Security Agreement dated February 26, 2019 by LightPath Technologies, Inc. in favor of BankUnited, N.A., and joined by GelTech, Inc. and ISP Optics Corporation

 

 

 

 

(a) Books and Records. The term “Books and Records” means all of Debtor's and Guarantor’s books and records, including, but not limited to, records indicating, summarizing, or evidencing the Collateral, the Obligations, and Debtor's and Guarantor’s property, business operations, or financial condition; computer runs, invoices, tapes, processing software, processing contracts (such as contracts for computer time and services), and any computer prepared information, tapes, or data of every kind and description, whether in the possession of Debtor or in the possession of third parties.

(b) Collateral. The term “Collateral” means all personal property of Debtor and Guarantor, whether now owned or hereafter acquired, whether now existing or hereafter acquired or arising, and wherever located, including, without limitation, the personal property described in Exhibit “A” attached hereto and made a part hereof, but specifically excluding any and all Capital Stock in the Foreign Guarantors held by Borrower or any Domestic Guarantor (the “Excluded Collateral”).

(c) Environmental Laws. The term “Environmental Laws” means, without limitation, all legal requirements of any governmental authority pertaining to the environment and all laws, regulations, and executive orders, federal, state, and local, pertaining to environmental matters, as the same may be amended, replaced, or supplemented from time to time.

(d) Obligor. The term “Obligor” means Debtor, and each and every maker, endorser, guarantor, or surety of or party obligated for any of the Obligations.

(e) Uniform Commercial Code. The term “Uniform Commercial Code” means the Uniform Commercial Code in effect from time to time in the State of Florida.

 

(a) promptly give, execute, deliver, pledge, endorse, file, and/or record any notice, statement, financing statement, instrument, document, chattel paper, agreement, or other papers that may be reasonably necessary or desirable, or that Bank may reasonably request, in order to create, preserve, perfect, or validate any security interest granted pursuant hereto or intended to be granted hereunder or to enable Bank to exercise or enforce its rights hereunder or with respect to such security interest; and

(b) keep, stamp, or otherwise mark any and all documents, instruments, chattel paper, and its/their Books and Records relating to the Collateral in such manner as Bank may reasonably require.

(a) to transfer or register in the name of itself or its nominee any of the Collateral, and whether or not so transferred or registered, to receive the income or proceeds thereon or derived therefrom, and to hold the same as a part of the Collateral and/or apply the same to the Obligations;

(b) to exchange any of the Collateral for other property upon the reorganization, recapitalization, or other readjustment and in connection therewith, to deposit the Collateral or any part thereof with any nominee or depository upon such terms as Bank may determine in its sole discretion; and

(c) extend the time of payment, arrange for payment in installments, or release its security interest in any of the Collateral, or refrain from exercising any right against any Collateral.

(a) Duly Authorized. This Security Agreement has been duly authorized, executed, and delivered, and constitutes the legal, valid, and binding obligations of Debtor and Guarantor, enforceable against Debtor and Guarantor in accordance with its terms, except as they might be limited by bankruptcy, reorganization, moratorium, insolvency or other similar laws relating to or affecting the enforcement of creditors' rights in general.

(b) Not in Violation of Law. This Security Agreement does not and will not violate any applicable law, the organizational documents, or bylaws of Debtor or Guarantor, or any other material agreement or material instrument to which Debtor or Guarantor or any of its property may be bound or subject. To the knowledge of Debtor and Guarantor, neither Debtor, Guarantor nor the Collateral are in violation of or subject to any existing, pending, or threatened investigation or inquiry pertaining to an alleged violation of any Environmental Law.

(c) No Consents Required. No consent or approval of any person or entity, or of any public authority, is necessary for the valid execution, delivery, and performance of this Security Agreement, except where the failure to obtain such consent or approval could not reasonably be expected to have a material adverse effect.

(d) Title to the Collateral; Good Repair. Debtor or Guarantor is or, to the extent that any Collateral will be acquired after the date hereof, will be, the sole owner of the Collateral, holding good and marketable title thereto, and covenants to keep the Collateral free from any lien, security interest, encumbrance, or claim of any person or entity other than the liens and encumbrances of Bank and Permitted Liens. Each of Debtor or Guarantor has the right to grant the security interests created by this Security Agreement. The security interests granted and reaffirmed by this Security Agreement constitute first priority security interests in the Collateral, which will be perfected upon the filing by Bank of the appropriate financing statements subject only to Permitted Liens. Except as set forth on Schedule 5.13(c) to the Loan Agreement, the Collateral is not subject to or restricted by any agreement or license relating to patents, trademarks, trade secrets or copyrights, except to the extent that the Collateral encompasses third party software. Debtor shall keep the Equipment in good order and repair, reasonable wear and tear excepted, and will not waste or destroy any material portion of the Equipment.

