SECURITY AGREEMENT (EQUIPMENT)
Exhibit 10.27
SECURITY AGREEMENT
(EQUIPMENT)
(EQUIPMENT)
X. Xxxxx of Security Interest. The undersigned, Synergetics, Inc. (“Debtor”), for value
received, hereby sells, assigns, transfers, conveys and mortgages to The Industrial Development
Authority of St. Xxxxxxx County, Missouri (“Secured Party”) and grants Secured Party a continuing
security interest in all of Debtor’s right, title and interest in and to the following described
property, all accessories and parts now or hereafter affixed or appertaining thereto or used in
connection therewith and all additions, accessions and substitutions thereto or therefor and all
proceeds (including without limitation insurance proceeds), products, rents and profits thereof,
whether cash or non-cash, immediate or remote (collectively, the “Collateral”):
all personal property, whether now owned or hereafter acquired by
Debtor, and used or intended to be used in the possession,
occupation or enjoyment thereof, and all replacements, additions and
substitutions thereof and thereto, including (but not limited to)
all furniture, furnishings and equipment
to secure the payment of (i) any and all indebtedness, liabilities and obligations of Debtor to
Secured Party under that certain Guarantor Agreement dated as of September 1, 2002 from the Debtor,
Xxxxxxx X. Xxxxx, Xxxxx X. Xxxxxxxx and Xxxx X. Xxxxx, Xx. for the benefit of the Secured Party
(the “Guaranty”), (ii) any and all indebtedness, liabilities and obligations of Debtor under this
Security Agreement, and (iii) any and all costs of collection, legal expenses and attorneys’ fees
and expenses incurred by Secured Party upon the occurrence of an Event of Default under this
Agreement, in collecting or enforcing payment of any such indebtedness, liabilities or obligations
or in preserving, protecting or realizing on the Collateral hereunder or in representing Secured
Party in connection with bankruptcy or insolvency proceedings (hereinafter collectively referred to
as the “Obligations”).
II. Possession of Collateral. Until an Event of Default has occurred under this
Agreement, Debtor may have possession of the Collateral and use the same in any lawful manner not
inconsistent with this Agreement or with any policy of insurance covering any of the Collateral.
III. Covenants. Debtor hereby represents, warrants, covenants and agrees that: (1) it is
duly organized, validly existing and in good standing under the laws of the State of Missouri, (2)
it has full corporate power and authority to borrow money from Secured Party and to grant to
Secured Party the security interest in the property hereby stated to be granted, (3) the officers
of Debtor executing this Agreement have been duly elected and qualified and have been duly
authorized and empowered to execute, deliver and perform the terms of this Agreement on behalf of
Debtor and (4) the execution, delivery and performance of this Agreement by Debtor do not and will
not violate any of the terms or provisions of the Articles or Certificate of Incorporation or
By-Laws of Debtor; (5) the execution, delivery and performance of this Agreement by Debtor do not
and will not violate any law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to Debtor or the terms of any
indenture, agreement, document, instrument or undertaking to which Debtor is a party or by which it
is bound; (6) if Debtor shall have advised Secured Party that any of the Collateral is being
acquired with any of the proceeds of any of the Obligations, such proceeds may be disbursed by
Secured Party directly to the seller of such Collateral; (7) unless otherwise consented to in
writing by Secured Party, the Collateral (i) is and will be kept at Debtor’s principal place of
business, the address thereof being that shown at the end of this Agreement, (if mobile equipment
or equipment of a type normally used in more than one location, remaining there when not in use),
(ii) is not of a type normally used in more than one state and will not be so used, (iii) will not
be attached or affixed in any manner to or become a part of any real estate or other personal
property apart from other items of the Collateral and (iv) is in the exclusive possession and
control of Debtor; (8) it has full title to the Collateral, and will at all times keep the
Collateral free and clear of any and all liens, claims and encumbrances whatsoever other than the
security interest hereunder, security
interests currently in effect in favor of Union Planters Bank, N.A. or Xxxxxx Financial, Inc.; (9)
no financing statement (other than any which may have been filed on behalf of Secured Party, Union
Planters Bank, N.A. or Xxxxxx Financial, Inc.) covering any of the Collateral is on file in any
public office; (10) Debtor will from time to time, on request of Secured Party, execute and deliver
