Exhibit 10.2
[COMERICA LOGO]
SECURITY AGREEMENT
As of NOVEMBER 28, 2001 , for value received, the undersigned ("Debtor")
pledges, assigns and grants to COMERICA BANK-CALIFORNIA ("Bank"), a CALIFORNIA
banking corporation, whose address is 000 XXXX XXXXX XXXXX XXXXXX, XXX XXXX, XX,
00000, Attention: COMMERCIAL LOAN DOCUMENTATION, Mail Code 4604, a continuing
security interest and lien (any pledge, assignment, security interest or other
lien arising hereunder is sometimes referred to herein as a "security interest")
in the collateral (as defined below) to secure payment when due, whether by
stated maturity, demand acceleration or otherwise, of all existing and future
indebtedness ("Indebtedness") to the Bank of OVERLAND DATA, INC. ("Borrower")
and/or Debtor. Indebtedness includes without limit any and all obligations or
liabilities of the Borrower and/or Debtor to the Bank, whether absolute or
contingent, direct or indirect, voluntary or involuntary, liquidated or
unliquidated, joint or several, known or unknown; any and all obligations or
liabilites for which the Borrower and/or Debtor would otherwise be liable to the
Bank were it not for the invalidity or unenforceability of them by reason of any
bankruptcy, insolvency or other law, or for any other reason; any and all
amendments, modifications, renewals and/or extensions of any of the above; all
costs incurred by Bank in establishing, determining, continuing, or defending
the validity or priority of its security interest, or in pursuing its rights and
remedies under this Agreement or under any other agreement between Bank and
Borrower and/or Debtor or in connection with any proceeding involving Bank as a
result of any financial accommodation to Borrower and/or Debtor; and all other
costs of collecting Indebtedness, including without limit attorney fees. Debtor
agrees to pay Bank all such costs incurred by the Bank, immediately upon demand,
and until paid all costs shall bear interest at the highest per annum rate
applicable to any of the Indebtedness, but not in excess of the maximum rate
permitted by law. Any reference in this Agreement to attorney fees shall be
deemed a reference to reasonable fees, costs, and expenses of both in-house and
outside counsel and paralegals, whether inside or outside counsel is used,
whether or not a suit or action is instituted, and to court costs if a suit or
action is instituted, and whether attorney fees or court costs are incurred at
the trial court level, on appeal, in a bankruptcy, administrative or probate
proceeding or otherwise. Debtor further covenants, agrees and represents as
follows:
1. Collateral shall mean all of the following property Debtor now or later
owns or has an interest in, wherever located:
- all Accounts Receivable (for purposes of this Agreement,
"Accounts Receivable" consists of all accounts, general
intangibles, chattel paper (including without limit electronic
chattel paper and tangible chattel paper), contract rights,
deposit accounts, documents, instruments and rights to payment
evidenced by chattel paper, documents or instruments, health
care insurance receivables, commercial tort claims, letters of
credit, letter of credit rights, supporting obligations, and
rights to payment for money or funds advanced or sold),
- all Inventory,
- all Equipment and Fixtures,
- all Software (for purposes of this Agreement "Software"
consists of all (i) computer programs and supporting
information provided in connection with a transaction relating
to the program, and (ii) computer programs embedded in goods
and any supporting information provided in connection with a
transaction relating to the program whether or not the program
is associated with the goods in such a manner that it
customarily is considered part of the goods, and whether or
not, by becoming the owner of the goods, a person acquires a
right to use the program in connection with the goods, and
whether or not the program is embedded in goods that consist
solely of the medium in which the program is embedded),
- specific items listed below and/or on attached Schedule A, if
any, is/are also included in Collateral:
- all goods, instruments, documents, policies and certificates
of insurance, deposits, money or other property (except real
property which is not a fixture) which are now or later in
possession of Bank, or as to which Bank now or later controls
possession by documents or otherwise, and
- all additions, attachments, accessions, parts, replacements,
substitutions, renewals, interest, dividends, distributions,
rights of any kind (including but not limited to stock splits,
stock rights, voting and preferential rights), products, and
proceeds of or pertaining to the above including, without
limit, cash or other property which were proceeds and are
recovered by a bankruptcy trustee or otherwise as a
preferential transfer by Debtor.
In the definition of Collateral, a reference to a type of collateral
shall not be limited by a separate reference to a more specific or
narrower type of that collateral.
2. Warranties, Covenants and Agreements. Debtor warrants, covenants and
agrees as follows:
2.1 Debtor shall furnish to Bank, in form and at intervals as Bank
may request, any information Bank may reasonably request and
allow Bank to examine, inspect, and copy any of Debtor's books
and records. Debtor shall, at the request of Bank, xxxx its
records and the Collateral to clearly indicate the security
interest of Bank under this Agreement.
