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Exhibit 10.25  

Execution Copy  

 
 

REGISTRATION RIGHTS AGREEMENT    
    

        THIS REGISTRATION RIGHTS AGREEMENT, dated as of February 22, 2005 (this "Agreement"), is made between
Fischer Imaging Corporation, a Delaware corporation (the "Company"), and ComVest Investment Partners II LLC, a Delaware limited liability company
("ComVest"). 

 
 

RECITALS    
    

        WHEREAS, pursuant to a Note and Warrant Purchase Agreement, dated as of the date hereof, between the Company and ComVest (the "Purchase
Agreement"), the Company has agreed to issue to ComVest a warrant (the "Warrant") to purchase up to 2,000,000 shares (the
"Shares") of common stock of the Company, $0.01 par value per share ("Common Stock"), in accordance with
the terms of the Purchase Agreement and the Warrant. 

        WHEREAS,
to induce ComVest to execute and deliver the Purchase Agreement, the Company has agreed to provide to ComVest and its permitted assigns certain registration rights under the
Securities Act (as defined below), and applicable state securities laws. 

        NOW,
THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the Company and ComVest hereby agree as follows: 

1.     Definitions.  

        As used in this Agreement, the following terms shall have the following meanings: 

        (a)   "Agreement" shall have the definition provided in the introductory paragraph. 

        (b)   "Blackout Period" shall have the definition provided in Section 2(a). 

        (c)   "Business Days" shall mean any day that is not a Saturday, a Sunday or other day on which banks are required or
authorized by law to be closed in The City of New York or the City of Denver. 

        (d)   "Claims" shall have the definition provided in Section 8(a). 

        (e)   "Common Stock" shall have the definition provided in the Recitals. 

        (f)    "Company" shall have the definition provided in the introductory paragraph. 

        (g)   "ComVest" shall have the definition provided in the introductory paragraph. 

        (h)   "ComVest Indemnified Person" shall have the definition provided in Section 8(a). 

        (i)    "Effective Date" means the day that the Registration Statement required to be filed under Section 2 is declared
effective by the SEC. 

        (j)    "Filing Date" means the day that the Registration Statement required to be filed under Section 2 is filed with the
SEC. 

        (k)   "Holder" means a holder or holders of Registrable Securities. 

        (l)    "Outside Date" shall have the definition provided in Section 2(a). 

        (m)  "Piggyback Sale" shall have the definition provided in Section 3. 

        (n)   "Purchase Agreement" shall have the definition provided in the Recitals. 

        (o)   "Registration Documents" shall have the definition provided in Section 2(e).

 

        (p)   "Registrable Securities" shall mean (i) the Shares and the shares of Common Stock or other securities issued or
issuable to ComVest or its permitted transferee or designee (x) upon exercise of the Warrant, or (y) upon any distribution with respect to, any exchange for or any replacement of such
Warrant, or (z) upon any conversion, exercise or exchange of any securities issued in connection with any such distribution, exchange or replacement; (ii) securities issued or issuable
upon any stock split, stock dividend, recapitalization or similar event with respect to such shares of Common Stock; and (v) any other security issued as a dividend or other distribution with
respect to, in exchange for, or in replacement of, the securities referred to in the preceding clauses. 

        (q)   "Registration Period" shall mean, with respect to a Registration Statement, the period of time from the effective date of
such Registration Statement until such date as is the earlier of (i) the date on which all of the Registrable Securities covered by such Registration Statement shall have been sold or
(ii) the date on which the Registrable Securities under such Registration Statement (in the opinion of counsel to ComVest and reasonably acceptable to legal counsel for the Company) may be
immediately sold without restriction (including without limitation as to volume restrictions by each holder thereof) without registration under the Securities Act. 

        (r)   "Registration Statement" means a registration statement or registration statements of the Company filed under the
Securities Act covering Registrable Securities. 

        (s)   "Rule 144" shall have the definition provided in Section 8. 

        (t)    "SEC" means the U.S. Securities and Exchange Commission, or any successor thereto. 

        (u)   "Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. 

        (v)   "Shares" shall have the definition provided in the Recitals. 

        (w)  "Transaction Documents" shall mean this Agreement, the Purchase Agreement, the Notes (as defined in the Purchase
Agreement) and the Warrant. 

        (x)   "Violations" shall have the definition provided in Section 8(a). 

        (y)   "Warrant" shall have the definition provided in the Recitals. 

        Capitalized
terms used herein and not otherwise defined herein shall have the meanings set forth in the Purchase Agreement. 

2.     Shelf Registration.  

        (a)   The
Company shall prepare and file with the SEC, not later than four (4) months from the date of this Agreement, a Registration Statement or Registration
Statements (as necessary) on a form that is appropriate under the Securities Act (and, if available, pursuant to Rule 415), covering the resale of all of the Registrable Securities, in an
amount sufficient to cover the resale of the Shares and additional shares of Common Stock issuable pursuant to the anti-dilution provisions of the Warrant. 

        (b)   The
Company shall use all reasonable efforts to cause the Registration Statement to be declared effective under the Securities Act as promptly as possible after the
filing thereof, but in any event not
earlier than the date that is six months from the date of this Agreement but not later than the date that is eight (8) months after the date of this Agreement (the
"Outside Date"). 

        (c)   If
(i) the Registration Statement is not declared effective by the Outside Date or (ii) the Registration Statement required to be filed by the Company
pursuant to this Section shall cease to be available for use by ComVest as a selling stockholder (x) as provided under Section 2(f) hereof

 
where such unavailability continues for a period in excess of five (5) days beyond the allowed time period or (y) for any other reason including, without limitation, by reason of a stop
order, a material misstatement or omission in such Registration Statement or the information contained in such Registration Statement having become outdated and continues to be unavailable for a
period in excess of ten (10) days, and ComVest is not in material breach of its obligations under this Agreement or any of the Transaction Documents, then the Company shall pay to ComVest a
cash fee equal to $50,000 for each 30-day period or part thereof during which any of the events described in clauses (i) or (ii) above occurs and is continuing (the
"Blackout Period"). Each such payment shall be due within five days of the end of each 30-day period of the Blackout Period until the
termination of the Blackout Period and within five (5) days after such termination. Such payments shall constitute ComVest's exclusive remedy for such events. The Blackout Period shall
terminate upon the effectiveness of the Registration Statement in the case of clause (i) above and upon notice from the Company that the Registration Statement is again available in the case of
clause (ii) above. 

        (d)   The
Company shall use its best efforts to keep each Registration Statement effective at all times during the applicable Registration Period. 

        (e)   If
any offering pursuant to a Registration Statement, pursuant to Section 2 hereof, involves an underwritten offering (which may only be with the consent of the
Company), ComVest shall have the right to select legal counsel and an investment banker or bankers and manager or managers to administer to the offering, which investment banker or bankers or manager
or managers shall be reasonably satisfactory to the Company. 

        (f)    If
the Registrable Securities are registered for resale under an effective Registration Statement, ComVest shall cease any distribution of such shares under such
Registration Statement: 

          (i)  for
a period of up to six (6) months if (x) such distribution would require the public disclosure of material non-public information
concerning any transaction or negotiations involving the Company or any of its affiliates that, in the reasonable judgment of the Company's Board of Directors, would materially interfere with such
transaction or negotiations or (y) such distribution would otherwise require premature disclosure of information that, in the reasonable judgment of the Company's Board of Directors, would
adversely affect or otherwise be detrimental to the Company; provided that the
Company shall not invoke this clause (i) more than twice in any twelve (12) month period and only for an aggregate of six (6) months in any such twelve (12) month period;
and 

         (ii)  not
more than once in any 12-month period, for up to 30 days, upon the request of the Company if the Company proposes to file a registration
statement under the Securities Act for the offering and sale of securities for its own account in an underwritten offering and the managing underwriter therefor shall advise the Company in writing
that in its opinion the continued distribution of the Registrable Securities would adversely affect the offering of the securities proposed to be registered for the account of the Company. 

The
Company shall promptly notify ComVest at such time as (i) such transactions or negotiations have been otherwise publicly disclosed or terminated, or (ii) such non-public
information has been publicly disclosed or counsel to the Company has determined that such disclosure is not required due to subsequent events. 

        (g)   The
Company shall permit ComVest's counsel to review such Registration Statement, and all amendments and supplements thereto (as well as all requests for acceleration or
effectiveness thereof and any correspondence between the Company and the SEC relating to the Registration Statement) (collectively, the "Registration
Documents") a reasonable period of time prior to their filing with the SEC, and not file (or send) any Registration Documents in a form to which such

 
counsel reasonably objects and will not request acceleration of such Registration Statement without prior notice to such counsel. The sections of such Registration Statement covering information with
respect to ComVest, ComVest's beneficial ownership of securities of the Company or ComVest's intended method of disposition of Registrable Securities shall conform to the information provided to the
Company by ComVest. 

        3.    Piggyback Sales.    At any time after the date that is six months from the date hereof, whenever the Company
proposes to register any Common Stock under the Securities Act, either in a primary distribution by the Company or a secondary distribution by any of its security holders, the Company will give prompt
written notice to ComVest of its intention to effect such a registration and will include in the offering all Registrable Securities with respect to which the Company has received a written request
for inclusion in the registration within fifteen (15) Business Days after receipt of the Company's notice (a "Piggyback Sale"). Notwithstanding
the foregoing, the Company may withdraw any registration statement referred to in this Section 3 without thereby incurring liability to ComVest. 