(e) Notice of Interest. If requested by Bank, Debtor and Guarantor shall give notice of Bank's security interests in the Collateral to any third person with whom Debtor has any actual or prospective contractual relationship or other business dealings.

(a) Changes in Location of Chief Executive Office, Books and Records, Collateral.  Debtor shall provide Bank with prompt written notice of (i) any intended change in the chief executive office, or state of formation of Debtor or Guarantor, and/or the office where Debtor or Guarantor maintains its Books and Records all as set forth in the Borrower’s Information Certificate; and (ii) the location or movement of any Collateral to or at an address other than the Collateral Location (other than shipments of Inventory made by Debtor or Guarantor in the ordinary course of its business), all such notices to be received by Bank at least thirty (30) days prior to the effective date of any such change. If any such new location as set forth in subparagraphs (i) and (ii) hereof is on leased or mortgaged premises, Debtor or Guarantor will furnish Bank, prior to the effective date of any such change, with landlord's or mortgagee's waivers pertaining to such premises in form and substance reasonably satisfactory to Bank in its reasonable discretion.

(b) Maintenance and Inspection of Books and Records. Debtor shall maintain materially complete and accurate Books and Records and, with respect to the Collateral, shall make all necessary entries therein to reflect the location of its Accounts, Equipment and Inventory. Debtor shall permit Bank and its authorized agents and representatives to have full, complete, and unrestricted access to the Books and Records at all reasonable times during normal business hours and upon reasonable prior notice (provided, however, that no such notice shall be required upon the occurrence and during the continuance of an Event of Default) to inspect, audit, and make copies of any and all such Books and Records, provided, however, Debtor shall at all times have the right to be present at any such inspection or audit. Debtor shall permit Bank and its authorized agents and representatives to inspect any or all of the Collateral at all reasonable times, provided, however, Debtor shall at all times have the right to be present at any such inspection. Subject to the foregoing limitations, upon submission to Debtor of an invoice therefor, Debtor will reimburse Bank for any and all fees and costs related to any inspection by Bank and its authorized agents and representatives. Upon the request of Bank, Debtor shall deliver to Bank all evidence of ownership in the Collateral, including certificates of title with Bank's interest appropriately noted on the certificate and if any of the Collateral is located upon land that is the subject of a lease or mortgage, Debtor shall deliver an agreement of subordination from the landlord or mortgagee providing that any lien of such party shall be subordinate to the security interest of Bank granted herein. Bank's rights hereunder shall be enforceable at law or in equity, and Debtor consents to the entry of judicial orders or injunctions enforcing specific performance of such obligations hereunder; and

(c) Assignment of Accounts. With respect to Accounts, Debtor and Guarantor shall, upon reasonable request, promptly give to Bank, in a form reasonably acceptable to Bank, assignments of all Accounts, all original and other documents evidencing a right to payment of Accounts, aging’s, lists of account debtors, copies of purchase orders, invoices, shipping and delivery receipts, and such other data concerning the Accounts as Bank may reasonably request. If any of the Accounts that are Collateral arise out of contracts with the United States or any of its departments, agencies, or instrumentalities, Debtor shall promptly notify and identify same to Bank, and shall promptly execute and deliver to Bank an assignment of claims for such Accounts in a form reasonably acceptable to Bank, and shall take all steps deemed reasonably necessary or desirable by Bank to protect Bank’s interest therein under the Federal Assignment of Claims Act, as amended from time to time, or any similar law or regulation. After the occurrence and during the continuation of an Event of Default, Debtor agrees that Bank and its authorized agents and representatives shall at all times have the right to confirm orders and to verify any or all of the Accounts in Bank’s name, or in any fictitious name used by Bank for verifications.

(a) Breach Under this Security Agreement. A breach by Debtor or Guarantor of any term, obligation, provision, covenant, representation, or warranty arising under this Security Agreement (provided that if the default is curable, Debtor or Guarantor shall have twenty (20) calendar days to cure any such default so long as neither the value of Bank’s rights in the Collateral or the value of the Collateral is materially impaired); or

(b) Default under Loan Agreement. If an “Event of Default” (as defined in the Loan Agreement) continues beyond any applicable cure or grace period.

(a) Rights in General. In addition to the remedies of Bank pursuant to the Loan Documents, upon the occurrence and during the continuation of an Event of Default Bank may, at its option, exercise any and all rights and remedies it has under this Security Agreement, any other Loan Document, and/or applicable law.

