grantor, in each case
accompanied by (i) in the case of any chattel paper, instruments or stock
certificates, stock powers duly executed in blank or other instruments of
transfer satisfactory to Lender and such other instruments and documents as
Lender may reasonably request and (ii) in all other cases, proper instruments of
assignment duly executed by such Grantor and such other instruments or documents
as Lender may reasonably request.
Section 4. Representations and Warranties
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Each of the Grantors, jointly with the others and severally,
represents and warrants to Lender that:
(a) Such Grantor has good and valid rights in and title to the
Collateral and has full power and authority to grant to Lender the Security
Interest in the Collateral pursuant hereto and to execute, deliver and perform
its obligations in accordance with the terms of this Security Agreement, without
the consent or approval of any other person other than any consent or approval
which has been obtained.
(b) The information set forth on Exhibit A is correct and complete.
(c) The Security Interest constitutes (i) a legal and valid Lien on
and security interest in all of the Collateral securing the payment and
performance of the Obligations, (ii) subject to (A) filing Uniform Commercial
Code financing statements, or other appropriate filings, recordings or
registrations containing a description of the Collateral owned or held by or on
behalf of such Grantor (including, without limitation, a counterpart or copy of
this Security Agreement) in each applicable governmental, municipal or other
office and (B) the delivery to Lender of any instruments or certificated
securities included in such Collateral, a perfected security interest in such
Collateral to the extent that a security interest may be perfected by filing,
recording or registering a financing statement or analogous document, or by
Lender's taking possession, in the United States (or any political subdivision
thereof) and its territories and possessions pursuant to the UCC or other
applicable law in such jurisdictions.
(d) The Security Interest is and shall be prior to any other Lien on
any of the Collateral owned or held by or on behalf of such Grantor other than
Liens expressly permitted pursuant to the Loan Documents. The Collateral owned
or held by or on behalf of such Grantor is so owned or held by it free and clear
of any Lien, except for Liens expressly permitted pursuant to the Loan
Documents.
(e) With respect to each Account Receivable: (i) no transaction
giving rise to such Account Receivable violated or will violate any applicable
federal, state or local law, rule or ordinance, (ii) each such Account
Receivable is not subject to terms prohibiting the assignment thereof or
requiring notice or consent to such assignment, except for notices and consents
that have been obtained and (iii) each such Account Receivable represents a bona
fide transaction which requires no further act on such Grantor's part to make
such Account Receivable payable by the Account Debtor with respect thereto, and,
to the Grantor's knowledge, such Account Receivable is not subject to any
offsets or deductions other than credits to customers in the ordinary course of
business and does not represent any consignment sales, guaranteed sale, sale or
return or other similar understanding or any obligation of any Affiliate of such
Grantor.
(f) With respect to all Inventory: (i) such Inventory is located on
the premises identified in Exhibit A, or is Inventory in transit for sale in the
ordinary course of business, (ii) no such Inventory is subject to any Lien other
than Liens permitted by Section 9.02 of the Credit Agreement, and (iii) except
as permitted hereby or by the Credit Agreement, no such Inventory is on
consignment or is now stored or shall be stored any time after the Effective
Date with a bailee, warehouseman or similar Person.
Section 5. Covenants
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(a) Each of the Grantors shall provide Lender with not less than 15
Banking Days prior written notice of any change (i) in its legal name, (ii) in
its jurisdiction of organization or formation, (iii) in the location of its
chief executive office or principal place of business, (iv) in its identity or
legal or organizational structure or (v) in its organization identification
number or its Federal Taxpayer Identification Number and shall execute and
deliver to Lender such instruments, agreements and documents as Lender shall
reasonably request so that Lender may make all filings under the UCC or
otherwise that are required in order for Lender to continue at all times
following such change to have a valid, legal and perfected first priority
security interest in all the Collateral (subject only to Liens expressly
permitted to be prior to the Security Interest pursuant to the Loan Documents).
Each Grantor shall promptly notify Lender if any material portion of the
Collateral owned or held by or on behalf of such Grantor is damaged or
destroyed.
(b) Each of the Grantors shall maintain, at its own cost and
expense, such complete and accurate records with respect to the Collateral owned
or held by it or on its behalf as is consistent with its current practices and
in accordance with such prudent and standard practices used in industries that
are the same as or similar to those in which it is engaged, but in any event to
include complete accounting records indicating all payments and proceeds
received with respect to any part of such Collateral, and, at such time or times
as Lender may reasonably request, promptly to prepare and deliver to Lender
copies of such records a duly certified by an officer of such Grantor.
