Exhibit 10.13
 
 
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SECURITY AGREEMENT
(Multiple Use)

1. THE SECURITY. The undersigned LIFELOC TECHNOLOGIES, INC. ( the "Pledgor")
hereby assigns and grants to Bank of America, N.A., its successors and assigns
("BANA"), and to Bank of America Corporation and its subsidiaries and affiliates
(BANA and all such secured parties, collectively, the "Bank") a security
interest in the following described property now owned or hereafter acquired by
the Pledgor (the "Collateral"):

(a) All accounts, and all chattel paper, instruments, deposit accounts, letter
of credit rights, and general intangibles related thereto; and all returned or
repossessed goods which, on sale or lease, resulted in an account.

(b) All inventory.

(c) All equipment and fixtures now owned or hereafter acquired by the Pledgor,
(including, but not limited to, the equipment described in the attached
Equipment Description, if any).
 
(d) All negotiable and nonnegotiable documents of title covering any Collateral.
(e) All accessions, attachments and other additions to the Collateral, and all
tools, parts and equipment used in connection with the Collateral.

(f) All substitutes or replacements for any Collateral, all cash or non-cash
proceeds (including insurance proceeds), products, rents and profits of the
Collateral, and all income, benefits and property receivable on account of the
Collateral, and all supporting obligations covering any Collateral.

(g) All books, data and records pertaining to any Collateral, whether in the
form of a writing, photograph, microfilm or electronic media, including but not
limited to any computer- readable memory and any computer software necessary to
process such memory ("Books and Records").

2. THE INDEBTEDNESS. The obligations secured by this Agreement are the payment
and performance of (a) all present and future Indebtedness of the Pledgor to the
Bank; (b) all obligations of the Pledgor and rights of the Bank under this
Agreement; and (c) all present and future obligations of the Pledgor to the Bank
of other kinds. Each party obligated under any Indebtedness is referred to in
this Agreement as a "Debtor." "Indebtedness" is used in its most comprehensive
sense and includes any and all advances, debts, obligations and liabilities of
the Debtor, now or hereafter existing, absolute or contingent, liquidated or
unliquidated, determined or undetermined, voluntary or involuntary, including
under any swap, derivative, foreign exchange, hedge, or other arrangement
("Swap"), deposit, treasury management or other similar transaction or
arrangement, and whether the Debtor may be liable individually or jointly with
others, or whether recovery upon such Indebtedness may be or hereafter becomes
unenforceable. "Indebtedness" secured by the Collateral of such Pledgor shall
not include obligations arising under any Swap to which it is not party if, and
to the extent that, all or a portion of the guaranty by such Pledgor to the Bank
of, or the grant by such Pledgor of a security interest to the Bank to

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secure, such Swap, would violate the Commodity Exchange Act (7 U.S.C., Sec. 1.
et. seq.) by virtue of such Pledgor's failure to constitute an "eligible
contract participant" as defined in the Commodity Exchange Act at the time such
guaranty or grant of such security interest becomes effective with respect to
such Swap.

Except as otherwise agreed in writing by the Bank and the Pledgor, if the
Indebtedness includes, now or hereafter, any Special Flood Zone Loan, then the
following shall apply: The Special Flood Zone Loan shall not be secured under
this Agreement by any Collateral which would constitute "contents" located
within the Flood Zone Improvements.

3. PLEDGOR'S COVENANTS. The Pledgor represents, covenants and warrants that
unless compliance is waived by the Bank in writing:

(a) The Pledgor agrees: (i) to indemnify the Bank against all losses, claims,
demands, liabilities and expenses of every kind caused by any Collateral; (ii)
to permit the Bank to exercise its rights under this Agreement; (iii) to execute
and deliver such documents as the Bank deems necessary to create, perfect and
continue the security interests contemplated by this Agreement; (iv) not to
change its name (including, for an individual, the Pledgor's name on any
driver's license or special identification card issued by any state), and as
applicable, its chief executive office, its principal residence or the
jurisdiction in which it is organized and/or registered or its business
structure without giving the Bank at least 30 days prior written notice; (v) not
to change the places where the Pledgor keeps any Collateral or the Pledgor's
Books and Records concerning the Collateral without giving the Bank prior
written notice of the address to which the Pledgor is moving same; and (vi) to
cooperate with the Bank in perfecting all security interests granted by this
Agreement and in obtaining such agreements from third parties as the Bank deems
necessary, proper or convenient in connection with the preservation, perfection
or enforcement of any of its rights under this Agreement.

