Exhibit 4.6
SECURITY AGREEMENT
January 2, 2003
I.D. Systems, Inc.
One University Plaza
Hackensack, New Jersey 07601
(Individually and collectively "Debtor")
Wachovia Bank, National Association
190 River Road
Summit, New Jersey 07901
(Hereinafter referred to as "Bank")
For value received and to secure payment and performance of any and all
obligations of Debtor (also referred to herein as "Borrower") to Bank however
created, arising or evidenced, whether direct or indirect, absolute or
contingent, now existing or hereafter arising or acquired, and whether or not
evidenced by a Loan Document, including swap agreements (as defined in 11 U.S.C.
ss 101), future advances, and all costs and expenses incurred by Bank to obtain,
preserve, perfect and enforce the security interest granted herein and to
maintain, preserve and collect the property subject to the security interest
(collectively, "Obligations"), Debtor hereby grants to Bank a continuing
security interest in and lien upon the following described property, whether now
owned or hereafter acquired, and any additions, replacements, accessions, or
substitutions thereof and all cash and non-cash proceeds and products thereof
(collectively, "Collateral"):
All of the personal property of Debtor of every kind and nature including,
without limitation, all accounts, equipment, accessions, inventory, chattel
paper, instruments, investment property, documents, letter-of-credit rights,
deposit accounts, and general intangibles, wherever located.
All of the investment property, financial assets, cash, equity interests,
instruments, and/or general intangibles, which are held in or credited to an
account with Wachovia Securities, Inc., who is a Securities Intermediary (as
defined herein) of the Debtor (the "Account"), and the Account itself, described
as follows: Account No. 44500070; and all rights to which Debtor now or
hereafter becomes entitled by reason of its interest in any of the previously
described Collateral.
Debtor hereby represents and agrees that:
OWNERSHIP. Debtor owns the Collateral. The Collateral is free and clear of all
liens, security interests, and claims except those previously reported in
writing to and approved by Bank, and Debtor will keep the Collateral free and
clear from all liens, security interests and claims, other than those granted to
or approved by Bank. Debtor will not borrow on margin or other credit secured by
the Account or property in the Account from any party other than Bank, either
directly or by making any purchases in excess of any credit balance or money
market mutual funds held in the Account, or by trading in instruments such as
options that create similar obligations. All securities and security
entitlements pledged as Collateral are fully paid and non-assessable. All
income, dividends, earnings and profits with respect to the Collateral shall be
reported for state and federal income tax purposes as attributable to the Debtor
and not Bank and Third Party (as defined herein), and Bank or any other person
authorized to report income distributions, is authorized to issue IRS Forms 1099
indicating Debtor as the recipient of such income, earnings and profits.
NAME AND OFFICES; JURISDICTION OF ORGANIZATION. The name and address of Debtor
appearing at the beginning of this Agreement are Debtor's exact legal name and
the address of its chief executive office. There has been no change in the name
of Debtor, or the name under which Debtor conducts business, within the five
years preceding the date hereof except as previously reported in writing to
Bank. Debtor has not moved its chief executive office within the five years
preceding the date hereof except as previously reported in writing to Bank.
Debtor is organized under the laws of the State
of Delaware and has not changed the jurisdiction of its organization within the
five years preceding the date hereof except as previously reported in writing to
Bank.
TITLE/TAXES. Debtor has good and marketable title to Collateral and will warrant
and defend same against all claims. Debtor will not transfer, sell, or lease
Collateral (except as permitted herein). Debtor agrees to pay promptly all taxes
and assessments upon or for the use of Collateral and on this Security
Agreement. At its option, Bank may discharge taxes, liens, security interests or
other encumbrances at any time levied or placed on Collateral. Debtor agrees to
reimburse Bank, on demand, for any such payment made by Bank. Any amounts so
paid shall be added to the Obligations.
