SECURITY AGREEMENT
Exhibit
10.3
This
Security Agreement (“Agreement”)
is
entered into effective as of May 1, 2006 by and among VendingData Corporation,
a
Nevada corporation (“Grantor”),
and
each of Bricoleur Partners, L.P., Bricoleur Enhanced, L.P., BRIC 6, L.P.
and
Bricoleur Offshore Ltd. (“Secured
Parties”).
RECITALS
A. The
Grantor and the Secured Parties are parties to (i) an 8% Senior Secured Note
Purchase Agreement of even date herewith (the “Note
Purchase Agreement”)
under
which the Grantor has issued certain 8% Senior Secured Promissory Notes (
each
an “8% Note”)
of
even date in favor of the Secured Parties in the aggregate original principal
amount of $13,000,000, and (ii) a Letter Agreement dated May 2, 2006 (the
“Letter
Agreement”)
pursuant to which the Grantor has issued Convertible Promissory Notes (
collectively with the 8% Notes, the “Notes”)
of
even date in favor of the Secured Parties in the aggregate principal amount
of
$1,500,000.
B. As
a
condition to extending credit to the Grantor under the Notes, the Secured
Parties have required the execution and delivery of this Agreement by the
Grantor.
AGREEMENT
NOW,
THEREFORE, for good and valuable consideration, the receipt and adequacy
of
which hereby is acknowledged, Grantor hereby represents, warrants, covenants,
agrees, assigns and grants as follows:
1. Definitions.
1.1 Unless
the context otherwise requires, terms defined in the Uniform Commercial Code
of
the State of Nevada (the “Uniform
Commercial Code”)
and
not otherwise defined in this Agreement shall have the meanings defined for
those terms in the Uniform Commercial Code.
1.2 “Collateral”
means
and includes all present and future right, title and interest of Grantor
in and
to all of the assets of the Grantor, wherever located and whether presently
owned or after acquired, including but not limited to:
a. All
accounts receivable, contract rights and general intangibles, including,
without
limitation, all forms of payment, goodwill, license rights, bailment or
leasehold interests, whether as lessor or lessee, inventions, designs,
trademarks, trade styles, trade names, trade secrets, formulas, patents,
patent
applications, tax refunds, customer lists, business and accounting records,
including all ledger account cards, computer tapes and discs and other computer
information, in all cases whether now owned or hereafter created or acquired
by
Grantor or in which Grantor may now have or may hereafter acquire an
interest;
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b. All
equipment, including, without limitation, machinery, furniture, furnishings,
fixtures, tools, parts, supplies and vehicles of every kind and description,
whether now owned or hereafter acquired by Grantor in which Grantor may now
have
or may hereafter acquire an interest, and all additions, accessions,
replacements, substitutions and improvements thereto and wherever
located;
c. All
documents, documents of title, deposit accounts, instruments, money, letters
of
credit and chattel paper whether now owned or hereafter acquired by Grantor;
d. All
other
intellectual property of Grantor, including, but not limited to, all (i)
patents, patent applications and inventions and discoveries that may be
patentable, (ii) all copyrights in both published works and unpublished works;
and (iii) all rights in mask works, know-how, trade secrets, confidential
information, customer files, software, technical information, data. process
technology, plans, drawings, and blue prints; and
e. All
proceeds and products of any of the foregoing, in any form, including, without
limitation, proceeds of any insurance relating thereto, proceeds consisting
of
any of the above types of collateral, and proceeds of any tort cause of action
now or hereafter in existence, and all replacements, substitutions, renewals,
returns, additions, accessions, rents, royalties, issues, documents of ownership
and receipts for any of the foregoing.
“Lien”
means
any security interest, mortgage, deed of trust, pledge, lien, charge,
encumbrance, title retention agreement or analogous instrument or device,
including the interest of each lessor under any capitalized lease and the
interest of any bondsman under any payment or performance bond, in, of or
on any
assets or properties of a person, whether now owned or hereafter acquired
and
whether arising by agreement or operation of law.
“Permitted
Liens”
means
(i) the Security Interest, (ii) covenants, restrictions, rights,
easements and minor irregularities in title which do not materially interfere
with the Grantor’s business or operations as presently conducted, and (iii)
Liens in existence on the date hereof and described on Exhibit
B
hereto.
2. Creation
of Security Interest.
