<PAGE>
EXHIBIT 10.30
SECURITY AGREEMENT
(Viisage)
1. Grant.
Viisage Technology, Inc., a Delaware corporation ("Debtor") with offices in
Littleton, Massachusetts, grants to Commerce Bank & Trust Company, a
Massachusetts trust company with offices in Worcester, Massachusetts ("Secured
Party"), a security interest in the property defined below as "Collateral."
2. Purpose.
A. Debtor grants the foregoing security interest to secure the full and
timely payment, performance, and observance of all its obligations to Secured
Party now existing and hereafter arising, direct or indirect, absolute or
contingent, due or to become due, and whether joint, several, or joint and
several (collectively "Obligations"), including but not limited to the
indebtedness evidenced by Debtor's promissory note of even date in the face
amount of $4,000,000 ("Note").
B. This agreement is made in connection with a Loan Agreement of even date
between Debtor and Secured Party ("Loan Agreement"). This agreement is
supplemented by the Loan Agreement and by the following documents, all of even
date ("Supplementary Documents"): Lockbox Agreement; Collateral Assignment of
Unencumbered Contracts; and Collateral Assignment of Key-Man Life Insurance
Policy.
C. Some of Debtor's assets are subject to security interests held by Lau
Acquisition Corp. ("Lau") or by Fleet Business Credit Corp. ("Fleet"). Lau,
Fleet, and Secured Party are parties to a certain Intercreditor Agreement dated
as of June 15, 2000 ("Intercreditor Agreement"). The Intercreditor Agreement
provides that Fleet will hold a senior security interest in certain assets of
Debtor and that Lau will hold a senior security interest in certain other
assets of Debtor, while Secured Party will hold (1) a senior security interest
in all assets of Debtor as to which neither Fleet nor Lau is senior and (2) a
junior security interest in all other assets of Debtor. This agreement shall be
construed accordingly.
3. Collateral.
"Collateral" means all of the Debtor's rights and interests in fixtures,
inventory, equipment, chattel paper, instruments, documents, accounts,
investment property, and general intangibles, including without implied
limitation the interests in property described on Exhibit A, attached. Each
category of collateral listed in the preceding sentence shall have the meaning
attributed to it in the Massachusetts Uniform Commercial Code, the definitional
sections of which are incorporated herein by reference as if fully set forth in
this agreement. "Collateral" also means and includes all other rights of Debtor
in tangible and intangible property of any other nature whatsoever. The
security interest of the Secured Party in the Collateral shall extend to all
collateral of the kind described above which Debtor acquires at any time before
the full payment, performance, and observance of the Obligations. Without
limiting the generality of the foregoing
<PAGE>
provisions, the term "Collateral" shall encompass all the Debtor's rights now
existing or hereafter arising under (i) a certain Purchase Agreement dated June
15, 1999, between the Debtor and Lau and (ii) a certain Purchase Agreement dated
September 12, 1996, between the Debtor and the predecessor in interest of Fleet,
as amended ("Purchase Agreements"), specifically including all "Lease Residual
Rights" as defined in the Purchase Agreements. The term "Purchase Agreements"
includes all amendments, restatements, replacements, and renewals.
4. Covenants, Warranties, and Agreements.
A. Debtor warrants and covenants that (1) it is the owner of the
Collateral free and clear of all claims, liens, and security interests, other
than those listed on Exhibit B, attached ("Permitted Encumbrances"), (2) it has
the lawful power and authority to make and perform this agreement, (3) the only
locations of the Collateral are or will be (i) at Debtor's present facility,
which is listed on Exhibit C, attached, (ii) at the places specified in the
current contracts between Debtor and Debtor's current customers, all of which
are listed on Exhibit C attached, and (iii) at places to be specified in future
contracts between Debtor and its customers and (4) Debtor has and will have no
Collateral except at the foregoing locations.