        4.    Restrictions on Piggyback Sale Rights.    

        (a)   ComVest
will not be entitled to effect a Piggyback Sale with respect to a registration statement (i) on Form S-4 or Form S-8
under the Securities Act (or any successor or replacement forms) or (ii) in connection with a registration the primary purpose of which is to register debt securities. 

        (b)   If
either: (i) the managing underwriter, in the case of an underwritten registration under which a Piggyback Sale is requested, advises the Company that in its
opinion or (ii) in the case of a registration not being underwritten, for which a Piggyback Sale is requested, the Company reasonably and in good faith determines, that the number of securities
proposed to be sold by the Company in such registration plus the number of shares subject to the Piggyback Sale request  plus the securities of all other
selling security holders to be included in such registration exceeds the number which can be effectively sold in such
offering (the "Maximum Number of Shares"), the Company will include in such registration first the
securities the Company proposes to register, second the Registrable Securities for which the Piggy Back Sale is requested and  third the securities of the
other selling security holders, up to the Maximum Number of Shares. The Company will not hereafter enter into any agreement
which is inconsistent with the rights of priority provided for in this paragraph (b). 

        5.    Obligations of the Company.    With respect to any registration of Registrable Securities required by
Section 2 or Section 3, the Company will use its reasonable best efforts to effect the registration in accordance with the intended method of disposition thereof and in connection with
the registration of the Registrable Securities, to use its reasonable best efforts to: 

        (a)   Prepare
and file with the SEC a Registration Statement for such Registrable Securities and such amendments (including post-effective amendments) and
supplements to the Registration Statement and the prospectuses used in connection with the Registration Statement, as may be necessary to keep the Registration Statement effective at all times during
the Registration Period, and, during the applicable Registration Period, to comply with the provisions of the Securities Act with respect to the disposition of all of the Registrable Securities until
such time as all of such Registrable Securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in the Registration
Statement; 

        (b)   Promptly
furnish, after such Registration Statement is prepared, filed with the SEC, publicly disseminated and distributed and received by the Company, to ComVest and
its legal counsel, a copy of any such Registration Statement, each preliminary prospectus, each final prospectus, and all amendments and supplements thereto and such other documents as ComVest may
reasonably request in order to facilitate the disposition of its Registrable Securities;

 

        (c)   As
soon as practicable for the Company and its counsel, but no later than two (2) Business Days after receipt thereof, furnish to ComVest and its counsel copies
of all correspondence between the
Company and the SEC with respect to any Registration Statement or amendment or supplement thereto filed pursuant to this Agreement; 

        (d)   (i) Register
and qualify the Registrable Securities covered by the Registration Statements under such other securities or blue sky laws, if applicable, of such
United States' jurisdictions as ComVest may reasonably request, (ii) prepare and file in those jurisdictions such amendments (including post-effective amendments) and supplements to
such registrations and qualifications as may be necessary to maintain the effectiveness thereof at all relevant times during the Registration Period, (iii) take such other actions as may be
necessary to maintain such registrations and qualifications in effect at all relevant times during the Registration Period and (iv) take all other actions necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions, except that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this subsection (d) be obligated to be so qualified, or to subject itself to taxation in any such jurisdiction, or to consent to
general service of process in any such jurisdiction; 

        (e)   List
such securities on any national securities exchanges or quotation systems on which the Common Stock of the Company is then listed, and file any filings required by
such securities exchanges or systems; 

        (f)    Notify
ComVest and (if requested by ComVest) confirm such advice in writing, (i) when or if the prospectus or any prospectus supplement or
post-effective amendment has been filed with the SEC, and, with respect to any Registration Statement or any posteffective amendment, when the same has been declared effective by the SEC,
(ii) of any request by the SEC for amendments or supplements to a Registration Statement or the prospectus or for additional information, (iii) of the issuance by the SEC of any stop
order suspending the effectiveness of such Registration Statement or the initiation of any proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Registrable Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, and (v) of the happening of any
event as a result of which the prospectus included in such Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; 

        (g)   If
(i) the matters contemplated by clause (iii) of paragraph (f) above occur, prevent the issuance or obtain the withdrawal of any order suspending
the effectiveness of such Registration Statement at the earliest possible time and (ii) any fact contemplated by clause (v) of paragraph (f) above shall exist, promptly prepare a
supplement or post-effective amendment to the Registration Statement or the related prospectus or any document incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchaser of the Registrable Securities, the prospectus will not contain an untrue statement of material fact or omit to state any material fact necessary to make
the statements therein not misleading; 

        (h)   If
the Company has consented to an underwritten offering and such offering is underwritten, at the request of ComVest, furnish on the date that Registrable Securities
are delivered to the underwriters for sale pursuant to such registration: (i) an opinion dated such date of counsel representing the Company for the purposes of such registration, addressed to
the underwriters and to ComVest, stating that such registration statement is effective under the Securities Act and that (A) to the knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the Securities Act and (B) the registration statement, the

 
related prospectus and each amendment or supplement thereof comply as to form in all material respects with the requirements of the Securities Act (except that such counsel need not express any
opinion as to financial statements or other financial data contained therein) and (ii) a letter dated such date from the Company's independent public accountants addressed to the underwriters
and to ComVest, stating that they are independent public accountants within the meaning of the Securities Act and that, in the opinion of such accountants, the financial statements of the Company
included in the registration statement or the prospectus, or any amendment or supplement thereof, comply as to form in all material respects with the applicable accounting requirements of the
Securities Act, and such letter shall additionally cover such other financial matters (including information as to the period ending no more than five (5) Business Days prior to the date of
such letter) with respect to such registration as such underwriters may reasonably request; 

        (i)    Cooperate
with ComVest to facilitate the timely preparation and delivery of certificates for the Registrable Securities offered and sold pursuant to the Registration
Statement and to enable such certificates for the Registrable Securities to be issued in such denominations or amounts, as the case may be, as ComVest may reasonably request, and registered in such
names as ComVest may request; and, within five (5) Business Days after receiving notice from ComVest or its representatives of a sale of Registrable Securities under the Registration Statement,
the Company shall deliver, and shall cause legal counsel selected by the Company to deliver, to the transfer agent for the Registrable Securities (with copies to ComVest) an appropriate instruction
and opinion of such counsel, satisfactory to the Company, and ComVest and its legal counsel; 

        (j)    Enter
into customary agreements (including, in the case of an underwritten offering, underwriting agreements in customary form, and including provisions with respect to
indemnification and contribution in customary form and consistent with the provisions relating to indemnification and contribution contained herein) and take all other customary and appropriate
actions in order to expedite or facilitate the disposition of such Registrable Securities and in connection therewith: 

          (i)  make
such representations and warranties to ComVest and the underwriters, if any, in form, substance and scope as are customarily made by issuers to underwriters in
similar underwritten offerings; 

         (ii)  to
the extent requested and customary for the relevant transaction, enter into a securities sales agreement with ComVest and such representative of ComVest as ComVest
shall select relating to the Registration and providing for, among other things, the appointment of such representative as agent for ComVest for the purpose of soliciting purchases of Registrable
Securities, which agreement shall be customary in form, substance and scope and shall contain customary representations, warranties and covenants; and 

        (iii)  deliver
such customary documents and certificates as may be reasonably requested by ComVest whose Registrable Securities are being sold or by the managing
underwriters, if any. 

        (k)   In
connection with any underwritten offering, make appropriate officers of the Company available to ComVest for meetings with prospective purchasers of the Registrable
Securities and prepare and present to potential investors customary "road show" material in each case in accordance with the recommendations of the underwriters and in all respects in a manner
consistent with other new issuances of securities in an offering of a similar size to such offering of the Registrable Securities. 

        6.    Obligations of ComVest to Provide Information.    In connection with the registration of the Registrable
Securities, ComVest shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities

 
held by it as shall be reasonably requested in writing by the Company to effect the registration of such Registrable Securities, and ComVest shall execute any customary documents in connection with
such registration as the Company and its legal counsel may reasonably request. At least ten (10) Business Days prior to the first anticipated filing date of the Registration Statement and any
subsequent prospectus supplement or post-effective amendment, the Company shall notify ComVest in writing of the information the Company requires of ComVest to be included in the
Registration Statement, prospectus supplement or post-effective amendment. 

        7.    Expenses of Registration.    The Company shall pay all expenses and fees incurred in connection with each
registration pursuant to Sections 2 and 3 of this Agreement, excluding underwriters' discounts and commissions, but including without limitation all registration, filing and qualification fees, word
processing, duplicating, printers' and accounting fees (including the expenses of any special audits or "comfort" letters required by or incident to such performance and compliance), fees of the NASD
or listing fees, messenger and delivery expenses, all fees and expenses of complying with state securities or blue sky laws, fees and disbursements of counsel for the Company, fees and expenses of the
Company and the underwriters relating to "road show" investor presentations, except that ComVest shall bear and pay the (i) underwriting commissions and discounts applicable to securities
offered for its account in connection with any registrations, filings and qualifications made pursuant to this Agreement and (ii) any fees and expenses incurred in respect of counsel or other
advisors to ComVest. 