(b) Right of Set-off. If any one or more Events of Default shall have occurred and are continuing, whether or not Bank shall have made any demand under any of the Loan Documents, and regardless of the adequacy of any Collateral for the Obligations or other means of obtaining repayment of the Obligations , Bank shall have the right, and is specifically authorized hereby to setoff against and apply to the then unpaid balance of the Obligations any items or funds of Debtor and/or any Obligor held by Bank or any Affiliate, any and all deposits (whether general or special, time or demand, matured or unmatured) or any other property of Debtor and/or any Obligor, including, without limitation, securities and/or certificates of deposit, now or hereafter maintained by Debtor and/or any Obligor for its or their own account with Bank or any Affiliate, and any other indebtedness at any time held or owing by Bank or any Affiliate to or for the credit or the account of Debtor and/or any Obligor, even if effecting such set-off results in a loss or reduction of interest or the imposition of a penalty applicable to the early withdrawal of time deposits. For such purpose, Bank shall have, and Debtor hereby grants to Bank, a first lien on and security interest in such deposits, property, funds, and accounts, and the proceeds thereof. Debtor further authorizes any Affiliate, upon and following the occurrence and during the continuation of an Event of Default, at the request of Bank, and without notice to Debtor, to turn over to Bank any property of Debtor, including, without limitation, funds and securities held by the Affiliate for Debtor's account, and to debit any deposit account maintained by Debtor with such Affiliate (even if such deposit account is not then due or there results a loss or reduction of interest or the imposition of a penalty in accordance with law applicable to the early withdrawal of time deposits), in the amount requested by Bank up to the amount of the Obligations, and to pay or transfer such amount or property to Bank for application to the Obligations.

(c) Additional Rights and Remedies. In addition to the rights and remedies available to Bank as set forth above, upon the occurrence and during the continuance of an Event of Default hereunder , Bank may, at its option, immediately and without notice, do any or all of the following, which rights and remedies are cumulative, may be exercised from time to time, and are in addition to any rights and remedies available to Bank under any other agreement or instrument by and between any Obligor and Bank: (i) exercise any and all of the rights and remedies of a secured party under the Uniform Commercial Code, including, without limitation, the right to require Debtor to assemble the Collateral and make it available to Bank at a place reasonably convenient to the parties; (ii) operate, utilize, recondition and/or refurbish any of the Collateral by any means deemed appropriate by Bank, in its sole discretion, including, without limitation, converting raw materials and work-in-process into finished goods; (iii) notify the account debtors for any of the Accounts to make payment directly to Bank, or to such post office box as Bank may direct; (iv) vote the Collateral and exercise all rights with the same force and effect as an absolute owner; (v) demand, sue for, collect, or retrieve any money or property at any time payable, receivable on account of, or in exchange for, or make any compromise, or settlement deemed desirable with respect to any of the Collateral; and/or (vi) upon ten (10) calendar days' prior written notice to Debtor (or one (1) day notice by telephone with respect to Collateral that is perishable or threatens to decline rapidly in value), which Debtor hereby acknowledges to be sufficient, commercially reasonable and proper, Bank may sell, lease, or otherwise dispose of any or all of the Collateral at any time and from time to time at public or private sale, with or without advertisement thereof, and apply the proceeds of any such sale first to Bank's expenses in preparing the Collateral for sale (including reasonable attorneys' fees) and second toward payment of the Obligations in any order deemed appropriate by Bank in its sole discretion, and third with any excess being paid by Bank to Debtor; provided, however, that nothing herein shall be construed to prohibit Bank from seeking a deficiency judgment if the proceeds do not fully and completely satisfy the Obligations. Bank shall be under no obligation to make or complete a sale regardless of whether notice of sale had been given. Moreover, Bank may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor and any such sale may, without further notice, be made at the time and place to which it was so adjourned. Debtor grants a royalty-free license to Bank for all patents, service marks, trademarks, tradenames, copyright, computer programs, and other intellectual property and proprietary rights sufficient to permit Bank to exercise all rights granted to Bank under this Section. Bank or anyone else may be the purchaser of any or all of the Collateral so sold and thereafter hold such Collateral absolutely, free from any claim or right of whatsoever kind, including any equity of redemption of Debtor or any other Obligor, any such notice, right, and/or equity of redemption being hereby expressly waived and released.

(d) Continuing Enforcement of the Loan Documents. If, after receipt of any payment of all or any part of the Obligations or the obligations of Debtor to Bank, Bank is compelled or agrees, for settlement purposes, to surrender such payment to any person or entity for any reason, then this Security Agreement and the other Loan Documents shall continue in full force and effect or be reinstated, as the case may be. The provisions of this Paragraph shall survive the termination of this Security Agreement and the other Loan Documents and shall be and remain effective notwithstanding the payment of the Obligations, the cancellation of the Security Agreement or any other Loan Document, the release of any security interest, lien, or encumbrance securing the Obligations or any other action that Bank may have taken in reliance upon its receipt of such payment. Debtor also agrees to indemnify, defend, and hold harmless Bank with respect to any and all claims, expenses, demands, losses, costs, fines, or liabilities of any kind (including, without limitation, those involving death or personal injury) arising from or in any way related to any hazardous materials or dangerous environments within, on, from, related to, or affecting any real property owned or occupied by Debtor, except to the extent attributable to the negligence or misconduct of Bank.