Document:

exhibit10-3.htm

Exhibit 10.3 

 

 

GUARANTY AGREEMENT 

(BUSINESS ENTITY) 

 

This Guaranty Agreement (as amended, supplemented, replaced or otherwise modified, this “Guaranty”) is given by Mechanical Technology, Incorporated, a corporation having an address of 431 New Karner Road, Albany, New York 12205 (“Guarantor”) to FIRST NIAGARA BANK, N.A., a national banking association having a banking office at 6950 South Transit Road, P.O. Box 514, Lockport, New York 14095-0514, and one or more of its affiliates (“Lender”) in consideration of Lender now or hereafter (a) extending or agreeing to extend any credit or other financial accommodation to MTI Instruments, Inc., a corporation (“Borrower”) or (b) agreeing to any direct or indirect extension, renewal, refinancing or other modification or replacement of or waiving or forbearing from exercising any right or remedy relating to any obligation heretofore or hereafter arising or accruing as a result of any such credit or other financial accommodation, and for other valuable consideration, the receipt of which is acknowledged. Guarantor agrees as follows: 

 

GUARANTY. 

 

     Each Guarantor unconditionally guarantees, without any setoff or other deduction, the payment when due, whether by acceleration or lapse of time or otherwise, of the Obligations, as defined below, without any limitation as to amount. This Guaranty is a continuing, absolute, irrevocable and unconditional guaranty of payment and not of collection. “Obligations” means, collectively, all obligations of Borrower to Lender in any capacity for the payment of any money, however evidenced, regardless of kind, class or form, whether for the payment of any principal, interest, fee, charge, cost or expense or otherwise (including, without limitation, to the extent permitted by law, reasonable attorneys’ fees and legal expenses), now existing or hereafter arising or accruing, created directly or by any assignment or other transfer, direct or indirect, absolute or contingent, whether pursuant to any guaranty, endorsement or other assurance of payment or otherwise, whether related to foreign exchange obligations, treasury management services, Interest Rate Protection Agreements, whether similar or dissimilar or related or unrelated and whether or not arising or accrued subsequent to any commencement of or made, proved, voted or allowed as a claim in any case or other proceeding pursuant to any bankruptcy, insolvency or similar statute, that have been heretofore or are hereafter incurred by, in any capacity and whether alone or otherwise, Borrower or, if Borrower is not an individual, any direct or indirect successor of Borrower or any direct or indirect transferee of all or substantially all of the assets of Borrower together with any amendments, extensions, renewals or increases thereof. “Interest Rate Protection Agreement” shall mean any agreement, device or arrangement designed to protect such Guarantor or Borrower from fluctuations of interest rates, exchange rates or forward rates, including, but not limited to, dollar-denominated or cross-currency exchange agreements, forward currency exchange agreements, interest rate caps, collars or floors, forward rate currency or interest rate options, puts, warrants, swaps, swaptions, U.S. Treasury locks and U.S. Treasury options, and any and all cancellations, buybacks, reversals, terminations or assignments of any of the foregoing. 

 

     Each portion of the Obligations now or hereafter (i) paid or satisfied, or (ii) received, applied or retained by Lender and later recovered from Lender as a result of any claim (including, without limitation, any claim involving any allegation that any money constituted trust funds or that the receipt, application or retention of any payments or the grant, creation or perfection of any security interest or lien on any collateral constituted a preference or a fraudulent conveyance or transfer) shall be reinstated as part of the Obligations for purposes of this Guaranty as of the date it originally arose or accrued. 

 

INDEMNIFICATION. Each Guarantor shall indemnify Lender on demand, without any limitation as to amount, against each liability, cost and expense (including, but not limited to, if Lender retains counsel for advice, litigation or any other purpose, reasonable attorneys’ fees and disbursements) now or hereafter imposed on, incurred by or asserted against Lender as a result of any claim arising out of this Guaranty.

 

 

EXPENSES. Each Guarantor shall pay to Lender on demand each cost and expense (including, but not limited to, if Lender retains counsel for advice, litigation or any other purpose, reasonable attorneys’ fees and disbursements) hereafter incurred by Lender in endeavoring to enforce any obligation of such Guarantor pursuant to this Guaranty or preserve or exercise any right or remedy of Lender pursuant to this Guaranty. 

 

FURNISHING OF INFORMATION. Promptly upon the request of Lender, each Guarantor shall furnish to Lender all information requested by Lender and relating to any Guarantor or the business, operations, assets, affairs or condition of any Guarantor. 

 

POSTPONEMENT OF SUBROGATION. Until (a) the final and indefeasible payment in full of (i) the Obligations, and (ii) each liability, cost and expense that any Guarantor is obligated to pay pursuant to this Guaranty and (b) the expiration or other termination of each commitment and other agreement of Lender to extend any credit or other financial accommodation to Borrower, no Guarantor shall assert any claim against Borrower or any other guarantor or commence or prosecute any action or other legal proceeding relating to or otherwise enforce any right of subrogation, indemnification, reimbursement or contribution, or any similar right, against Borrower or any other guarantor in connection with this Guaranty or any of the Obligations or any collateral therefore. 