        8.    Indemnification.    In the event any Registrable Securities are included in a Registration Statement under this
Agreement: 

        (a)   The
Company will indemnify and hold harmless ComVest, its investment advisor and sub-advisors, its officers, directors, members, partners and shareholders,
and each person, if any, who controls ComVest within the meaning of the Securities Act or the Exchange Act (each, a "ComVest Indemnified Person"),
against any losses, claims, damages, liabilities or expenses (joint or several) incurred (collectively, "Claims") to which any of them may become
subject under the Securities Act, the Exchange Act or otherwise, insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any post-effective amendment thereof or the omission or alleged
omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances in which they were made, not misleading,
(ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained
in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission to state therein any material fact necessary in
order to make the statements made therein, in light of the circumstances under which they were made, not misleading, or (iii) any violation or alleged violation by the Company of the Securities
Act, the Exchange Act, any state or foreign securities law or any rule or regulation under the Securities Act, the Exchange Act or any state or foreign securities law (the matters in foregoing clauses
(i) through (iii) being, collectively, "Violations"). The Company shall, subject to the provisions of Section 8(b) and 8(c) below,
reimburse ComVest, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees for counsel to ComVest and other reasonable costs and expenses incurred by it in
connection with the investigation or defense of any such violation or Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this
Section 8(a) shall not (i) apply to any Claim to the extent it arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in
connection with such Registration Statement, preliminary prospectus, final prospectus or amendments or supplements thereto, in each case which is made

 
reliance upon and conformity with information furnished in writing to the Company by or on behalf of any ComVest Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto; (ii) with respect to any preliminary prospectus, inure to the benefit of any such person from whom the person
asserting any such Claim purchased the Registrable Securities that are the subject thereof (or to the benefit of any person controlling such person) if the untrue statement or omission of material
fact contained in the preliminary prospectus was corrected in the final prospectus, as then amended or supplemented, if such final prospectus was timely made available by the Company pursuant to
Section 5(b) hereof; (iii) be available to the extent that such Claim is based upon a failure of ComVest to deliver or to cause to be delivered the prospectus made available by the
Company, if such prospectus was timely made available by the Company pursuant to Section 5(b) hereof; or (iv) apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of the Company, which consent shall not be unreasonably withheld. Such indemnity shall remain in full force and effect regardless of any investigation made
by or on behalf of ComVest Indemnified Person and shall survive the transfer of the Registrable Securities by ComVest pursuant to Section 9. 

        (b)   ComVest
will indemnify the Company and its officers, directors and employees against any Claims arising out of or based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in connection with a Registration Statement, preliminary prospectus, final prospectus or amendments or supplements thereto to the extent, and only to the
extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with information furnished in writing to the Company, by or
on behalf of ComVest, expressly for use in connection with the preparation of the Registration Statement (including any modifications, amendments or supplements thereto), subject to such limitations
and conditions as are applicable to the indemnification provided by the Company in this Section 8; provided, however, that in no event shall any
indemnity by ComVest under this Section 8 exceed the amount of the net proceeds received by ComVest in connection with the offering effected through such Registration Statement. 

        (c)   Promptly
after receipt by an indemnified person under this Section 8 of notice of the commencement of any action (including any governmental action), such
indemnified person shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 8, deliver to the indemnifying party a written notice of the commencement
thereof, and the indemnifying party shall have the right to participate in, and to the extent that the indemnifying party so desires, jointly with any other indemnifying party similarly notified, to
assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the indemnified person, provided, however, that
an indemnified person shall have the right to retain its own counsel with the reasonable fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by
the indemnifying party, the representation by such counsel of the indemnified person and the indemnifying party would be inappropriate due to actual or potential differing interests between such
indemnified person and any other party represented by such counsel in such proceeding. In such event, the Company shall pay for only one legal counsel for ComVest, and such legal counsel shall be
selected by ComVest. The failure to deliver written notice to an indemnifying party within a reasonable time after the commencement of any such action shall not relieve such indemnifying party of any
liability to the indemnified person under this Section 8, except to the extent that the indemnifying party is materially prejudiced in its ability to such action. The indemnification required
by this Section 8 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due
and payable.

 

        (d)   No
indemnifying party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified person of an unconditional and irrevocable release from
all liability in respect of such claim or litigation. 

        (e)   Notwithstanding
the foregoing, to the extent that any provisions relating to indemnification or contribution contained in the underwriting agreements entered into among
the Company, the underwriters and ComVest in connection with the underwritten public offering are in conflict with the
foregoing provisions, the provisions in such underwriting agreements shall be controlling as to the Registrable Securities included in the public offering. 

        9.    Contribution.    To the extent any indemnification by an indemnifying party is prohibited or limited under
applicable law, the indemnifying party agrees to contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage, liability or expense in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified person on the other hand in connection with the statements or omissions which resulted in
such Claim, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and the indemnified person shall be determined by reference to, among other things,
whether the untrue statement of a material fact or the omission to state a material fact on which such Claim is based relates to information supplied by the indemnifying party or by the indemnified
person, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. Notwithstanding the forgoing, (a) no contribution
shall be made under circumstances where the payor would not have been liable for indemnification under the fault standards set forth in Section 8, (b) no seller of Registrable Securities
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty
of such fraudulent misrepresentation and (c) contribution by any seller of Registrable Securities shall be limited in amount to the net proceeds received by such seller from the sale of such
Registrable Securities. The Company and ComVest agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation or by any other
method of allocation that does not take account of the equitable considerations referred to in this Section. 

        10.    Reports Under Exchange Act.    With a view to making available to ComVest the benefits of Rule 144
promulgated under the Securities Act or any other similar rule or regulation of the SEC that may at any time permit ComVest to sell securities of the Company to the public without registration
("Rule 144"), the Company agrees to: 

          (i)  make
and keep public information available, as those terms are understood and defined in Rule 144; 

         (ii)  file
with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and 

        (iii)  furnish
to ComVest so long as ComVest owns the Shares or the Warrant such other information as may be reasonably requested to permit ComVest to sell such securities
pursuant to Rule 144 without registration. 

        11.    Assignment of the Registration Rights.    The rights to have the Company register Registrable Securities
pursuant to this Agreement shall be automatically assigned by ComVest to any transferee of the Registrable Securities or the Warrant held by ComVest if: (a) the Warrant or the Registrable
Securities, as the case may be, are transferred or assigned in accordance with the requirements of Section 5.1(b) of the Purchase Agreement; (b) ComVest agrees in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a

 
reasonable time after such assignment; (c) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of the name and address of such transferee
or assignee; (d) at or before the time the Company receives the written notice contemplated by clause; and (e) of this sentence, the transferee or assignee agrees in writing to be bound
by all of the provisions contained herein. 

        12.    Amendment of Registration Rights.    Any provision of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and ComVest. Any amendment or waiver affected in
accordance with this Section 12 shall be binding upon ComVest and the Company. 

        13.    Termination of Registration Rights.    The obligations of the Company under this Agreement shall terminate on
the earlier of (a) the sale of the Registrable Securities pursuant to an effective registration statement or otherwise and (b) with respect to ComVest, if ComVest is eligible to sell
under Rule 144(k) under the Securities Act. 

        14.    Miscellaneous.    

        (a)   A
person or entity is deemed to be a holder of Registrable Securities whenever such person or entity owns of record such Registrable Securities or the Warrant
convertible into such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more persons or entities with respect to the same Registrable
Securities, the Company shall act upon the basis of the instructions, notice or election received from the registered owner of such Registrable Securities or Warrant. 

        (b)   Any
notice which is required to be given by this Agreement must be in writing, and shall be given or served, unless otherwise expressly provided herein, by depositing
the same in the United States Mail, postpaid and certified and addressed to the party to be notified, with return receipt requested, or by delivering the same by courier or in person to such party
(or, if the party or parties to be notified be incorporated, to an officer of such party). Notice deposited in the mail, postpaid and certified with return receipt requested, shall be deemed received
and effective upon the deposit in a proper United States depository. Notice given in any other manner shall be

 
effective only if and when received by the party to be notified. For the purposes of notice, the addresses of the parties for the receipt of notice hereunder are: 

	COMPANY:	 	Fischer Imaging Corporation

12300 N. Grant Street

Denver, Colorado 80241

Attention: Harris Ravine
	

 	
 	

Tel.: (303) 450-4370

Fax: (303) 252-4256
	

 	
 	

With copies to:
	

 	
 	

Ronald R. Levine, II

Davis Graham & Stubbs LLP

1550 Seventeenth Street, Suite 500
	

 	
 	

Tel.: 303-892-7514

Fax: 303-892-7400
	

ComVest:	
 	

ComVest Investment Partners II LLC

One North Clematis, Suite 300

West Palm Beach, Florida 33401

Attention: Carl Kleidman
	

 	
 	

Telephone: (561) 868-6070

e-mail: carlk@comvest.com
	

with a copy to:	
 	

Greenberg Traurig, LLP

200 Park Avenue

New York, New York 10166

Attention: Alan Annex and Kenneth A. Gerasimovich
	

 	
 	

Telephone: (212) 801-9200

Facsimile: (212) 801-6400

Any
party shall have the right from time to time, and at any time, to change its address for the receipt of notice by giving at least five (5) days' prior written notice of the change of its
address to the other parties in the manner specified herein. 

        (c)   Failure
of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a
waiver thereof. 

        (d)   This
Agreement shall be governed by and construed and construed in accordance with the laws of the State of New York, without giving effect to any choice of law or
conflict of law rules or provisions. Each of the parties submits to the jurisdiction of the federal courts whose district encompass the Borough of Manhattan, City of New York or the state courts of
the State of New York sitting in the Borough of Manhattan, City of New York in connection with any dispute arising under this Agreement or any of the transactions contemplated hereby, and hereby
waives, to the maximum extent permitted by law, any objection, including any objections based on forum non conveniens, to the bringing of any such proceeding in such jurisdictions 

        (e)   This
Agreement, together with the other Transaction Documents, supersedes all prior agreements and understandings among the parties hereto with respect to the subject
matter hereof, including the Term Sheet dated as of December 29, 2004.