(b) The Pledgor agrees with regard to the Collateral, unless the Bank agrees
otherwise in writing: (i) that the Bank is authorized to file financing
statements in the name of the Pledgor to perfect the Bank's security interest in
the Collateral; (ii) that the Bank is authorized to notify any account debtors,
any buyers of the Collateral, or any other persons of the Bank's interest in the
Collateral, (iii) where applicable, to operate the Collateral in accordance with
all applicable statutes, rules and regulations relating to the use and control
of the Collateral, and not to use any Collateral for any unlawful purpose or in
any way that would void any insurance required to be carried; (iv) not to remove
the Collateral from the Pledgor's premises except in the ordinary course of the
Pledgor's business; (v) to pay when due all license fees, registration fees and
other charges in connection with any Collateral; (vi) not to permit any lien on
the Collateral, including without limitation, liens arising from repairs to or
storage of the Collateral, except in favor of the Bank; (vii) not to sell,
hypothecate or dispose of, nor permit the transfer by operation of law of, any
Collateral or any interest in the Collateral, except sales of inventory to
buyers in the ordinary course of the Pledgor's business; (viii) to permit the
Bank to inspect the Collateral at any time; (ix) to keep, in accordance with
generally accepted accounting principles, complete and accurate Books and
Records regarding all the Collateral, and to permit the Bank to inspect the same
and make copies at any reasonable time; (x) if requested by the Bank, to receive
and use reasonable diligence to collect the Collateral consisting of accounts
and other rights to payment and proceeds, in trust and as the property of the
Bank, and to immediately endorse as appropriate and deliver such Collateral to
the Bank daily in the exact form in which they are received together with a
collection report in form satisfactory to the Bank; (xi) not to commingle the
Collateral, or collections with respect to the Collateral, with other property;
(xii) to give only normal allowances and credits and to advise the Bank thereof
immediately in writing if they affect any rights to payment or proceeds in any
material respect; (xiii) from time to time, when requested by the Bank, to
prepare and deliver a schedule of all the Collateral subject to this Agreement
and to assign in writing and deliver to the Bank all accounts, contracts, leases
and other chattel paper, instruments, and documents; (xiv) in the event the Bank
elects to receive
 
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payments or rights to payment or proceeds hereunder, to pay all expenses
incurred by the Bank, including expenses of accounting, correspondence,
collection efforts, reporting to account or contract debtors, filing, recording,
record keeping and other expenses; and (xv) to provide any service and do any
other acts which may be necessary to maintain, preserve and protect all the
Collateral and, as appropriate and applicable, to keep all the Collateral in
good and saleable condition, to deal with the Collateral in accordance with the
standards and practices adhered to generally by users and manufacturers of like
property, and to keep all the Collateral free and clear of all defenses, rights
of offset and counterclaims.
.
(c) If any Collateral is or becomes the subject of any registration certificate,
certificate of deposit or negotiable document of title, including any warehouse
receipt or bill of lading, the Pledgor shall immediately deliver such document
to the Bank, together with any necessary endorsements.