Grantor
hereby grants to Secured Parties to the extent permitted by law a security
interest in and to all right, title and interest of Grantor in and to all
presently existing and hereafter acquired Collateral. The security interest
and
pledge created by this Section 2 shall continue in effect so long as any of
the Obligations (as defined below) remains unpaid.
3. Security
for Obligations.
This
Agreement and the security interests granted herein secure the prompt payment,
in full in cash, and full performance of, all obligations (“Obligations”) of the
Secured Parties now or hereafter existing under the Notes, the Note Purchase
Agreement or the Letter Agreement.
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4. Representations,
Warranties and Agreements.
The
Grantor hereby represents, warrants and agrees as follows:
4.1 Title.
The
Grantor (i) has absolute title to each item of Collateral in existence on
the date hereof, free and clear of all Liens except the Permitted Liens,
(ii) will have, at the time the Grantor acquires any rights in the
Collateral hereafter arising, absolute title to each such item of the
Collateral, free and clear of all Liens except the Permitted Liens,
(iii) will keep all of the Collateral free and clear of all Liens except
the Permitted Liens, and (iv) will defend the Collateral against all claims
or demands of all persons other than the Secured Parties. The Grantor will
not
sell or otherwise dispose of the Collateral or any interest therein, outside
the
ordinary course of business, without the prior written consent of the Secured
Parties.
4.2 Chief
Executive Office; Identification Number.
The
Grantor’s chief executive office and principal place of business is located at
the address set forth under its signature below. The Grantor’s federal employer
identification number and organizational identification number is correctly
set
forth under its signature below.
4.3 Location
of the Collateral.
As of
the date hereof, the tangible Collateral is located only in the state and
at the
address(es) identified on Exhibit
A
attached
hereto. The Grantor will not permit any tangible Collateral to be located
in any
state (and, if county filing is required, in any county) in which a financing
statement covering such Collateral is required to be, but has not in fact
been,
filed in order to perfect the Security Interest.
4.4 Changes
in Name, Constituent Documents, Location.
The
Grantor will not change its name or its business address without giving prior
written notice to the Secured Parties.
4.5 Fixtures.
The
Grantor will not permit any tangible Collateral to become part of or to be
affixed to any real property without first assuring to the reasonable
satisfaction of the Secured Parties that the Security Interest will be prior
and
senior to any Lien then held or thereafter acquired by any mortgagee of such
real property or the owner or purchaser of any interest therein.
4.6 Rights
to Payment.
Each
right to payment and each instrument, document, chattel paper and other
agreement constituting or evidencing the Collateral is (or will be when arising,
issued or assigned to the Secured Parties) the valid, genuine and legally
enforceable obligation, subject to no defense, setoff or counterclaim (other
than those arising in the ordinary course of business), of the account debtor
or
other obligor named therein or in the Grantor’s records pertaining thereto as
being obligated to pay such obligation. The Grantor will neither agree to
any
material modification or amendment nor agree to any forbearance, release
or
cancellation of any such obligation, and will not subordinate any such right
to
payment to claims of other creditors of such account debtor or other obligor.
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4.7 Commercial
Tort Claims.
Promptly upon knowledge thereof, the Grantor will deliver to the Secured
Parties
notice of any commercial tort claims it may bring against any person, including
the name and address of each defendant, a summary of the facts, an estimate
of
the Grantor’s damages, copies of any complaint or demand letter submitted by the
Grantor, and such other information as the Secured Parties may request. Upon
request by the Secured Parties, the Grantor will grant the Secured Parties
a
security interest in all commercial tort claims it may have against any person.
4.8 Miscellaneous
Covenants.