(c) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to Section 8.08 of
the Credit Agreement, Borrower shall deliver to Lender a certificate or
confirming that there has been no change in the information set forth on Exhibit
A since the date hereof or the date of the most recent certificate delivered
pursuant to this paragraph and (ii) certifying that Borrower and the Guarantors
are in compliance with all of the terms of this Security Agreement.
(d) Each of the Grantors shall, at its own cost and expense, take
any and all actions reasonably necessary to defend title to the Collateral owned
or held by it or on its behalf against all persons and to defend the Security
Interest of Lender in such Collateral and the priority thereof against any Lien
not expressly permitted pursuant to the Loan Documents.
(e) Each of the Grantors shall, at its own expense, execute,
acknowledge, deliver and cause to be duly filed all such further instruments and
documents and take all such actions as Lender may from time to time reasonably
request to preserve, protect and perfect the Security Interest granted by it and
the rights and remedies created hereby, including the payment of any fees and
taxes required in connection with its execution and delivery of this Security
Agreement, the granting by it of the Security Interest and the filing of any
financing statements or other documents in connection herewith or therewith.
(f) The Lender and such persons as Lender may reasonably designate
shall have the right, at the cost and expense of the Grantors, and upon
reasonable prior notice, at reasonable times and during normal business hours,
to inspect all of its records (and to make extracts and copies from such
records), to discuss its affairs with its officers and independent accountants
and to verify under reasonable procedures the validity, amount, quality,
quantity, value, condition and status of, or any other matter relating to, the
Collateral owned or held by it or on its behalf, including, in the case of
Accounts or Collateral in the possession of any third person, by contacting
Account Debtors, obligors or the third person possessing such Collateral for the
purpose of making such a verification.
(g) Each of the Grantors shall remain liable to observe and perform
all the conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the Collateral, all in accordance
with the terms and conditions thereof, and such Grantor shall, jointly with the
others and severally, indemnify and hold harmless the from and against any and
all liability for such performance.
(h) None of the Grantors shall make or permit to be made an
assignment, pledge or hypothecation of the Collateral owned or held by it or on
its behalf, or shall grant any other Lien in respect of such Collateral, except
as expressly permitted by the Loan Documents. Except for the Security Interest,
no Grantor shall make or permit to be made any transfer of such Collateral, and
each Grantor shall remain at all times in possession of such Collateral and
shall remain the direct owner, beneficially and of record, of the Pledged Equity
included in such Collateral, except that prior to the occurrence and during the
continuance of an Event of Default, the Grantors may use and dispose of the
Collateral in any lawful manner not inconsistent with the provisions of this
Security Agreement, the Credit Agreement or any other Loan Document, including
the sale of Inventory or the disposition of Equipment in the ordinary course of
business. Without limiting the generality of the foregoing, each Grantor shall
not permit any Inventory to be in the possession or control of any warehouseman,
bailee, agent or processor at any time unless such warehouseman, bailee, agent
or processor shall have been notified of the Security Interest and shall have
agreed in writing to hold such Inventory subject to the Security Interest and
the instructions of Lender and to waive and release any Lien held by it with
respect to such Inventory, whether arising by operation of law or otherwise.
(i) None of the Grantors will, without Lender's prior written
consent, grant any extension of the time of payment of any Accounts Receivable,
compromise, compound or settle the same for less than the full amount thereof or
allow any credit or discount whatsoever thereon, other than extensions, credits,
discounts, compromises or settlements granted or made in the ordinary course of
business and consistent with its current practices.
(j) The Grantors, at their own expense, shall maintain or cause to
be maintained insurance covering physical loss or damage to the Inventory and
Equipment in accordance with Section 8.05 of the Credit Agreement, which
insurance shall be against all risks. The Grantors shall not modify any such
insurance or reduce amounts payable thereunder without the consent of Lender.
All policies covering such insurance (i) shall contain a standard loss payable
clause and shall name Lender as sole loss payee in respect of each claim
relating to the Collateral and resulting in a payment thereunder and (ii) shall
be indorsed to provide, in respect of the interests of Lender, that (A) Lender
shall be an additional insured, (B) 30 days' prior written notice of any
cancellation thereof shall be given to Lender and (C) if any Grantor at any time
or times shall fail to pay any premium in whole or part relating thereto, Lender
may, in its sole discretion, pay such premium. Each Grantor irrevocably makes,
constitutes and appoints Lender (and all officers, employees or agents
designated by Lender) as such Grantor's true and lawful agent (and
attorney-in-fact) for the purpose, during the continuance of an Event of
Default, of making, settling and adjusting claims in respect of Collateral under
policies of insurance, endorsing the name of such Grantor on any check, draft,
instrument or other item of payment for the proceeds of such policies of
insurance and for making all determinations and decisions with respect thereto.