WAIVERS. Debtor agrees not to assert against Bank as a defense (legal or
equitable), as a set-off, as a counterclaim, or otherwise, any claims Debtor may
have against any seller or lessor that provided personal property or services
relating to any part of the Collateral or against any other party liable to Bank
for all or any part of the Obligations. Debtor waives all exemptions and
homestead rights with regard to the Collateral. Debtor waives any and all rights
to any bond or security which might be required by applicable law prior to the
exercise of any of Bank's remedies against any Collateral. All rights of Bank
and security interests hereunder, and all obligations of Debtor hereunder, shall
be absolute and unconditional, not discharged or impaired irrespective of (and
regardless of whether Debtor receives any notice of): (i) any lack of validity
or enforceability of any Loan Document; (ii) any change in the time, manner or
place of payment or performance, or in any term, of all or any of the
Obligations or the Loan Documents or any other amendment or waiver of or any
consent to any departure from any Loan Document; or (iii) any exchange,
insufficiency, unenforceability, enforcement, release, impairment or
non-perfection of any collateral, or any release of or modifications to or
insufficiency, unenforceability or enforcement of the obligations of any
guarantor or other obligor. To the extent permitted by law, Debtor hereby waives
any rights under any valuation, stay, appraisement, extension or redemption laws
now existing or which may hereafter exist and which, but for this provision,
might be applicable to any sale or disposition of the Collateral by Bank; and
any other circumstance which might otherwise constitute a defense available to,
or a discharge of any party with respect to the Obligations.
NOTIFICATIONS; LOCATION OF COLLATERAL. Debtor will notify Bank in writing at
least 30 days prior to any change in: (i) Debtor's chief place of business
and/or residence; (ii) Debtor's name or identity; (iii) Debtor's
corporate/organizational structure; or (iv) the jurisdiction in which Debtor is
organized. In addition, Debtor shall promptly notify Bank of any claims or
alleged claims of any other person or entity to the Collateral or the
institution of any litigation, arbitration, governmental investigation or
administrative proceedings against or affecting the Collateral. Debtor will keep
Collateral at the location(s) previously provided to Bank until such time as
Bank provides written advance consent to a change of location. Debtor will bear
the cost of preparing and filing any documents necessary to protect Bank's
liens.
COLLATERAL CONDITION AND LAWFUL USE. Debtor represents that the Collateral is in
good repair and condition and that Debtor shall use reasonable care to prevent
Collateral from being damaged or depreciating, normal wear and tear excepted.
Debtor shall immediately notify Bank of any material loss or damage to
Collateral. Debtor shall not permit any item of Collateral to become a fixture
to real estate or an accession to other personal property unless such property
is also Collateral hereunder. Debtor represents it is in compliance in all
respects with all laws, rules and regulations applicable to the Collateral and
its properties, operations, business, and finances.
RISK OF LOSS AND INSURANCE. Debtor shall bear all risk of loss with respect to
the Collateral. The injury to or loss of Collateral, either partial or total,
shall not release Debtor from payment or other performance hereof. Debtor agrees
to obtain and keep in force property insurance on the Collateral with a Lender's
Loss Payable Endorsement in favor of Bank and commercial general liability
insurance naming Bank as Additional Insured. Such insurance is to be in form and
amounts satisfactory to Bank and issued by reputable insurance carriers
satisfactory to Bank with a Best Insurance Report Key Rating of at least "A-".
All such policies shall provide to Bank a minimum OF 30 days written notice of
cancellation. Debtor shall furnish to Bank such policies, or other evidence of
such policies satisfactory to Bank. If Debtor fails to obtain or maintain in
force such insurance or fails to furnish such evidence, Bank is authorized, but
not obligated, to purchase any or all insurance or "Single Interest Insurance"
protecting
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such interest as Bank deems appropriate against such risks and for such coverage
and for such amounts, including either the loan amount or value of the
Collateral, all at its discretion, and at Debtor's expense. In such event,
Debtor agrees to reimburse Bank for the cost of such insurance and Bank may add
such cost to the Obligations. Debtor shall bear the risk of loss to the extent
of any deficiency in the effective insurance coverage with respect to loss or
damage to any of the Collateral. Debtor hereby assigns to Bank the proceeds of
all property insurance covering the Collateral up to the amount of the
Obligations and directs any insurer to make payments directly to Bank. Debtor
hereby appoints Bank its attorney-in-fact, which appointment shall be
irrevocable and coupled with an interest for so long as Obligations are unpaid,
to file proof of loss and/or any other forms required to collect from any
insurer any amount due from any damage or destruction of Collateral, to agree to
and bind Debtor as to the amount of said recovery, to designate payee(s) of such
recovery, to grant releases to insurer, to grant subrogation rights to any
insurer, and to endorse any settlement check or draft. Debtor agrees not to
exercise any of the foregoing powers granted to Bank without Bank's prior
written consent.