The
Grantor will:
(i) keep
all
tangible Collateral in good repair, working order and condition, normal
depreciation excepted, and will, from time to time, replace any worn, broken
or
defective parts thereof;
(ii) promptly
pay all taxes and other governmental charges levied or assessed upon or against
any Collateral or upon or against the creation, perfection or continuance
of the
Security Interest;
(iii) at
all
reasonable times, permit the Secured Parties or their representatives to
examine
or inspect any Collateral, wherever located, and to examine, inspect and
copy
the Grantor’s books and records pertaining to the Collateral and its business
and financial condition and to send and discuss with account debtors and
other
obligors requests for verifications of amounts owed to the Grantor;
(iv) keep
accurate and complete records pertaining to the Collateral and pertaining
to the
Grantor’s business and financial condition and submit to the Secured Parties
such periodic reports concerning the Collateral and the Grantor’s business and
financial condition as the Secured Parties may from time to time reasonably
request;
(v) promptly
notify the Secured Parties of any loss of or material damage to any Collateral
or of any adverse change known to the Grantor pertaining to the prospect
of
payment of any sums due on or under any instrument, chattel paper, or account
constituting the Collateral;
(vi) if
the
Secured Parties at any time so request (after the occurrence and during the
continuation of an Event of Default), promptly deliver to the Secured Parties
any instrument, document or chattel paper constituting the Collateral, duly
endorsed or assigned by the Grantor;
(vii) at
all
times keep all tangible Collateral insured against risks of fire (including
so-called extended coverage), theft, collision (in case of the Collateral
consisting of motor vehicles) and such other risks and in such amounts as
the
Secured Parties may reasonably request, with any such policies containing
a
lender loss payable endorsement acceptable to the Secured Parties;
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(viii) from
time
to time execute such financing statements as the Secured Parties may reasonably
require in order to perfect the Security Interest (including, without
limitation, any filings with the United States Patent and Trademark Office,
copyright or other intellectual property filings and any filings of financing
or
continuation statements under the UCC) in order to create, preserve, upgrade
in
rank (to the extent required hereby), perfect, confirm or validate the Security
Interest or to enable the Secured Parties to obtain the full benefits of
this
Agreement, or to enable the Secured Parties to exercise and enforce any of
its
rights, powers and remedies hereunder with respect to any of the Collateral
and,
if any Collateral consists of a motor vehicle, execute such documents as
may be
required to have the Security Interest properly noted on a certificate of
title;
(ix) pay
when
due or reimburse the Secured Parties on demand for all costs of collection
of
any of the Obligations and all other out-of-pocket expenses (including, in
each
case, all reasonable attorneys’ fees) incurred by the Secured Parties in
connection with the creation, perfection, satisfaction, protection, defense
or
enforcement of the Security Interest or the creation, continuance, protection,
defense or enforcement of this Agreement or any or all of the Obligations,
including expenses incurred in any litigation or bankruptcy or insolvency
proceedings;
(x) execute,
deliver or endorse any and all instruments, documents, assignments, security
agreements and other agreements and writings which the Secured Parties may
at
any time reasonably request in order to secure, protect, perfect or enforce
the
Security Interest and the Secured Parties’ rights under this Agreement;
and
(xi) not
use
or keep any Collateral, or permit it to be used or kept, for any unlawful
purpose or in violation of any federal, state or local law, statute or
ordinance.
4.9 The
Secured Parties’ Right to Take Action.
The
Grantor authorizes the Secured Parties to file from time to time where permitted
by law, such financing statements against the Collateral described as “all of
the Grantor’s personal property” as the Secured Parties deem necessary or useful
to perfect the Security Interest. The Grantor will not amend any financing
statements in favor of the Secured Parties, except as permitted by law. Further,
if the Grantor at any time fails to perform or observe any agreement contained
in Section 4.8, and if such failure continues for a period of ten (10) days
after the Secured Parties give the Grantor written notice thereof (or, in
the
case of the agreements contained in clauses (vii) and (viii) of Section 4.8,
immediately upon the occurrence of such failure, without notice or lapse
of
time), the Secured Parties may (but need not) perform or observe such agreement
on behalf and in the name, place and stead of the Grantor (or, at the Secured
Parties’ option, in the Secured Parties’ own name) and may (but need not) take
any and all other actions which the Secured Parties may reasonably deem
necessary to cure or correct such failure (including, without limitation,
the
payment of taxes, the satisfaction of security interests, liens, or
encumbrances, the performance of obligations under contracts or agreements
with
account debtors or other obligors, the procurement and maintenance of insurance,
the execution of financing statements, the endorsement of instruments, and
the
procurement of repairs or transportation); and, except to the extent that
the
effect of such payment would be to render any loan or forbearance of money
usurious or otherwise illegal under any applicable law, the Grantor shall
thereupon pay the Secured Parties on demand the amount of all moneys expended
and all costs and expenses (including reasonable attorneys’ fees) incurred by
the Secured Parties in connection with or as a result of the Secured Parties’
performance or observation of such agreements or any actions taken thereunder,
together with interest thereon from the date expended or incurred by the
Secured
Parties at the highest rate then applicable to any of the Obligations. To
facilitate the performance or observance by the Secured Parties of such
agreements of the Grantor, the Grantor hereby irrevocably appoints (which
appointment is coupled with an interest) the Secured Parties, or their delegate,
as the attorney-in-fact of the Grantor with the right (but not the duty)
from
time to time to create, prepare, complete, execute, deliver, endorse or file,
in
the name and on behalf of the Grantor, any and all instruments, documents,
financing statements, applications for insurance and other agreements and
writings required to be obtained, executed, delivered or endorsed by the
Grantor
under this Section 4. The Grantor shall pay the costs of, or incidental to,
any
recording or filing of any financing statements, financing statement amendments
or continuation statements concerning the Collateral.