 

        (f)    Subject
to the requirements of Section 11 hereof, this Agreement shall inure for the benefit of and be binding upon the successors and assigns of each of the
parties hereto. 

        (g)   This
Agreement may be signed in two or more counterparts (and by facsimile), each of which shall be deemed an original. 

        (h)   The
headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement. 

        (i)    If
any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or
enforceability of the remainder of this Agreement or the validity or unenforceability of this Agreement in any other jurisdiction. 

        (j)    The
Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to ComVest by vitiating the intent and purpose of the transactions
contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Agreement, that ComVest shall be entitled, in addition to all other available remedies in law or in equity, to an injunction or injunctions
to prevent or cure any breaches of the provisions of this Agreement and to enforce specifically the terms and provisions of this Agreement, without the necessity of showing economic loss and without
any bond or other security being required. 

        (k)   Each
of the parties hereto hereby waives to the fullest extent permitted by applicable law any right it may have to a trial by jury with respect to any litigation
directly or indirectly arising out of, under or in connection with this Agreement or the transactions contemplated hereby and thereby. Each of the parties hereto (i) certifies that no
representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce that foregoing waiver and
(ii) acknowledges that it and the other hereto have been induced to enter into this Agreement and the transactions contemplated hereby and thereby, as applicable, by, among other things, the
mutual waivers and certifications in this Paragraph (k). 

        IN
WITNESS WHEREOF, this Registration Rights Agreement has been duly executed by the undersigned as of the date set forth above. 

	 	 	FISCHER IMAGING CORPORATION
	

 	
 	

	 	 	Name:	Harris Ravine
	 	 	Title:	President and Chief Executive Officer
	

 	
 	

COMVEST INVESTMENT PARTNERS II LLC
	

 	
 	

	 	 	Name:	Harris Ravine
	 	 	Title:	President and Chief Executive Officer

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REGISTRATION RIGHTS AGREEMENT

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Exhibit 10.26    
    

Execution Copy  

 
 

SECURITY AGREEMENT    
    

        THIS SECURITY AGREEMENT (as from time to time amended, modified, restated, supplemented and in effect, this
"Security Agreement") is entered into as of February 22, 2005 by Fischer Imaging Corporation, a Delaware corporation (the "Company"), to and in
favor of ComVest Investment Partners II LLC, a Delaware limited liability company (the "Secured Party"), as contemplated in the Note and Warrant
Purchase Agreement (the "Purchase Agreement") between the Company and the Secured Party dated of even date herewith. 

 
 

RECITALS:    
    

        A.    Pursuant
to the Purchase Agreement, the Company is issuing to the Secured Party a Senior Secured Promissory Note dated of even date herewith in the principal amount of
$5,000,000 and may hereafter issue additional senior secured promissory notes in an aggregate principal amount of up to $5,000,000 (collectively, the
"Notes"). The purchase and sale of the Notes is governed by the Purchase Agreement. Capitalized terms used herein without definition shall be defined in
the manner set forth in the Purchase Agreement. 

        B.    In
order to induce the Secured Party to accept the Notes in accordance with the Purchase Agreement, and in consideration therefor, the Company has agreed to grant to the
Secured Party a perfected lien on and security interest in all of the Company's assets and properties, wherever located, and whether now or hereafter existing, owned or acquired, all pursuant to the
terms of this Security Agreement, in order to secure the due and punctual payment of (i) the principal and interest (including, without limitation, interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Notes, when and as due, whether at maturity, by acceleration,
upon one or more dates set for prepayment or otherwise, and (ii) all other monetary obligations, including but not limited to fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including, without limitation, monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding
regardless of whether allowed or allowable in such proceeding), of the Company under the Notes or this Security Agreement (collectively, the
"Obligations"). 

        C.    It
is a condition precedent to the purchase and acceptance of the Notes by the Secured Party that the Company executes and delivers this Security Agreement. 

        NOW, THEREFORE, for and in consideration of the covenants and provisions set forth herein, and for other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company agrees as follows: 

 
 

ARTICLE 1
  SECURITY INTEREST    
    

        1.1    Grant of Security Interest.    As security for the Obligations, the Company hereby assigns, pledges and grants
a continuing and unconditional security interest to the Secured Party, its successors and assigns, in and to all of the personal property of the Company, wherever located, and whether now owned or
hereafter acquired, including: 

        (a)   all
equipment (including all "Equipment" as such term is defined in Section 9-102(a)(33) of the Uniform Commercial Code as in effect from time to time
in the State of New York (the "Code")), machinery, vehicles, fixtures, improvements, supplies, furniture, and other fixed assets, all as now owned or
hereafter acquired by the Company or in which the Company has or hereafter acquires any interest, and any items substituted therefor as replacements and any additions or

 
accessions thereto (all of the property described in this clause (a) being hereinafter collectively referred to as "Equipment"); 

        (b)   all
goods (including all "Goods" as defined in Section 9-102(a)(44) of the Code) and all inventory (including all "Inventory" as defined in
Section 9-102(a)(48) of the Code) of the Company, now owned or hereafter acquired by the Company or in which the Company has or hereafter acquires any interest, including but not
limited to, raw materials, scrap inventory, work in process, products, packaging materials, finished goods, documents of title, chattel paper and other instruments covering the same and all
substitutions therefor and additions thereto (all of the property described in this clause (b) being hereinafter collectively referred to as "Inventory"); 

        (c)   all
present and future accounts in which the Company has or hereafter acquires any interest (including all "Accounts" as defined in
Section 9-102(a)(2) of the Code), contract rights (including all rights to receive payments and other rights under all equipment and other leasing contracts) and rights to payment
and rights or accounts receivable evidencing or representing indebtedness due or to become due the Company on account of goods sold or leased or services rendered, claims and instruments (including
tax refunds, royalties and all other rights to the payment of money of every nature and description), including but not limited to, any such right evidenced by chattel paper (whether in tangible,
electronic or other form), and all liens, securities, guaranties, remedies, security interests and privileges pertaining thereto (all of the property described in this clause (c) being
hereinafter collectively referred to as "Accounts"); 

        (d)   all
investment property now owned or hereafter acquired by the Company (including all "Investment Property" as defined in Section 9-102(a)(49) of the
Code), including, without limitation, all securities (certificated and uncertificated), securities accounts, securities entitlements, commodity contracts and commodity accounts, and all dividends and
distributions paid or payable thereon; provided, however, that with respect to securities constituting
capital stock or other equity interests in entities whose jurisdiction of formation is other than the United States of America or any state thereof, the Collateral shall not include more than 65% of
the outstanding equity securities of any class of any such issuers; 

        (e)   all
general intangibles now owned or hereafter acquired by the Company or in which the Company has or hereafter acquires any interest (including all "General
Intangibles" as defined in Section 9-102(a)(42) of the Code), including but not limited to, payment intangibles (including all "Payment Intangibles" as defined in
Section 9-102(a)(61) of the Code), choses in action and causes of action and all licenses and permits (to the extent the collateral assignment of such licenses and permits is not
prohibited by applicable law), registrations, franchises, corporate or other business records, systems, designs, software, manuals, procedures, drawings, goodwill, logos, indicia, business
identifiers, inventions, processes, production methods, proprietary
information, know-how and trade-secrets of the Company, and all Owned Intellectual Property, trade-names, copyrights, patents, trademarks (including service marks) and copyright, patent
and trademark applications, all continuations thereof in whole or in part, and contract rights (including but not limited to all rights to receive payments and other rights under all equipment and
other leasing contracts, instruments and documents owned or used by the Company, and any goodwill relating thereto); 

        (f)    all
other personal property owned by the Company or in which the Company has or hereafter acquires any interest, wherever located, and of whatever kind or nature,
tangible or intangible; 

        (g)   all
moneys, cash, chattel paper (including all "Chattel Paper" as defined in Section 9-102(a)(11) of the Code), checks, notes, bills of exchange,
documents of title, money orders, negotiable instruments, commercial paper, and other securities, letters of credit (including all "Letter-of-Credit Rights" as defined in
Section 9-102(a)(51) of the Code), supporting obligations (including all "Supporting Obligations" as defined in Section 9-102(a)(77) of the Code),

 
instruments (including all "Instruments" as defined in Section 9-102(a)(47) of the Code), documents (including all "Documents" as defined in Section 9-102(a)(30)
of the Code) and deposit accounts (including all "Deposit Accounts" as defined in Section 9-102(a)(29) of the Code), deposits and credits from time to time whether or not in the
possession of or under the control of the Secured Party; 

        (h)   all
commercial tort claims (as defined in Section 9-102(a)(13) of the Code); 

        (i)    all
books and records relating to any of the foregoing assets or property; and 

        (j)    any
consideration received or receivable when all or any part of the property referred to in clauses (a) through (i) above is sold, transferred, exchanged,
leased, collected or otherwise disposed of, or any value received or receivable as a consequence of possession thereof, including but not limited to, all products, proceeds (including all "Proceeds"
as defined in Section 9-102(a)(64) of the Code), cash, negotiable instruments and other instruments for the payment of money, chattel paper, security agreements or other documents,
insurance proceeds, condemnation awards or proceeds of other proceeds now or hereafter owned by the Company or in which the Company has an interest. 

        The
property set forth in clauses (a) through (j) of the preceding sentence is referred to herein as the "Collateral." 