or authorize the filing of such financing statements and other documents and instruments and do
such other acts and things, all as Secured Party may request, to establish and maintain a valid and
perfected security interest in the Collateral to secure the payment of the Obligations, including,
without limitation, the execution of applications for certificates of ownership or title naming
Secured Party as first lienholder and the delivery of such certificates to Secured Party and Debtor
hereby authorizes the filing of financing statements under the Uniform Commercial Code in
connection with the security interest granted hereunder; (12) it will reimburse Secured Party for
all costs incident to perfecting, maintaining or terminating the security interest granted hereby,
including filing and recording fees, fees for obtaining and transferring certificates of title and
all taxes and legal and clerical fees and expenses paid or incurred by Secured Party in connection
with any of the foregoing; (13) it will not sell, transfer, lease or otherwise dispose of or offer
to dispose of any of the Collateral or any interest therein except with the prior written consent
of Secured Party and Bondowner Consent as defined in that certain Indenture of Trust dated as of
September 1, 2002 between the Secured Party and UMB Bank, N.A., as Trustee; (14) it will at all
times keep the Collateral in first class order and repair, excepting any loss, damage or
destruction which is fully covered by proceeds of insurance, and will not use the Collateral in
violation of any law, regulation or insurance policy; (15) it will pay promptly when due all taxes
and assessments on the Collateral or for its use or operation or upon this Agreement or any
Obligation or with respect to the perfection of any security interest or other lien hereunder
(except as otherwise provided by law); (16) it will at all times keep the Collateral insured
against loss, damage, theft and other risks, in such amounts and companies and under policies in
such form, all as shall be satisfactory to Secured Party, which policies shall provide that loss
thereunder shall be payable to Secured Party and shall provide for thirty (30) days’ minimum
written notice of cancellation or amendment to Secured Party and that coverage in favor of Secured
Party will not be impaired in any way by any act, omission or default of Debtor or any other person
(and Secured Party may apply any proceeds of such insurance which may be received by it toward
payment of the Obligations, whether or not due, in such order of application as the Secured Party
may determine) and such policies and certificates thereof shall, if Secured Party so requests, be
deposited with Secured Party; (17) Secured Party may examine and inspect the Collateral or any part
thereof, wherever located, at any reasonable time or times; (18) it shall notify Secured Party in
writing at least fifteen (15) days in advance of its new name and the effective date of its name
change before changing its name; (19) it shall give Secured Party fifteen (15) days’ advance
written notice of any change of its principal place of business and of the cessation of maintenance
of any other place of business of Debtor; and (20) it shall immediately notify Secured Party in
writing of any change of location of any of the Collateral to any location other than Debtor’s
principal place of business.
IV. Additional Actions by Secured Party. Secured Party, at its option, may from time to
time perform any agreement of Debtor hereunder which Debtor shall fail to perform and take any
other action which Secured Party deems necessary for the maintenance or preservation of any of the
Collateral or its interest therein (including, without limitation, the discharge of taxes or liens
of any kind against the Collateral or the procurement of insurance or the payment of warehousing
charges, landlord’s bills or other charges), and Debtor agrees to forthwith reimburse Secured Party
for all costs and expenses incurred by Secured Party in connection with the foregoing, together
with interest thereon at a rate per annum equal to the lesser of Twenty Percent (20%) or the
highest rate allowed by law from the date incurred until reimbursed by Debtor. Secured Party may
for the foregoing purposes act in its own name or that of Debtor and may also so act for the
purposes of adjusting, settling or cancelling any policy of insurance on the Collateral or
endorsing any draft received in connection therewith, in payment of a loss or otherwise, for all of
which purposes Debtor hereby grants to Secured Party its power of attorney, irrevocable during the
term of this Agreement. This power of attorney shall not be affected by the subsequent disability
or incapacity of the Debtor and shall in all respects constitute a durable power of attorney.