If any Grantor at any time or times shall fail to obtain or maintain any of the
policies of insurance required hereby or to pay any premium in whole or part
relating thereto, Lender may, without waiving or releasing any obligation or
liability of the Grantors hereunder or any Event of Default, in its sole
discretion, obtain and maintain such policies of insurance and pay such premium
and take any other actions with respect thereto as Lender deems advisable. All
sums disbursed by Lender in connection with this paragraph, including reasonable
attorneys' fees, court costs, expenses and other charges relating thereto, shall
be payable, upon demand, by the Grantors to Lender and shall be additional
Obligations secured hereby.
(k) Each Grantor shall legend its Accounts Receivable and its books,
records and documents evidencing or pertaining thereto with an appropriate
reference to the fact that such Accounts Receivable have been assigned to Lender
and that Lender has a security interest therein.
(l) Each Grantor shall: (i) not (and shall cause each of its
licensees not to) do any act, or omit to do any act, whereby any patent that is
material to the conduct of such Grantor's business may become invalidated or
dedicated to the public; (ii) (and shall cause each of its licensees to)
continue to xxxx any products covered by a patent with the relevant patent
number as necessary and sufficient to establish and preserve its maximum rights
under applicable patent laws; (iii) for each trademark material to the conduct
of such Grantor's business, (A) maintain (and shall cause each of its licensees
to maintain) such trademark in full force free from any claim of abandonment or
invalidity for non-use, (B) maintain (and shall cause each of its licensees to
maintain) the quality of products and services offered under such trademark, (C)
display (and shall cause each of its licensees to display) such trademark with
notice of federal or foreign registration to the extent necessary and sufficient
to establish and preserve its rights under applicable law and (D) not knowingly
use or knowingly permit the use of such trademark in violation of any third
party valid and legal rights; (iv) for each work covered by a copyright material
to the conduct of such Grantor's business, continue to publish, reproduce,
display, adopt and distribute the work with appropriate copyright notice as
necessary and sufficient to establish and preserve its maximum rights under
applicable copyright laws; (v) notify Lender promptly if it knows or has reason
to know that any patent, trademark or copyright material to the conduct of its
business may become abandoned, lost or dedicated to the public, or of any
adverse determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, United States Copyright Office or any court or similar office
of any country) regarding such Grantor's ownership of same, its right to
register the same, or to keep and maintain the same; and (vi) take all necessary
steps that are consistent with the practice in any proceeding before the United
States Patent and Trademark Office, United States Copyright Office or any office
or agency in any political subdivision of the United States or in any other
country or any political subdivision thereof, to maintain and pursue each
material application relating to its patents, trademarks or copyrights (and to
obtain the relevant grant or registration) and to maintain each issued patent
and each registration of the trademarks and copyrights that is material to the
conduct of such Grantor's business, including timely filings of applications for
renewal, affidavits of use, affidavits of incontestability and payment of
maintenance fees, and, if consistent with good business judgment, to initiate
opposition, interference and cancellation proceedings against third parties.
Section 6. Certain Rights as to the Collateral; Attorney-In-Fact
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(a) So long as no Event of Default shall have occurred and be
continuing:
(i) Each Grantor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any part
thereof for any purpose not inconsistent with the terms of this Security
Agreement and the other Loan Documents, provided, that such Grantor shall not
exercise or refrain from exercising any such right without the prior written
consent of Lender if such action or inaction would have a material adverse
effect on the value of the Collateral, or any part thereof, or the validity,
priority or perfection of the security interests granted hereby or the remedies
of Lender hereunder.
(ii)Each Grantor shall be entitled to receive and retain any
and all dividends, principal, interest and other distributions paid in respect
of the Collateral to the extent not prohibited by this Security Agreement or the
other Loan Documents, provided, that any and all (A) dividends, principal,
interest and other distributions paid or payable other than in cash in respect
of, and instruments (other than checks in payment of cash dividends) and other
Property received, receivable or otherwise distributed in respect of, or in
exchange for, Collateral, (B) dividends and other distributions paid or payable
in cash in respect of any Collateral in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital
surplus or paid-in-surplus, and (C) cash paid, payable or otherwise distributed
in redemption of, or in exchange for, any Collateral, shall be, and shall
forthwith be delivered to Lender to be held as, Collateral and shall, if
received by such Grantor, be received in trust for the benefit of Lender, be
segregated from the other property of such Grantor, and be forthwith delivered
to Lender as Collateral in the same form as so received (with any necessary
indorsement or assignment).