2.2 At the time any Collateral becomes, or is represented to be,
subject to a security interest in favor of Bank, Debtor shall
be deemed to have warranted that (a) Debtor is the lawful
owner of the Collateral and has the right and authority to
subject it to a security interest granted to Bank; (b) none of
the Collateral is subject to any security interest other than
that in favor of Bank; (c) there are no financing statements
on file, other than in favor of Bank; (d) no person, other
than Bank, has possession or control (as defined in the
Uniform Commercial Code) of any Collateral of such nature that
perfection of a security interest may be accomplished by
control; and (e) Debtor acquired its rights in the Collateral
in the ordinary course of its business.
2.3 Debtor will keep the Collateral free at all times from all
claims, liens, security interests and encumbrances other than
those in favor of Bank. Debtor will not, without the prior
written consent of Bank, sell, transfer or lease, or permit to
be sold, transferred or leased, any or all of the Collateral,
except (where Inventory is pledged as Collateral) for
Inventory in the ordinary course of its business and will not
return any Inventory to its supplier. Bank or its
representatives may at all reasonable times inspect the
Collateral and may enter upon all premises where the
Collateral is kept or might be located.
2.4 Debtor will do all acts and will execute or cause to be
executed all writings requested by Bank to establish, maintain
and continue an exclusive, perfected and first security
interest of Bank in the Collateral. Debtor agrees that Bank
has no obligation to acquire or perfect any lien on or
security interest in any asset(s), whether realty or
personalty, to secure payment of the Indebtedness, and Debtor
is not relying upon assets in which the Bank may have a lien
or security interest for payment of the Indebtedness.
2.5 Debtor will pay within the time that they can be paid without
interest or penalty all taxes, assessments and similar charges
which at any time are or may become a lien, charge, or
encumbrance upon any Collateral, except to the extent
contested in good faith and bonded in a manner satisfactory to
Bank. If Debtor fails to pay any of these taxes, assessments,
or other charges in the time provided above, Bank has the
option (but not the obligation) to do so and Debtor agrees to
repay all amounts so expended by Bank immediately upon demand,
together with interest at the highest lawful default rate
which could be charged by Bank on any Indebtedness.
2.6 Debtor will keep the Collateral in good condition and will
protect it from loss, damage, or deterioration from any cause.
Debtor has and will maintain at all times (a) with respect to
the Collateral, insurance under an "all risk" policy against
fire and other risks customarily insured against, and (b)
public liability insurance and other insurance as may be
required by law or reasonably required by Bank, all of which
insurance shall be in amount, form and content, and written by
companies as may be satisfactory to Bank, containing a
lender's loss
payable endorsement acceptable to Bank. Debtor will deliver to
Bank immediately upon demand evidence satisfactory to Bank
that the required insurance has been procured. If Debtor fails
to maintain satisfactory insurance, Bank has the option (but
not the obligation) to do so and Debtor agrees to repay all
amounts so expended by Bank immediately upon demand, together
with interest at the highest lawful default rate which could
be charged by Bank on any Indebtedness.
2.7 On each occasion on which Debtor evidences to Bank the account
balances on and the nature and extent of the Accounts
Receivable, Debtor shall be deemed to have warranted that
except as otherwise indicated (a) each of those Accounts
Receivable is valid and enforceable without performance by
Debtor of any act; (b) each of those account balances are in
fact owing, (c) there are no setoffs, recoupments, credits,
contra accounts, counterclaims or defenses against any of
those Accounts Receivable, (d) as to any Accounts Receivable
represented by a note, trade acceptance, draft or other
instrument or by any chattel paper or document, the same have
been endorsed and/or delivered by Debtor to Bank, (e) Debtor
has not received with respect to any Account Receivable, any
notice of the death of the related account debtor, nor of the
dissolution, liquidation, termination of existence,
insolvency, business failure, appointment of a receiver for,
assignment for the benefit of creditors by, or filing of a
petition in bankruptcy by or against, the account debtor, and
(f) as to each Account Receivable, except as may be expressly
permitted by Bank to the contrary in another document, the
account debtor is not an affiliate of Debtor, the United
States of America or any department, agency or instrumentality
of it, or a citizen or resident of any jurisdiction outside of
the United States. Debtor will do all acts and will execute
all writings requested by Bank to perform, enforce performance
of, and collect all Accounts Receivable. Debtor shall neither
make nor permit any modification, compromise or substitution
for any Account Receivable without the prior written consent
of Bank. Debtor shall, at Bank's request, arrange for
verification of Accounts Receivable directly with account
debtors or by other methods acceptable to Bank.
2.8 Debtor at all times shall be in strict compliance with all
applicable laws, including without limit any laws, ordinances,
directives, orders, statutes, or regulations an object of
which is to regulate or improve health, safety, or the
environment ("Environmental Laws").