FINANCING STATEMENTS, CERTIFICATES OF TITLE, POWER OF ATTORNEY. No financing
statement (other than any filed or approved by Bank) covering any Collateral is
on file in any public filing office. Debtor authorizes the filing of one or more
financing statements covering the Collateral in form satisfactory to Bank, and
without Debtor's signature where authorized by law, agrees to deliver
certificates of title on which Bank's lien has been indicated covering any
Collateral subject to a certificate of title statue, and will pay all costs and
expenses of filing or applying for the same or of filing this Security Agreement
in all public filing offices, where filing is deemed by Bank to be desirable.
Debtor hereby constitutes and appoints Bank the true and lawful attorney of
Debtor with full power of substitution to take any and all appropriate action
and to execute any and all documents, instruments or applications that may be
necessary or desirable to accomplish the purpose and carry out the terms of this
Security Agreement, including, without limitation, to complete, execute, and
deliver Control Agreement(s) by Bank, Debtor and Third Party(ies) required in
connection herewith (individually and collectively the "Control Agreement"),
instructions to Third Party(ies) regarding, among other things, control and
disposition of any Collateral, and endorsements desirable for transfer or
delivery of any Collateral, registration of any Collateral under applicable
laws, retitling any Collateral, receipt, endorsement and/or collection of all
checks and other orders for payment of money payable to Debtor with respect to
Collateral. The foregoing power of attorney is coupled with an interest and
shall be irrevocable until all of the Obligations have been paid in full.
Neither Bank nor anyone acting on its behalf shall be liable for acts,
omissions, errors in judgment, or mistakes in fact in such capacity as
attorney-in-fact. Debtor ratifies all acts of Bank as attorney-in-fact. Debtor
agrees to take such other actions, at Debtor's expense, as might be requested
for the perfection, continuation and assignment, in whole or in part, of the
security interests granted herein and to assure and preserve Bank's intended
priority position. If certificates, passbooks, or other documentation or
evidence is/are issued or outstanding as to any of the Collateral, Debtor will
cause the security interests of Bank to be properly protected, including
perfection by notation thereon or delivery thereof to Bank. Upon Bank's request,
Debtor will, at its own expense: (i) do all things determined by Bank to be
desirable to register such Collateral or qualify for an exemption from
registration, under the provisions of all applicable securities laws, and (ii)
otherwise do or cause to be done all other acts and things as may be necessary
to make the sale of the Collateral valid, binding and in compliance with
applicable law.
LANDLORD/MORTGAGEE WAIVERS. Debtor shall cause each mortgagee of real property
owned by Debtor and each landlord of real property leased by Debtor to execute
and deliver instruments satisfactory in form and substance to Bank by which such
mortgagee or landlord subordinates its rights, if any, in the Collateral.
STOCK, DIVIDENDS. If, with respect to any securities pledged hereunder, a stock
dividend is declared, any stock split made or right to subscribe is issued, all
the certificates for the shares representing such stock dividend, stock split or
right to subscribe will be immediately delivered, duly endorsed, to the Bank as
additional Collateral, and any cash or non-cash proceeds and products thereof,
including investment property and security entitlements will be immediately
delivered to Bank. Debtor acknowledges that such grant includes all investment
property and security entitlements, now existing or hereafter arising, relating
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to such securities. In addition, Debtor agrees to execute such notices and
instructions to securities intermediaries as Bank may reasonably request.