 

TERMINATION. This Guaranty shall remain in full force and effect until the Obligations have been indefeasibly paid in full and shall terminate as to such Guarantor only upon (a) the actual receipt by an officer of Lender at the chief executive office of Lender of a written notice of the termination of this Guaranty by such Guarantor, (b) the expiration of a reasonable period of time for Lender to act upon such written notice and (c) the final and indefeasible payment in full of (i) each portion of the Obligations (A) arising or accrued before such receipt of such written notice and the expiration of such period of time, (B) thereafter arising or accruing as a result of any credit or other financial accommodation theretofore committed or otherwise agreed to by Lender or (C) thereafter arising or accruing as a result of any of the Obligations described in clause (c)(i)(A) or (B) of this sentence (including, but not limited to, (I) all interest, fees, charges, costs and expenses thereafter arising or accruing with respect to any of the Obligations described in such clause (c)(i)(A) or (B) and (II) all of the Obligations thereafter arising or accruing as a result of any direct or indirect extension, renewal, refinancing or other modification or replacement of any of the Obligations described in such clause (c)(i)(A) or (B)), and (ii) each liability, cost and expense that such Guarantor is obligated to pay pursuant to this Guaranty. 

 

REPRESENTATIONS AND WARRANTIES. Each Guarantor represents and warrants to Lender that (a) the execution, delivery to Lender and performance of this Guaranty by any Guarantor (i) do not and will not violate applicable law, any judgment or order of any court, agency or other governmental body by which such Guarantor is bound or, any certificate or articles of incorporation or organization, by-laws, operating or partnership agreement or other charter, organizational or other governing document of such Guarantor or any resolution or other action of record of any shareholders, members, directors or managers of such Guarantor, (ii) do not and will not violate or constitute any default under any agreement, instrument or other document by which such Guarantor is bound, (iii) are and will be in furtherance of the purposes and within the power and authority of such Guarantor and (iv) do not and will not require any authorization of, notice to or other act by or relating to any Person (including, but not limited to, any shareholder, member, director or manager of such Guarantor) that has not been duly obtained, given or done and is not in full force and effect and (b) this Guaranty is enforceable in accordance with its terms against each Guarantor. 

 

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CERTAIN CONSENTS AND WAIVERS. 

 

     Consents. Any act, omission or other thing, whether now in existence or hereafter occurring shall not cause (i) this Guaranty to be modified or terminated as to any Guarantor, (ii) any obligation of any Guarantor pursuant to this Guaranty and no right or remedy of Lender pursuant to this Guaranty or arising or accruing as a result of this Guaranty to be impaired or otherwise adversely affected, and (iii) any right or remedy to be waived, by any act, omission or other thing, whether now in existence or hereafter occurring. Each Guarantor knowingly, voluntarily, intentionally and irrevocably consents, without any notice, and agrees that this Guaranty shall not be modified or terminated as to any Guarantor by, or no right or remedy shall be waived by, whether now in existence or hereafter occurring, (A) any direct or indirect extension, renewal, refinancing or other modification or replacement of, or any assignment or other transfer, compromise, cancellation, discharge, invalidity, impairment, unenforceability or change in any term or condition of, defense with respect to or grant of any participation in, any of the Obligations or any other obligation of Borrower or any Guarantor, or any other Person, (B) any acceptance of any individual, corporation, partnership, limited liability company, governmental body or other entity who or that is now or hereafter liable, whether directly or indirectly, for payment any obligations (each, an “Other Obligor”), (C) any taking, change in value, impairment or release of, collection or sale, lease or other disposition of or other realization upon or failure or delaying to call for, take any property as, hold, preserve, protect, insure or collect, sell, lease or otherwise dispose of or otherwise realize upon any collateral for the Obligations, (D) any failure or delaying to perfect, keep perfected or maintain the priority of any security interest in or other lien on any collateral for the Obligations, (E) any exercise or waiver of, failure or delaying to exercise, forbearance from exercising, or failure to give any notice prior to exercising, any right or remedy of Lender or any other Person relating to any of the Obligations or any collateral for the Obligations or against Borrower, any Guarantor, any Other Obligor or any other Person, (F) any case or other proceeding pursuant to any bankruptcy, insolvency or similar statute with respect to Borrower or any Guarantor, Other Obligor or other Person, (G) any failure of Lender or any other Person to make, prove or vote any claim relating to any of the Obligations or any collateral therefore, or any failure of any such claim to be allowed, in any case or other proceeding pursuant to any bankruptcy, insolvency or similar statute, (H) the Obligations being at any time or from time to time paid in full or reduced and then increased or exceeding any limitation as to amount set forth in Section 1 of this Guaranty, (I) any refusal or other failure of Lender or any other Person to grant any or any additional credit or other financial accommodation to Borrower or any Guarantor, Other Obligor or other Person or to provide to any Guarantor any or complete and accurate information relating to Borrower, any other Guarantor, Other Obligor or other Person, (J) any notice to Lender or any other Person from any Guarantor, Other Obligor or other Person not to grant any or any additional credit or other financial accommodation to Borrower or to take or not to take any other action, (K) the acceptance by Lender or any other Person of any writing intended by Borrower or any Guarantor, Other Obligor or other Person, but not by Lender, to create an accord and satisfaction with respect to any of the Obligations, (L) the manner or order of any collection or sale, lease or other disposition of or other realization upon any collateral for the Obligators, (M) the manner or order of application of any money applied in payment of any of the Obligations, (N) any change in the ownership, membership, location, business, name, identity or structure of Borrower or any Guarantor, Other Obligor or other Person, (O) the execution and delivery to Lender by Borrower or any Guarantor, Other Obligor or other Person of any agreement, instrument or other document providing any collateral for the obligations, (P) the surrender, exchange, termination, compromise or release of this Guaranty or any security held for the Obligations, whether by agreement or operation of law or otherwise or (Q) the surrender, exchange, acceptance or compromise or release by Lender of any other party, guarantor, guaranty or security held for the Obligations. 

