BCInet, Inc. SECURITY AGREEMENT
Exhibit 10.22
BCInet, Inc.
This Security Agreement (the “Agreement”) is made as of August 31, 2009 by and between BCINET,
INC., a Delaware corporation (the “Debtor”), and OCZ TECHNOLOGY GROUP, INC., a Delaware corporation
(the “Secured Party”).
RECITALS
The Debtor has issued to the Secured Party three Secured Promissory Notes in the amount of
$311,215, $170,000 and $414,200, respectively, all of even date with this Agreement. Such Secured
Promissory Notes and any other promissory notes issued from time to time by Debtor to Secured Party
shall collectively be referred to herein as the “Notes”.
The Debtor and Secured Party are also parties to that certain Asset Purchase Agreement and
Series A Preferred Stock Purchase Agreement of an even date herewith (the “Purchase Agreements”).
In order to induce the Secured Party to enter into this Agreement, Debtor wishes and has
agreed to secure its obligations to the Secured Party under the Notes, to enter into this Agreement
and to grant the Secured Party a first priority security interest in the Collateral (defined
below).
The parties intend that Debtor’s obligations to repay the Notes be secured by all of the
Collateral (as defined below) of the Debtor.
AGREEMENT
In consideration of the execution of the Notes by the Secured Party and for other good and
valuable consideration, the Debtor hereby agrees with the Secured Party as follows:
1. Grant of Security Interest. To secure the Debtor’s full and timely performance of
all of the Debtor’s obligations and liabilities to the Secured Party under the Notes (the
“Obligations”), and pursuant to the provisions of the California Uniform Commercial Code, the
Debtor hereby grants to the Secured Party a continuing security interest (the “Security Interest”)
in and to all of the property described on Exhibit A to this Agreement (the “Collateral”).
2. Representations and Covenants.
(a) Ownership. The Debtor owns all right, title and interest in the Collateral and
will be the owner of the Collateral hereafter acquired free from any adverse lien, security
interest or encumbrance (other than purchase money security interests that will be discharged upon
Debtor’s payment of the purchase price for the applicable property), and the Debtor will
BCInet — Security Agreement
-1-
defend the Collateral against the claims and demands of all persons at any time claiming the
same or any interest therein.
(b) Further Documentation. At any time and from time to time, at the sole expense of
the Debtor, the Debtor will promptly and duly execute and deliver such further instruments and
documents and take such further action as the Secured Party may reasonably request for the purpose
of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein
granted. The Debtor hereby authorizes the Secured Party to file any such financing or continuation
statement without the signature of the Debtor to the extent permitted by applicable law. A
reproduction of this Agreement may be filed by the Secured Party as a financing statement (or as an
exhibit to a financing statement on form UCC-1) and, if applicable, may be filed with the Register
of Copyrights and the Commissioner of Patents and Trademarks, each without further authorization
from Debtor.
(c) Indemnification. The Debtor agrees to defend, indemnify and hold harmless the
Secured Party against any and all liabilities, costs and expenses (including, without limitation,
all reasonable legal fees and expenses): (i) with respect to, or resulting from, any delay in
paying, any and all excise, sales or other taxes which may be payable or are determined to be
payable with respect to any of the Collateral, (ii) with respect to, or resulting from, any delay
in complying with any law, rule, regulation or order of any governmental authority applicable to
any of the Collateral or (iii) in connection with any of the transactions contemplated by this
Agreement; provided, however, that this indemnification shall not extend to any damages caused by
the gross negligence or willful misconduct of such Secured Party.
(d) Limitations on Dispositions of Collateral. The Debtor shall not sell, transfer,
lease or otherwise dispose of a material portion of the Collateral, or offer or contract to do so
without the written consent of the Secured Party; provided, however, that Debtor will be allowed to
sell inventory and grant non-exclusive licenses to its products, intellectual property and related
documentation.
3. Secured Party’s Appointment as Attorney-in-Fact.
(a) Powers. The Debtor hereby appoints the Secured Party and any officers or agents
of the Secured Party, with full power of substitution, as its attorney-in-fact with full
irrevocable power and authority in the place of the Debtor and in the name of the Debtor or in its
own name, so long as an Event of Default has occurred and is continuing, for the purpose of
carrying out the terms of this Agreement, to take any and all appropriate action and to execute any
instrument which may be necessary or desirable to accomplish the purposes of this Agreement.