VALUE REQUIREMENT. The Fair Market Value of the securities pledged to the Bank
under this Security Agreement shall at all times exceed $500,000.00. If at any
time the Fair Market Value of the securities pledged to the Bank hereunder falls
below this amount, Debtor shall within 3 business days, deliver additional
Collateral to Bank in an amount sufficient to restore the Fair Market Value to
the required amount. "Fair Market Value" means the value of the securities
pledged hereunder based on the closing price per unit of any of the investment
property which is a part of the Collateral as quoted or reported in THE WALL
STREET JOURNAL or, if not available, other customary publication of such
information, plus the amount of any cash or other financial assets comprising
the Collateral. If the Fair Market Value of any securities pledged hereunder
cannot be determined by the foregoing procedure, the Fair Market Value of such
Collateral shall be determined by the Bank by reference to such public
information as may be available.
TRADING OF COLLATERAL. Until a Default occurs, if securities pledged hereunder
are held in the Account, Debtor shall have the right to vote such Collateral, to
exchange it or any part thereof for other easily marketable investment property
or cash of at least equivalent value or purchase for cash readily marketable
investment property, all of which property or cash proceeds shall be placed or
paid into the Account, to collect and receive all cash dividends and interest
distributed periodically in the ordinary course by the obligor or issuer of such
Collateral or part thereof, and unless otherwise restricted by this Security
Agreement, to exercise other rights with respect to such Collateral. In the
event that, notwithstanding the above, any such property or cash proceeds are
received by Debtor (other than in the Account) as a result of such an exchange
or purchase, such property or cash proceeds shall be held by Debtor in trust
for, and immediately delivered to, Bank.
CONTROL. Debtor will cooperate with Bank in obtaining control with respect to
Collateral consisting of investment property and electronic chattel paper.
Debtor authorizes and directs Third Party to comply with the terms of this
Security Agreement, to enter into a Control Agreement, to mark its records to
show the security interest of and/or the transfer to Bank of the property
pledged hereunder and to mail monthly statements to the Bank, in addition to
Debtor, to the address provided herein.
CHATTEL PAPER, ACCOUNTS, GENERAL INTANGIBLES. Debtor warrants that Collateral
consisting of chattel paper, accounts, or general intangibles is (i) genuine and
enforceable in accordance with its terms; (ii) not subject to any defense,
set-off, claim or counterclaim of a material nature against Debtor except as to
which Debtor has notified Bank in writing; and (iii) not subject to any other
circumstances that would impair the validity, enforceability, value, or amount
of such Collateral except as to which Debtor has notified Bank in writing.
Debtor shall not amend, modify or supplement any lease, contract or agreement
contained in Collateral or waive any provision therein, without prior written
consent of Bank. Debtor will not create any tangible chattel paper without
placing a legend on the chattel paper acceptable to Bank indicating that Bank
has a security interest in the chattel paper. Debtor will not create any
electronic chattel paper without taking all steps deemed necessary by Bank to
confer control of the electronic chattel paper upon Bank in accordance with the
UCC.
ACCOUNT INFORMATION. From time to time, at Bank's request, Debtor shall provide
Bank with schedules describing all accounts, including customers' addresses,
created or acquired by Debtor and at Bank's request shall execute and deliver
written assignments of contracts and other documents evidencing such accounts to
Bank. Together with each schedule, Debtor shall, if requested by Bank, furnish
Bank with copies of Debtor's sales journals, invoices, customer purchase orders
or the equivalent, and original shipping or delivery receipts for all goods
sold, and Debtor warrants the genuineness thereof.
ACCOUNT DEBTORS. If a Default should occur, Bank shall have the right to notify
the account debtors obligated on any or all of the Collateral to make payment
thereof directly to Bank and Bank may take control of all proceeds of any such
Collateral, which rights Bank may exercise at any time. The cost of such
collection and enforcement, including attorneys' fees and expenses, shall be
borne solely by Debtor whether the same is incurred by Bank or Debtor. If a
Default should occur or upon demand of Bank,
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Debtor will, upon receipt of all checks, drafts, cash and other remittances in
payment on Collateral, deposit the same in a special bank account maintained
with Bank, over which Bank also has the power of withdrawal.
