Audiovox 2011 Annual Report Download - page 318

[EXECUTION]
SECURITY AGREEMENT
This SECURITY AGREEMENT (this “Agreement”), dated as of March 1, 2011, among the Grantors listed on the signature pages
hereof and those additional entities that hereafter become parties hereto by executing the form of Joinder attached hereto as Annex 1 (each, a
“Grantor”), and WELLS FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company (“ WFCF”), in its capacity as agent for the
Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns in such capacity, “ Agent”).
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated of even date herewith (as amended, restated, supplemented, or otherwise modified
from time to time, the “Credit Agreement”), by and among Audiovox Corporation, a Delaware corporation (“ Parent”), Audiovox Accessories Corp.,
a Delaware corporation (“ACC”), Audiovox Electronics Corporation, a Delaware corporation (“ AEC”), Audiovox Consumer Electronics, Inc., a
Delaware corporation (“ACEI”), American Radio Corp., a Georgia corporation (“ ARC”), Code Systems, Inc., a Delaware corporation (“ CSI”),
Invision Automotive Systems, Inc., a Delaware corporation (“ IAS”), Klipsch Group, Inc., an Indiana corporation (“ Klipsch”) and Batteries.com,
LLC, an Indiana limited liability company (“ Batteries” and together with each of ACC, AEC, ACEI, ARC, CSI, IAS and Klipsch, each,
individually, a “Borrower” and, collectively, “Borrowers”), the lenders party thereto as “Lenders” (such Lenders, together with their respective
successors and assigns in such capacity, each, individually, a “Lender” and, collectively, the “Lenders”) and Agent, the Lender Group has agreed to
make certain financial accommodations available to Borrowers from time to time pursuant to the terms and conditions thereof; and
WHEREAS, Agent has agreed to act as agent for the benefit of the Lender Group and the Bank Product Providers in connection with the
transactions contemplated by the Credit Agreement and this Agreement; and
WHEREAS, in order to induce the Lender Group to enter into the Credit Agreement and the other Loan Documents and to induce the
Lender Group to make financial accommodations to Borrowers as provided for in the Credit Agreement, Grantors have agreed to grant a continuing
security interest in and to the Collateral in order to secure the prompt and complete payment, observance and performance of, among other things, the
Secured Obligations.
NOW, THEREFORE, for and in consideration of the recitals made above and other good and valuable consideration, the receipt,
sufficiency and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. Defined Terms. All initially capitalized terms used herein (including in the preamble and recitals hereof) without definition shall
have the meanings ascribed thereto in the Credit Agreement. Any terms (whether capitalized or lower case) used in this Agreement that are defined in
the Code shall be construed and defined as set forth in the Code unless otherwise defined herein or in the Credit Agreement; provided, however, that to
the extent that the Code is used to define any term used herein and if such term is defined differently in different Articles of the Code, the definition
of such term contained in Article 9 of the Code shall govern. In addition to those terms defined elsewhere in this Agreement, as used in this
Agreement, the following terms shall have the following meanings:
(a) “Account” means an account (as that term is defined in Article 9 of the Code).
(b) “Account Debtor” means an account debtor (as that term is defined in the Code).
(c) “Activation Instruction” has the meaning specified therefor in Section 6(k).
(d) “Agent” has the meaning specified therefor in the preamble to this Agreement.
(e) “Agent's Lien” has the meaning specified therefor in the Credit Agreement.
(f) “Agreement” has the meaning specified therefor in the preamble to this Agreement.
(g) “Bank Product Obligations” has the meaning specified therefor in the Credit Agreement.
(h) “Bank Product Provider” has the meaning specified therefor in the Credit Agreement.
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