2.9 If Bank, acting in its sole discretion, redelivers Collateral
to Debtor or Debtor's designee for the purpose of (a) the
ultimate sale or exchange thereof; or (b) presentation,
collection, renewal, or registration of transfer thereof; or
(c) loading, unloading, storing, shipping, transshipping,
manufacturing, processing or otherwise dealing with it
preliminary to sale or exchange; such redelivery shall be in
trust for the benefit of Bank and shall not constitute a
release of Bank's security interest in it or in the proceeds
or products of it unless Bank specifically so agrees in
writing. If Debtor requests any such redelivery, Debtor will
deliver with such request a duly executed financing statement
in form and substance satisfactory to Bank. Any proceeds of
Collateral coming into Debtor's possession as a result of any
such redelivery shall be held in trust for Bank and
immediately delivered to Bank for application on the
Indebtedness. Bank may (in its sole discretion) deliver any or
all of the Collateral to Debtor, and such delivery by Bank
shall discharge Bank from all liability or responsibility for
such Collateral. Bank, at its option, may require delivery of
any Collateral to Bank at any time with such endorsements or
assignments of the Collateral as Bank may request.
2.10 At any time and without notice, Bank may, as to Collateral
other than Equipment, Fixtures or Inventory, (a) cause any or
all of such Collateral to be transferred to its name or to the
name of its nominees; (b) receive or collect by legal
proceedings or otherwise all dividends, interest, principal
payments and other sums and all other distributions at any
time payable or receivable on account of such Collateral, and
hold the same as Collateral, or apply the same to the
Indebtedness, the manner and distribution of the application
to be in the sole discretion of Bank; (c) enter into any
extension, subordination, reorganization, deposit, merger or
consolidation agreement or any other agreement relating to or
affecting such Collateral, and deposit or surrender control of
such Collateral, and accept other property in exchange for
such Collateral and hold or apply the property or money so
received pursuant to this Agreement; and (d) take such actions
in its own name or in Debtor's name as Bank, in its sole
discretion, deems necessary or appropriate to establish
exclusive control (as defined in the Uniform Commercial Code)
over any Collateral of such nature that perfection of the
Bank's security interest may be accomplished by control.
2.11 Bank may assign any of the Indebtedness and deliver any or all
of the Collateral to its assignee, who then shall have with
respect to Collateral so delivered all the rights and powers
of Bank under this Agreement, and after that Bank shall be
fully discharged from all liability and responsibility with
respect to Collateral so delivered.
2.12 Debtor delivers this Agreement based solely on Debtor's
independent investigation of (or decision not to investigate)
the financial condition of Borrower and is not relying on any
information furnished by Bank. Debtor assumes full
responsibility for obtaining any further information
concerning the Borrower's financial condition, the status of
the Indebtedness or any other matter which the undersigned may
deem necessary or appropriate now or later. Debtor waives any
duty on the part of Bank, and agrees that Debtor is not
relying upon nor expecting Bank to disclose to Debtor any fact
now or later known by Bank, whether relating to the operations
or condition of Borrower, the existence, liabilities or
financial condition of any guarantor of the Indebtedness, the
occurrence of any default with respect to the Indebtedness, or
otherwise, notwithstanding any effect such fact may have upon
Debtor's risk or Debtor's rights against Borrower. Debtor
knowingly accepts the full range of risk encompassed in this
Agreement, which risk includes without limit the possibility
that Borrower may incur Indebtedness to Bank after the
financial condition of Borrower, or Borrower's ability to pay
debts as they mature, has deteriorated.
2.13 Debtor shall defend, indemnify and hold harmless Bank, its
employees, agents, shareholders, affiliates, officers, and
directors from and against any and all claims, damages, fines,
expenses, liabilities or causes of action of whatever kind,
including without limit consultant fees, legal expenses, and
attorney fees, suffered by any of them as a direct or indirect
result of any actual or asserted violation of any law,
including, without limit, Environmental Laws, or of any
remediation relating to any property required by any law,
including without limit Environmental Laws, INCLUDING ANY
CLAIMS, DAMAGES, FINES, EXPENSES, LIABILITIES OR CAUSES OF
ACTION OF WHATEVER KIND RESULTING FROM BANK'S OWN NEGLIGENCE,
except and to the extent (but only to the extent) caused by
Bank's gross negligence or willful misconduct.
3. Collection of Proceeds.
3.1 Debtor agrees to collect and enforce payment of all Collateral
until Bank shall direct Debtor to the contrary. Immediately
upon notice to Debtor by Bank and at all times after that,
Debtor agrees to fully and promptly cooperate and assist Bank
in the collection and enforcement of all Collateral and to
hold in trust for Bank all payments received in connection
with Collateral and from the sale, lease or other disposition
of any Collateral, all rights by way of suretyship or
guaranty and all rights in the nature of a lien or security
interest which Debtor now or later has regarding Collateral.