If a Default should occur, no discount, credit, or allowance shall be granted by
Debtor tc any account debtor and no return of merchandise shall be accepted by
Debtor without Bank's consent. Bank may, after Default, settle or adjust
disputes and claims directly with account debtors for amounts and upon terms
that Bank considers advisable, and in such cases Bank will credit the
Obligations with the net amounts received by Bank, after deducting all of the
expenses incurred by Bank. Debtor agrees to indemnify and defend Bank and hold
it harmless with respect to any claim or proceeding arising out of any matter
related to collection of Collateral.
GOVERNMENT CONTRACTS. If any Collateral covered hereby arises from obligations
due to Debtor from any governmental unit or organization, Debtor shall
immediately notify Bank in writing and execute all documents and take all
actions deemed necessary by Bank to ensure recognition by such governmental unit
or organization of the rights of Bank in the Collateral.
INVENTORY. So long as no Default has occurred, Debtor shall have the right in
the regular course of business, to process and sell Debtor's inventory. If a
Default should occur or upon demand of Bank, Debtor will, upon receipt of all
checks, drafts, cash and other remittances, in payment of Collateral sold,
deposit the same in a special bank account maintained with Bank, over which Bank
also has the power of withdrawal. Debtor agrees to notify Bank immediately in
the event that any inventory purchased by or delivered to Debtor is evidenced by
a bill of lading, dock warrant, dock receipt, warehouse receipt or other
document of title and to deliver such document to Bank upon request.
INSTRUMENTS, CHATTEL PAPER, DOCUMENTS. Any Collateral that is, or is evidenced
by, instruments, chattel paper or negotiable documents will be properly assigned
to and the originals of any such Collateral in tangible form deposited with and
held by Bank, unless Bank shall hereafter otherwise direct or consent in
writing. Bank may, without notice, before or after maturity of the Obligations,
exercise any or all rights of collection, conversion, or exchange and other
similar rights, privileges and options pertaining to such Collateral, but shall
have no duty to do so.
COLLATERAL DUTIES. Bank shall have no custodial or ministerial duties to perform
with respect to Collateral pledged except as set forth herein; and by way of
explanation and not by way of limitation, Bank shall incur no liability for any
of the following: (i) loss or depreciation of Collateral (unless caused by its
willful misconduct or gross negligence), (ii) failure to present any paper for
payment or protest, to protest or give notice of nonpayment, or any other notice
with respect to any paper or Collateral, (iii) failure to ascertain, notify
Debtor of, or take any action in connection with any conversion, call,
redemption, retirement or any other event relating to any of the Collateral, or
failure to notify any party hereto that Collateral should be presented or
surrendered for any such reason. Debtor acknowledges that Bank is not an
investment advisor or insurer with respect to the Collateral; and Bank has no
duty to advise Debtor of any actual or anticipated changes in the value of the
Collateral.
TRANSFER OF COLLATERAL. Bank may assign its rights in Collateral or any part
thereof to any assignee who shall thereupon become vested with all the powers
and rights herein given to Bank with respect to the property so transferred and
delivered, and Bank shall thereafter be forever relieved and fully discharged
from any liability with respect to such property so transferred, but with
respect to any property not so transferred, Bank shall retain all rights and
powers hereby given.
INSPECTION, BOOKS AND RECORDS. Debtor will at all times keep accurate and
complete records covering each item of Collateral, including the proceeds
therefrom. Bank, or any of its agents, shall have the right, at intervals to be
determined by Bank and without hindrance or delay, at Debtor's expense, to
inspect, audit, and examine the Collateral and to make copies of and extracts
from the books, records, journals, orders, receipts, correspondence and other
data relating to Collateral, Debtor's business or any other transaction between
the parties hereto. Debtor will at its expense furnish Bank copies thereof upon
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request. For the further security of Bank, it is agreed that Bank has and is
hereby granted a security interest in all books and records of Debtor pertaining
to the Collateral.