(d) The Pledgor will maintain and keep in force all risk insurance covering the
Collateral against fire, theft, liability and extended coverages (including
without limitation flood, windstorm coverage and hurricane coverage as
applicable), to the extent that any Collateral is of a type which can be so
insured. Such insurance shall be in form, amounts, coverages and basis
reasonably acceptable to the Bank, shall require losses to be paid on a
replacement cost basis, shall be issued by insurance companies acceptable to the
Bank and include a lender loss payable endorsement and additional insured
endorsement in favor of the Bank in a form acceptable to the Bank. Upon the
request of the Bank, the Pledgor will deliver to the Bank a copy of each
insurance policy, or, if permitted by the Bank, a certificate of insurance
listing all
insurance in force.

(e) The Pledgor will not attach any Collateral to any real property or fixture
in a manner which might cause such Collateral to become a part thereof unless
the Pledgor first obtains the written consent of any owner, holder of any lien
on the real property or fixture, or other person having an interest in such
property to the removal by the Bank of the Collateral from such real property or
fixture. Such written consent shall be in form and substance acceptable to the
Bank and shall provide that the Bank has no liability to such owner, holder of
any lien, or any
other person.

4. BANK RIGHTS. The Pledgor appoints the Bank its attorney in fact to perform
any of the following rights, which are coupled with an interest, are irrevocable
until termination of this Agreement and may be exercised from time to time by
the Bank's officers and employees, or any of them, whether or not the Pledgor is
in default: (a) to perform any obligation of the Pledgor hereunder in the
Pledgor's name or otherwise; (b) to release persons liable on the Collateral and
to give receipts and acquittances and compromise disputes; (c) to release or
substitute security; (d) to prepare, execute, file, record or deliver notes,
assignments, schedules, designation statements, financing statements,
continuation statements, termination statements, statements of assignment,
applications for registration or like documents to perfect, preserve or release
the Bank's interest in the Collateral; (e) to take cash, instruments for the
payment of money and other property to which the Bank is entitled; (f) to verify
facts concerning the Collateral by inquiry of obligors thereon, or otherwise, in
its own name or a fictitious name; (g) to endorse, collect, deliver and receive
payment under instruments for the payment of money constituting or relating to
the Collateral; (h) to prepare, adjust, execute, deliver and receive payment
under insurance claims, and to collect and receive payment of and endorse any
instrument in payment of loss or returned premiums or any other insurance refund
or return, and to apply such amounts received by the Bank, at the Bank's sole
option, toward repayment of the Indebtedness or, where appropriate, replacement
of the Collateral; (i) to enter onto the Pledgor's premises in inspecting the
Collateral; (j) to make withdrawals from and to close deposit accounts or other
accounts with any financial institution, wherever located, into which proceeds
may have been deposited, and to apply funds so withdrawn to payment of the
Indebtedness; (k) to preserve or release the interest evidenced by chattel paper
to which the Bank is entitled and to endorse and deliver any evidence of title;
and (l) to do all acts and things and execute all documents in the name of the
Pledgor or otherwise, deemed by the Bank as necessary, proper and convenient in
connection with the preservation, perfection or enforcement of its rights.
 
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5. DEFAULTS. Any one or more of the following shall be a default hereunder:

(a) The occurrence of any defined or described event of default under, or any
default in the performance of or compliance with any obligation, agreement,
representation, warranty, or other provision contained in (i) this Agreement,
but only after Borrower has been provided a thirty (30) day opportunity to cure,
or (ii) any other contract or instrument evidencing the Indebtedness if such
default is beyond any applicable cure period in such other contract or
instrument evidencing the Indebtedness.

(b) Any involuntary lien of any kind or character attaches to any Collateral,
except for liens for taxes not yet due, and such lien is not removed within
sixty (60) days of the day such lien attaches.

6. BANK'S REMEDIES AFTER DEFAULT. In the event of any default, the Bank may do
any one or more of the following, to the extent permitted by law:

  (a) Declare any Indebtedness immediately due and payable, without notice or
demand.
 
  (b) Enforce the security interest given hereunder pursuant to the Uniform
Commercial Code and any other applicable law.

(c) Enforce the security interest of the Bank in any deposit account of the
Pledgor maintained with the Bank by applying such account to the Indebtedness.