Immediately upon and after such notice, Debtor agrees to (a)
endorse to Bank and immediately deliver to Bank all payments
received on Collateral or from the sale, lease or other
disposition of any Collateral or arising from any other rights
or interests of Debtor in the Collateral, in the form received
by Debtor without commingling with any other funds, and (b)
immediately deliver to Bank all property in Debtor's
possession or later coming into Debtor's possession through
enforcement of Debtor's rights or interests in the Collateral.
Debtor irrevocably authorizes Bank or any Bank employee or
agent to endorse the name of Debtor upon any checks or other
items which are received in payment for any Collateral, and to
do any and all things necessary in order to reduce these items
to money. Bank shall have no duty as to the collection or
protection of Collateral or the proceeds of it, nor as to the
preservation of any related rights, beyond the use of
reasonable care in the custody and preservation of Collateral
in the possession of Bank. Debtor agrees to take all steps
necessary to preserve rights against prior parties with
respect to the Collateral. Nothing in this Section 3.1 shall
be deemed a consent by Bank to any sale, lease or other
disposition of any Collateral.
3.2 Debtor agrees that immediately upon Bank's request (whether or
not any Event of Default exists) the indebtedness shall be on
a "remittance basis" as follows: Debtor shall at its sole
expense establish and maintain (and Bank, at Bank's option,
may establish and maintain at Debtor's expense): (a) an United
States Post office lock box (the "Lock Box"), to which Bank
shall have exclusive access and control. Debtor expressly
authorizes Bank, from time to time, to remove contents from
the Lock Box, for disposition in accordance with this
Agreement. Debtor agrees
to notify all account debtors and other parties obligated to
Debtor that all payments made to Debtor (other than payments
by electronic funds transfer) shall be remitted, for the
credit of Debtor, to the Lock Box, and Debtor shall include a
like statement on all invoices; and (b) a non-interest bearing
deposit account with Bank which shall be titled as designated
by Bank (the "Cash Collateral Account") to which Bank shall
have exclusive access and control. Debtor agrees to notify all
account debtors and other parties obligated to Debtor that all
payments made to Debtor by electronic funds transfer shall be
remitted to the Cash Collateral Account, and Debtor, at Bank's
request, shall include a like statement on all invoices.
Debtor shall execute all documents and authorizations as
required by Bank to establish and maintain the Lock Box and
the Cash Collateral Account.
3.3 All items or amounts which are remitted to the Lock Box, to
the Cash Collateral Account, or otherwise delivered by or for
the benefit of Debtor to Bank on account of partial or full
payment of, or with respect to, any Collateral shall, at
Bank's option, (a) be applied to the payment of the
Indebtedness, whether then due or not, in such order or at
such time of application as Bank may determine in its sole
discretion, or, (b) be deposited to the Cash Collateral
Account. Debtor agrees that Bank shall not be liable for any
loss or damage which Debtor may suffer as a result of Bank's
processing of items or its exercise of any other rights or
remedies under this Agreement, including without limitation
indirect, special or consequential damages, loss of revenues
or profits, or any claim, demand or action by any third party
arising out of or in connection with the processing of items
or the exercise of any other rights or remedies under this
Agreement. Debtor agrees to indemnify and hold Bank harmless
from and against all such third party claims, demands or
actions, and all related expenses or liabilities, including,
without limitation, attorney's fees and INCLUDING CLAIMS,
DAMAGES, FINES, EXPENSES, LIABILITIES OR CAUSES OF ACTION OF
WHATEVER KIND RESULTING FROM BANK'S OWN NEGLIGENCE except to
the extent (but only to the extent) caused by Bank's gross
negligence or willful misconduct.
4. Defaults, Enforcement and Application of Proceeds.
4.1 Upon the occurrence of any of the following events (each an
"Event of Default"), Debtor shall be in default under this
Agreement:
(a) Any failure to pay the Indebtedness or any other
indebtedness when due, or such portion of it as may
be due, by acceleration or otherwise; or
(b) Any failure or neglect to comply with, or breach of
or default under, any term of this Agreement, or any
other agreement or commitment between Borrower,
Debtor, or any guarantor of any of the Indebtedness
("Guarantor") and Bank; or
(c) Any warranty, representation, financial statement, or
other information made, given or furnished to Bank by
or on behalf of Borrower, Debtor, or any Guarantor
shall be, or shall prove to have been, false or
materially misleading when made, given, or furnished;
or
(d) Any loss, theft, substantial damage or destruction to
or of any Collateral, or the issuance or filing of
any attachment, levy, garnishment or the commencement
of any proceeding in connection with any Collateral
or of any other judicial process of, upon or in
respect of Borrower, Debtor, any Guarantor, or any
Collateral; or
(e) Sale or other disposition by Borrower, Debtor, or any
Guarantor of any substantial portion of its assets or
property or voluntary suspension of the transaction
of business by Borrower, Debtor, or any Guarantor, or
death, dissolution, termination of existence, merger,
consolidation, insolvency, business failure, or
assignment for the benefit of creditors of or by
Borrower, Debtor, or any Guarantor; or commencement
of any proceedings under any state or federal
bankruptcy or insolvency laws or laws for the relief
of debtors by or against Borrower, Debtor, or any
Guarantor; or the appointment of a receiver, trustee,
court appointee, sequestrator or otherwise, for all
or any part of the property of Borrower, Debtor, or
any Guarantor; or
(f) Bank deems the margin of Collateral insufficient or
itself insecure, in good faith believing that the
prospect of payment of the Indebtedness or
performance of this Agreement is impaired or shall
fear deterioration, removal, or waste of Collateral;
or
(g) An event of default shall occur under any instrument,
agreement or other document evidencing, securing or
otherwise relating to any of the Indebtedness.