COMPLIANCE WITH LAW. Debtor will comply with all federal, state and local laws
and regulations, applicable to it, including without limitation, environmental
and labor laws and regulations, in the creation, use, operation, manufacture and
storage of the Collateral and the conduct of its business.
CROSS COLLATERALIZATION LIMITATION. As to any other existing or future consumer
purpose loan made by Bank to Debtor, within the meaning of the Federal Consumer
Credit Protection Act, Bank expressly waives any security interest granted
herein in Collateral that Debtor uses as a principal dwelling and household
goods.
ATTORNEYS' FEES AND OTHER COSTS OF COLLECTION. Debtor shall pay all of Bank's
reasonable expenses incurred in enforcing this Security Agreement and in
preserving and liquidating Collateral, including but not limited to, reasonable
arbitration, paralegals', attorneys' and experts' fees and expenses, whether
incurred with or without the commencement of a suit, trial, arbitration, or
administrative proceeding, or in any appellate or bankruptcy proceeding.
DEFAULT. If any of the following occurs, a default ("Default") under this
Security Agreement shall exist: LOAN DOCUMENT DEFAULT. A default under any Loan
Document. COLLATERAL LOSS OR DESTRUCTION. Any loss, theft, substantial damage,
or destruction of Collateral not fully covered by insurance, or as to which
insurance proceeds are not remitted to Bank within 30 days of the loss.
COLLATERAL SALE, LEASE OR ENCUMBRANCE. Any sale, lease, or encumbrance of any
Collateral not specifically permitted herein without prior written consent of
Bank. LEVY, SEIZURE OR ATTACHMENT. The making of any levy, seizure, or
attachment on or of Collateral which is not removed within 10 days. UNAUTHORIZED
COLLECTION OF COLLATERAL. Any attempt to collect, cash in or otherwise recover
deposits that are Collateral. THIRD PARTY BREACH. Any default or breach by a
Third Party of any provision contained in any Control Agreement executed in
connection with any of the Collateral. UNAUTHORIZED TERMINATION. Any attempt to
terminate, revoke, rescind, modify, or violate the terms of this Security
Agreement or any Control Agreement without the prior written consent of Bank.
REMEDIES ON DEFAULT (INCLUDING POWER OF SALE). If a Default occurs, all of the
Obligations shall be immediately due and payable, without notice, other than
Obligations under any swap agreements (as defined in 11 U.S.C. ss. 101) with
Bank, which shall be governed by the default and termination provisions of said
swap agreements, and Bank shall have all the rights and remedies of a secured
party under the Uniform Commercial Code. Without limitation thereto, Bank shall
have the following rights and remedies: (i) to take immediate possession of
Collateral, without notice or resort to legal process, and for such purpose, to
enter upon any premises on which Collateral or any part thereof may be situated
and to remove the same therefrom, or, at its option, to render Collateral
unusable or dispose of said Collateral on Debtor's premises; (ii) to require
Debtor to assemble the Collateral and make it available to Bank at a place to be
designated by Bank; (iii) to exercise its right of set-off or bank lien as to
any monies of Debtor deposited in accounts of any nature maintained by Debtor
with Bank or affiliates of Bank, without advance notice, regardless of whether
such accounts are general or special; (iv) to dispose of Collateral, as a unit
or in parcels, separately or with any real property interests also securing the
Obligations, in any county or place to be selected by Bank, at either private or
public sale (at which public sale Bank may be the purchaser) with or without
having the Collateral physically present at said sale. In addition to the
foregoing, Bank shall be authorized to: notify Third Party to terminate
immediately any trading, other rights or entitlements of Debtor with respect to
the Collateral and any distributions to Debtor from the Collateral; transfer
into Bank's name or the name of its nominee, all or any part of the Collateral;
receive all interest, dividends, and other proceeds of the Collateral; notify
any person obligated on any Collateral of the security interest of Bank therein