        1.2    Perfection of Security Interests.    

        (a)   The
Company hereby authorizes the Secured Party to file a financing statement or financing statements and other filing or recording documents or instruments
(collectively, the "Financing Statements") describing the Collateral (which may be described as "all assets" or similar general description) in any and
all jurisdictions and filing offices where the Secured Party deems such filing to be necessary or appropriate including, without limitation, the jurisdiction of the debtor's location for purposes of
the Code. For purposes of this Section 1.2(a), the Financing Statements shall be deemed to include any amendment, modification, assignment, continuation statement or other similar instrument
consistent with the rights granted to Secured Party under this Agreement and the Purchase Agreement. 

        (b)   The
Company will reasonably cooperate with Secured Party in obtaining control (including "Control" as contemplated by Section 9-312(b) of the Code)
with respect to Collateral consisting of deposit accounts, investment property and electronic chattel paper, and will execute and deliver any and all control agreements reasonably required by the
Secured Party in order to effect and obtain such control. In addition, the Company will (i) notify the Secured Party regarding the acquisition of any and all Collateral which is subject to or
evidenced by a certificate of title (including, without limitation, vehicles) and with respect to such Collateral, upon the request of the Secured Party, cause the certificate of title for such
Collateral to include official notation of the Secured Party's lien and security interest in such Collateral, and (ii) notify the Secured Party regarding the acquisition of any Collateral as to
which perfection of the Secured Party's security interest cannot be effected by the filing of a financing statement but can be effected by possession of such Collateral and with respect to such
Collateral, upon the request of the Secured Party, promptly deliver possession of such Collateral to the Secured Party. 

 
 

ARTICLE 2
  REPRESENTATIONS AND WARRANTIES    
    

        2.1    Representations and Warranties.    The Company represents and warrants that: 

        (a)   The
Company has and shall have good and indefeasible title to all the Collateral owned by it, wherever and whenever acquired, free and clear of any lien or encumbrance
except (i) to the

 
extent disclosed in the Purchase Agreement, (ii) liens for taxes, assessments and other governmental charges or levies (excluding liens imposed pursuant to any of the provisions of ERISA or
Environmental Law) not yet due or as to which the period of grace, if any, related thereto has not expired or which are being contested in good faith and by appropriate proceedings with adequate
reserves on the books of the Company, (iii) claims of materialmen, mechanics, carriers, warehousemen, processors or landlords for labor, materials, supplies or rentals incurred in the ordinary
course of business which are not overdue for a period of more than thirty (30) days or which are being contested in good faith and by appropriate proceedings, (iv) liens consisting of
deposits or pledges made in the ordinary course of business in connection with, or to secure payment of, obligations under workers' compensation, unemployment insurance or similar legislation,
(v) liens securing purchase money indebtedness or capitalized leases for the acquisition of capital assets to the extent permitted without violation of the Purchase Agreement, provided that
such liens shall be created substantially simultaneously with the acquisition or lease of the subject assets, do not at any time encumber any property or assets other than the assets acquired in such
purchase money financing or capitalized lease, and do not secure any amount exceeding the original purchase price or lease payment amount of the acquired assets at the time that such assets were
acquired by the Company, and (vi) the liens and security interests of the Secured Party pursuant to this Security Agreement (collectively, "Permitted
Liens"). Except as disclosed in or permitted without violation of the Purchase Agreement, the Company has not filed, nor is there on record, a financing statement under the
Code (or similar statement or instrument of registration under the law of any jurisdiction) covering any Collateral except for Permitted Liens. No consent of any other person is required on the part
of the Company for the Company's execution, delivery and performance of this Security Agreement and the granting of the liens hereunder. 

        (b)   Schedule A hereto lists, as to the Company, (i) the Company's principal executive office and other place(s)
of business, (ii) the address where the books and records relating to the Collateral are maintained, (iii) any other location of any Equipment or tangible Collateral, (iv) the
location of leased facilities and name of each lessor/sublessor, (v) the location, account title and account numbers of all bank accounts maintained by or on behalf of the Company,
(vi) all Owned Intellectual Property of the Company (setting forth, with respect to all owned patents, trademarks and copyrights or applications therefor, the name, registered owner, filing
date, registration number or serial number, as applicable), and (vii) all other names by which the Company has been known or under which the Company or any predecessor has done business within
the past five (5) years, and all entities or businesses acquired by the Company (whether through stock purchase, merger, consolidation, share exchange, acquisition of assets or otherwise)
within the past five (5) years. 

        (c)   Except
as disclosed or permitted without violation of the Purchase Agreement, the Company has paid or will pay when due all taxes, fees, assessments and other charges
now or hereafter imposed upon the Collateral except for any tax, fee, assessment or other charge the validity of which is being contested in good faith by appropriate proceedings and so long as the
Company shall have set aside on its books adequate reserves with respect thereto. 

        (d)   As
a result of the execution and delivery of this Security Agreement and the filing of any financing statements or other documents necessary to assure, preserve and
perfect the security interest created hereby to the extent a lien may be perfected by filing a financing statement, the Secured Party shall have a valid and perfected lien on, and a continuing
security interest in, the Collateral and such lien shall be superior and prior to all other liens other than the Permitted Liens. 

        (e)   All
Accounts represent bona fide transactions completed in accordance with the terms and provisions contained in the contracts, agreements, invoices and other documents
governing or evidencing the same. As of the date hereof, there are no setoffs, counterclaims or disputes existing

 
or asserted with respect to Accounts, subject only to nonmaterial set off, return and similar rights arising in the ordinary course of business. The Company has not made any agreement with any account
debtor for any deduction therefrom except non-material set-offs and claims arising in the ordinary course of business. To the Company's knowledge, at the date hereof, all
account debtors have the capacity to contract and are solvent, and each Account constitutes the legally valid and binding obligation of the subject account debtor, except as and to the extent set
forth on Schedule B attached hereto. To the Company's knowledge, the goods giving rise to Accounts are not subject to any lien, claim or
encumbrance except (i) set-off and claims arising in the ordinary course of business, (ii) liens, claims and encumbrances in favor of the Secured Party, and (iii) as
disclosed or permitted without violation of the Purchase Agreement. 

        (f)    All
Inventory is of good and merchantable quality, free from any material defects. To the Company's knowledge, none of such Inventory is subject to any licensing,
patent, trademark, trade name or copyright with any person that restricts the Company's ability to manufacture and/or sell Inventory. Except as disclosed in Schedule 4.15(c) of the Purchase
Agreement, the completion of the manufacturing process of such Inventory by a person other than the Company is permitted under each contract to which the Company is a party or to which the subject
Inventory is subject. All Inventory manufactured by the Company has been and will be manufactured in compliance in all material respects with the Fair Labor Standards Act and other applicable law. 

        (g)   None
of the Collateral is held by a third party in any location as assignee, trustee, bailee, consignee or in any similar capacity. 

        (h)   The
Company is a Delaware corporation whose legal name is Fischer Imaging Corporation, whose federal tax identification number is 36-2756787, and whose
Delaware organizational identification number is 2266894. 

        2.2    Survival.    All representations, warranties and agreements of the Company contained in this Security Agreement
shall survive the execution, delivery and performance of this Security Agreement and shall,
except for any covenants which expressly continue thereafter, continue until the termination of this Security Agreement pursuant to Section 5.5 hereof. 

 
 

ARTICLE 3
  COVENANTS    
    

        3.1    Covenants.    The Company hereby covenants and agrees with the Secured Party that so long as this Security
Agreement shall remain in effect, any Obligations shall remain unpaid or unperformed, or the Post-Closing Commitment shall not have expired or been terminated, (a) the Company shall
promptly give written notice to the Secured Party of any adverse claim or levy or attachment, execution or other process against a material portion of the Collateral; (b) at the Company's own
cost and expense, the Company shall take any and all lawful actions reasonably necessary or desirable to defend the Collateral against the claims and demands of all persons other than the Secured
Party and persons holding Permitted Liens, and to defend the security interest of the Secured Party in the Collateral and the priority thereof against any lien or encumbrance of any nature other than
Permitted Liens; (c) the Company shall keep all tangible Collateral insured with financially sound and reputable insurers, against loss by fire, explosion, theft, fraud and such other
casualties, with coverages in amounts and with deductibles at least as favorable as those generally maintained by businesses of similar size, scope and location engaged in similar activities, and
shall maintain liability insurance with financially sound and reputable companies, with coverages in amounts and with deductibles at least as favorable as those generally maintained by businesses of
similar size, scope and location engaged in similar activities (all such policies to name the Secured Party as loss payee and/or additional insured (as appropriate), and with certificates thereof to
be delivered to the Secured Party at any time and from time to time upon reasonable request, indicating that such coverages will not be cancelled or modified without thirty

 
(30) days prior written notice to the Secured Party); (d) the Company shall keep all Equipment and other tangible Collateral in good order and repair (normal wear and tear excepted) and
promptly notify the Secured Party of any event causing any material loss, damage or depreciation in value of the Collateral in the aggregate and of the estimated extent of such loss, damage or
depreciation; (e) at the Secured Party's request, the Company shall mark any Collateral that is chattel paper with a legend showing the Secured Party's lien and security interest therein or
shall deliver same to the Secured Party; (f) the Company shall promptly give written notice to the Secured Party of any change in or addition to the intellectual property rights material to its
business or any change in any of the information set forth on Schedule A hereto, and update such Schedule A accordingly if so requested by the Secured Party; (g) the Company shall
promptly notify the Secured Party in writing of the particulars of any and all commercial tort claims held or acquired by the Company at any time and from time to time; and (h) the Company
shall not (i) amend or terminate any contract or other document or instrument constituting part of the Collateral, except for transactions in the ordinary course of business substantially
consistent with customary practice, (ii) voluntarily or involuntarily exchange, lease, sell, transfer or otherwise dispose of any Collateral other than in the ordinary course of business, with
respect to the routine sale or other disposition of obsolete or worn out Equipment, (iii) make any compromise, settlement, discharge or adjustment or grant any extension of time for payment
with respect to any Account or any lien, Guaranty or remedy pertaining thereto, except for transactions in the ordinary course of business, (iv) except upon thirty (30) days prior
written notice to the Secured Party, change its name, or the location of any Collateral or the establishment or closing of any bank account, or (v) change the location of its principal
executive office or jurisdiction of incorporation. 