B. Debtor covenants and agrees with Secured Party as follows:
(1) it will timely pay Secured Party all amounts required by the
Obligations, whether on demand, at maturity, by acceleration, or otherwise, and
will otherwise perform and observe strictly in accordance with their terms all
of the Obligations;
(2) it will defend the Collateral against the claims and demands of
all persons and will indemnify and hold harmless Secured Party against all such
claims and demands;
(3) it will not permit any of the Collateral, or any business records
relating to the Collateral, to be removed from a permitted location without the
prior written consent of Secured Party, except in the ordinary course of
business;
(4) it will immediately advise Secured Party in writing of any change
in its place of business, or the opening of any new place of business;
(5) it will not permit (a) any security interests (other than Secured
Party's security interest and the Permitted Encumbrances) to attach to any of
the Collateral; (b) permit any of the Collateral to be levied upon under any
legal process or to become the subject of any lien unless such lien is dissolved
within thirty (30) days after the lien arises; (c) transfer in any manner
whatsoever any interest in the Collateral without the prior written consent of
the Secured Party; (d) permit to be done or to occur anything that may impair
the value of any of the Collateral or the security intended to be afforded by
this agreement; or (e) permit any tangible Collateral to become an accession to
other goods, unless such other goods are owned by Debtor; and
(6) it will perform and observe, as and when due, all the terms and
conditions of the obligations secured by the Permitted Encumbrances.
2
<PAGE>
C. With respect to Collateral consisting of inventory and equipment,
Debtor further covenants and agrees as follows:
(1) it will insure the Collateral against all hazards requested by
Secured Party in form and amount reasonably satisfactory to Secured Party and
will use the proceeds of such insurance to repair or replace the Collateral free
of all liens and security interests other than Secured Party's and (to the
extent applicable) the Permitted Encumbrances. If Debtor fails to obtain such
insurance, Secured Party shall have the right (but not the obligation) to obtain
it at Debtor's expense, whereupon Debtor shall reimburse Secured Party on
demand;
(2) it will keep the Collateral in good condition and repair,
reasonable wear and tear excepted, and will permit Secured Party and its agents
to inspect the Collateral at any reasonable times; and
(3) it will pay Secured Party on demand all reasonable amounts,
including reasonable attorney's fees, paid or incurred by Secured Party (a)
after notice to Debtor, for any costs which Secured Party incurs to discharge
Debtor's duties with regard to taxes, levies, repairs, or maintenance of the
Collateral, and (b) after any default, in taking possession of, disposing of, or
preserving the Collateral.
D. With respect to Collateral consisting of chattel paper, instruments,
documents, accounts, investment property, and general intangibles, Debtor
covenants and agrees as follows:
(1) it will immediately upon Secured Party's request give notice of
Secured Party's security interest to the persons obligated to Debtor on any such
Collateral;
(2) it will immediately upon Secured Party's demand deliver to
Secured Party any such Collateral requested by it, in connection with which
Debtor on demand shall make or furnish all endorsements, notations, records,
information, and other forms of assistance requested by Secured Party to enable
it to perfect its security interest in such Collateral or to hold, transfer, or
collect the proceeds of the same; and
(3) it will take any action necessary to preserve its rights against
account debtors and any other obligors on such Collateral.
E. Debtor covenants and agrees with Secured Party that except as provided
in the Loan Agreement, Debtor will not take any new loan, refinance any existing
loan, or otherwise create or incur any new or additional obligations secured by
the Permitted Encumbrances.
5. Power of Attorney.
Debtor agrees to take all steps reasonably requested by Secured Party to
protect and perfect its security interest in the Collateral. For that purpose
Debtor irrevocably appoints Secured Party as Debtor's attorney-in-fact to do all
acts and things which Secured Party decides
3
<PAGE>
advisable to perfect and continue perfected such security interest and to
protect the Collateral, but Secured Party agrees not to exercise the foregoing
power until after an Event of Default.
6. Default. Debtor shall be in default upon the occurrence of any of the
following events, each of which shall constitute an Event of Default (sometimes
referred to merely as "default") under this agreement:
(1) Material breach of any warranty, covenant, or other provision
of this agreement;
(2) Material misrepresentation in this agreement or in any
document furnished to Secured Party by or on behalf of Debtor;
(3) The imposition upon any Collateral of any lien or encumbrance
(other than the Permitted Encumbrances and a security interest in favor of
Secured Party) except (i) liens for taxes for which Borrower (a) has established
adequate reserves and (b) is contesting in good faith, (ii) liens for taxes not
yet due and payable and (iii) liens dissolved within thirty (30) days after they
arise;
(4) The making of any levy, seizure, sequestration, or attachment
of or upon any property of Debtor, unless released within thirty (30) days;
(5) The issuance of any injunction or other order which, in
Secured Party's judgment, materially impairs Debtor's business or its financial
condition, unless such injunction is dissolved within seven (7) days after its
issuance;
(6) The filing by Debtor in any forum of any petition, answer, or
similar document seeking (a) relief under any bankruptcy, insolvency, or similar
law, or (b) the appointment of a receiver, trustee, or other fiduciary to take
charge of any of Debtor's property;
(7) The filing against Debtor in any forum of any petition or
similar document under any bankruptcy, insolvency, or similar law, if such is
not dismissed within sixty (60) days;
(8) The filing against Debtor in any forum of any petition or
similar document seeking the appointment of a receiver, trustee, or other
fiduciary to take charge of any of Debtor's property, if such is not dismissed
within sixty (60) days;
(9) Debtor's written statement or acknowledgment of its inability
to pay its debts as they become due;
(10) Any assignment by Debtor for the benefit of any of its
creditors, or any composition by Debtor with any of its creditors; or
(11) The dissolution of Debtor as a corporation;
4
<PAGE>
(12) The commencement of any proceeding seeking the dissolution
of Debtor, unless such proceeding is dismissed within sixty (60) days; or
(13) The occurrence of any Event of Default under the Loan
Agreement, the Note, or any other document which secures, evidences, or states
any of the Obligations, unless such Event of Default is cured within such time,
if any, as is expressly allowed for such a cure.