and require such person to make payment directly to Bank; demand, sue for,
collect or receive the Collateral and any proceeds thereof, and/or make any
settlement or compromise as Bank deems desirable with respect to any Collateral;
and exercise any voting, conversion, registration, purchase or other rights of
an owner, holder or entitlement holder of the Collateral. Debtor agrees that
Bank may exercise its rights under this Security Agreement without regard
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for the actual or potential tax consequences to Debtor under federal or state
law and without regard to any instructions or directives given Bank by Debtor,
Any notice of sale, disposition or other action by Bank required by law and sent
to Debtor at Debtor's address shown above, or at such other address of Debtor as
may from time to time be shown on the records of Bank, at least 5 days prlor to
such action, shall constitute reasonable notice to Debtor. Notice shall be
deemed given or sent when mailed postage prepaid to Debtor's address as provided
herein. Bank shall be entitled to apply the proceeds of any sale or other
disposition of the Collateral, and the payments received by Bank with respect to
any of the Collateral, to Obligations in such order and manner as Bank may
determine. Collateral that is subject to rapid declines in value and is
customarily sold in recognized markets may be disposed of by Bank in a
recognized market for such collateral without providing notice of sale. Debtor
waives any and all requirements that the Bank sell or dispose of all or any part
of the Collateral at any particular time, regardless of whether Debtor has
requested such sale or disposition.
REMEDIES ARE CUMULATIVE. No failure on the part of Bank to exercise, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by Bank or any right,
power or remedy hereunder preclude any other or further exercise thereof or the
exercise of any right, power or remedy. The remedies herein provided are
cumulative and are not exclusive of any remedies provided by law, in equity, or
in other Loan Documents.
INDEMNIFICATION. Debtor shall protect, indemnify and save harmless Bank from and
against all losses, liabilities, obligations, claims, damages, penalties, causes
of action, costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) (collectively, "Damages") imposed upon, incurred
by or asserted against Bank on account of (i) the Loan Documents or any failure
or alleged failure of Debtor to comply with any of the terms or representations
of this Agreement; (ii) any claim of loss or damage to the Collateral or any
injury or claim of injury to, or death of, any person or property that may be
occasioned by any cause whatsoever pertaining to the Collateral or the use,
occupancy or operation thereof, (iii) any failure or alleged failure of Debtor
to comply with any law, rule or regulation applicable to the Collateral or the
use, occupancy or operation of the Collateral (including, without limitation,
the failure to pay any taxes, fees or other charges), (iv) any Damages
whatsoever by reason of any alleged action, obligation or undertaking of Bank
relating in any way to or any matter contemplated by the Loan Documents, or (v)
any claim for brokerage fees or such other commissions relating to the
Collateral or any other Obligations; provided that such indemnity shall be
effective only to the extent of any Damages that may be sustained by Bank in
excess of any net proceeds received by it from any insurance of Debtor (other
than self-insurance) with respect to such Damages. Nothing contained herein
shall require Debtor to indemnify Bank for any Damages resulting from Bank's
gross negligence or its willful misconduct. The indemnity provided for herein
shall survive payment of the Obligations and shall extend to the officers,
directors, employees and duly authorized agents of Bank. In the event Bank
incurs any Damages arising out of or in any way relating to the transaction
contemplated by the Loan Documents (including any of the matters referred to in
this section), the amounts of such Damages shall be added to the Obligations,
shall bear interest, to the extent permitted by law, at the interest rate borne
by the Obligations from the date incurred until paid and shall be payable on
demand.