 

     Waivers. Each Guarantor knowingly, voluntarily, intentionally and irrevocably waives, without any notice, (i) the acceptance of this Guaranty by Lender, (ii) any demand upon or presentment or protest to Borrower or any Guarantor, Other Obligor or other Person, (iii) any exercise of any right or remedy of Lender or any other Person relating to any of the Obligations or any collateral therefore or against Borrower or any Guarantor, Other Obligor or other Person or (iv) any notice to Borrower or any Guarantor, Other Obligor or other Person of the acceptance of this Guaranty by Lender, any incurring or nonpayment of any of the Obligations, any occurrence or existence of any event or condition of default relating to any of the Obligations or any Collateral, any decrease in the value of any Collateral, any exercise of any right or remedy of Lender or any other Person relating to any of the Obligations or any Collateral or against Borrower or any Guarantor, Other Obligor or other Person, any action taken or not taken by Lender or any other Person or any other matter. 

 

NOTICES AND OTHER COMMUNICATIONS. Each notice and other communication relating to this Guaranty shall be in writing, sent by mail or overnight courier service, and shall be deemed to have been given when deposited in the mail, first-class or certified postage prepaid, or accepted by any post office or overnight courier service for delivery and to have been received upon the earlier of (a) the actual receipt thereof or (b) three days after being so deposited or accepted. 

 

MISCELLANEOUS. 

 

     Joint and Several Liability. If there is more than one Guarantor, (i) each of them shall be jointly and severally liable pursuant to this Guaranty, and (ii) this Guaranty shall be construed, interpreted and enforced, whether in any action or other legal proceeding or otherwise, as to each of them as though each of them had executed and delivered to Lender a separate agreement identical to this Guaranty. 

 

     Right of Setoff. Without limiting its rights of setoff under New York law generally, upon and at any time and from time to time after any default in the payment when due, whether by acceleration or lapse of time or otherwise, of any of the Obligations or any occurrence or existence of any other event or condition of default relating to any of the Obligations, Lender shall have the right to place an administrative hold on, and set off against each obligation of any Guarantor pursuant to this Guaranty, any obligation of Lender or any other direct or indirect subsidiary of First Niagara Financial Group, Inc. (in any capacity) owing to any Guarantor, whether now existing or hereafter arising or accruing, whether or not then due and whether pursuant to any deposit account or certificate of deposit or in any other manner. Such setoff shall become effective at the time Lender opts therefor even though evidence thereof is not entered in the records of Lender until later. 

 

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     Assignment or Grant of Participation. In conjunction with any assignment or other transfer of or grant of any participation in any of the Obligations by Lender, Lender shall have the right to assign or otherwise transfer or grant any participation in this Guaranty, any obligation of any Guarantor pursuant to this Guaranty or any right or remedy of Lender pursuant to this Guaranty or arising or accruing as a result of this Guaranty. 

 

     Binding Effect. This Guaranty shall be binding upon each Guarantor and each direct or indirect legal representative, successor and assignee of any Guarantor and shall inure to the benefit of and be enforceable by Lender and each direct or indirect successor and assignee of Lender. 

