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Exhibit 10.6
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of June 4, 2001, is made by Xxxxxx X.
Xxxxxxx ("Pledgor"), to individuals listed on Schedule A hereto ("Lenders")
For valuable consideration and in order to induce Lenders to make the
loan represented by those Notes of even date herewith executed by Borrower in
favor of Lenders (the "Notes"), to Hypercom Corporation, a Delaware corporation
("Borrower"), including without limitation, Pledgor agrees as follows:
SECTION 1. GRANT OF SECURITY. Pledgor hereby assigns, pledges, and
grants to the Lenders a security interest in all of the personal property
described in Schedule B hereto and all proceeds thereof (collectively the
"Collateral").
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures the
payment and performance of the Notes (all such indebtedness and obligations of
Borrower being the "Obligations").
SECTION 3. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and
warrants as follows:
(a) Pledgor has full authority to enter into, deliver and
perform in accordance with the terms of this Agreement, and the granting of the
security interest to Lenders as provided herein does not contravene or violate
any agreement, law or document applicable to Borrower or Pledgor.
(b) The Collateral is owned by Pledgor and is and will be free
and clear of any lien, security interest, charge or encumbrance except for the
security interest created by this Agreement and such liens and encumbrances as
may be first approved in writing by Lenders. No financing statement covering the
Collateral or any proceeds thereof is on file in favor of anyone other than
Lenders.
SECTION 4. FURTHER ASSURANCE. Pledgor agrees that from time to time,
at the expense of Pledgor, that he will promptly execute and deliver all further
instruments and documents, and take all further action that may be necessary or
desirable, or that Lenders may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable Lenders to exercise and enforce its rights and remedies hereunder with
respect to any Collateral.
SECTION 5. TRANSFERS AND OTHER LIENS. Pledgor shall not:
(a) Sell, assign (by operation of law or otherwise) or otherwise
dispose of any interest in the Collateral.
(b) Create or suffer to exist any lien, security interest or
other charge or encumbrance upon or with respect to any of the Collateral except
for the security interest created by this Agreement.
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SECTION 6. LENDERS APPOINTED ATTORNEYS-IN-FACT. Pledgor hereby
irrevocably appoints Lenders the Pledgor's attorneys-in-fact, which such powers
of attorney are coupled with an interest, with full authority in the place and
stead of Pledgor and in the name of Pledgor, Lenders or otherwise, from time to
time in Lenders' discretion, to take any action and to execute any instrument
which Lenders may deem necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation:
(a) to ask, demand, collect, xxx for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other
instruments, documents or chattel paper in connection with the Collateral;
(c) to file any claims or take any action or institute any
proceedings which Lenders may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the rights of Lenders with respect
to any of the Collateral; and
(d) to sell, assign, transfer, pledge or otherwise enter into
agreements in connection with or otherwise deal with, any or all of the
Collateral as fully and completely as though Lenders were the absolute owner
thereof for all purposes. Upon the occurrence of an Event of Default and at any
time thereafter, Lenders shall have the right to take possession of all
Collateral.
SECTION 7. LENDERS MAY PERFORM. If Pledgor fails to perform any
agreement contained herein, Lenders may themselves perform, or cause performance
of, such agreement, and the expenses of Lenders incurred in connection therewith
shall be payable by Pledgor.
SECTION 8. LENDERS' DUTIES. The powers conferred on Lenders hereunder
are solely to protect their interest in the Collateral and shall not impose any
duty upon them to exercise any such powers. Except for the safe custody of any
Collateral in their possession and the accounting for moneys actually received
by them hereunder, Lenders shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral.
SECTION 9. DEFAULT. An Event of Default shall exist hereunder if:
(a) Borrower or Pledgor fails to pay, where due, all obligations
owing under the Notes;
(b) Pledgor breaches any representation, warranty, covenant or
term of this Agreement; and
(c) Any material part of the Collateral is lost, destroyed,
attached, encumbered or otherwise impaired.
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SECTION 10. REMEDIES. Upon the happening of any of the events
specified above:
(a) Lenders may exercise with respect to the Collateral any
remedy provided for herein, under any other agreement or otherwise available to
them, and all other rights and remedies of a secured party on default under the
Uniform Commercial Code (including the right to any deficiency remaining after
disposition of the Collateral for which Pledgor agrees to remain fully liable).
(b) Lenders may exercise any other rights or remedies they may
have either at law or in equity.
(c) All cash proceeds received by Lenders in respect of any
collection or other realization upon all or any part of the Collateral may, at
the discretion of Lenders, be applied in whole or in part by Lenders against all
or any part of the Obligations in such order and manner as Lenders shall elect.
Any surplus of such cash or cash proceeds held by Lenders and remaining after
payment in full of all the Obligations shall be paid over to Pledgor or to
whomsoever may be lawfully entitled to receive such surplus.
