EXHIBIT 5
GENERAL SECURITY AGREEMENT
Pursuant to the Agreement and Plan of Merger (the "Merger Agreement")
dated as of March 14, 2002, by and among Security Biometrics, Inc., a Nevada
corporation ("Biometrics"), Lightec Communications Inc., a New York corporation
("Lightec"), LT Acquisition Corp., a New York corporation ("Newco"), Xxxxxxxx
Xxxxxxx ("M.A. Xxxxxxx") and Xxxxxxx Xxxxxxx, and in consideration of the
Promissory Note dated June ____, 2002 (the "Note") in the principal amount of
$1,000,000.00 accepted by Xxxxxx Xxxxxx from Biometrics, Newco, for the benefit
of Biometrics, hereby grants to Xxxxxx Xxxxxx a security interest in the
Collateral, as defined herein, and agrees that Xxxxxx Xxxxxx shall have the
rights, remedies and benefits hereinafter set forth.
The term "Liabilities" shall mean and include any and all indebtedness,
obligations and liabilities of any kind arising under the Note and all
costs and expenses that Biometrics shall become obligated to pay pursuant
hereto.
The terms "Collateral" or "Security" shall mean and include the
following personal property of Newco, including that which is hereafter
acquired:
(a) Accounts; (b) Deposit Accounts; (c) Investment property; (d)
Letter-of-credit rights and Letters of credit; (e) rights to payment evidenced
by chattel paper or an instrument; (f) rights to payment for money or funds
advanced or sold; and (g) all Proceeds of any and all of the foregoing.
THIS GENERAL SECURITY AGREEMENT AND ALL RIGHTS PROVIDED FOR HEREIN ARE
EXPRESSLY SUBJECT AND SUBORDINATE TO ANY AND ALL SECURITY AGREEMENTS WITH, AND
TO ANY AND ALL SECURITY INTERESTS IN OR TO ANY OR ALL OF THE COLLATERAL OR
SECURITY GRANTED BY NEWCO TO, ANY BANK OR OTHER COMMERCIAL OR FINANCIAL
INSTITUTION NOT AFFILIATED WITH BIOMETRICS OR NEWCO, OR ANY OF THEIR OFFICERS OR
DIRECTORS ("INSTITUTIONAL LENDERS") WHETHER GRANTED BEFORE OR AFTER THE DATE
HEREOF. FURTHER, IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT THIS SECURITY
AGREEMENT AND ALL RIGHTS PROVIDED FOR HEREIN ARE CO-EQUAL IN PRIORITY AND PARI
PASSU WITH THE
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GENERAL SECURITY AGREEMENT WITH, AND THE SECURITY INTERESTS IN OR TO, ANY AND
ALL OF THE COLLATERAL OR SECURITY INTERESTS BEING GRANTED BY NEWCO TO, THE
SYNERGEX GROUP PARTNERSHIP, A CONNECTICUT PARTNERSHIP ("SYNERGEX"), PURSUANT TO
A GENERAL SECURITY AGREEMENT OF EVEN DATE HEREWITH IN CONNECTION WITH A LOAN
BEING MADE BY SYNERGEX TO BIOMETRICS SIMULTANEOUSLY HEREWITH TO FACILITATE THE
EXECUTION AND CONSUMMATION BY BIOMETRICS OF ITS OBLIGATIONS UNDER THE MERGER
AGREEMENT.
At any time and from time to time, upon the request of Xxxxxx Xxxxxx, the
undersigned will (1) deliver and pledge to Xxxxxx Xxxxxx, endorsed and/or
accompanied by such evidence of assignment and transfer, in such forms and
substance as Xxxxxx Xxxxxx may reasonably request, any and all instruments
or documents as Xxxxxx Xxxxxx may reasonably specify in the request which
relate(s) to any security interest granted pursuant hereto; (2) give,
execute, deliver, file and/or record any notice, statement, instrument,
document, agreement or other papers that may be reasonably necessary or
desirable, or that Xxxxxx Xxxxxx may reasonably request, in order to
create, preserve, perfect or validate any security interest granted
pursuant hereto or to enable Xxxxxx Xxxxxx to exercise and enforce her
rights hereunder or with respect to such security interest; and (3) keep
and stamp or otherwise xxxx any and documents and chattel paper and her
individual books and records relating to accounts and contract rights in
such manner as Xxxxxx Xxxxxx may reasonably require.