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V. Defaults. The occurrence of any of the following events or conditions shall constitute
an “Event of Default” hereunder: (a) non-payment of any principal of or interest on any of the
Obligations owed by Debtor to Secured Party within fifteen days of the date when the same shall
become due and payable, whether by reason of demand, acceleration or otherwise; (b) default by
Debtor in the due performance or observance of any of the terms, provisions, covenants or
agreements contained in this Agreement for a period of 30 days after written notice of such default
has been given to Debtor by Secured Party during which time such default is neither cured by Debtor
nor waived in writing by the Secured Party, provided that, if the failure stated in the notice
cannot be corrected within said 30-day period, Secured Party may, with Bondowner Consent, consent
in writing to an extension of such time prior to its expiration if corrective action is instituted
by Debtor within the 30-day period and diligently pursued to completion; (c) any representation or
warranty made by Debtor in this Agreement shall prove to be untrue or incorrect in any material
respect; (d) loss, theft, damage, destruction, sale or encumbrance to or of any of the Collateral
or the making of any levy, seizure or attachment thereof or thereon; or (e) any event of default
shall occur under or within the meaning of the Guaranty or under any agreement, document or
instrument (including any guaranty) evidencing or securing any of the Obligations secured hereby.
VI. Remedies. Upon the occurrence of an Event of Default: (a) notwithstanding any
provision contained in any agreement secured hereby to the contrary, Secured Party shall be under
no further obligation to make any further advances required by such agreement; (b) Secured Party
may, by written notice to Debtor effective upon mailing or delivery, declare the principal of and
the interest on the Obligations of Debtor to Secured Party to be forthwith due and payable,
whereupon all such indebtedness, liabilities and other obligations shall become forthwith due and
payable, notwithstanding any other terms thereof or hereof; (c) whether or not such indebtedness,
liabilities or other obligations are declared to be forthwith due and payable, Secured Party shall
have the right to take immediate possession of the Collateral covered hereby, and, for that purpose
may pursue the same wherever said Collateral may be found, and may enter upon any of the premises
of Debtor with or without force or process of law, wherever said Collateral may be or may be
supposed to be, and search for the same, and, if found, take possession of and remove and sell and
dispose of said Collateral, or any part thereof; and (d) Secured Party may exercise any one or more
of the rights and remedies accruing to a secured party under the Uniform Commercial Code of the
relevant state or states and any other applicable law upon default by a debtor. Debtor shall, upon
Secured Party’s request, assemble the Collateral and make the Collateral available to Secured Party
at any place designated by Secured Party which is reasonably convenient to Debtor.
VII. Foreclosure. Foreclosure on the Collateral covered hereby may be had at public or
private sale or sales, disposing of such portion or portions of the Collateral at each such sale,
for cash or on credit, on such terms, at such place or places, and with or without the Collateral
being present at such sale, all as Secured Party in its sole and absolute discretion shall
determine from time to time. In the case of public sale, notice thereof shall be deemed and held
to be adequate and reasonable if such notice shall appear three (3) times in a newspaper published
in the City or County wherein the sale is to be held, the first such publication being at least ten
(10) days before such sale and the last such publication being not more than three (3) days before
such sale. In the case of a private sale, notice thereof shall be deemed and held to be adequate
and reasonable if such notice shall be mailed to Debtor at its last known address at least ten (10)
days before such sale. The enumeration of these methods of notice shall not be deemed or construed
to render unreasonable any other method of notice which would otherwise be reasonable under the
circumstances.