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5. Secured
Parties’ Rights Regarding Collateral
5.1 At
any
time and from time to time, at the expense of Grantor, Secured Parties may,
to
the extent necessary or desirable to protect the security hereunder, but
Secured
Parties shall not be obligated to (a) notify obligors on the Collateral that
the
Collateral has been assigned as security to Secured Parties; (b) after an
Event
of Default (as defined below) has occurred and is continuing, at any time
and
from time to time request from obligors on the Collateral, in the name of
Grantor or in the name of Secured Parties, information concerning the Collateral
and the amounts owing thereon; and (c) after an Event of Default has occurred
and is continuing, instruct obligors on the Collateral to direct their
performance to Secured Parties. Secured Parties shall at all reasonable times
on
reasonable notice have full access to and the right to audit any and all
of
Grantor’s books and records pertaining to the Collateral, and to confirm and
verify the value of the Collateral. Secured Parties shall be under no duty
or
obligation whatsoever to take any action to preserve any rights of or against
any prior or other parties in connection with the Collateral, to exercise
any
voting rights or managerial rights with respect to any Collateral or to make
or
give any presentments for payment, demands for performance, notices of
non-performance, protests, notices of protest, notices of dishonor or notices
of
any other nature whatsoever in connection with the Collateral or the
Obligations. Secured Parties shall be under no duty or obligation whatsoever
to
take any action to protect or preserve the Collateral or any rights of Grantor
therein, or to make collections or enforce payment thereon, or to participate
in
any foreclosure or other proceeding in connection therewith. Nothing contained
herein shall constitute an assumption by Secured Parties of any of Grantor’s
obligations under any contract rights unless Secured Parties shall have given
written notice of Secured Parties’ intention to assume such contract rights.
Grantor shall continue to be liable for performance of its obligations under
such contracts rights.
5.2 Collections
on the Collateral.
Grantor
shall have the right to use and to continue to make collections on and receive
dividends and other proceeds of all of the Collateral in the ordinary course
of
business so long as no Event of Default shall have occurred and be continuing.
Upon the occurrence and during the continuance of an Event of Default, at
the
option of Secured Parties, Grantor’s right to make collections on and receive
proceeds of the Collateral and to use or dispose of such collections and
proceeds shall terminate, and any and all proceeds and collections, including
all partial or total prepayments, then held or thereafter received on or
on
account of the Collateral will be held or received by Grantor in trust for
Secured Parties and immediately delivered in kind to Secured Parties (duly
endorsed to Secured Parties, if required), to be applied to the Obligations
or
held as Collateral, as Secured Parties shall elect. Upon the occurrence and
during the continuance of an Event of Default, Secured Parties shall have
the
right at all times to receive, receipt for, endorse, assign, deposit and
deliver, in the name of Secured Parties or in the name of Grantor, any and
all
checks, notes, drafts and other instruments for the payment of money
constituting proceeds of or otherwise relating to the Collateral; and Grantor
hereby authorizes Secured Parties to affix, by facsimile signature or otherwise,
the general or special endorsement of Grantor, in such manner as Secured
Parties
shall deem advisable, to any such instrument in the event the same has been
delivered to or obtained by Secured Parties without appropriate endorsement,
and
Secured Parties and any collecting bank are hereby authorized to consider
such
endorsement to be a sufficient, valid and effective endorsement by Grantor,
to
the same extent as though it were manually executed by the duly authorized
representative of Grantor, regardless of by whom or under what circumstances
or
by what authority such endorsement actually is affixed, without duty of inquiry
or responsibility as to such matters, and Grantor hereby expressly waives
demand, presentment, protest and notice of protest or dishonor and all other
notices of every kind and nature with respect to any such
instrument.