4.2 Upon the occurrence of any Event of Default, Bank may at its
discretion and without prior notice to Debtor declare any or
all of the Indebtedness to be immediately due and payable, and
shall have and may exercise any one or more of the following
rights and remedies:
(a) Exercise all the rights and remedies upon default, in
foreclosure and otherwise, available to secured
parties under the provisions of the Uniform
Commercial Code and other applicable law;
(b) Institute legal proceedings to foreclose upon the
lien and security interest granted by this Agreement,
to recover judgment for all amounts then due and
owing as Indebtedness, and to collect the same out of
any Collateral or the proceeds of any sale of it;
(c) Institute legal proceedings for the sale, under the
judgment or decree of any court of competent
jurisdiction, of any or all Collateral; and/or
(d) Personally or by agents, attorneys, or appointment of
a receiver, enter upon any premises where Collateral
may then be located, and take possession of all or
any of it and/or render it unusable; and without
being responsible for loss or damage to such
Collateral, hold, operate, sell, lease, or dispose of
all or any Collateral at one or more public or
private sales, leasings or other dispositions, at
places and times and on terms and conditions as Bank
may deem fit, without any previous demand or
advertisement; and except as provided in this
Agreement, all notice of sale, lease or other
disposition, and advertisement, and other notice or
demand, any right or equity of redemption, and any
obligation of a prospective purchaser or lessee to
inquire as to the power and authority of Bank to
sell, lease, or otherwise dispose of the Collateral
or as to the application by Bank of the proceeds of
sale or otherwise, which would otherwise be required
by, or available to Debtor under, applicable law are
expressly waived by Debtor to the fullest extent
permitted.
At any sale pursuant to this Section 4.2, whether
under the power of sale, by virtue of judicial
proceedings or otherwise, it shall not be necessary
for Bank or a public officer under order of a court
to have present physical or constructive possession
of Collateral to be sold. The recitals contained in
any conveyances and receipts made and given by Bank
or the public officer to any purchaser at any sale
made pursuant to this Agreement shall, to the extent
permitted by applicable law, conclusively establish
the truth and accuracy of the matters stated
(including, without limit, as to the amounts of the
principal of and interest on the Indebtedness, the
accrual and nonpayment of it and advertisement and
conduct of the sale); and all prerequisites to the
sale shall be presumed to have been satisfied and
performed. Upon any sale of any Collateral, the
receipt of the officer making the sale under judicial
proceedings or of Bank shall be sufficient discharge
to the purchaser for the purchase money, and the
purchaser shall not be obligated to see to the
application of the money. Any sale of any Collateral
under this Agreement shall be a perpetual bar against
Debtor with respect to that Collateral. At any sale
or other disposition of the Collateral pursuant to
this Section 4.2, Bank disclaims all warranties which
would otherwise be given under the Uniform Commercial
Code, including without limit a disclaimer of any
warranty relating to title, possession, quiet
enjoyment or the like, and Bank may communicate these
disclaimers to a purchaser at such disposition. This
disclaimer of warranties will not render the sale
commercially unreasonable.
4.3 Debtor shall at the request of Bank, notify the account
debtors or obligors of Bank's security interest in the
Collateral and direct payment of it to Bank. Bank may, itself,
upon the occurrence of any Event of Default so notify and
direct any account debtor or obligor. At the request of Bank,
whether or not an Event of Default shall have occurred, Debtor
shall immediately take such actions as the Bank shall request
to establish exclusive control
(as defined in the Uniform Commercial Code) by Bank over any
Collateral which is of such a nature that perfection of a
security interest may be accomplished by control.