VIII. Application of Proceeds and Deficiency. Secured Party may apply the net proceeds of
any sale, lease or other disposition of the Collateral, after deducting all costs and expenses of
every kind incurred therein or incidental to the retaking, holding, preparing for sale, selling,
leasing or the like of the Collateral on Debtor’s premises, or elsewhere, or in any way related to
Secured Party’s rights thereunder (including, without limitation, attorneys’ fees and expenses,
court costs, bonds and other legal expenses, insurance, security guard and alarm expenses incurred
in connection with the holding of the Collateral, advertisements of sale of the Collateral, and
rental and utilities expense on the premises or elsewhere in connection with storage
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and sale of the Collateral) to the payment, in whole or in part, of the Obligations of Debtor to
Secured Party, whether due or not due, absolute or contingent, and only after payment by Secured
Party of any other amounts required by any existing or future provision of law (including Section
9-504(1)(c) of the Uniform Commercial Code or any comparable statutory provision of any
jurisdiction in which any of the Collateral may at the time be located) need Secured Party account
to Debtor for the surplus, if any. Debtor shall remain liable to Secured Party for the payment of
any deficiency, with interest.
IX. Secured Party’s Care of Collateral. Secured Party shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its possession if it takes
such action for that purpose as Debtor requests in writing, but failure of Secured Party to comply
with any such request shall not of itself be deemed a failure to exercise reasonable care, and no
failure of Secured Party to preserve or protect any rights with respect to such Collateral against
prior parties, or to do any act with respect to the preservation of such Collateral not so
requested by Debtor, shall be deemed a failure to exercise reasonable care in the custody or
preservation of such Collateral.
X. Amendments; Waivers; Remedies Cumulative. No delay on the part of Secured Party in the
exercise of any right hereunder shall operate as a waiver thereof and no single or partial exercise
by Secured Party of any right shall preclude other or further exercise thereof or the exercise of
any other right. Each and every right granted to Secured Party hereunder, under any other security
agreement, note, loan agreement, mortgage, pledge or other instrument, document or agreement, or at
law or in equity, shall be deemed cumulative and may be exercised from time to time. Secured Party
shall not by any act, delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder and no waiver whatsoever shall be valid unless in writing and signed by Secured
Party, and then only to the extent therein set forth. A waiver by Secured Party of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which
Secured Party would otherwise have on any future occasion. This Agreement may not be amended
except by a writing duly signed by Debtor and Secured Party. The headings of the paragraphs hereof
shall not be considered in the construction or interpretation of this Agreement.
XI. Durable Power of Attorney. Debtor hereby makes, constitutes and appoints Secured
Party the true and lawful agent and attorney-in-fact of Debtor with full power of substitution to
do any and all things necessary and take such action in the name and on behalf of Debtor to carry
out the intent of this Agreement, including, without limitation, the grant of the security interest
granted under this Agreement and to perfect and protect the security interest granted to Secured
Party in respect to the Collateral and Secured Party’s rights created under this Agreement, which
power of attorney is irrevocable during the term of this Agreement. Debtor agrees that neither
Secured Party nor any of its shareholders, directors, officers, employees, agents, designees or
attorneys-in-fact will be liable for any acts of commission or omission, or for any error of
judgment or mistake of fact or law in respect to the exercise of any power of attorney provided for
under this Agreement. This power of attorney shall not be affected by the subsequent disability or
incapacity of the Debtor and shall in all respects constitute a durable power of attorney.
XII. Notices. All notices provided for in this Agreement shall be in writing and shall be
deemed to have been given when delivered personally or when deposited in the United States mail,
registered or certified mail, return receipt requested and postage prepaid, addressed as follows,
or to such other address as may hereafter be designated in writing by the respective parties
hereto: if to Secured Party to 0000 Xxx Xxxxxx Xxxx Xxxxx, Xx. Xxxxxxx, Xxxxxxxx 00000, Attention:
President, and if to Debtor, to the address of the principal place of business of Debtor listed at
the end of this Agreement.