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6. Events
of Default.
Grantor
shall be in default under this Security Agreement upon the occurrence of
the
following (each an “Event of Default”):
6.1 In
the
event of any default under a Note;
6.2 On
the
material non-monetary breach by Grantor of any of the provisions of this
Security Agreement, and with respect to any such breach which by its nature
can
be cured, such breach remains uncured for a period of ten (10) days from
Grantor’s receipt of written notice;
6.3 Any
of
the Grantor’s representations or warranties made herein or any statement or
certificate at any time given in writing pursuant hereto or in connection
herewith being false or misleading in any material respect; and
6.4 There
occurs any levy, attachment or seizure for any cause or reason whatsoever,
upon
all or any part of the Collateral (unless discharged by payment, release
or
fully bonded against not more than thirty (30) days after such event has
occurred);
7. Remedies.
7.1 Remedies
upon an Event of Default.
Upon
the occurrence of an Event of Default and at any time thereafter during the
continuance of an Event of Default, the Secured Parties may exercise any
one or
more of the following rights and remedies effective immediately upon written
notice to Grantor: (i) declare all unmatured Obligations to be immediately
due and payable, and the same shall thereupon be immediately due and payable,
without presentment or other notice or demand; (ii) exercise and enforce
any or all rights and remedies available upon default to a secured party
under
the Uniform Commercial Code, including, but not limited to, the right to
take
possession of any Collateral, proceeding without judicial process or by judicial
process (without a prior hearing or notice thereof, which the Grantor hereby
expressly waives), and the right to sell, lease or otherwise dispose of any
or
all of the Collateral, and in connection therewith, the Secured Parties may
require the Grantor to make the Collateral available to the Secured Parties
at a
place to be designated by the Secured Parties which is reasonably convenient
to
such parties, and if notice to the Grantor of any intended disposition of
the
Collateral or any other intended action is required by law in a particular
instance, such notice shall be deemed commercially reasonable if given (in
the
manner specified in Section 7.2) at least ten (10) days prior to the date
of intended disposition or other action; and (iii) exercise or enforce any
or all other rights or remedies available to the Secured Parties by law or
agreement against the Collateral, against the Grantor or against any other
person or property.
7.2 Notice
of Sale.
Secured
Parties shall give Grantor reasonable notice of the time and place of any
public
sale thereof or of the time on or after which any private sale thereof is
to be
made. The requirement of reasonable notice conclusively shall be met if such
notice is mailed, certified mail, postage prepaid, to Grantor at its address
set
forth on the signature page hereto or delivered or otherwise sent to Grantor,
at
least five business days before the date of the sale. Grantor expressly waives,
to the fullest extent permitted by applicable law, any right to receive notice
of any public or private sale of any Collateral or other security for the
Obligations except as expressly provided for in this Section 7.2. Secured
Parties shall not be obligated to make any sale of the Collateral if it shall
determine not to do so regardless of the fact that notice of sale of the
Collateral may have been given. Secured Parties may, without notice or
publication, except as required by applicable law, adjourn the sale from
time to
time by announcement at the time and place fixed for sale, and such sale
may,
without further notice (except as required by applicable law), be made at
the
time and place to which the same was so adjourned.
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7.3 Disposition
of Proceeds of Sale.
The
proceeds resulting from the collection, liquidation, sale or other disposition
of the Collateral shall be applied, first, to the reasonable costs and expenses
(including reasonable attorneys’ fees) of retaking, holding, storing, processing
and preparing for sale, selling, collecting and liquidating the Collateral,
and
the like; second, to the satisfaction of all Obligations; and, third, any
surplus remaining after the satisfaction of all Obligations shall be paid
over
to Grantor or to whomsoever may be lawfully entitled to receive such
surplus.
8. Miscellaneous.
8.1 Remedies
Cumulative.
The
rights and remedies provided under this Agreement are cumulative and may
be
exercised singly or concurrently, and are not exclusive of any other rights
and
remedies provided by law or equity.
8.2 Cooperation
by Grantor.