 

     Entire Agreement, Modifications and Waivers. This Guaranty contains the entire agreement between Lender and each Guarantor with respect to the subject matter of this Guaranty and supersedes each action heretofore taken or not taken, each course of conduct heretofore pursued, accepted or acquiesced in, and each oral, written or other agreement and representation heretofore made, by or on behalf of Lender with respect thereto. Notwithstanding the foregoing, this Guaranty does not supersede or replace any other guaranty or security granted to Lender by Guarantor or others. No action now or hereafter taken or not taken, no course of conduct now or hereafter pursued, accepted or acquiesced in, no oral, written or other agreement or representation made, and no agreement or representation hereafter made other than in writing, by or on behalf of Lender, shall modify or terminate this Guaranty, impair or otherwise adversely affect any obligation of any Guarantor pursuant to this Guaranty or any right or remedy of Lender pursuant to this Guaranty or arising or accruing as a result of this Guaranty or operate as a waiver of any such right or remedy. No modification of this Guaranty or waiver of any such right or remedy shall be effective unless made in a writing duly executed by Lender and specifically referring to such modification or waiver. 

 

     Rights and Remedies Cumulative. All rights and remedies of Lender pursuant to this Guaranty or arising or accruing as a result of this Guaranty shall be cumulative, and no such right or remedy shall be exclusive of any other such right or remedy. 

 

     Exercise of Rights; Requests. Except as expressly provided in this Guaranty, each right and remedy of Lender pursuant to this Guaranty may be exercised (i) at any time and from time to time, (ii) in the sole discretion of Lender, (iii) without any notice or demand of any kind and (iv) whether or not any event or condition of default relating to any of the Obligations has occurred or existed, but Lender shall not be obligated to exercise any such right or remedy. Each request by Lender pursuant to this Guaranty may be made (A) at any time and from time to time, (B) in the sole discretion of Lender and (C) whether or not any Event of Default or any other event or condition of default relating to any of the Obligations has occurred or existed. 

 

     Severability. Whenever possible, each provision of this Guaranty shall be interpreted in such manner as to be effective and valid under applicable law. If, however, any such provision shall be prohibited by or invalid under such law, it shall be deemed modified to conform to the minimum requirements of such law, or, if for any reason it is not deemed so modified, it shall be prohibited or invalid only to the extent of such prohibition or invalidity without the remainder thereof or any other such provision being prohibited or invalid. 

 

     Governing Law. This Guaranty shall be governed by the internal law of the State of New York without regard to the law of any other jurisdiction. 

 

     Headings. In this Guaranty, headings of sections are for convenience of reference only and have no substantive effect. 

 

LEGAL PROCEEDINGS. 

 

     JURISDICTION AND VENUE. EACH GUARANTOR KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY (i) CONSENTS IN EACH ACTION AND OTHER LEGAL PROCEEDING COMMENCED BY LENDER AND ARISING OUT OF OR OTHERWISE RELATING TO THIS GUARANTY, ANY OF THE OBLIGATIONS OR ANY COLLATERAL TO THE NONEXCLUSIVE PERSONAL JURISDICTION OF ANY COURT THAT IS EITHER A COURT OF RECORD OF THE STATE OF NEW YORK OR A COURT OF THE UNITED STATES LOCATED IN THE STATE OF NEW YORK, (ii) WAIVES EACH OBJECTION TO THE LAYING OF VENUE OF ANY SUCH ACTION OR OTHER LEGAL PROCEEDING, (iii) WAIVES PERSONAL SERVICE OF PROCESS IN EACH SUCH ACTION AND OTHER LEGAL PROCEEDING, AND (iv) CONSENTS TO THE MAKING OF SERVICE OF PROCESS IN EACH SUCH ACTION AND OTHER LEGAL PROCEEDING BY REGISTERED MAIL DIRECTED TO SUCH GUARANTOR AT THE LAST ADDRESS OF SUCH GUARANTOR SHOWN IN THE RECORDS RELATING TO THIS GUARANTY MAINTAINED BY LENDER, WITH SUCH SERVICE OF PROCESS TO BE DEEMED COMPLETED FIVE DAYS AFTER THE MAILING THEREOF. 

 

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     WAIVER OF JURY TRIAL. EACH GUARANTOR KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVES EACH RIGHT EACH GUARANTOR MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO, AND EACH RIGHT TO ASSERT ANY CLAIM FOR DAMAGES (INCLUDING, BUT NOT LIMITED TO, PUNITIVE DAMAGES) IN ANY ACTION OR OTHER LEGAL PROCEEDING OF ANY NATURE, RELATING TO (i) THIS GUARANTY, ANY RELATED LOAN DOCUMENT OR ANY COLLATERAL RELATED HERETO, (ii) ANY TRANSACTION CONTEMPLATED BY ANY SUCH DOCUMENT OR (iii) ANY NEGOTIATION, PERFORMANCE OR ENFORCEMENT OF THIS GUARANTY, OR ANY COLLATERAL RELATED HERETO. EACH GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL AS NECESSARY AND APPROPRIATE. 