4.4 The proceeds of any sale or other disposition of Collateral
authorized by this Agreement shall be applied by Bank first
upon all expenses authorized by the Uniform Commercial Code
and all reasonable attorney fees and legal expenses incurred
by Bank; the balance of the proceeds of the sale or other
disposition shall be applied in the payment of the
Indebtedness, first to interest, then to principal, then to
remaining Indebtedness and the surplus, if any, shall be paid
over to Debtor or to such other person(s) as may be entitled
to it under applicable law. Debtor shall remain liable for any
deficiency, which it shall pay to Bank immediately upon
demand. Debtor agrees that Secured Party shall be under no
obligation to accept any noncash proceeds in connection with
any sale or disposition of Collateral unless failure to do so
would be commercially unreasonable. If Secured Party agrees in
its sole discretion to accept noncash proceeds (unless the
failure to do so would be commercially unreasonable), Secured
Party may ascribe any commercially reasonable value to such
proceeds. Without limiting the foregoing, Secured Party may
apply any discount factor in determining the present value of
proceeds to be received in the future or may elect to apply
proceeds to be received in the future only as and when such
proceeds are actually received in cash by Secured Party.
4.5 Nothing in this Agreement is intended, nor shall it be
construed, to preclude Bank from pursuing any other remedy
provided by law for the collection of the Indebtedness or for
the recovery of any other sum to which Bank may be entitled
for the breach of this Agreement by Debtor. Nothing in this
Agreement shall reduce or release in any way any rights or
security interests of Bank contained in any existing agreement
between Borrower, Debtor, or any Guarantor and Bank.
4.6 No waiver of default or consent to any act by Debtor shall be
effective unless in writing and signed by an authorized
officer of Bank. No waiver of any default or forbearance on
the part of Bank in enforcing any of its rights under this
Agreement shall operate as a waiver of any other default or of
the same default on a future occasion or of any rights.
4.7 Debtor (a) irrevocably appoints Bank or any agent of Bank
(which appointment is coupled with an interest) the true and
lawful attorney of Debtor (with full power of substitution) in
the name, place and stead of, and at the expense of, Debtor
and (b) authorizes Bank or any agent of Bank, in its own name,
at Debtor's expense, to do any of the following, as Bank, in
its sole discretion, deems appropriate:
(i) to demand, receive, xxx for, and give receipts or
acquittances for any moneys due or to become due on
any Collateral and to endorse any item representing
any payment on or proceeds of the Collateral;
(ii) to execute and file in the name of and on behalf of
Debtor all financing statements or other filings
deemed necessary or desirable by Bank to evidence,
perfect, or continue the security interests granted
in this Agreement; and
(iii) to do and perform any act on behalf of Debtor
permitted or required under this Agreement.
4.8 Upon the occurrence of an Event of Default, Debtor also
agrees, upon request of Bank, to assemble the Collateral and
make it available to Bank at any place designated by Bank
which is reasonably convenient to Bank and Debtor.
4.9 The following shall be the basis for any finder of fact's
determination of the value of any Collateral which is the
subject matter of a disposition giving rise to a calculation
of any surplus or deficiency under Section 9.615(f) of the
Uniform Commercial Code (as in effect on or after July 1,
2001): (a) The Collateral which is the subject matter of the
disposition shall be valued in an "as is" condition as of the
date of the disposition, without any assumption or expectation
that such Collateral will be repaired or improved in any
manner; (b) the valuation shall be based upon an assumption
that the transferee of such Collateral desires a resale of the
Collateral for cash promptly (but no later than 30 days)
following the disposition; (c) all reasonable closing costs
customarily borne by the seller in commercial sales
transactions relating to property similar to such Collateral
shall be deducted including, without limitation, brokerage
commissions, tax prorations, attorney's fees, whether inside
or outside counsel is used, and marketing costs; (d) the value
of the Collateral which is the subject matter of the
disposition shall be further discounted to account for any
estimated holding costs associated with maintaining such
Collateral pending sale (to the extent not accounted for in
(c) above), and other maintenance, operational and ownership
expenses; and (e) any expert opinion testimony given or
considered in connection with a determination of the value of
such Collateral must be given by persons having at least 5
years experience in appraising property similar to the
Collateral and who have conducted and prepared a complete
written appraisal of such Collateral taking into consideration
the factors set forth above. The "value" of any such
Collateral shall be a factor in determining the amount of
proceeds which would have been realized in a disposition to a
transferee other than a secured party, a person related to a
secured party or a secondary obligor under Section 9.615(f) of
the Uniform Commercial Code.
5. Miscellaneous.
5.1 Until Bank is advised in writing by Debtor to the contrary,
all notices, requests and demands required under this
Agreement or by law shall be given to, or made upon, Debtor at
the first address indicated in Section 5.15 below.
5.2 Debtor will give Bank not Less than 90 days prior written
notice of all contemplated changes in Debtor's name, location,
chief executive office, principal place of business, and/or
location of any Collateral, but the giving of this notice
shall not cure any Event of Default caused by this change.
5.3 Bank assumes no duty of performance or other responsibility
under any contracts contained within the Collateral.