If an
Event of Default shall have occurred and be continuing, Grantor shall take
any
action which Secured Parties may request in the exercise of its rights and
remedies under this Agreement in order to transfer and assign to Secured
Parties
or to one or more third parties as Secured Parties may designate, or to a
combination of the foregoing, the Collateral for the purposes of a public
or
private sale. Upon the occurrence and during the continuance of an Event
of
Default, Grantor shall further use its best efforts to assist in obtaining
any
approval required by any governmental authority for any action or transaction
contemplated by this Agreement.
8.3 Notice.
Secured
Parties shall use reasonable efforts to give Grantor prior written notice
of the
exercise of any remedy provided for herein; provided that the failure to
give
such notice shall not subject Secured Parties to liability and shall not
affect
the validity or exercise of any remedy hereunder.
8.4 Secured
Parties Appointed Attorney-in-Fact.
To the
full extent permitted by applicable law, Grantor hereby irrevocably appoints
Secured Parties as Grantor’s attorney-in-fact, effective upon and during
continuance of an Event of Default, with full authority in the place and
stead
of Grantor, and in the name of Grantor, or otherwise, from time to time,
in
Secured Parties’ sole and absolute discretion to do any of the following acts or
things: (a) to do all acts and things and to execute all documents necessary
or
advisable to perfect and continue perfected the security interests created
by
this Agreement and to preserve, maintain and protect the Collateral; (b)
to do
any and every act which Grantor is obligated to do under this Agreement;
(c) to
prepare, sign, file and record, in Grantor’s name, any financing statement
covering the Collateral; and (d) to endorse and transfer the Collateral upon
foreclosure by Secured Parties; provided, however, that Secured Parties shall
be
under no obligation whatsoever to take any of the foregoing actions, and
Secured
Parties shall have no liability or responsibility for any act or omission
(other
than Secured Parties’ own gross negligence or willful misconduct) taken with
respect thereto. Grantor hereby agrees to repay within five business days
after
demand all reasonable out-of-pocket costs and expenses (including attorneys’
fees) incurred or expended by Secured Parties in exercising any right or
taking
any action under this Agreement.
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8.5 Costs
and Expenses.
After
the occurrence and during the continuance of an Event of Default, Grantor
agrees
to pay to Secured Parties all reasonable costs and out-of-pocket expenses
(including, without limitation, reasonable attorneys’ fees and disbursements)
incurred by Secured Parties in the enforcement or attempted enforcement of
this
Agreement, whether or not an action is filed in connection therewith, and
in
connection with any waiver or amendment of any term or provision hereof.
All
reasonable advances, charges, costs and expenses, including reasonable
attorneys’ fees and disbursements, incurred or paid by Secured Parties in
exercising any right, privilege, power or remedy conferred by this Agreement
or
in the enforcement or attempted enforcement thereof, shall be secured hereby
and
shall become a part of the Obligations and shall be due and payable to Secured
Parties by Grantor on demand therefor.
8.6 Transfers
and Other Liens.
Grantor
agrees that, except in the ordinary course of business and for fair value,
it
will not (a) sell, assign, exchange, transfer or otherwise dispose of, or
contract to sell, assign, exchange, transfer or otherwise dispose of, or
grant
any option with respect to, any of the Collateral, or (b) create or permit
to
exist any lien upon or with respect to any of the Collateral, except for
liens
in favor of Secured Parties; provided, however, that nothing herein shall
prohibit Grantor from entering into a purchase money security interest
transaction with a third party creditor so long as the security interest
granted
herein or created hereby is not impaired.
8.7 Other
Agreements; Governing Agreement.
Nothing
herein shall in any way modify or limit the effect of terms or conditions
set
forth in any other agreement executed by Grantor or any other person in
connection with the Obligations, but each and every term and condition hereof
shall be in addition thereto.
8.8 Counterparts;
Delivery.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original but all of which taken together shall constitute one and
the
same instrument. Delivery of this Agreement may be effected by telefax
transmittal of signed counterparts.
8.9 Understandings
With Respect to Waivers and Consents.
Grantor
warrants and agrees that each of the waivers and consents set forth herein
are
made with full knowledge of their significance and consequences, with the
understanding that events giving rise to any defense or right waived may
diminish, destroy or otherwise adversely affect rights which Grantor otherwise
may have against Secured Parties or others, or against any Collateral. If
any of
the waivers or consents herein are determined to be unenforceable under
applicable law, such waivers and consents shall be effective to the maximum
extent permitted by law.