        3.2    Further Deliveries.    The Company hereby covenants and agrees with the Secured Party that so long as this
Security Agreement shall remain in effect, any Obligations shall remain unpaid or unperformed, or the Post-Closing Commitment shall not have expired or been terminated, (a) the
Company shall, at any time and from time to time upon request of the Secured Party, execute and deliver any and all specific collateral assignments which the Secured Party may reasonably request with
respect to Owned Intellectual Property, and the Secured Party hereby consents to the filing thereof with the United States Patent and Trademark Office, the United States Copyright Office, and/or any
other governmental agency or office (domestic or foreign) in which such filing may be appropriate, (b) the Company shall use all reasonable efforts to cause each depositary bank holding a
deposit account of the Company, and each securities intermediary holding any investment property owned by the Company, to execute and deliver a control agreement sufficient to provide the Secured
Party with control of such deposit account or investment property, and otherwise in form and substance reasonably satisfactory to the Secured Party, and the Company shall itself execute and deliver
any and all such control agreements (and in the event that any such depositary bank or securities intermediary refuses to execute and deliver such control agreement, the Secured Party may require the
applicable deposit account or investment property to be transferred to another institution which will execute and deliver such control agreements), (c) the Company shall, with respect to all
letter of credit rights and electronic chattel paper owned or held by the Company, take such actions and deliver such agreements as are reasonably requested by the Secured Party to provide the Secured
Party with control thereof, (d) with respect to any Collateral which is the subject of or evidenced by a certificate of title, the Company shall notify the Secured Party of the existence of
such collateral and upon the Secured Party's request, cause the Secured Party's security interest to be officially noted on such certificate of title, (e) upon request by the Secured Party, the
Company shall obtain for the benefit of the Secured Party a landlord waiver or landlord subordination agreement pursuant to which, among other things, the landlord of each premises at which any
material amount of Collateral is located agrees to treat all such Collateral as personal property (and not as fixtures) and agrees to waive or subordinate in favor of the Secured Party any and all
liens and security interests (whether pursuant to a lease agreement, by statute, or otherwise) which such landlord may have for unpaid rent or otherwise, or obtain such landlord's written consent to a
collateral assignment of the subject lease in favor of the Secured Party,

 
(f) in the event that any of the Collateral is at any time or from time to time held by any bailee, warehouseman, consignee or other person, the Company shall notify such person in writing of
the Secured Party's security interest in such Collateral, and shall use commercially reasonable efforts to obtain such person's written agreement to hold such Collateral for the Secured Party's
account and subject to the Secured Party's instructions and to deliver to the Secured Party all warehouse receipts, bills of lading or other similar documents (duly endorsed in favor of the Secured
Party) relating to such Collateral, and (g) the Company shall notify the Secured Party not less than thirty (30) days prior to acquiring any fee interest in any real property, and shall
execute and deliver to the Secured Party a mortgage or deed of trust on such real property to secure the Obligations, which shall be senior and in priority to any other mortgage or deed of trust other
than Permitted Liens. 

        3.3    Intellectual Property.    

        (a)   Except
as could not reasonably be expected to have a Material Adverse Effect, the Company (either itself or through licensees) (i) will continue to use each
registered trademark (owned by the Company)
and trademark for which an application (owned by the Company) is pending, to the extent reasonably necessary to maintain such trademark in full force free from any claim of abandonment for
non-use, (ii) will maintain products and services offered under such trademark at a level not less than the quality of such products and services as of the date hereof,
(iii) will not (and will not knowingly permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby such trademark would reasonably be expected to become
invalidated or impaired in any way, (iv) will not do any act, or and knowingly omit to do any act, whereby any issued patent owned by the Company would reasonably be expected to become
forfeited, abandoned or dedicated to the public, (v) will not knowingly (and will not knowingly permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby
any registered copyright owned by the Company or copyright for which an application is pending (owned by the Company) would reasonably be expected to become invalidated or otherwise impaired, and
(vi) will not (either itself or through licensees) do any act whereby any material portion of the Company's owned copyrights may fall into the public domain. The foregoing does not obligate the
Company to institute or pursue any reconsideration, lawsuit or appellate proceeding, or to exhaust all available legal or administrative recourses. 

        (b)   The
Company will give prompt written notice to the Secured Party if the Company knows, or has reason to know, that any application or registration relating to any
material Owned Intellectual Property has become forfeited, abandoned or dedicated to the public, or of any adverse determination (including, without limitation, any adverse determination in, any
proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any court or tribunal in any country) regarding the Company's ownership of, or the validity of, any
material Owned Intellectual Property or the Company's right to register the same or to own and maintain the same. 

        (c)   Whenever
the Company, either by itself or through any agent, employee, licensee or designee, shall file an application for the registration of any material Owned
Intellectual Property with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof,
the Company shall report such filing to the Secured Party in writing within five (5) business days after the last day of the fiscal quarter in which such filing occurs. Upon request of the
Secured Party, the Company shall execute and deliver, and have recorded, any and all agreements, instruments, documents and papers as the Secured Party may reasonably request to evidence the Secured
Party's security interest in any material copyright, patent or trademark owned by the Company and the goodwill and general intangibles of the Company relating thereto or represented thereby.

 

        (d)   Except
as could not reasonably be expected to have a Material Adverse Effect, the Company will take all reasonable and necessary steps, at the Company's sole cost and
expense, including, without limitation, in any proceeding before the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country
or any political subdivision thereof, to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of the material Owned Intellectual Property,
including, without limitation, filing of applications for renewal, affidavits of use and affidavits of incontestability. The foregoing does
not obligate the Company to institute or pursue any reconsideration, lawsuit or appellate proceeding, or to fully exhaust all available legal or administrative recourses. 

        (e)   In
the event that any material Owned Intellectual Property owned by the Company is infringed, misappropriated or diluted by a third party, the Company shall
(i) at its sole cost and expense, take such actions as the Secured Party shall reasonably request and which in any event, the Company shall reasonably deem appropriate under the circumstances
to protect such Owned Intellectual Property, and (ii) if such Owned Intellectual Property is of material economic value, promptly notify the Secured Party after the Company learns of such
infringement, misappropriation or dilution. 

 
 

ARTICLE 4
  REMEDIAL MATTERS    
    

        4.1    Event of Default.    An "Event of Default "shall exist hereunder (a) if an Event of Default shall occur
under any of the Notes, or (b) if the Company shall breach in any material respect any agreement contained herein or otherwise default in any material respect in the observance or performance
of any of the covenants, terms, conditions or agreements on the part of the Company contained in this Security Agreement and such non-observance or nonperformance continues for a period of
thirty (30) days after the occurrence thereof. 

        4.2    Collections.    Upon the occurrence and during the continuance of an Event of Default, the Secured Party may,
in its sole discretion, in its name or in the name of the Company, or otherwise: (a) communicate with the account debtors of any and all Accounts, and require the Company to notify such account
debtors and any and all parties to any contracts included in the Collateral, notifying such account debtors and parties to contracts that the subject Accounts and contracts have been assigned to the
Secured Party; (b) demand, sue for, collect or receive any money or property at any time payable or receivable on account of or in exchange for, or make any compromise or settlement deemed
desirable with respect to any of the Collateral, but shall be under no obligation to do so; and/or (c) extend the time of payment, arrange for payment in installments, or otherwise modify the
term of, or release, any of the Collateral, without thereby incurring responsibility to, or discharging or otherwise affecting any liability of, the Company, other than to discharge the Company in so
doing with respect to liabilities of the Company to the extent that the liabilities are paid or repaid. After the occurrence and during the continuance of an Event of Default, any money, checks,
notes, bills, drafts, or commercial paper received by the Company shall be held in trust for the Secured Party and shall be promptly (and in any event within five (5) business days after
receipt by the Company) turned over to the Secured Party as its interest shall appear. Upon the occurrence and during the continuance of an Event of Default, the Secured Party may make such payments
and take such actions as the Secured Party deems necessary to protect its security interest in the Collateral or the value thereof, and the Secured Party is hereby unconditionally and irrevocably
authorized (without limiting the general nature of the authority hereinabove conferred) to pay, purchase, contest or compromise any liens which in the judgment of the Secured Party appear to be equal
to, prior to or superior to its security interest in the Collateral and any liens not expressly permitted by this Security Agreement.