MISCELLANEOUS. (i) AMENDMENTS AND WAIVERS. No waiver, amendment or modification
of any provision of this Security Agreement shall be valid unless in writing and
signed by Debtor and an officer of Bank. No waiver by Bank of any Default shall
operate as a waiver of any other Default or of the same Default on a future
occasion. (ii) ASSIGNMENT. All rights of Bank hereunder are freely assignable,
in whole or in part, and shall inure to the benefit of and be enforceable by
Bank, its successors, assigns and affiliates. Debtor shall not assign its rights
and interest hereunder without the prior written consent of Bank, and any
attempt by Debtor to assign without Bank's prior written consent is null and
void. Any assignment shall not release Debtor from the Obligations. This
Security Agreement shall be binding upon Debtor, and the heirs, personal
representatives, successors, and assigns of Debtor. (iii) APPLICABLE LAW;
CONFLICT BETWEEN DOCUMENTS. This Security Agreement shall be governed by and
construed under the law of the jurisdiction named in the address of the Bank
shown on the first page hereof (the "Jurisdiction")
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without regard to that Jurisdiction's conflict of laws principles, except to the
extent that the UCC requires the application of the law of a different
jurisdiction. If any terms of this Security Agreement conflict with the terms of
any commitment letter or loan proposal, the terms of this Security Agreement
shall control. (iv) JURISDICTION. Debtor irrevocably agrees to non-exclusive
personal jurisdiction in the state identified as the Jurisdiction above. (v)
SEVERABILITY. If any provision of this Security Agreement shall be prohibited by
or invalid under applicable law, such provision shall be ineffective but only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Security Agreement. (vi)
NOTICES. Any notices to Debtor shall be sufficiently given, if in writing and
mailed or delivered to the address of Debtor shown above or such other address
as provided hereunder; and to Bank, if in writing and mailed or delivered to
Wachovia Bank, National Association, Mail Code VA7391, P. 0. Box 13327, Roanoke,
VA 24040 or Wachovia Bank, National Association, Mail Code VA7391, 10 South
Jefferson Street, Roanoke, VA 24011 or such other address as Bank may specify in
writing from time to time. Notices to Bank must include the mail code. In the
event that Debtor changes Debtor's mailing address at any time prior to the date
the Obligations are paid in full, Debtor agrees to promptly give written notice
of said change of address by registered or certified mail, return receipt
requested, all charges prepaid. (vii) CAPTIONS. The captions contained herein
are inserted for convenience only and shall not affect the meaning or
interpretation of this Security Agreement or any provision hereof. The use of
the plural shall also mean the singular, and vice versa. (viii) JOINT AND
SEVERAL LIABILITY. If more than one party has signed this Security Agreement,
such parties are jointly and severally obligated hereunder. (ix) BINDING
CONTRACT. Debtor by execution and Bank by acceptance of this Security Agreement,
agree that each party is bound by all terms and provisions of this Security
Agreement.
DEFINITIONS. LOAN DOCUMENTS. The term "Loan Documents" refers to all documents,
including this Agreement, whether now or hereafter existing, executed in
connection with or related to the Obligations, and may include, without
limitation and whether executed by Debtor or others, commitment letters that
survive closing, loan agreements, promissory notes, guaranty agreements, deposit
or other similar agreements, other security agreements, letters of credit and
applications for letters of credit, security instruments, financing statements,
mortgage instruments, any renewals or modifications, whenever any of the
foregoing are executed, but does not include swap agreements (as defined in 11
U.S.C. ss 101). THIRD PARTY. The term "Third Party" means each and every Broker,
Collateral Agent or Securities Intermediary maintaining a securities account,
and acting in such capacity, for Debtor with respect to some or all of the
Collateral. UCC. "UCC" means the Uniform Commercial Code as presently and
hereafter enacted in the Jurisdiction. TERMS DEFINED IN THE UCC. Any term used
in this Agreement and in any financing statement filed in connection herewith
which is defined in the UCC and not otherwise defined in this Agreement or any
other Loan Document has the meaning given to the term in the UCC.
IN WITNESS WHEREOF, Debtor, on the day and year first written above, has caused
this Security Agreement to be executed under seal.
I.D. Systems, Inc.
Taxpayer Identification Number: 22-3270799
By: Ned Mavrommatis (SEAL)
--------------------------------
Ned Mavrommatis, CFO
Tracking #: 15086SUM
CAT - Deal # 168419 Facility ID 120679
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