8.10 Amendments,
Etc.
No
amendment or waiver of any provision of this Agreement nor consent to any
departure by Grantor herefrom (other than supplements to the Schedules hereto
in
accordance with the terms of this Agreement) shall in any event be effective
unless the same shall be in writing and shall be effective only in the specific
instance and for the specific purpose for which given.
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8.11 Notices.
Any
notice, payment, report or any other communication required or permitted
to be
given by one party to the other party by this Agreement shall be in writing
and
either (a) served personally on the other party, (b) sent by express, registered
or certified first-class mail, postage prepaid, addressed to the other party
at
its principal business address or to such other address as the addressee
shall
have theretofore furnished to the other party by proper notice, (c) delivered
by
commercial courier to the other party, or (d) sent by telefax to the other
party
at its telefax number indicated next to its signature below or to such other
telefax number as the party shall have theretofore furnished to the other
party
by proper notice, with machine confirmation of transmission.
8.12 Continuing
Security Interest: Transfer of Note; Termination.
This
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until indefeasible payment in
full of the Obligations, (b) be binding upon Grantor, its successors and
assigns, and (c) inure, together with the rights and remedies of Secured
Parties hereunder, to the benefit of Secured Parties. Secured Parties may
assign
or otherwise transfer any rights in Collateral held by it to any other person,
and such other person shall thereupon become vested with all the benefits
in
respect thereof granted to Secured Parties herein or otherwise. Nothing set
forth herein is intended or shall be construed to give to any other party
any
right, remedy or claim under, to or in respect of this Agreement or any
Collateral. Grantor’s successors and assigns shall include, without limitation,
a receiver, trustee or debtor-in-possession thereof or therefor; provided
that,
except as otherwise permitted under the Guarantee, or any agreement between
the
parties, none of the rights or obligations of Grantor hereunder may be assigned
or otherwise transferred without the prior written consent of Secured
Parties.
8.13 Release
of Grantor.
This
Agreement and all obligations of Grantor hereunder and all security interests
granted hereby shall be released and terminated when all Obligations have
been
indefeasibly paid in full in cash or otherwise performed. Upon such release
and
termination of all Obligations and the security interest granted hereunder,
all
rights in and to the Collateral pledged or assigned by Grantor hereunder
shall
automatically revert to Grantor, and Secured Parties shall return any pledged
Collateral in its possession to Grantor, or to the person or persons legally
entitled thereto, and shall endorse, execute, deliver, record and file all
instruments and documents, and do all other acts and things, reasonably required
for the return of the Collateral to Grantor, or to the person or persons
legally
entitled thereto, and to evidence or document the release of the interests
of
Secured Parties arising under this Agreement, all as reasonably requested
by,
and at the sole expense of, Grantor.
10
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
VENDINGDATA
CORPORATION
By: /s/
Xxxx X. Xxxxxxx
Xxxx
X.
Xxxxxxx,
President
and Chief Executive Officer
BRICOLEUR
PARTNERS, L.P.
By:
Bricoleur Capital Management, LLC,
Its
General Partner
By: /s/
Xxxxxx
Xxxxx
Xxxxxx
Xxxxx, Member of
Management Board
BRICOLEUR
ENHANCED, L.P.
By:
Bricoleur Capital Management, LLC,
Its
General Partner
By: /s/
Xxxxxx
Xxxxx
Xxxxxx
Xxxxx, Member of
Management
Board
BRIC
6, L.P.
By:
Bricoleur Capital Management, LLC,
Its
General Partner
By: /s/
Xxxxxx
Xxxxx
Xxxxxx
Xxxxx, Member of
Management
Board
BRICOLEUR
OFFSHORE LTD.
By:
Bricoleur Capital Management, LLC,
Its
Investment Adviser
By: /s/
Xxxxxx
Xxxxx
Xxxxxx
Xxxxx, Member of
Management
Board
11
Exhibit
A
Location
of Collateral
All
Collateral is located at the Company’s facilities at:
0000
Xxxxxxx Xxxxxx
Xxx
Xxxxx, Xxxxxx 00000
and
Xiaolan
Town
Zhongshan
City
Guangdong
Province, China
12
Exhibit
B
Permitted
Liens
13