 

Dated: September 20, 2011 

 

	 	 	Mechanical Technology, Incorporated
	 	 	 

 
	 	By:   	/s/Peng K. Lim
	 	 	 
	 	Its:	President, CEO & Chairman of the Board

WITNESS/ATTEST: 

 

	 	 
	Print Name:	 	 

 

	Rev. 11/16/2010
	 	 	 	 
	STATE OF NEW YORK	 	)	 
	 	 	)	SS:
	COUNTY OF Albany	)	 	 

On the 20th day of September in the year 2011, before me, the undersigned, personally appeared ________________, known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument. 

 

	 	/s/Jeuillie A. Keegan
	 	Notary Public

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Exhibit 10.4 

 

 

 

SECURITY AGREEMENT 

 

     SECURITY INTEREST. MTI Instruments, Inc., a corporation organized under the law of the State of New York and having its chief executive office at, 325 Washington Avenue Extension, Albany, New York 12205 (“Debtor”) hereby grants to FIRST NIAGARA BANK, N.A., a national banking association with a banking office at 6950 South Transit Road, P.O. Box 514, Lockport, New York 14095-0514, and any of its affiliates (“Secured Party”) a continuing security interest (“Security Interest”) in all property of Debtor described in Schedule A annexed to this Security Agreement (together with all amendments, supplements or other modifications, the “Agreement”) hereto and made part hereof and on any separate schedule(s) at any time or from time to time furnished by Debtor to Secured Party, (all of which are hereby deemed part of this Agreement) , in all supporting obligations thereof and in all increases or profits received therefrom, the software and books and records related thereto, and in all parts, accessories, special tools, attachments, additions, accessions, replacements and substitutions thereto or therefor, wherever located, whether now existing or hereafter acquired or created, and in all Proceeds of all of the foregoing in any form (the “Collateral”). 

 

     INDEBTEDNESS SECURED. The Security Interest granted by Debtor secures the full payment of all loans, advances, debts, liabilities, indebtedness, obligations, and credit of any kind or character owing by Debtor MTI Instruments, Inc. to Secured Party of any kind or nature, present or future, whether as borrower or guarantor, however evidenced, whether arising under this Agreement or any other loan, note, letter of credit, guaranty, collateral or other agreement or by operation of law, and whether direct or indirect, absolute or contingent, due or to become due, now owing or existing or hereafter arising or created and however acquired, and any amendments, extensions, renewals or increases thereof, including, without limitation, all principal, interest, charges, expenses, commitment or facility fees, collateral management or other fees, treasury management obligations, foreign exchange obligations, obligations due pursuant to any Interest Rate Protection Agreement entered into by Debtor, reasonable attorneys’ fees and expenses related to the collection of the foregoing, and any other amounts payable by Debtor under this Agreement or any other agreements between Debtor and Secured Party whether executed in connection herewith or otherwise (collectively, the “Indebtedness”). “Interest Rate Protection Agreement” shall mean any agreement, device or arrangement designed to protect such Debtor from fluctuations of interest rates, exchange rates or forward rates, including, but not limited to, dollar-denominated or cross-currency exchange agreements, forward currency exchange agreements, interest rate caps, collars or floors, forward rate currency or interest rate options, puts, warrants, swaps, swaptions, U.S. Treasury locks and U.S. Treasury options, and any and all cancellations, buybacks, reversals, terminations or assignments of any of the foregoing. 

 

     REPRESENTATIONS AND WARRANTIES OF DEBTOR. Debtor represents and warrants, and so long as any Indebtedness remains unpaid shall be deemed continuously to represent and warrant, that: 

 

          Debtor is the owner of the Collateral free and clear of all security interests, liens or other encumbrances, except the Security Interest in favor of Secured Party and any Permitted Liens identified on Schedule B attached hereto; 

 

          Debtor has the power and authority to own the Collateral, to grant the Security Interest and to enter into and perform this Agreement and any other document or instrument delivered in connection herewith; and 

 

          Except as may hereafter be disclosed in writing by Debtor to Secured Party, the Collateral is located at and used in connection with Debtor’s business operations at the address(es) specified on Schedule B hereto, and Debtor’s records concerning the Collateral are kept only at such address(es). 

 

     COVENANTS OF DEBTOR. 

 

          Debtor will defend the Collateral against the claims and demands of all other parties including, without limitation, defenses, setoffs, claims and counterclaims asserted by any obligor against Debtor and/or Secured Party, will keep the Collateral free from all security interests, liens or other encumbrances, except for Permitted Liens, and will not sell, transfer, lease, assign, deliver or otherwise dispose of any Collateral or any interest therein without the prior written consent of Secured Party except for sales of Inventory in the ordinary course of Debtor’s business;

 

 

          Debtor will keep, in accordance with generally accepted accounting principles consistently applied, accurate and complete records concerning the Collateral, and at Secured Party’s request, Debtor will mark any and all such records to indicate the Security Interest and will permit Secured Party or its agents to inspect the Collateral and to audit and make extracts from such records or any of Debtor’s books, ledgers, financial reports, correspondence or other records; 

 