SECTION 11. SECURITY INTEREST ABSOLUTE. All rights of Lenders and
security interest hereunder, shall be absolute and unconditional, irrespective
of:
(a) any lack of validity or enforceability of any note or other
loan document, agreement or instrument delivered to Lenders;
(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 any loan agreement, note, or
other loan document, agreement or instrument delivered to Lenders;
(c) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guaranty, for all or any of the Obligations; or
(d) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Pledgor or a third party grantor of
a security interest.
SECTION 12. GENERAL AGREEMENTS.
(a) Lenders shall not be deemed to have waived any of their
rights hereunder or under any other agreement, instrument or paper signed by
Pledgor unless such waiver is in writing and signed by Lenders. No delay or
omission on the part of Lenders in exercising any right shall operate as a
waiver thereof or of any other right. A waiver upon any one occasion shall not
be construed as a bar or waiver of any right or remedy on any future occasion.
All of the rights and remedies of Lenders, whether evidenced hereby or by any
other agreement, instrument or paper, shall be cumulative and may be exercised
consecutively or concurrently.
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(b) This Agreement shall terminate upon the payment in full of
all Obligations and the termination of all agreements giving rise thereto in
accordance with their respective terms.
(c) Lenders and Pledgor are not and shall not be considered as
joint venturers, partners or agents of the other for purpose of fulfilling the
obligations of this Agreement and neither shall have the power to bind or
obligate the other. Neither Lenders nor Pledgor shall be liable for any of the
debts or other liabilities contracted by or due from the other and each will
hold the other free and harmless therefrom.
(d) If any provision of this Agreement or its application to any
person or circumstance is invalid or unenforceable, then the remainder of this
Agreement or the application of such provision to other persons or circumstances
shall not be affected thereby.
SECTION 13. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement nor consent to any departure by Lenders herefrom shall in any
event be effective unless the same shall be in writing and signed by Lenders and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
SECTION 14. ADDRESSES FOR NOTICES. All notices and communications
required or permitted under this Agreement shall be in writing and shall be
delivered by hand, by facsimile transmission, by registered or certified mail,
postage prepaid, or by overnight courier, addressed as follows:
If to Pledgor: If to Lenders:
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxxx
0000 Xxxx Xxxxxxxx Xxxx P.O. Box 32097
Phoenix, Arizona 85053 Xxxxxxx, Xxxxxxx 00000
Fax No: (000) 000-0000
All notices and communications shall be effective upon the earlier of
actual receipt or, if transmitted by facsimile during the normal business hours
of the recipient party or, if delivered by mail, five days after being deposited
in the mail, postage prepaid and addressed as required by this Section 14.
Either party may, by written notice so delivered to the other, change the
address to which delivery shall thereafter be made.
SECTION 15. WAIVER OF NOTICE OF ACCEPTANCE. Pledgor waives notice of
acceptance of this Agreement by Lenders.
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IN WITNESS WHEREOF, Pledgor has caused this Agreement to be duly executed
and delivered by an officer thereunto duly authorized and empowered as of the
date first written above.
"PLEDGOR"
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Address: 0000 Xxxx Xxxxxxxx Xx.
Xxxxxxx, Xxxxxxx 00000
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SCHEDULE A
TO THE SECURITY AGREEMENT
NORTON FAMILY LIVING TRUST UTD 0-0-00
Xxxx Xxxxxx Xxx 00
Xxxxxxxxx, Xxxxxx 00000
Attention: Xxxx X. Xxxxxx
XXXXXX FAMILY LIVING TRUST UTD 2-15-96
Post Office Box 44015
Phoenix, Arizona 85064
Attention: Xxxx X. Xxxxxx III
XXXXXX X. XXXXXXXX
Xxxx Xxxxxx Xxx 00000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
GUARANTEE & TRUST COMPANY
TTEE FBO Xxxx X. Xxxxxx
SEP XXX
Account #705-80762
c/o DB Xxxx Xxxxx LLC
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
XXXXXX X. XXXXXXXXX
0000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxxxx
FIRST WESTERN CAPITAL LLC
An Arizona Limited Liability Corporation
0000 Xxxxxxx Xxxxxx, Xxxx X
Xxxxxx, Xxxxx 00000
Attention: Xx. Xxxxx X. Xxxx
XX. XXXX X. XXXXX
0 Xxxxx Xxxxx Xxxx
Xxxxxxxxxx Xxxxx, XX 00000
Attention: Xx. Xxxx X. Xxxxx
XXXXXXX X. XXXXXXXX
000 X. Xxxxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx Ph.D.
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SCHEDULE B
COLLATERAL
1. AMENDED AND RESTATED PROMISSORY NOTE dated as of December 27, 2000 executed
by Hypercom Corporation.
2. AMENDED AND RESTATED PROMISSORY NOTE dated as of March 31, 2001 executed by
Hypercom Corporation.
3. Promissory Note dated June 5, 2001 executed by Hypercom Corporation.