Newco hereby authorizes Xxxxxx Xxxxxx to file any financing statement under
the Uniform Commercial Code in respect to any security interest created
pursuant to the Note which may at any time be required or shall, in the
opinion of Xxxxxx Xxxxxx, at any time be desirable naming Newco as debtor
and Xxxxxx Xxxxxx as secured party, and indicating therein the types or
describing the items of Security herein specified. In the event that any
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recording, rerecording, filing or refiling thereof (or the filing of any
statement of continuation or assignment of any financing statement) is
required to protect and preserve such lien or security interest, Xxxxxx
Xxxxxx may cause the same to be recorded, rerecorded, filed and/or refiled
at the time and in the manner determined by Xxxxxx Xxxxxx. Additionally,
Newco hereby authorizes Xxxxxx Xxxxxx to sign any such financing statement
on behalf of Newco and file or record the same and Newco hereby irrevocably
designates Xxxxxx Xxxxxx, her agents, representatives and designees, as
agents and attorney-in-fact for Newco for this purpose. Except in
connection with superior, priority security interests granted to
Institutional Lenders and the co-equal and pari passu security interest and
rights of Synergex, Newco will not file or authorize or permit to be filed
in any jurisdiction any such financing or like statement in which Xxxxxx
Xxxxxx is not named as sole secured party without the prior written consent
of Xxxxxx Xxxxxx, which consent shall not be unreasonably withheld or
delayed. Newco shall give Xxxxxx Xxxxxx prior written notice of the grant
of any superior, priority security interests to Institutional Lenders after
the date hereof; provided Newco's failure to do so shall not affect the
validity or priority of any such superior lien.
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Xxxxxx Xxxxxx shall have a security interest in and be deemed to have
possession of any of the Collateral or Security in transit or set apart for it
or for any of her agents, associates or correspondents.
If an event of default, as defined in the Note (which terms are
incorporated herein by this reference) or a breach or violation of any of the
terms of this agreement occurs (an "Event of Default"), which shall remain
uncured after any applicable grace period, Xxxxxx Xxxxxx, at her discretion may
in her name or in the name of the undersigned or otherwise, demand, xxx for,
collect or receive any money or property at any time payable or receivable on
account of or in exchange for, or make any compromise or settlement deemed
desirable with respect to, any of the Security (SUBJECT ALWAYS TO THE SUPERIOR
SECURITY INTERESTS OF INSTITUTIONAL LENDERS AND THE CO-EQUAL AND PARI PASSU
SECURITY INTEREST AND RIGHTS OF SYNERGEX), but shall be under no obligation to
do so, or Xxxxxx Xxxxxx may extend the time of payment, arrange for payment in
installments, or otherwise modify the terms of, or release any of the Security,
without thereby incurring responsibility to, or discharging or otherwise
affecting any liability of, the undersigned. Xxxxxx Xxxxxx shall not be required
to take any steps necessary to preserve any rights against prior parties or in
and to any of the Security. Upon an Event of Default hereunder, or in connection
with any of the Liabilities (whether such default be that of the undersigned)
Newco shall, at the request of Xxxxxx Xxxxxx, assemble and make the Security
available at such place or places as Xxxxxx Xxxxxx designates.
Xxxxxx Xxxxxx shall have the rights and remedies with respect to the
Security of a secured party under the Uniform Commercial Code (whether or not
the Code is in effect in the jurisdiction where the rights and remedies are
asserted). In addition, with respect to the Security, or any part thereof,
Xxxxxx Xxxxxx may, upon and after the occurrence of an Event of Default has
occurred, sell or
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cause the Security to be sold in New York State, or elsewhere, in one or more
sales or parcels, at such price as Xxxxxx Xxxxxx may reasonably deem best, and
for cash or on credit or for future delivery, without assumption of any credit
risk, all or any of the Security, at any broker's board or at public or private
sale, without demand or performance or notice of intention to sell or of time or
place of sale (except such notice as is required by applicable statute and
cannot be waived) and Xxxxxx Xxxxxx or anyone else may be the purchaser of any
or all of the Security so sold and thereafter hold the same absolutely free from
any claim or right of whatsoever kind, including any equity of redemption, of
the undersigned, any such demand, notice or right and equity being hereby
expressly waived and released. The undersigned is obligated to pay to Xxxxxx
Xxxxxx all expenses incidental to the enforcement of any of the provisions
hereof, including but not limited to attorney's fees, or any actual or attempted
sale, repossession, enforcement, collection, compromise or settlement of any of
the Security or receipt of the proceeds thereof, and for the care of the
Security and defending or asserting the rights and claims of Xxxxxx Xxxxxx in
respect thereof, by litigation or otherwise, including expenses of insurance;
and all such expenses shall be Liabilities within the terms of this agreement.