 

        4.3    Possession; Sale of Collateral.    

        (a)   Upon
the occurrence and during the continuance of an Event of Default, the Secured Party may: (i) require the Company to assemble the tangible assets that
comprise part of the Collateral and make them available to the Secured Party at any place or places reasonably designated by the Secured Party; (ii) to the extent permitted by applicable law,
with or without notice or demand for performance and without liability for trespass, enter any premises where the Collateral may be located and peaceably take possession of the same, and may demand
and receive such possession from any person who has possession thereof, and may take such measures as it may deem necessary or proper for the care or protection thereof (including, but not limited to,
the right to remove all or any portion of the Collateral); and (iii) with or without taking such possession may sell or cause to be sold, in one or more sales or parcels, for cash, on credit or
for future delivery, without assumption of any credit risk, all or any portion of the Collateral, at public or private sale or at any broker's board or any securities exchange, without demand of
performance or notice of intention to sell or of time or place of sale, except ten (10) days' written notice to the Company of the time and place of such sale or sales (and such other notices
as may be required by applicable statute, if any, and which cannot be waived), which the Company hereby expressly acknowledges is commercially reasonable. The Secured Party shall have no obligation to
clean-up or otherwise prepare any Collateral for sale. The Collateral may be sold or disposed of for cash, upon credit or for future delivery as the Secured Party shall deem appropriate.
Each such purchaser at any such sale shall hold the property sold absolutely, free from any claim or right on the part of the Company. At any such sale, the Collateral, or portion thereof, to be sold
may be sold in one lot as an entirety or in separate parcels, as the Secured Party may determine. The Secured Party shall not be obligated to make any sale of any Collateral if it shall determine not
to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The Secured Party may, without notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so
adjourned. The Secured Party may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered adversely to
affect the commercial reasonableness of any disposition of the Collateral. In case any sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be
retained by the Secured Party until the sale price is paid by the purchaser or purchasers thereof. The Secured Party shall not incur any liability for the failure to collect or realize upon any or all
of the Collateral or for any delay in doing so and, in case of any such failure, shall not be under any obligation to take any action with respect thereto; provided, such Collateral may be sold again
upon like notice. If any Collateral is sold upon credit, the Company will be credited only with payments actually made by the purchaser, received by the Secured Party and applied to the Obligations in
accordance with Section 4.4. In the event the purchasers fail to pay for the Collateral, the Secured Party may resell the Collateral. At any public sale made pursuant to this
Section 4.3, the Secured Party may bid for or purchase, free from any right of redemption, stay or appraisal and all rights of marshalling, the Collateral and any other security for the
Obligations (all such rights being also hereby waived and released by the Company to the fullest extent permitted by law), and may make payment on account thereof by using any claim then due and
payable to the Secured Party from the Company as a credit against the purchase price, and the Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property
without further accountability to the Company therefor. As an alternative to exercising the power of sale herein conferred upon it, the Secured Party may proceed by a suit or suits at law or in equity
to foreclose this Security Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding
by a court-appointed receiver. In any action hereunder, the Secured Party shall be entitled to the

 
appointment of a receiver without notice, to peaceably take possession of all or any portion of the Collateral and to exercise such powers as the court shall confer upon the receiver. Notwithstanding
the
foregoing, if an Event of Default shall occur and be continuing, the Secured Party shall be entitled, in its discretion, to apply, upon written notice to the Company, any cash or cash items
constituting Collateral in its possession to payment of the Obligations and to set off the Obligations against any and all liabilities or obligations owed by the Secured Party to the Company. 

        (b)   If
an Event of Default shall occur and be continuing, the Secured Party shall, in addition to exercising any and all rights and remedies afforded to it hereunder, have
all the rights and remedies of a secured party under all applicable provisions of law, including but not limited to the Code. 

        (c)   If
an Event of Default shall occur and be continuing, the Secured Party shall be entitled (but shall not be required) to (i) operate any or all of the Collateral,
(ii) perform any and all obligations of the Company under any contract included within the Collateral and exercise all rights of the Company thereunder, (ii) do all other acts which the
Secured Party may deem reasonably necessary or appropriate to protect its security interest hereunder, and (iv) sell, assign, subcontract or otherwise transfer any such contract (subject,
however, to the prior approval of each other party to such contract to the extent required thereunder). The Company agrees that notwithstanding anything to the contrary contained in this Security
Agreement, the Company shall remain liable under each contract or other agreement giving rise to Accounts and general intangibles and all other contracts or agreements constituting part of the
Collateral and the Secured Party shall not have any obligation or liability in respect thereof. 

        (d)   After
the occurrence and during the continuance of an Event of Default, upon the Secured Party's request, the Company shall deliver to the Secured Party all original and
other documents, evidencing and relating to the sale and delivery of Inventory or Accounts, including but not limited to, all original orders, invoices and shipping receipts. The Company shall also
furnish to the Secured Party, reasonably promptly upon the request of the Secured Party, such reports, reconciliations and aging balances regarding Accounts as the Secured Party may reasonably request
from time to time. 

        (e)   After
the occurrence and during the continuance of an Event of Default, the Secured Party shall have the right (i) to receive any and all cash dividends, payments
or distributions paid or payable in respect of any investment property included in the Collateral, (ii) to cause such investment property to be registered in the name of the Secured Party or
its nominee, and (iii) to exercise all voting and other rights pertaining to such investment property and any and all rights of conversion, exchange and subscription and any other rights,
privileges or options pertaining to such investment property as if the Secured Party were the absolute owner thereof. The Company hereby authorizes each issuer of investment property included in the
Collateral to rely, without investigation, on any notice given by the Secured Party which states the existence of an Event of Default and requires compliance with instructions of the Secured Party
with respect to such investment property, without requirement of any other or further instructions from the Company; and the Company agrees that each such issuer shall be fully protected in so
complying with any such notice and instruction. 

        4.4    Application of Proceeds.    Unless the Secured Party otherwise directs, the proceeds of any sale of Collateral
pursuant to this Security Agreement or otherwise shall be applied after receipt by the Secured Party as follows: 

        (a)   First,
to the payment of all costs, fees and expenses of the Secured Party and its agents, representatives and attorneys incurred in connection with such sale or with
the retaking, holding, handling, preparing for sale (or other disposition) of the Collateral or otherwise in connection with

 
any of the Notes, this Security Agreement or any of the Obligations, including, but not limited to, the reasonable fees and expenses of the Secured Party's agents and attorneys and court costs
(whether at trial, appellate or administrative levels), if any, incurred by the Secured Party in so doing; 

        (b)   Second,
to the payment of the outstanding principal balance, accrued interest, fees and other amounts payable on the Obligations in such order as the Secured Party may
determine; and 

        (d)   Third,
to the Company or to such other Person as a court may direct. 

        4.5    Authority of Secured Party.    The Secured Party shall have and be entitled to exercise all such powers
hereunder as are specifically delegated to the Secured Party by the terms hereof, together with such powers as are reasonably incidental thereto. The Secured Party may execute any of its duties
hereunder by or through its agents or employees and shall be entitled to retain counsel and to act in reliance upon the advice of such counsel concerning all matters pertaining to its duties
hereunder. 

        4.6    Certain Waivers; Company Not Discharged.    The Company expressly and irrevocably waives (to the extent
permitted by applicable law) presentment, demand for payment and protest of nonpayment in respect of its Obligations under this Security Agreement. The obligations and duties of the Company hereunder
are irrevocable, absolute, and unconditional and shall not be discharged, impaired or otherwise affected by (a) the failure of the Secured Party to assert any claim or demand or to enforce any
right or remedy against the Company or any grantee or any Collateral under the provisions of this Security Agreement or any waiver, consent, extension, indulgence or other action or inaction in
respect thereof, (b) any extension or renewal of any part of the Obligations, (c) the release of any security interests in any part of the Collateral or the release, sale or exchange of
or failure to foreclose against any security held by or for the benefit of the Secured Party for payment or performance of the Obligations, (d) the bankruptcy, insolvency or reorganization of
the Company or any grantee or any other Persons, or (e) any change, restructuring or termination of the corporate structure or existence of the Company or any grantee or any restructuring,
refinancing, subordination or other change or variation in the terms of all or any portion of the Obligations. 

        4.7    Transfer of Security Interest.    Subject to those restrictions imposed under the Purchase Agreement and the
Notes with respect to any transfer or assignment of the Notes, the Secured Party may transfer to any other Person all or any part of the liens and security interests granted hereby, and all or any
part of the Collateral which may be in the Secured Party's possession. Upon such transfer, the transferee shall be vested with all the rights and powers of the Secured Party hereunder with respect to
such of
the Collateral as is so transferred, but, with respect to any of the Collateral not so transferred, the Secured Party shall retain all of its rights and powers (whether given to it in this Security
Agreement, or otherwise). 

 
 

ARTICLE 5
  MISCELLANEOUS    
    

        5.1    Further Assurances.    The Company agrees, at its expense, to do such further things, to execute, acknowledge,
deliver and cause to be duly filed all such further instruments and documents and take all such actions as the Secured Party may from time to time reasonably request for the better preservation and
perfection of the security interests and the rights and remedies created hereby, including but not limited to the execution and delivery of such schedules of Collateral and additional assignments,
agreements and instruments, the payment of any fees and taxes required in connection with the execution and delivery of this Security Agreement, the granting and maintenance of the security interests
created hereby and the execution, filing and recordation of any financing statements (including fixture filings) or other documents as the Secured Party may deem reasonably necessary or desirable for
the perfection of the security interests granted hereunder. If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any promissory note or other

 
instrument, such note or instrument shall be immediately pledged and delivered to the Secured Party, duly endorsed in a manner satisfactory to the Secured Party. If any Collateral requires possession
thereof to perfect the Secured Party's security interest hereunder, such Collateral shall be promptly delivered to the Secured Party or its agent. If at any time the Company shall take and perfect a
security interest in any property to secure payment and performance of an Account, the Company, upon the request of the Secured Party, shall promptly assign such security interest to the Secured
Party. The Company agrees that, after the occurrence and during the continuance of an Event of Default, it shall upon request of the Secured Party, take any and all actions, to the extent permitted by
applicable law, at its own expense, to obtain the approval of any governmental authority for any action or transaction contemplated by this Security Agreement that is then required by law, and
specifically, without limitation, upon request of the Secured Party, to prepare, sign and file with any governmental authority the Company's portion of any application or applications for consent to
the assignment of licenses held by the Company, or for consent to the possession and sale of any of the Collateral by or on behalf of the Secured Party. The Company shall at all times, at its own
expense and cost, keep accurate and complete records with respect to the Collateral, including but not limited to a record of all payments and proceeds received in connection therewith or as a result
of the sale thereof and of all credits granted, and agrees that the Secured Party or its representatives shall have the right at any reasonable time and from time to time to call at the Company's
place or places of business to inspect the Collateral and to examine or cause to be examined all of the books, records, journals and other data relating to the Collateral and to make extracts
therefrom or copies thereof as are reasonably requested. 