          Except in connection with Permitted Liens, Debtor will deliver to Secured Party, upon demand, any instruments, documents and chattel paper constituting, representing or relating to the Collateral or any part thereof and any schedules, invoices, shipping documents, delivery receipts, purchase orders, contracts or other documents representing or relating to the Collateral or any part thereof; 

 

          Without thirty (30) days prior written notice to Secured Party, Debtor will not (i) change its business addresses or chief executive office, or (ii) make any change in Debtor’s name, state of formation, identity or organizational status; 

 

          Debtor will keep the Collateral in good condition, working order and repair and will not use the Collateral in violation of any provisions of this Agreement, any applicable law or governmental regulation or of any policy insuring the Collateral, unless the failure to so keep the Collateral will not have a material adverse effect on Debtor, the Collateral, or the business, operation, assets or affairs of Debtor; 

 

          Debtor will (i) pay all taxes, assessments and other charges of every nature which may be levied or assessed against the Collateral other than taxes, assessments, fees and charges being contested in good faith by appropriate proceedings being diligently pursued and (ii) at all times keep the Collateral insured against loss, damage, theft and other risks, in such amounts, with such insurance carriers and under such form of policies as shall be reasonably acceptable to Secured Party, with appropriate endorsements designating Secured Party as lender loss payee and additional insured, as requested by Secured Party, and which policies of insurance shall provide that all losses thereunder shall be payable to Secured Party, as its interest may appear, and Secured Party may apply any proceeds of such insurance received by it toward payment of any of the Indebtedness, whether or not due, in such order of application as Secured Party may determine, and the original or duplicates of such policies of insurance or certificates thereof shall be delivered to Secured Party, on the date hereof, upon each renewal and upon its request; 

 

          Debtor will not permit any part of the Collateral to be or become an accession to other goods not covered by this Agreement; 

 

          If all or any part of the Collateral is located on property which is not owned by Debtor, Debtor will deliver to Secured Party for each such location a Landlord’s Waiver; and 

 

          Debtor will execute and deliver to Secured Party such certificates of title, assignments and other documents and will take such other actions relating to the Security Interest and the perfection thereof as Secured Party may reasonably request and will pay all costs of title searches and filing financing statements, certificates of title, assignments and other documents in all public offices requested by Secured Party. 

 

     VERIFICATION OF COLLATERAL. Secured Party shall have the right to verify all or any Collateral in any manner and through any medium Secured Party may consider appropriate, and Debtor agrees to furnish all assistance and information and perform any acts which Secured Party may reasonably require in connection therewith. 

 

     NOTIFICATION AND PAYMENTS. Secured Party may notify Debtor in writing, at any time after demand or the occurrence of an Event of Default, and without waiving in any manner the Security Interest, that any payments on account of and from the Collateral received by Debtor (a) shall be held by Debtor in trust for Secured Party in the same medium in which received, (b) shall not be commingled with any assets of Debtor and (c) shall be turned over to Secured Party not later than the next business day following the day of their receipt. 

 

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     EVENTS OF DEFAULT 

 

          Upon demand or the occurrence of an Event of Default, as applicable, Secured Party’s rights and remedies with respect to the Collateral shall be those of a Secured Party under the Uniform Commercial Code and under any other applicable law, as the same may from time to time be in effect, in addition to those rights granted herein and in any other agreement now or hereafter in effect between Debtor and Secured Party. Without in any way limiting the foregoing, Secured Party, upon demand or the occurrence and during the continuance of an Event of Default, may at any time and from time to time, with or without judicial process, enter upon any premises in which any Collateral may be located and, without resistance or interference by Debtor, take possession of the Collateral; and/or dispose of any Collateral on any such premises; and/or require Debtor to assemble and make available to Secured Party at the expense of Debtor any Collateral at any place or time designated by Secured Party; and/or remove any Collateral from any such premises for the purpose of effecting sale or other disposition thereof. Secured Party may apply the net proceeds actually received from any sale or other disposition to the reasonable expenses of retaking, holding, preparing for sale, selling, leasing and the like, to reasonable attorney’s fees and all legal, travel and other expenses incurred by Secured Party in attempting to collect any part of the Indebtedness or enforcing this Agreement; and then to the Indebtedness in such order of application as Secured Party may elect; and Debtor shall remain liable and will pay to Secured Party on demand the amount of any deficiency remaining, together with interest thereon at the highest rate then payable on the Indebtedness. 

 

          Without in any way requiring notice to be given in the following manner, Debtor agrees that any notice by Secured Party of sale, disposition or other intended action hereunder or in connection herewith, whether required by the Uniform Commercial Code or otherwise, shall constitute reasonable notice to Debtor if such notice is mailed by regular mail, postage prepaid, at least ten (10) days prior to such action, to the address set forth above as the location of Debtor’s chief executive office or to any other address which Debtor has specified in writing to Secured Party as the address to which notices hereunder shall be given to Debtor. 