If the undersigned shall, or any maker, drawer, acceptor, endorser,
guarantor, surety, accommodation party or other person liable upon or for any of
the Liabilities or Security shall die, become insolvent (however such insolvency
may be evidenced), commit any act of bankruptcy, or make general assignment for
the benefit of creditors, or if the undersigned or any co-partnership of which
the undersigned is a member (or members) shall suspend the transaction of its,
his, her or their usual business, or any judgment is docketed or lien filed
against the undersigned or any such co-partnership, maker, drawer, acceptor,
endorser, guarantor, surety, accommodation party or other person, or if a
petition in bankruptcy or for any relief under any law relating to the relief of
debtors, readjustment of indebtedness, reorganization, composition or extension
shall be filed, or any proceeding shall be instituted under any such law by or
against the undersigned or any such co-partnership, maker, drawer, acceptor,
endorser, guarantor, surety, accommodation party or other party, or if any
governmental authority or any court at the instance thereof shall take
possession of any substantial
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part of the property, or, assume control over the affairs or operations of, or a
receiver, trustee or conservator shall be appointed of any substantial part of
the property of, or a writ or order of attachment or garnishment shall be issued
or made against any of the property of, the undersigned or of any such
co-partnership, asker, drawer, acceptor, endorser, guarantor, surety,
accommodation party or other person, or if any debts or other liabilities of the
undersigned or of any such co-partnership, maker, drawer, acceptor, endorser,
guarantor, surety, accommodation party or other person shall become due and
payable, or if the undersigned shall be dissolved or be a party to any merger or
consolidation without the written consent of Xxxxxx Xxxxxx, the Liabilities
shall, at the option of Xxxxxx Xxxxxx, become due and payable forthwith.
No delay on the part of Xxxxxx Xxxxxx in exercising any power or right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any power or right hereunder preclude other or further exercise
thereof or the exercise of any other power or right. No waiver shall be
enforceable against Xxxxxx Xxxxxx unless in writing, signed by Xxxxxx Xxxxxx,
and shall be limited solely to the one event. The rights, remedies and benefits
herein expressly specified are cumulative and not exclusive of any rights,
remedies or benefits which Xxxxxx Xxxxxx may otherwise have. The undersigned
hereby waives presentment, notice of dishonor and protest of all instruments
included in or evidencing the Liabilities or the Security.
No provision hereof shall be modified or limited except by a written
instrument signed by Xxxxxx Xxxxxx, expressly referring hereto and to the
provision so modified or limited. The undersigned, if more than one, shall be
jointly and severally liable hereunder and all provisions hereof regarding the
Liabilities or Security of the undersigned shall apply to any Liability or any
Security of any or all of them. This agreement shall be binding upon the heirs,
executors, administrators, assigns or successors of the undersigned, and shall
inure to the benefit of and be enforceable by Xxxxxx Xxxxxx, her successors,
transferees and assigns; shall so continue in force notwithstanding any change
in any partnership party hereto, whether such change occurs through death,
retirement or otherwise. Unless the context otherwise requires all terms used
herein which are defined in the Uniform Commercial Code shall have the meaning
therein stated.
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If this agreement shall be terminated or revoked by operation of law,
the undersigned will indemnify and save Xxxxxx Xxxxxx harmless from any loss
which may be suffered or incurred by Xxxxxx Xxxxxx in acting hereunder prior to
the receipt by Xxxxxx Xxxxxx, her successors, transferees or assigns of notice
of such termination or revocation. In the event that any part of this agreement
is determined by any court of competent jurisdiction to be unenforceable, the
balance of this agreement shall remain in full force and effect unless Xxxxxx
Xxxxxx gives the undersigned written notice by registered mail, return receipt
requested, of her intention to terminate this agreement, in which event all of
the obligations of the undersigned to Xxxxxx Xxxxxx shall immediately become due
and payable. If any part of this agreement shall be determined by any court of
competent jurisdiction to be unenforceable against any of the undersigned, the
same shall nevertheless be and remain enforceable against the remaining parties.
The undersigned warrants and represents that all Security in which a
security interest is or will be granted to Xxxxxx Xxxxxx is and will at all
times be valid and subsisting, free and clear of all liens and
encumbrances, except the one created hereunder or as otherwise contemplated
herein or in the Merger Agreement; that the undersigned will defend the
title and security interest at its own cost and expense; that all
representations are continuing in nature; that the undersigned is
authorized to execute this agreement; that the undersigned is a
corporation, in good standing in the state of its incorporation, is
authorized and licensed to do business in every state where it does
business, that the execution of this agreement does not violate its
certificate of incorporation, its by-laws or any other agreement to which
it is a party or pursuant to which any of its assets are bound or affected.
The security interest created herein shall attach without the execution
or delivery to Xxxxxx Xxxxxx of any instruments, documents, trust receipts,
assignments or other agreements of transfer, and in the event that any such
paper, instruments, documents or other agreements of transfer are or will be
delivered to Xxxxxx Xxxxxx, the same are and will be in furtherance and in
addition to the security interest created by virtue of this agreement.
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This agreement shall be interpreted, and the rights and liabilities of
the parties hereto determined, in accordance with the laws of State of New York,
without regard to her principles of conflicts of law.
Dated: June ____, 0000
Xxx Xxxx, Xxx Xxxx
LT ACQUISITION CORP.
___________________________________
By:
Title:
Attest:
___________________________________
AGREED AND ACCEPTED:
___________________________________
XXXXXX XXXXXX
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