(iii) The Lender shall execute and deliver (or cause to be
executed and delivered) to the Grantors, at the Grantors' expense) all such
proxies and other instruments as the Grantors may reasonably request for the
purpose of enabling the Grantors to exercise the voting and other rights which
it is entitled to exercise pursuant to clause (i) above and to receive the
dividends, principal or interest payments, or other distributions which it is
authorized to receive and retain pursuant to clause (ii) above.
(b) Upon the occurrence and during the continuance of an
Event of Default:
(i) All rights of each Grantor to (A) exercise the voting and
other consensual rights which it would otherwise be entitled to exercise
pursuant to Section 6(a)(i) shall, upon notice to such Grantor by Lender, cease
and (B) receive the dividends, principal and interest payments and other
distributions which it would otherwise be authorized to receive and retain
pursuant to Section 6(a)(ii) shall automatically cease, and all such rights
shall thereupon become vested in Lender, which shall thereupon have the right,
but not the obligation, to exercise such voting and other consensual rights and
to receive and hold as Collateral such dividends, principal or interest payments
and distributions.
(ii)All dividends, principal and interest payments and other
distributions which are received by any Grantor contrary to the provisions of
Section 6(b)(i) shall be received in trust for the benefit of Lender, shall be
segregated from other funds of such Grantor and shall be forthwith paid over to
Lender as Collateral in the same form as so received (with any necessary
indorsement).
(c) If all or any part of the securities or instruments constituting
the Collateral are lost, destroyed or wrongfully taken while such securities or
instruments are in the possession of Lender, the Grantors shall cause the
delivery of new securities or instruments in place of the lost, destroyed or
wrongfully taken securities or instruments upon request therefor by Lender
without the necessity of any indemnity bond or other security other than
Lender's agreement or indemnity therefor customary for security agreements
similar to this Security Agreement.
(d) Each Grantor hereby irrevocably appoints Lender such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time at any time when an
Event of Default exists, in Lender's discretion, to take any action and to
execute any instrument which Lender may deem necessary or advisable to
accomplish the purposes of this Security Agreement, including, without
limitation:
(i) to ask for, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral, and to receive, indorse, and collect any
drafts or other chattel paper, instruments and documents in connection
therewith,
(ii)to file any claims or take any action or institute any
proceedings which Lender may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the rights of Lender with respect
to any of the Collateral, and
(iii) to receive, indorse and collect all instruments made
payable to such Grantor representing any dividend, principal payment, interest
payment or other distribution in respect of the Collateral or any part thereof
and to give full discharge for the same. The powers granted to Lender under this
Section constitute a power coupled with an interest which shall be irrevocable
by such Grantor and shall survive until all of the Obligations have been
indefeasibly paid in full in cash.
(e) If any Grantor fails to perform any agreement contained herein,
Lender, ten days after notice to such Grantor (except that no notice will be
required upon and during the continuance of an Event of Default), may itself
perform, or cause performance of, such agreement, and the reasonable expenses of
Lender incurred in connection therewith shall be payable by the Grantors under
Section 9.
(f) The powers conferred on Lender hereunder are solely to protect
its interest in the Collateral and shall not impose any duty upon it to exercise
any such powers. Except for the safe custody of any Collateral in its possession
and the accounting for moneys actually received by it hereunder, Lender shall
have no duty as to any Collateral. The Lender shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which Lender accords its own property.
Section 7. Remedies upon Default
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(a) Upon the occurrence and during the continuance of an Event of
Default, each of the Grantors shall deliver each item of Collateral to Lender on
demand, and Lender shall have in any jurisdiction in which enforcement hereof is
sought, in addition to any other rights and remedies, the rights and remedies of
a secured party under the NYUCC or the UCC of any jurisdiction in which the
Collateral is located, including, without limitation, the right, with or without
legal process (to the extent permitted by law) and with or without prior notice
or demand for performance, to take possession of the Collateral and without
liability for trespass (to the extent permitted by law) to enter any premises
where the Collateral may be located for the purpose of taking possession of or
removing the Collateral (and for that purpose Lender may, so far as the Grantors
can give authority therefor, enter upon any premises on which the Collateral may
be situated and remove the Collateral therefrom) and, generally, to exercise any
and all rights afforded to a secured party under the UCC or other applicable
law. Without limiting the generality of the foregoing, each of the Grantors
agrees that Lender shall have the right, subject to the mandatory requirements
of applicable law, to sell or otherwise dispose of all or any part of the
Collateral, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as Lender
shall deem appropriate. Each such purchaser at any such sale shall hold the
property sold absolutely, free from any claim or right on the part of any
Grantor, and each of the Grantors hereby waives (to the extent permitted by law)
all rights of redemption, stay, valuation and appraisal which such Grantor or
now has or may at any time in the future have under any rule of law or statute
now existing or hereafter enacted.