7. Power to Sell or Collect Collateral.
A. Upon and after the occurrence of any Event of Default Secured Party
shall have, in addition to all other rights and remedies, the rights and
remedies of a secured party under the Uniform Commercial Code of the state in
which the Collateral is located, including without implied limitation the right
to take possession of the Collateral. For that purpose Secured Party may enter
upon any premises on which the Collateral may be situated and remove the same
therefrom. Unless the Collateral is perishable, or threatens to decline
speedily in value, or is of a type customarily sold on a recognized market,
Secured Party shall give Debtor at least ten (10) days' prior written notice of
the time and place of any public sale of Collateral or of the time after which
any private sale or any other intended disposition is to be made.
B. At any time in its discretion after any Event of Default Secured Party
may transfer any securities or other property constituting Collateral into its
own name or that of its nominee, may receive the income thereon, may hold the
same as security, or may apply it against principal, interest, or other sums due
on the Obligations. Insofar as the Collateral consists of accounts receivable,
insurance policies, instruments, documents, chattel paper, or general
intangibles, Secured Party may demand, collect, receipt for, settle, compromise,
adjust, sue for, foreclose, or realize upon the same as it may determine,
whether or not the same are then due. To realize Secured Party's rights
therein, Secured Party after any Event of Default may receive, open, and dispose
of mail addressed to Debtor and may endorse notes, checks, drafts, money orders,
documents of title, or other evidence of payment, shipment, or storage or any
other form of Collateral, on behalf of and in the name of Debtor.
8. Deposits.
Regardless of the adequacy of Collateral, any deposits or other sums at any
time credited by or due from Secured Party to Debtor may at any time after any
Event of Default be applied to or set off against liabilities on which Debtor is
liable as a primary obligor and may at or after the maturity thereof be applied
to or set off against liabilities on which Debtor is liable as a secondary
obligor.
9. Waivers and Assents.
To the full extent permitted by law, Debtor waives demand, notice, and
protest of all instruments; notice of acceptance of this agreement; notice of
loans made, credit extended, collateral received or delivered; and notice of all
other actions taken by Secured Party in reliance on this agreement, and all
other demands and notices of any description. With respect both to the
Obligations and the Collateral, Debtor assents to any extension, postponement,
or other
5
<PAGE>
indulgence; to any substitution, exchange, or release of collateral; to the
addition or release of any person primarily or secondarily liable; to the
acceptance of partial payments; and to any settlement, compromise, or
adjustment, all in such manner and at such time or times as Secured Party may
deem advisable. To the full extent permitted by law, Secured Party shall have no
duty as to the collection or protection of the Collateral or any income
therefrom, as to the preservation of rights against prior parties; and as to the
preservation of any rights pertaining thereto. Secured Party may exercise its
rights with respect to the Collateral without resort or regard to other sources
of reimbursement for the Obligations. Secured Party shall not be deemed to have
waived any of its rights unless such waiver is in writing and signed by Secured
Party. No delay or omission on the part of Secured Party in exercising any right
shall operate as a waiver of such right or any other right. No waiver shall
arise from any course of conduct by Secured Party. A waiver on any one occasion
shall not be construed as a bar to or waiver of any right on any future
occasion. All rights and remedies of Secured Party, whether available by law or
stated in this agreement or in any other instrument or document, shall be
cumulative, and all such rights and remedies may be exercised singly,
concurrently, or sequentially.