(d) Require the Pledgor to obtain the Bank's prior written consent to any sale,
lease, agreement to sell or lease, or other disposition of any Collateral
consisting of inventory.

(e) Require the Pledgor to segregate all collections and proceeds of the
Collateral so that they are capable of identification and deliver daily such
collections and proceeds to the Bank in kind.

(f) Require the Pledgor to direct all account debtors to forward all payments
and proceeds of the Collateral to a post office box under the Bank's exclusive
control.

(g) Give notice to others of the Bank's rights in the Collateral, to enforce or
forebear from enforcing the same and make extension and modification agreements.

(h) Require the Pledgor to assemble the Collateral, including the Books and
Records, and make them available to the Bank at a place designated by the Bank.

(i) Enter upon the property where any Collateral, including any Books and
Records, are located and take possession of such Collateral and such Books and
Records, and use such property (including any buildings and facilities) and any
of the Pledgor's equipment, if the Bank deems such use necessary or advisable in
order to take possession of, hold, preserve, process, assemble, prepare for sale
or lease, market for sale or lease, sell or lease, or otherwise dispose of, any
Collateral.

(j) Demand and collect any payments on and proceeds of the Collateral. In
connection therewith the Pledgor irrevocably authorizes the Bank to endorse or
sign the Pledgor's name on all checks, drafts, collections, receipts and other
documents, and to take possession of

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and open the mail addressed to the Pledgor and remove therefrom any payments and
proceeds of the Collateral.

(k) Grant extensions and compromise or settle claims with respect to the
Collateral for less than face value, all without prior notice to the Pledgor.

(l) Use or transfer any of the Pledgor's rights and interests in any
Intellectual Property now owned or hereafter acquired by the Pledgor, if the
Bank deems such use or transfer necessary or advisable in order to take
possession of, hold, preserve, process, assemble, prepare for sale or lease,
market for sale or lease, sell or lease, or otherwise dispose of, any
Collateral. The Pledgor agrees that any such use or transfer shall be without
any additional consideration to the Pledgor. As used in this paragraph,
"Intellectual Property" includes, but is not limited to, all trade secrets,
computer software, service marks, trademarks, trade names, trade styles,
copyrights, patents, applications for any of the foregoing, customer lists,
working drawings, instructional manuals, and rights in processes for technical
manufacturing, packaging and labeling, in which the Pledgor has any right or
interest, whether by ownership, license, contract or otherwise.

(m) Have a receiver appointed by any court of competent jurisdiction to take
possession of the Collateral. The Pledgor hereby consents to the appointment of
such a receiver and agrees not to oppose any such appointment.

(n) Take such measures as the Bank may deem necessary or advisable to take
possession of, hold, preserve, process, assemble, insure, prepare for sale or
lease, market for sale or lease, sell or lease, or otherwise dispose of, any
Collateral, and the Pledgor hereby irrevocably constitutes and appoints the Bank
as the Pledgor's attorney-in-fact to perform all acts and execute all documents
in connection therewith.

(o) Without notice or demand to the Pledgor, set off and apply against any and
all of the Indebtedness any and all deposits (general or special, time or
demand, provisional or final) and any other indebtedness, at any time held or
owing by the Bank or any of the Bank's agents or affiliates to or for the credit
of the account of the Pledgor or any guarantor or endorser of the Pledgor's
Indebtedness.

(p) Exercise all rights, powers and remedies which the Pledgor would have, but
for this Agreement, with respect to all Collateral.

(q) Receive, open and read mail addressed to the Pledgor.

(r) Resort to the Collateral under this Agreement, and any other collateral
related to the Indebtedness, in any order.

(s) Exercise any other remedies available to the Bank at law or in equity.

7. MISCELLANEOUS.

(a) Any waiver, express or implied, of any provision hereunder and any delay or
failure by the Bank to enforce any provision shall not preclude the Bank from
enforcing any such provision thereafter.