5.4 Bank has the right to sell, assign, transfer, negotiate or
grant participations or any interest in, any or all of the
Indebtedness and any related obligations, including without
limit this Agreement. In connection with the above, but
without limiting its ability to make other disclosures to the
full extent allowable, Bank may disclose all documents and
information which Bank now or later has relating to Debtor,
the Indebtedness or this Agreement, however obtained. Debtor
further agrees that Bank may provide information relating to
this Agreement or relating to Debtor to the Bank's parent,
affiliates, subsidiaries, and service providers.
5.5 In addition to Bank's other rights, any indebtedness owing
from Bank to Debtor can be set off and applied by Bank on any
Indebtedness at any time(s) either before or after maturity or
demand without notice to anyone. Any such action shall not
constitute acceptance of collateral in discharge of any
portion of the Indebtedness.
5.6 Debtor waives any right to require the Bank to: (a) proceed
against any person or property; (b) give notice of the terms,
time and place of any public or private sale of personal
property security held from Borrower or any other person, or
otherwise comply with the provisions of Section 9.504 of the
Uniform Commercial Code in effect prior to July 1, 2001 or its
successor provisions thereafter; or (c) pursue any other
remedy in the Bank's power. Debtor waives notice of acceptance
of this Agreement and presentment, demand, protest, notice of
protest, dishonor, notice of dishonor, notice of default,
notice of intent to accelerate or demand payment of any
Indebtedness, any and all other notices to which the
undersigned might otherwise be entitled, and diligence in
collecting any Indebtedness, and agree(s) that the Bank may,
once or any number of times, modify the terms of any
Indebtedness, compromise, extend, increase, accelerate, renew
or forbear to enforce payment of any or all Indebtedness, or
permit Borrower to incur additional Indebtedness, all without
notice to Debtor and without affecting in any manner the
unconditional obligation of Debtor under this Agreement.
Debtor unconditionally and irrevocably waives each and every
defense and setoff of any nature which, under principles of
guaranty or otherwise, would operate to impair or diminish in
any way the obligation of Debtor under this Agreement, and
acknowledges that such waiver is by this reference
incorporated into each security agreement, collateral
assignment, pledge and/or other document from Debtor now or
later securing the Indebtedness, and acknowledges that as of
the date of this Agreement no such defense or setoff exists.
5.7 Debtor waives any and all rights (whether by subrogation,
indemnity, reimbursement, or otherwise) to recover from
Borrower any amounts paid or the value of any Collateral given
by Debtor pursuant to this Agreement until such time as all of
the Indebtedness has been fully paid.
5.8 In the event that applicable law shall obligate Bank to give
prior notice to Debtor of any action to be taken under this
Agreement, Debtor agrees that a written notice given to Debtor
at least ten days before the date of the act shall be
reasonable notice of the act and, specifically, reasonable
notification of the time and place of any public sale or of
the time after which any private sale, lease, or other
disposition is to be made, unless a shorter notice period is
reasonable under the circumstances. A notice shall be deemed
to be given under this Agreement when delivered to Debtor or
when placed in an envelope addressed to Debtor and deposited,
with postage prepaid, in a post office or official depository
under the exclusive care and custody of the United States
Postal Service or delivered to an overnight courier. The
mailing shall be by overnight courier, certified, or first
class mail.
5.9 Notwithstanding any prior revocation, termination, surrender,
or discharge of this Agreement in whole or in part, the
effectiveness of this Agreement shall automatically continue
or be reinstated in the event that any payment received or
credit given by Bank in respect of the Indebtedness is
returned, disgorged, or rescinded under any applicable law,
including, without limitation, bankruptcy or insolvency laws,
in which case this Agreement, shall be enforceable against
Debtor as if the returned, disgorged, or rescinded payment or
credit had not been received or given by Bank, and whether or
not Bank relied upon this payment or credit or changed its
position as a consequence of it. In the event of continuation
or reinstatement of this Agreement, Debtor agrees upon demand
by Bank to execute and deliver to Bank those documents which
Bank determines are appropriate to further evidence (in the
public records or otherwise) this continuation or
reinstatement, although the failure of Debtor to do so shall
not affect in any way the reinstatement or continuation.
5.10 This Agreement and all the rights and remedies of Bank under
this Agreement shall inure to the benefit of Bank's successors
and assigns and to any other holder who derives from Bank
title to or an interest in the Indebtedness or any portion of
it, and shall bind Debtor and the heirs, legal
representatives, successors, and assigns of Debtor. Nothing in
this Section 5.10 is deemed a consent by Bank to any
assignment by Debtor.
5.11 If there is more than one Debtor, all undertakings, warranties
and covenants made by Debtor and all rights, powers and
authorities given to or conferred upon Bank are made or given
jointly and severally.