(b) Unless the Collateral is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market,
Lender shall give to Borrower at least five Business Days prior written notice
of the time and place of any public sale of Collateral or of the time after
which any private sale or any other intended disposition is to be made. Each
Grantor hereby acknowledges that five Business Days prior written notice of such
sale or sales shall be reasonable notice. Each Grantor hereby waives any and all
rights that it may have to a judicial hearing in advance of the enforcement of
any of Lender's rights hereunder, including, without limitation, the right of
Lender following an Event of Default to take immediate possession of the
Collateral and to exercise Lender's rights with respect thereto.
(c) Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as Lender may fix and state
in the notice (if any) of such sale. At any such sale, the Collateral, or
portion thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as Lender may (in its sole and absolute discretion) determine. The
Lender shall not be obligated to make any sale of any Collateral if it shall
determine not to do so, regardless of the fact that notice of sale of such
Collateral shall have been given. The Lender may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for sale, and such sale may,
without further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by Lender
until the sale price is paid by the purchaser or purchasers thereof, but Lender
shall not incur any liability in case any such purchaser or purchasers shall
fail to take up and pay for the Collateral so sold and, in case of any such
failure, such Collateral may be sold again upon like notice. At any public (or,
to the extent permitted by applicable law, private) sale made pursuant to this
Section, Lender may bid for or purchase, free from any right of redemption,
stay, valuation or appraisal on the part of any Grantor (all said rights being
also hereby waived and released), the Collateral or any part thereof offered for
sale and may make payment on account thereof by using any claim then due and
payable to Lender from any Grantor as a credit against the purchase price, and
Lender may, upon compliance with the terms of sale, hold, retain and dispose of
such property without further accountability to any Grantor therefor. For
purposes hereof, (i) a written agreement to purchase the Collateral or any
portion thereof shall be treated as a sale thereof, (ii) Lender shall be free to
carry out such sale pursuant to such agreement and (iii) none of the Grantors
shall be entitled to the return of the Collateral or any portion thereof subject
thereto, notwithstanding the fact that after Lender shall have entered into such
an agreement all Events of Default shall have been remedied and the Obligations
paid in full. As an alternative to exercising the power of sale herein conferred
upon it, Lender may proceed by a suit or suits at law or in equity to foreclose
upon the Collateral and to sell the Collateral or any portion thereof pursuant
to a judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver.
(d) Any sale pursuant to the provisions of this Section 7 shall be
deemed to conform to commercially reasonable standards as provided in Section
9-610 of the NYUCC or the UCC of any other jurisdiction in which Collateral is
located or any other requirement of applicable law. Without limiting the
foregoing, each Grantor agrees and acknowledges that, to the extent that
applicable law imposes duties on Lender to exercise remedies in a commercially
reasonable manner, it shall be commercially reasonable for Lender to do any or
all of the following: (i) fail to incur expenses deemed significant by Lender to
prepare Collateral for disposition or otherwise to complete raw materials or
work in process into finished goods or other finished products for disposition;
(ii) 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, (iii) fail to exercise collection
remedies against Account Debtors or other persons obligated on Collateral or to
remove Liens on any Collateral, (iv) exercise collection remedies against
Account Debtors and other persons obligated on Collateral directly or through
the use of collection agencies and other collection specialists, (v) advertise
dispositions of Collateral through publications or media of general circulation,
whether or not the Collateral is of a specialized nature, (vi) contact other
Persons, whether or not in the same business as the Grantors, for expressions of
interest in acquiring all or any portion of the Collateral, (vii) hire one or
more professional auctioneers to assist in the disposition of Collateral,
whether or not the Collateral is of a specialized nature, (viii) dispose of
Collateral utilizing Internet sites that provide for the auction of assets of
the types included in the Collateral or that have reasonable capability of doing
so, or that match buyers and sellers of assets, (ix) disclaim dispositions of
warranties, (x) purchase (or fail to purchase) insurance or credit enhancements
to insure Lender against risk of loss, collection or disposition of Collateral
or to provide to Lender a guaranteed return from the collection or disposition
of Collateral, or (xi) to the extent deemed appropriate by Lender, obtain the
services of other brokers, investment bankers, consultants and other
professionals to assist Lender in the collection or disposition of any of the
Collateral. Nothing in this Section 7 shall be construed to grant any rights to
the Grantors or to impose any duties on Lender that would not have been granted
or imposed by this Security Agreement or applicable law in the absence of this
Section 7 and the parties hereto acknowledge that the purpose of this Section 7
is to provide non-exhaustive indications of what actions or omissions by Lender
would be deemed commercially reasonable in the exercise by Lender of remedies
against the Collateral and that other actions or omissions by Lender shall not
be deemed commercially unreasonable solely on account of not being set forth in
this Section 7.