(b) The Pledgor shall, at the request of the Bank, execute such other
agreements, documents, instruments, or financing statements in connection with
this Agreement as the Bank may reasonably deem necessary.

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(c) All notes, security agreements, subordination agreements and other documents
executed by the Pledgor or furnished to the Bank in connection with this
Agreement must be in form and substance satisfactory to the Bank.

(d) Governing Law. Except to the extent that any law of the United States may
apply, this Agreement shall be governed and interpreted according to the laws of
Colorado (the "Governing Law State"), without regard to any choice of law, rules
or principles to the contrary. Nothing in this paragraph shall be construed to
limit or otherwise affect any rights or remedies of the Bank under federal law.

(e) All rights and remedies herein provided are cumulative and not exclusive of
any rights or remedies otherwise provided by law. Any single or partial exercise
of any right or remedy shall not preclude the further exercise thereof or the
exercise of any other right or remedy.
 
(f) All terms not defined herein are used as set forth in the Uniform Commercial
Code.

(g) The Pledgor shall pay to the Bank immediately upon demand the full amount of
all payments, advances, and expenses, including reasonable attorneys' fees,
expended or incurred by the Bank in connection with (a) the perfection and
preservation of the Collateral or the Bank's interest therein, and (b) the
realization, enforcement and exercise of any right, power, privilege or remedy
conferred by this Agreement, relating to the Pledgor, or in any way affecting
any of the Collateral or the Bank's ability to exercise any of its rights or
remedies with respect to the Collateral.

(h) In the event the Bank seeks to take possession of any or all of the
Collateral by judicial process, the Pledgor irrevocably waives any bonds and any
surety or security relating thereto that may be required by applicable law as an
incident to such possession, and waives any demand for possession prior to the
commencement of any such suit or action.

(i) This Agreement shall constitute a continuing agreement, applying to all
future as well as existing transactions.

(j) This Agreement shall be binding upon and inure to the benefit of the heirs,
executors, administrators, legal representatives, successors and assigns of the
parties, and may be amended or modified only in writing signed by the Bank and
the Pledgor.

(k) The secured parties covered by this Agreement include BANA as well as Bank
of America Corporation and its subsidiaries and affiliates. Such secured parties
are collectively referred to as the "Bank." If, from time to time, any of the
Indebtedness covered by this Agreement includes obligations to entities other
than BANA, then BANA shall act as collateral agent for itself and all such other
secured parties. BANA shall have the right to apply proceeds of the Collateral
against debts, obligations or liabilities constituting all or part of the
Indebtedness in such order as BANA may determine in its sole discretion, unless
otherwise agreed by BANA and one or more of the other secured parties.

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8. FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES
THAT: (A) THIS DOCUMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF, (B) THIS DOCUMENT SUPERSEDES ANY
COMMITMENT LETTER, TERM SHEET, OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS
RELATING TO THE SUBJECT MATTER HEREOF, UNLESS SUCH COMMITMENT LETTER, TERM
SHEET, OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS EXPRESSLY PROVIDES TO
THE CONTRARY, (C) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES,
AND (D) THIS DOCUMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.
 
 
 
Dated: October 29, 2014.
 
BANK OF AMERICA, N.A.
 
By: /s/ Kirk R. Fronckiewicz
Kirk R. Fronckiewicz, Senior Vice President

Address for Notices:
Bank of America, N.A.
Doc Retention Center
CT2-515-BB-03
70 Batterson Park Road
Farmington, CT 06032

LIFELOC TECHNOLOGIES, INC.
 
By: /s/ Barry Knott 
Barry Knott, President/CEO

Pledgor's Location (principal residence, if the Pledgor is an individual; chief
executive office, if the Pledgor is not an individual):

12441 West 49th Ave Unit 4
Wheat Ridge, CO 80033

Pledgor's state of incorporation or organization (if the Pledgor is a
corporation, partnership, limited liability company or other registered entity):
 
 
 
 
 
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