XIII. Applicable Law and Severability. It is the intention of the parties hereto that
this Agreement is entered into pursuant to the provisions of the Uniform Commercial Code as it is
in force in the State of Missouri (the “Code”). Any applicable provisions of the Code, not
specifically included herein, shall be deemed a part of this Agreement in the same manner as if set
forth herein at length; and any provisions of
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this Agreement that might in any manner be in conflict with any provision of the Code shall be
deemed to be modified so as not to be inconsistent with the Code. In all respects this Agreement
and all transactions, assignments and transfers hereunder, and all the rights of the parties, shall
be governed as to validity, construction, enforcement and in all other respects by the laws of the
State of Missouri. To the extent any provision of this Agreement is not enforceable under
applicable law, such provision shall be deemed null and void and shall have no effect on the
remaining portions of this Agreement.
XIV. Successors and Assigns; Other Obligations; Duration of Security Interest. This
Agreement shall be binding upon and inure to the benefit of Debtor and Secured Party and their
respective heirs, executors, administrators, personal representatives, successors and assigns,
except that Debtor may not assign any of its rights or delegate any of its obligations under this
Agreement. Nothing contained in this Agreement shall be deemed or held to impair or limit in any
way the enforcement of the terms of any instrument evidencing any indebtedness, liability or other
obligation of Debtor to Secured Party. This Agreement shall continue in full force and effect and
the security interest granted hereby and all of the representations, warranties, covenants and
agreements of Debtor hereunder and all of the terms, conditions and provisions hereof relating
thereto shall continue to be fully operative until such time as (a) Debtor shall have paid or
caused to be paid, or otherwise discharged, all Obligations to Secured Party and (b) there shall be
no remaining obligation of Secured Party to advance funds to Debtor under any loan agreement or
credit agreement or otherwise. Debtor expressly agrees that to the extent a payment or payments to
Secured Party, or any part thereof, are subsequently invalidated, declared to be void or voidable
or set aside and are required to be repaid to a trustee, custodian, receiver or any other party
under any bankruptcy act, state or federal law, common law or equitable cause, then to the extent
of such payment or repayment, the obligation or part thereof intended to be satisfied shall be
revived and continued in full force and effect as if said payment had not been made.
XV. Guaranty to Prevail. In the event of any conflict between the provisions of this
Agreement and the Guaranty, the provisions of the Guaranty shall prevail.
XVI. Miscellaneous. The neuter pronoun, when used herein, shall include the masculine and
feminine and also the plural. If this Agreement is not dated when executed by Debtor, Secured
Party is authorized, without notice to Debtor, to date this Agreement.
XVII. Changes in Organization. Debtor agreements to immediately notify the Secured Party
and UMB Bank, N.A., as Trustee in writing if Debtor changes its place of formation, changes its
form of organization, changes its name or takes any other action which could affect the property
location for filing of Uniform Commercial Code financing statements or continuation statements or
which could render existing filings seriously misleading or invalid and promptly deliver to the
Secured Party or UMB Bank, N.A., as Trustee such additional information or documentation regarding
such change as such parties may reasonably request for the purpose of amending and/or refilling, at
the expense of the Debtor , as may be reasonably determined to be necessary by the Secured Party or
UMB Bank, N.A., as Trustee and their respective counsel.
XVIII. Entire Agreement. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT
OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE. TO PROTECT THE DEBTOR AND THE SECURED PARTY FROM MISUNDERSTANDING OR
DISAPPOINTMENT, ANY AGREEMENTS THE DEBTOR AND THE SECURED PARTY REACH COVERING SUCH MATTERS ARE
CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN
THE SECURED PARTY AND THE DEBTOR, EXCEPT AS THE SECURED PARTY AND THE DEBTOR MAY LATER AGREE IN
WRITING TO MODIFY IT.
IN WITNESS WHEREOF, Debtor has executed this Security Agreement at St. Xxxxxxx, Missouri as of
this first day of September, 2002.
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| SYNERGETICS, INC. (Debtor) |
||
| By: /s/ Xxxx X. Xxxxx | ||
| Title: EXECUTIVE VICE PRESIDENT | ||
| Address of Principal Place of Business of Debtor: | ||
| 00 Xxxxxx Xxxxx X’Xxxxxx, Xxxxxxxx 00000 |
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