Section 8. Application of Proceeds of Sale
-------------------------------
The Lender shall apply the proceeds of any collection or sale of the
Collateral, as well as any Collateral consisting of cash, first, to the payment
of all costs and expenses incurred by Lender in connection with such collection
or sale or otherwise in connection with this Security Agreement, any other Loan
Document or any of the Obligations, including all court costs and the reasonable
fees and expenses of their respective agents and legal counsel, the repayment of
all advances made by Lender hereunder or under any other Loan Document on behalf
of any Grantor and any other costs or expenses incurred in connection with the
exercise of any right or remedy hereunder or under any other Loan Document,
second, to the payment in full of the Obligations, and third, to the Grantors,
their respective successors or assigns, or as a court of competent jurisdiction
may otherwise direct. Lender shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Security Agreement. Upon any sale of the Collateral by Lender (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the purchase money by Lender or of the officer making the sale
shall be a sufficient discharge to the purchaser or purchasers of the Collateral
so sold and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to Lender or such
officer or be answerable in any way for the misapplication thereof.
Section 9. Reimbursement of Lender
-----------------------
(a) Each of the Grantors shall, jointly with the other Grantors and
severally, pay upon demand to Lender the amount of any and all reasonable
expenses, including the reasonable fees, other charges and disbursements of
counsel and of any experts or agents, that Lender may incur in connection with
(i) the administration of this Security Agreement relating to such Grantor or
any of its property, (ii) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Collateral owned or held
by or on behalf of such Grantor, (iii) the exercise, enforcement or protection
of any of Lender's the rights hereunder relating to such Grantor or any of its
property or (iv) the failure by such Grantor to perform or observe any of the
provisions hereof.
(b) Without limitation of its indemnification obligations under the
other Loan Documents, each of the Grantors shall, jointly with the other
Grantors and severally, indemnify Lender and its directors, officers, employees,
advisors, agents, successors and assigns (each an "Indemnitees") against, and
hold each Indemnitee harmless from, any and all losses, damages, liabilities and
related expenses, including reasonable counsel fees, other charges and
disbursements, incurred by any Indemnitee arising out of, in any way connected
with, or as a result of (i) the execution or delivery by such Grantor of this
Security Agreement or any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the performance by such Grantor of its
obligations under the Loan Documents and the other transactions contemplated
thereby or (ii) any claim, litigation, investigation or proceeding relating to
any of the foregoing, whether or not any Indemnitee is a party thereto, provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee.
(c) Any amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section shall remain operative and in full force and effect regardless
of the termination of this Security Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
this Security Agreement or any other Loan Document or any investigation made by
or on behalf of Lender. All amounts due under this Section shall be payable on
written demand therefor and shall bear interest at the Default Rate.
Section 10. Waivers; Amendment
------------------
(a) No failure or delay of Lender in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
Lender hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Security Agreement or any other Loan Document or consent
to any departure by any Grantor therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) of this Section, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. No notice or demand on any Grantor in any case shall
entitle such Grantor to any other or further notice or demand in similar or
other circumstances.
(b) Neither this Security Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written agreement entered into
by, between or among Lender and the other parties hereto with respect to which
such waiver, amendment or modification is to apply.
Section 11. Securities Laws; Registration Rights
------------------------------------
(a) In view of the position of the Grantors in relation to the
Pledged Equity, or because of other current or future circumstances, a question
may arise under the Securities Act of 1933, as now or hereafter in effect, or
any similar statute hereafter enacted analogous in purpose or effect (such Act
and any such similar statute as from time to time in effect being called the
"Federal securities laws") with respect to any disposition of the Pledged Equity
permitted hereunder. Each of the Grantors understands that compliance with the
Federal securities laws might very strictly limit the course of conduct of
Lender if Lender were to attempt to dispose of all or any part of the Pledged
Equity, and might also limit the extent to which or the manner in which any
subsequent transferee of any Pledged Equity could dispose of the same.