 

          Debtor agrees to pay on demand all reasonable costs and expenses incurred by Secured Party in enforcing this Agreement, in realizing upon or protecting any Collateral and in enforcing and collecting any Indebtedness or any guaranty thereof, including, without limitation, if Secured Party retains counsel for advice, suit, insolvency proceedings or any of the above purposes, the reasonable counsel’s fees and expenses incurred by Secured Party. 

 

     MISCELLANEOUS. 

 

          Debtor hereby appoints Secured Party as attorney-in-fact of Debtor, irrevocably and with power of substitution, in the same manner, to the same extent and with the same effect as if Debtor were to do the same to file financing statements relating to the Collateral or to execute and file any such financing statement in Debtor’s name, all as Secured Party may deem appropriate to perfect and continue the Security Interest; upon demand or the occurrence and during the continuance of an Event of Default (i) to make, adjust or settle and receive payment on any insurance claims with respect to the Collateral; (ii) to endorse the name of Debtor on any instruments, documents or other evidences of the Collateral that may come into Secured Party’s possession; (iii) to execute proofs of claim and loss; (iv) to execute endorsements, assignments or other instruments of conveyance or transfer; and (v) to perform all other acts which Secured Party deems appropriate to protect and preserve the Collateral and to enforce the terms of this Agreement. The agency hereunder is unconditional and shall not terminate until all of the Indebtedness is paid in full. 

 

          Upon Debtor’s failure to perform any of its covenants or obligations hereunder, Secured Party may, but shall not be obligated to, perform any or all such covenants or obligations, and Debtor shall pay an amount equal to the expense thereof to Secured Party upon demand by Secured Party, and all such amounts shall become part of the Indebtedness secured hereby. 

 

          No course of dealing and no delay or omission by Secured Party in exercising any right or remedy hereunder or with respect to any Indebtedness shall operate as a waiver thereof or of any other right or remedy, and no single or partial exercise thereof shall preclude any other or further exercise thereof or the exercise of any other right or remedy. Secured Party may remedy any default by Debtor hereunder or with respect to any Indebtedness in any reasonable manner without waiving the default remedied and without waiving any other prior or subsequent default by Debtor. All rights and remedies of Secured Party hereunder are cumulative, and are in addition to any and all rights and remedies available to Secured Party under the Uniform Commercial Code and other applicable law in effect from time to time. 

 

- 3 -

 

 

          Secured Party shall have no obligation to take, and Debtor shall have the sole responsibility for taking, any and all steps to preserve rights against any and all prior parties to any instrument or chattel paper constituting Collateral whether or not in Secured Party’s possession. Secured Party shall not be responsible to Debtor for loss or damage resulting from Secured Party’s failure to enforce or collect any Collateral or to collect any moneys due or to become due thereunder. Debtor waives protest of any instrument constituting Collateral at any time held by Secured Party on which Debtor is in any way liable and waives notice of any other action taken by Secured Party. 

 

          Without limiting its rights of setoff under New York law generally, upon and at any time and from time to time after demand or any occurrence or existence of any Event of Default, Secured Party shall have the right to place an administrative hold on, and setoff against each obligation of Debtor pursuant to this Agreement, each obligation of Secured Party or any affiliate of Secured Party (in any capacity) owing to Debtor, whether now existing or hereafter arising or accruing, whether or not then due and whether pursuant to any Deposit Account or certificate of deposit or in any other manner. Such setoff shall become effective at the time Secured Party determines even though evidence thereof is not entered in the records of Secured Party until later.

 

          The rights and benefits of Secured Party hereunder shall, if Secured Party so agrees, inure to any party acquiring any interest in the Indebtedness or any part thereof. 

 

          Secured Party and Debtor shall include the heirs, distributees, executors or administrators, or successors or assigns, of those parties. 

 

          No modification, rescission, waiver, release or amendment of any provision of this Agreement shall be binding except by a written agreement subscribed by Debtor and by a duly authorized officer of Secured Party. 

 

          This Agreement and the transaction evidenced hereby shall be construed under the laws of New York State as the same may from time to time be in effect. All terms defined in the Uniform Commercial Code, unless otherwise defined in this Agreement or in any financing statement, shall have the definitions set forth in the Uniform Commercial Code adopted in New York State as in effect on the date of this Agreement and as the same may be amended, modified or supplemented from time to time. If any term of this Agreement shall be held to be invalid, illegal or unenforceable, the validity of all other terms hereof shall in no way be affected thereby. 

 

          This Agreement is and is intended to be a continuing Security Agreement and shall remain in full force and effect until all of the Indebtedness and any extensions or renewals thereof shall be paid in full. 

 

     CONSENTS AND WAIVERS RELATING TO LEGAL PROCEEDINGS. 