        5.2    Effectiveness.    This Security Agreement shall take effect immediately upon execution and delivery by the
Company. 

        5.3    Indemnity; Reimbursement of Secured Party; Deficiency.    In connection with the administration and enforcement
or exercise of any right or remedy granted to the Secured Party hereunder or under any other security documents, the Company shall, subject to the limitations set forth hereafter,
(a) indemnify, defend and hold harmless the Secured Party from and against any and all claims, demands, losses, judgments and liabilities (including but not limited to liabilities for taxes and
penalties) of whatever nature, incurred by or assessed against the Secured Party in connection with such administration, enforcement or exercise (including in connection with any workout,
restructuring, bankruptcy or any similar proceeding), and (b) pay or reimburse the Secured Party for all reasonable costs and expenses, including but not limited to the reasonable fees and
disbursements of attorneys, incurred by or assessed against the Secured Party in connection with such administration, enforcement or exercise (including in connection with any workout, restructuring,
bankruptcy or any similar proceeding), but not including any costs or expenses related to the negotiation, drafting or execution of this Security Agreement or related documents (except to the extent
provided in Article 8 of the Purchase Agreement). The foregoing indemnity agreement includes all reasonable costs incurred by the Secured Party in connection with any litigation relating to the
Collateral whether or not the Secured Party shall be a party to such litigation, including but not limited to the reasonable fees and disbursements of attorneys for the Secured Party, and any
out-of-pocket costs incurred by the Secured Party in appearing as a witness or in otherwise complying with legal process served upon it. The obligations of the Company in this
Section 5.3 shall not apply to any claims or losses which are found by a court of competent jurisdiction to have been proximately and primarily caused by the gross negligence or willful
misconduct of the Secured Party. All indemnities contained in this Section 5.3 and elsewhere in this Security Agreement shall survive the expiration or earlier termination of this Security
Agreement. After application of the proceeds by the Secured Party pursuant to Section 4.4 hereof, the Company shall remain liable to the Secured Party for any deficiency. The provisions of this
Section 5.3 shall survive any termination of this Security Agreement and release of liens hereunder.

 

        5.4    Continuing Lien.    It is the intent of the parties hereto that (a) this Security Agreement shall
constitute a continuing agreement as to any and all future, as well as existing transactions, between the Company and the Secured Party under or in connection with the Notes, the Purchase Agreement
and the other Transaction Documents, and (b) the security interest provided for herein shall attach to after-acquired as well as existing Collateral. 

        5.5    Release.    Upon payment in full of the Obligations and expiration or termination of the
Post-Closing Commitment, the Secured Party shall reassign, redeliver and release (or cause to be so reassigned, redelivered and released), without recourse upon or warranty by the Secured
Party, and at the sole expense of the Company, to the Company, against receipt therefor, such of the Collateral (if any) as shall not have been sold or otherwise applied by the Secured Party pursuant
to
the terms hereof and not theretofore reassigned, redelivered and released to the Company, together with appropriate instruments of reassignment and release. 

        5.6    Notice.    Any notice required or permitted hereunder shall be given in writing (unless otherwise specified
herein) and shall be effective upon personal delivery, via facsimile (upon receipt of confirmation of error-free transmission) or two business days following deposit of such notice with an
internationally recognized courier service, with all charges prepaid or billed to the account of the sender and addressed to each of the other parties thereunto entitled at the following addresses, or
at such other addresses as a party may designate by five days advance written notice to each of the other parties hereto. 

	 	Company:	Fischer Imaging Corporation

12300 N. Grant Street

Denver, Colorado 80241

ATTENTION: Harris Ravine
	

 	

 	

Telephone: (303) 452-6800

Facsimile: (303) 252-4256
	

 	

with a copy to:	

Ronald R. Levine, II

Davis Graham & Stubbs LLP

1550 Seventeenth Street, Suite 500

Denver, Colorado 80202-1500
	

 	

 	

Telephone: (303) 892-9400

Facsimile: (303) 893-1379
	

 	

Secured Party:	

ComVest Investment Partners II LLC

One North Clematis, Suite 300

West Palm Beach, Florida 33401

ATTENTION: Carl Kleidman
	

 	

 	

Telephone: (561) 868-6070

E-mail: carlk@comvest.com
	

 	

with a copy to:	

Greenberg Traurig, LLP

200 Park Avenue

New York, New York 10166

ATTENTION: Alan Annex and Kenneth A. Gerasimovich
	

 	

 	

Telephone: (212) 801-9200

Facsimile: (212) 801-6400

        5.7    Successors and Assigns.    This Security Agreement shall be binding upon and inure solely to the benefit of
each party hereto and their successors and assigns, and nothing in this Security

 
Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. Neither the Company nor
the Secured Party shall assign this Security Agreement or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, the Secured Party may
assign its rights hereunder, subject to Section 4.7 above. 

        5.8    Governing Law; Jurisdiction; Waiver of Jury Trial.    The provisions of this Security Agreement shall be
governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice of law or conflict of law rules or provisions. The Company hereby irrevocably
consents to the jurisdiction of all courts (state and federal) sitting in the State of New York in connection with any claim, action or proceeding relating to or for enforcement of this Security
Agreement, and hereby waives any defense of inconvenient forum or other such claim or defense in respect of the lodging of any such claim, action or proceeding in any such court. THE COMPANY HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY CLAIM, ACTION OR PROCEEDING RELATING TO THIS SECURITY AGREEMENT. 

        5.9    Waivers.    No failure or delay of the Secured Party in exercising any power or right hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or future
exercise thereof or the exercise of any other right or power. The rights and remedies of the Secured Party hereunder are cumulative, may be exercised singly or concurrently, and are not exclusive of
any rights or remedies which it would otherwise have. No course of conduct or course of dealing, or any delay, indulgence or other act or omission of the Secured Party, shall affect or impair, or
constitute a waiver of, any of the Secured Party's rights or remedies hereunder, except to the extent set forth in a written agreement as provided in Section 5.10. No waiver of any provision of
this Security Agreement or consent to any departure by the Company therefrom shall in any event be effective unless the same shall be evidenced as provided in Section 5.10, and then such waiver
or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on the Company in any case shall entitle the Company to any other or further
notice or demand in similar or other circumstances. 

        5.10    Amendments.    Neither this Security Agreement nor any provision hereof may be amended or modified, and no
required performance hereunder may be waived, except pursuant to an agreement or agreements in writing signed by the party to be charged therewith. 

        5.11    Severability.    In the event any one or more of the provisions contained in this Security Agreement shall be
held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such provision shall be limited in scope or effect to the extent necessary so as to permit such provision to
be enforceable to the fullest extent permitted by applicable law, and the validity, legality and enforceability of the remaining provisions contained herein or therein shall not in any way be affected
or impaired thereby. 

        5.12    Counterparts.    This Security Agreement may be executed in two or more counterparts, each of which shall
constitute an original, but all of which when taken together shall constitute but one contract, and shall become effective when copies hereof which, when taken together, bear the signatures of each of
the parties hereto shall be delivered or mailed to the Secured Party. 

        5.13    Headings.    Article and Section headings used herein are for convenience of reference only and are not to
affect the construction of, or to be taken into consideration in interpreting, this Security Agreement. 

        5.15    Interpretation.    In the event of any express conflict between this Security Agreement and the Purchase
Agreement, the terms of the Purchase Agreement shall control; provided, that the imposition of any greater or more specific standard of performance or obligation in this Security Agreement shall not
constitute a conflict with the Purchase Agreement. 

[signatures
on following pages] 

 
        IN WITNESS WHEREOF, this Security Agreement has been duly executed by each of the undersigned as of the date first set forth above. 

	 	 	COMPANY:
	

 	
 	

FISCHER IMAGING CORPORATION
	

 	
 	

 	

 
	 	 	By:	    
 Name: Harris Ravine

Title: President and Chief Executive Officer
	

 	
 	

 	

 
	 	 	COMVEST INVESTMENT PARTNERS II LLC
	

 	
 	

 	

 
	 	 	By:	    
 Name:

Title:

 

 
 

SCHEDULE A
  Location of Asset and Records    
    

 

 
 

SCHEDULE B    
    

QuickLinks

Exhibit 10.26

SECURITY AGREEMENT

RECITALS

ARTICLE 1 SECURITY INTEREST

ARTICLE 2 REPRESENTATIONS AND WARRANTIES

ARTICLE 3 COVENANTS

ARTICLE 4 REMEDIAL MATTERS

ARTICLE 5 MISCELLANEOUS

SCHEDULE A Location of Asset and Records

SCHEDULE B

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