Similarly, there may be other legal restrictions or limitations affecting Lender
in any attempt to dispose of all or part of the Pledged Equity under applicable
Blue Sky or other state securities laws or similar laws analogous in purpose or
effect. Each of the Grantors recognizes that in light of such restrictions and
limitations, Lender may, with respect to any sale of the Pledged Equity, limit
the purchasers to those who will agree, among other things, to acquire such
Pledged Equity for their own account, for investment, and not with a view to the
distribution or resale thereof. Each of the Grantors acknowledges and agrees
that in light of such restrictions and limitations, Lender, in its sole and
absolute discretion, (i) may proceed to make such a sale whether or not a
registration statement for the purpose of registering such Pledged Equity, or
any part thereof, shall have been filed under the Federal securities laws and
(ii) may approach and negotiate with a single potential purchaser to effect such
sale. Each of the Grantors acknowledges and agrees that any such sale might
result in prices and other terms less favorable to the seller than if such sale
were a public sale without such restrictions. In the event of any such sale,
Lender shall incur no responsibility or liability for selling all or any part of
the Pledged Equity at a price that Lender, in its sole and absolute discretion,
may in good xxxxx xxxx reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might have been realized if the
sale were deferred until after registration as aforesaid or if more than a
single purchaser were approached. The provisions of this Section will apply
notwithstanding the existence of a public or private market upon which the
quotations or sales prices may exceed substantially the price at which Lender
sells.
(b) Each of the Grantors agrees that, upon the occurrence and during
the continuance of an Event of Default, if for any reason Lender desires to sell
any of the Pledged Equity owned or held by or on behalf of such Grantor at a
public sale, it will, at any time and from time to time, upon the written
request of Lender, use its best efforts to take or to cause the issuer of such
Pledged Equity to take such action and prepare, distribute or file such
documents, as are required or advisable in the reasonable opinion of counsel for
Lender to permit the public sale of such Pledged Equity. Each of the Grantors
further agrees, jointly with the other Grantors and severally, to indemnify,
defend and hold harmless Lender, any underwriter and their respective officers,
directors, affiliates and controlling persons from and against all loss,
liability, expenses, costs of counsel (including reasonable fees and expenses of
legal counsel), and claims (including the costs of investigation) that they may
incur, insofar as such loss, liability, expense or claim, as applicable, relates
to such Grantor or any of its property, and arises out of or is based upon any
alleged untrue statement of a material fact contained in any prospectus (or any
amendment or supplement thereto) or in any notification or offering circular, or
arises out of or is based upon any alleged omission to state a material fact
required to be stated therein or necessary to make the statements in any thereof
not misleading, except insofar as the same may have been caused by any untrue
statement or omission based upon information furnished in writing to such
Grantor or the issuer of such Pledged Equity, as applicable, by Lender expressly
for use therein. Each of the Grantors further agrees, upon such written request
referred to above, to use its best efforts to qualify, file or register, or
cause the issuer of such Pledged Equity to qualify, file or register, any of the
Pledged Equity owned or held by or on behalf of such Grantor under the Blue Sky
or other securities laws of such states as may be requested by Lender and keep
effective, or cause to be kept effective, all such qualifications, filings or
registrations. Each of the Grantors will bear all costs and expenses of carrying
out its obligations under this Section. Each of the Grantors acknowledges that
there is no adequate remedy at law for failure by it to comply with the
provisions of this Section and that such failure would not be adequately
compensable in damages, and therefore agrees that its agreements contained in
this Section may be specifically enforced.
Section 12. Security Interest Absolute
--------------------------
All rights of Lender hereunder, the Security Interest and all
obligations of each of the Grantors hereunder shall be absolute and
unconditional irrespective of (a) any lack of validity or enforceability of the
Credit Agreement, any other Loan Document, any agreement with respect to any of
the Obligations or any other agreement or instrument relating to any of the
foregoing, (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to any departure from the Credit Agreement, any other Loan
Document or any other agreement or instrument relating to any of the foregoing,
(c) any exchange, release or non-perfection of any Lien on any other collateral,
or any release or amendment or waiver of, or consent under, or departure from,
any guaranty, securing or guaranteeing all or any of the Obligations or (d) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, any Grantor in respect of the Obligations or in respect of this
Security Agreement or any other Loan Document other than the indefeasible
payment of the Obligations in full in cash.
Section 13. Notices
-------
All communications and notices hereunder shall be in writing and
given as provided in the Credit Agreement. All communications and notices
hereunder to Borrower and any other Grantor shall be given to it at Borrower's
address.
Section 14. Binding Effect; Several Agreement; Assignments
----------------------------------------------
Whenever in this Security Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party; and all covenants, promises and agreements by or on
behalf of any Grantor that are contained in this Security Agreement shall bind
and inure to the benefit of each party hereto and its successors and assigns.