 

          DEBTOR KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY (i) CONSENTS IN EACH ACTION AND OTHER LEGAL PROCEEDING COMMENCED BY SECURED PARTY AND ARISING OUT OF OR OTHERWISE RELATING TO THIS AGREEMENT, ANY OF THE OBLIGATIONS, ANY OF THE COLLATERAL OR ANY OTHER COLLATERAL TO THE NONEXCLUSIVE PERSONAL JURISDICTION OF ANY COURT THAT IS EITHER A COURT OF RECORD OF THE STATE OF NEW YORK OR A COURT OF THE UNITED STATES LOCATED IN THE STATE OF NEW YORK, (ii) WAIVES EACH OBJECTION TO THE LAYING OF VENUE OF ANY SUCH ACTION OR OTHER LEGAL PROCEEDING, (iii) WAIVES PERSONAL SERVICE OF PROCESS IN EACH SUCH ACTION AND OTHER LEGAL PROCEEDING, AND (iv) CONSENTS TO THE MAKING OF SERVICE OF PROCESS IN EACH SUCH ACTION AND OTHER LEGAL PROCEEDING BY REGISTERED MAIL DIRECTED TO DEBTOR AT THE LAST ADDRESS OF DEBTOR SHOWN IN THE RECORDS RELATING TO THIS AGREEMENT MAINTAINED BY SECURED PARTY, WITH SUCH SERVICE OF PROCESS TO BE DEEMED COMPLETED FIVE DAYS AFTER THE MAILING THEREOF. 

 

- 4 - 

 

 

          DEBTOR KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVES EACH RIGHT DEBTOR MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO, AND EACH RIGHT TO ASSERT ANY CLAIM FOR DAMAGES (INCLUDING, BUT NOT LIMITED TO, PUNITIVE DAMAGES) IN ANY ACTION OR OTHER LEGAL PROCEEDING OF ANY NATURE, RELATING TO (i) THIS AGREEMENT, ANY RELATED LOAN DOCUMENT OR ANY COLLATERAL, (ii) ANY TRANSACTION CONTEMPLATED BY ANY SUCH DOCUMENT OR (iii) ANY NEGOTIATION, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT, OR ANY COLLATERAL.  DEBTOR CERTIFIES THAT NEITHER SECURED PARTY NOR ANY REPRESENTATIVE THEREOF HAS REPRESENTED TO DEBTOR THAT SECURED PARTY WILL NOT SEEK TO ENFORCE THE WAIVER MADE BY DEBTOR IN THIS SECTION.  DEBTOR ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL AS NECESSARY AND APPROPRIATE.

 

Dated this 20th day of September, 2011.

 

	MTI Instruments, Inc.
	 
	 
	By: /s/Peng Lim
	 
	Name: Peng Lim
	 
	Title: CEO & General Manager

	Rev. 12/13/2010	 	 	 
	 
	STATE OF NEW YORK	 	)	 
	 	 	)	SS:
	COUNTY OF Albany	)	 	 

On the 20th day of September in the year 2011, before me, the undersigned, personally appeared ________________ , known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument. 

 

	/s/Jeuillie A. Keegan	 
	Notary Public

 - 5 -

 

 

SCHEDULE A 

 

The “Collateral” means collectively, wherever located, whether now owned or hereafter acquired or now existing or hereafter acquired or created, all right, title and interest of Debtor in and to (i) Accounts, (including, but not limited to, Health-Care-Insurance Receivables), Chattel Paper, Deposit Accounts, Documents, General Intangibles (including, but not limited to Intellectual Property, Payment Intangibles, Software, licenses, franchises and customer information), Goods (including, but not limited to Equipment, [Farm Products], Fixtures and Inventory), Instruments, Investment Property, Letter-of-Credit Rights, money, other personal property, software, any Commercial Tort Claims described below and (ii) to the extent not referred to in clause (i) of this sentence, (A) Supporting Obligations and incidental property rights incident to, arising or accruing pursuant to or otherwise relating to any of the things referred to in clause (i) of this sentence, whether arising or accruing from any action taken by Debtor or Secured Party or otherwise, (B) Proceeds of any of the things referred to in clauses (i) and (ii)(A) of this sentence and (C) Books and Records relating to any of the things referred to in clauses (i) and (ii)(A) and (B) of this sentence. 

 

All terms, unless otherwise defined in this Agreement or in any financing statement, shall have the definitions set forth in the Uniform Commercial Code adopted in New York State, as in effect on the date of this Agreement and as may be amended, modified or supplemented from time to time. 

 

	Description of Commercial Tort Claims:  	 

 

SCHEDULE B 

 

Locations at which Debtor’s business is conducted and at which the Collateral and records concerning Collateral are located: 

 

	 	 	 	 	
Recent Owner

	Address	     	County	     	
of Location

	325 Washington Avenue Extension	 	Albany	 	Carl Touhey Associates
	Albany, NY 12205	 	 	 	 

“Permitted Liens” as used in this Agreement means: 

 

	Name of Secured Party	     	Collateral	     	Lien Position

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