10. Expenses; Proceeds of Collateral.
Debtor shall pay on demand to Secured Party any and all expenses, including
reasonable counsel fees, incurred or paid by Secured Party in protecting or
enforcing its rights under this agreement (i) after notice to Debtor, if no
Event of Default is then outstanding or (ii) after any Event of Default . After
deducting all such expenses, the balance of any proceeds of collection or sale
of the Collateral shall be applied to the payment of principal, interest, and
other sums due on the Obligations in such order as Secured Party may determine,
proper allowance for interest on Obligations not then due being made, and any
surplus shall be returned to Debtor.
11. General.
A. Any communication to Debtor shall be effective only upon its actual
delivery to Debtor's principal office, to the attention of Debtor's Chief
Financial Officer.
B. Any communication to Secured Party shall be effective only upon its
actual delivery to the attention of Secured Party's Senior Loan Officer, 390
Main Street, Worcester, Massachusetts 01608.
C. Because this agreement has been negotiated and signed in Massachusetts
in reliance upon the applicability of Massachusetts substantive law, the
construction, validity, and performance of this agreement shall be governed by
the laws of Massachusetts, disregarding any law or doctrine which might dictate
the application of the law of another state, except as provided in Section 7A.
This agreement shall benefit Secured Party and its successors and assigns and
shall bind Debtor and its successors and assigns. This agreement may not be
amended, supplemented, or otherwise changed except by a written instrument
signed by both parties. This agreement (together with the Supplementary
Documents) contains the entire understanding of the parties, superseding all
negotiations, representations, and prior understandings. All rights and
remedies accorded Secured Party in this agreement are
6
<PAGE>
cumulative; none shall be considered to limit or restrict any right or remedy
otherwise available to Secured Party.
Signed as a sealed instrument as of June 15, 2000.
Witness: VIISAGE TECHNOLOGY, INC.
By: /s/ Sean F. Mack
--------------------------------- ----------------------------------
Sean F. Mack, Treasurer
and Controller
COMMERCE BANK & TRUST
COMPANY
By: /s/ Roger F. Allard
--------------------------------- ----------------------------------
Roger F. Allard,
Senior Vice President
7
<PAGE>
EXHIBIT A to Security Agreement
Debtor: Viisage Technology, Inc.
Secured Party: Commerce Bank & Trust Company
Collateral
All of the following property and rights of the Debtor (as defined under the
Massachusetts Uniform Commercial Code unless specifically defined otherwise in
the Security Agreement), now existing or hereafter arising or acquired, whether
arising by future advances or otherwise: all Inventory, meaning all goods,
---------
merchandise, raw materials, supplies, goods in process, finished goods, and
other tangible personal property held by the Debtor for processing, sale or
other business purpose or to be used or consumed in the Debtor's business; all
Accounts, meaning any right to payment for goods sold or leased or for services
--------
rendered which is not evidenced by an instrument or chattel paper, whether or
not it has been earned by performance; all Documents, meaning all documents of
---------
title including bills of lading, dock warrants, dock receipts, warehouse
receipts, and orders for the delivery of goods, and also any other document
which is in the regular course of business or financing is treated as adequately
evidencing that the person in possession of its is entitled to receive, hold,
and dispose of the document and goods it covers; all Instruments, meaning all
-----------
negotiable instruments, certificated securities, and any other writing which
evidences a right to payment of money and is not itself a security agreement or
lease and is of a type which are in the ordinary course of business transferred
by delivery with any necessary endorsement or assignment; all Chattel Paper,
-------------
meaning a writing or writings which evidence both a monetary obligation and a
security interest in or a lease of specific goods; all Investment Property,
-------------------
meaning all securities, securities accounts, securities entitlements, commodity
contracts, commodity accounts, and all other investment property; all General
-------
Intangibles, including things in action, meaning any personal property other
-----------
than goods, accounts, chattel paper, documents, and instruments, but including
without limitation all good will and contract rights; money; and all Goods,
-----
meaning all things which are movable at the time the security interest attaches
or which are fixtures, including without limitation all equipment and machinery.
8
<PAGE>
EXHIBIT "B" to Security Agreement
Permitted Encumbrances
Secured Party Collateral
Lau See Intercreditor Agreement.
Fleet See Intercreditor Agreement.
9
<PAGE>
EXHIBIT "C" to Security Agreement
Locations of Collateral
(i) Debtor's present facility:
30 Porter Road, Littleton, Massachusetts
(ii) Locations dictated by current customer contracts:
10