This Security Agreement shall become effective as to any Grantor when a
counterpart hereof executed on behalf of such Grantor shall have been delivered
to Lender and a counterpart hereof shall have been executed on behalf of Lender,
and thereafter shall be binding upon such Grantor and Lender and their
respective successors and assigns, and shall inure to the benefit of such
Grantor and Lender and their respective successors and assigns, except that none
of the Grantors shall have the right to assign its rights or obligations
hereunder or any interest herein or in the Collateral (and any such attempted
assignment shall be void), except as expressly contemplated by this Security
Agreement or the other Loan Documents. This Security Agreement shall be
construed as a separate agreement with respect to each of the Grantors and may
be amended, modified, supplemented, waived or released with respect to any
Grantor without the approval of any other Grantor and without affecting the
obligations of any other Grantor hereunder.
Section 15. Survival of Agreement; Severability
-----------------------------------
(a) All covenants, agreements, representations and warranties made
by the Grantors herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Security Agreement or any other
Loan Document shall be considered to have been relied upon by Lender and shall
survive the execution and delivery of any Loan Documents and the making of any
Loan or other extension of credit, regardless of any investigation made by
Lender or on their behalf and notwithstanding that Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended under the Credit Agreement, and shall continue in full force
and effect until this Security Agreement shall terminate.
(b) In the event any one or more of the provisions contained in this
Security Agreement or any other Loan Document should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein or therein shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
Section 16. Governing Law
-------------
This Security Agreement shall be governed by and construed in
accordance with New York laws.
Section 17. Counterparts
------------
This Security Agreement may be executed in two or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute but one contract (subject to Section 14), and shall
become effective as provided in Section 14. Delivery of an executed counterpart
of this Security Agreement by facsimile transmission shall be as effective as
delivery of a manually executed counterpart of this Security Agreement.
Section 18. Headings
--------
Section headings used herein are for convenience of reference only,
are not part of this Security Agreement and are not to affect the construction
of, or to be taken into consideration in interpreting, this Security Agreement.
Section 19. Jurisdiction; Consent to Service of Process
-------------------------------------------
(a) Each party hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
the New York counties of Nassau or Suffolk, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this Security
Agreement or the other Loan Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that, to the extent permitted by applicable law, all claims in respect of
any such action or proceeding may be heard and determined in such New York State
or, to the extent permitted by applicable law, in such federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Security
Agreement shall affect any right that any party hereto may otherwise have to
bring any action or proceeding relating to this Security Agreement or the other
Loan Documents in the courts of any jurisdiction.
(b) Each of the parties hereto hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Security
Agreement or the other Loan Documents in any court referred to in paragraph (a)
of this Section. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each party to this Security Agreement irrevocably consents to
service of process in the manner provided for notices in Section 13. Nothing in
this Security Agreement will affect the right of any party to this Security
Agreement to serve process in any other manner permitted by law.
Section 20. WAIVER OF JURY TRIAL
--------------------
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS SECURITY AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS SECURITY AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 21. Additional Subsidiaries
------------------------
(a) Each new Domestic Subsidiary of Borrower shall execute a
counterpart hereof, whereupon it shall become a Grantor hereunder with the same
force and effect as if originally named as a Grantor herein. The execution and
delivery of any such instrument shall not require the consent of any Grantor
hereunder. The rights and obligations of each of the Grantors hereunder shall
remain in full force and effect notwithstanding the addition of any new Grantor
as a party to this Security Agreement.
(b) To the extent that any Grantor form or acquires any Subsidiary,
whether or not a Domestic Subsidiary, such Grantor shall pledge the Equity
Interests in such Subsidiary to Lender in accordance with the terms hereof and
any such Equity Interests shall become Pledged Equity hereunder.
Section 22. Covenants of Lender
--------------------
The security interest granted to Lender hereunder shall terminate
when the Grantors shall have indefeasibly paid and discharged all of the
Obligations in full in cash. Upon such indefeasible payment and discharge of the
Obligations, Lender shall reassign, release, or deliver to the Grantors all
Collateral then held by or at the direction of Lender, and shall execute and
deliver to the Grantors (at the Grantors' sole expense) such termination
statements, satisfactions, releases, reconveyances, or reassignments as the
Grantors may reasonably request to evidence such termination.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Security Agreement as of the day and year first above written.
Vicon Industries, Inc.
By:
-------------------------
Name: Xxxx X. Xxxxx
Title: Vice President, Finance
TeleSite USA, Inc.
By:
--------------------------
Name: Xxxx X. Xxxxx
Title: Vice President, Finance
Vicon Industries International Sales Corp.
By:
--------------------------
Name: Xxxx X. Xxxxx
Title: Vice President, Finance
Washington Mutual Bank, FA
By:
---------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