5.12 Except as otherwise provided in this Agreement, all terms in
this Agreement have the meanings assigned to them in Division
9 (or, absent definition in Division 9, in any other Division)
of the Uniform Commercial Code, as those meanings may be
amended, revised or replaced from time to time. "Uniform
Commercial Code" means the California Uniform Commercial
Code, as amended
5.13 No single or partial exercise, or delay in the exercise, of
any right or power under this Agreement, shall preclude other
or further exercise of the rights and powers under this
Agreement. The unenforceability of any provision of this
Agreement shall not affect the enforceability of the remainder
of this Agreement. This Agreement constitutes the entire
agreement of Debtor and Bank with respect to the subject
matter of this Agreement. No amendment or modification of this
Agreement shall be effective unless the same shall be in
writing and signed by Debtor and an authorized officer of
Bank. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPALS.
5.14 To the extent that any of the Indebtedness is payable upon
demand, nothing contained in this Agreement shall modify the
terms and conditions of that Indebtedness nor shall anything
contained in this Agreement prevent Bank from making demand,
without notice and with or without reason, for immediate
payment of any or all of that Indebtedness at any time(s),
whether or not an Event of Default has occurred.
5.15 Debtor represents and warrants that Debtor's exact name is the
name set forth in this Agreement. Debtor further represents
and warrants the following and agrees that Debtor is, and at
all times shall be, located in the following place :
[Debtor is an individual, and Debtor is located (as determined
pursuant to the Uniform Commercial Code) at Debtor's principal
residence which is (street address, state and county or
parish): 0000 XXXXXX XXX., XXX XXXXX, XX, 00000, .]
[Debtor is a registered organization which is organized under
the laws of one of the states comprising the United States
(e.g. corporation, limited partnership, registered limited
liability partnership or limited liability company), and
Debtor is located (as determined pursuant to the Uniform
Commercial Code) in the state under the laws of which it was
organized, which is (street address, state and county or
parish): N/A .]
[Debtor is a domestic organization which is not a registered
organization under the laws of the United States or any state
thereof (e.g. general partnership, joint venture, trust,
estate or association), and Debtor is located (as determined
pursuant to the Uniform Commercial Code) at its sole place of
business or, if it has more than one place of business, at its
chief executive office, which is (street address, state and
county or parish): N/A.]
[Debtor is a registered organization organized under the laws
of the United States, and Debtor is located in the state that
United States law designates as its location or, if United
States law authorizes the Debtor to designate the state for
its location, the state designated by Debtor, or if neither of
the foregoing are applicable, at the District of Columbia.
Based on the foregoing, Debtor is located (as determined
pursuant to the Uniform Commercial Code) at (street address,
state and county or parish): N/A .]
[Debtor is [a foreign individual or foreign organization-or-a
branch or agency of a bank that is not organized under the
laws of the United States or a state thereof], Debtor is
located (as determined pursuant to the Uniform Commercial
Code) at (street address, state and county or parish): N/A .]
If Collateral is located at other than the address specified
above, such Collateral is located and shall be maintained
at ___________________________________________________________
STREET ADDRESS
______________________________________________________________
CITY STATE ZIP CODE COUNTY
Collateral shall be maintained only at the locations
identified in this Section 5.15.
5.16 A carbon, photographic or other reproduction of this Agreement
shall be sufficient as a financing statement under the Uniform
Commercial Code and may be filed by Bank in any filing office.
5.17 This Agreement shall be terminated only by the filing of a
termination statement in accordance with the applicable
provisions of the Uniform Commercial Code, but the obligations
contained in Section 2.13 of this Agreement shall survive
termination.
5.18 Debtor agrees to reimburse the Bank upon demand for any and
all costs and expenses (including, without limit, court costs,
legal expenses and reasonable attorneys' fees, whether inside
or outside counsel is used, whether or not suit is instituted
and, if suit is instituted, whether at the trial court level,
appellate level, in a bankruptcy, probate or administrative
proceeding or otherwise) incurred in enforcing or attempting
to enforce this Agreement or in exercising or attempting to
exercise any right or remedy under this Agreement or incurred
in any other matter or proceeding relating to this Security
Agreement.
6. DEBTOR AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF
THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR
MUTUAL BENEFIT WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION
REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS
AGREEMENT OR THE INDEBTEDNESS.
7. Special Provisions Applicable to this Agreement. (*None, if left blank)
DEBTOR: Overland Data, Inc.
---------------------------------------
DEBTOR NAME TYPED/PRINTED
By: /s/ Xxxxxxxxxxx Xxxxxx
------------------------------------------
SIGNATURE OF
Its: President and CEO
------------------------------------------
TITLE (If applicable)
By: /s/ Xxxxxx X. XxXxxxx
------------------------------------------
SIGNATURE OF
Its: VP and CFO
------------------------------------------
TITLE (If applicable)
By:
------------------------------------------
SIGNATURE OF
Its:
------------------------------------------
TITLE (If applicable)
By:
------------------------------------------
SIGNATURE OF
Its:
------------------------------------------
TITLE (If applicable)
Borrower(s):
Overland Data, Inc.
---------------------
PEDESTAL - Dynamic Security Agreement
Revision Date (4/01) KMA