Without limiting the foregoing, so long as an Event of Default has occurred and is continuing, the
Secured Party, in its discretion, will have the right, without notice to, or the consent of the
Debtor to do any of the following on the Debtor’s behalf:
(i) to pay or discharge any taxes or liens levied or placed on or threatened against the
Collateral;
BCInet — Security Agreement
-2-
(ii) to direct any party liable for any payment under any of the Collateral to make payment of
any and all amounts due or to become due thereunder directly to the Secured Party or as the Secured
Party directs;
(iii) to ask for or demand, collect, and receive payment of and receipt for, any payments due
or to become due at any time in respect of or arising out of any Collateral;
(iv) to commence and prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to enforce any right in respect of any Collateral;
(v) to defend any suit, action or proceeding brought against the Debtor with respect to any
Collateral;
(vi) to settle, compromise or adjust any suit, action or proceeding described in subsection
(v) above and, to give such discharges or releases in connection therewith as the Secured Party may
deem appropriate;
(vii) to assign any patent right included in the Collateral of Debtor (along with the goodwill
of the business to which any such patent right pertains), throughout the world for such term or
terms, on such conditions, and in such manner, as the Secured Party in its sole discretion
determines; and
(viii) to sell, transfer, pledge and make any agreement with respect to or otherwise deal with
any of the Collateral, and to take, at the Secured Party’s option and the Debtor’s expense, any
actions which the Secured Party deems necessary to protect, preserve or realize upon the Collateral
and the Secured Party’s liens on the Collateral and to carry out the intent of this Agreement, in
each case to the same extent as if the Secured Party were the absolute owners of the Collateral for
all purposes.
The Debtor hereby ratifies whatever actions the Secured Party lawfully does or causes to be
done in accordance with this Section 3. This power of attorney will be a power coupled with an
interest and will be irrevocable.
(b) No Duty on Secured Party’s Part. The powers conferred on the Secured Party by
this Section 3 are solely to protect the Secured Party’s interest in the Collateral and do not
impose any duty upon it to exercise any such powers. The Secured Party will be accountable only
for amounts that it actually receives as a result of the exercise of such powers, and the Secured
Party will not, in the absence of willful misconduct or negligence, be responsible to the Debtor
for any act or failure to act pursuant to this Section 3.
4. Expenses Incurred by Secured Party. If the Debtor fails to perform or comply with
any of its agreements or covenants contained in this Agreement, and the Secured Party performs or
complies, or otherwise causes performance or compliance, with such agreement or covenant in
accordance with the terms of this Agreement, then the reasonable expenses of the Secured Party
incurred in connection with such performance or compliance will be payable by the Debtor to the
Secured Party on demand and will constitute Obligations secured by this Agreement.
BCInet — Security Agreement
-3-
5. Events of Default. The following events shall constitute events of default
(“Events of Default”) hereunder:
(a) Debtor shall fail in any respect to perform or observe any covenant, condition or
agreement to be performed or observed by it under the Notes, the Purchase Agreements or hereunder;
(b) Any representation or warranty made by Debtor in the Notes, the Purchase Agreements or
hereunder shall prove to be incorrect in any material respect; or
(c) An event occurs which constitutes a default under the Notes, or any event occurs as
described in item 5 of the Notes.
6. Remedies. Upon the occurrence of an Event of Default, all amounts owing under the
Notes by Debtor shall immediately become due and payable, and Secured Party may exercise in respect
of the Collateral, in addition to other rights and remedies provided for herein or otherwise
available to it under the Notes or under applicable law, all the rights and remedies of a secured
party upon default under the Uniform Commercial Code. The rights and remedies provided under this
Agreement are cumulative and may be exercised singly or concurrently, and are not exclusive of any
other rights and remedies provided by law or equity. Debtor agrees that upon an Event of Default
and at Secured Party’s request, it will assemble the Collateral and make it available to Secured
Party.
7. Limitation on Duties Regarding Preservation of Collateral. The sole duty of the
Secured Party with respect to the custody, safekeeping and preservation of the Collateral, under
Section 9207 of the Code or otherwise, will be to deal with it in the same manner as the Secured
Party deals with similar property for its own account. The Secured Party will not be liable for
failure to demand, collect or realize upon all or any part of the Collateral or for any delay in
doing so or will be under any obligation to sell or otherwise dispose of any Collateral upon the
request of the Debtor or otherwise.
8. Powers Coupled with an Interest. All authorizations and agencies contained in this
Agreement with respect to the Collateral are irrevocable and powers coupled with an interest.
9. No Waiver; Cumulative Remedies. The Secured Party will not by any act of delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any default under the Notes or in any breach of any of the terms and conditions of
this Agreement. No failure to exercise, nor any delay in exercising, on the part of the Secured
Party, any right, power or privilege hereunder will operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder will preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A waiver by the Secured
Party of any right or remedy under this Agreement on any one occasion will not be construed as a
bar to any right or remedy which the Secured Party would otherwise have on any subsequent occasion.
The rights and remedies provided in this Agreement are cumulative, may be exercised singly or
concurrently and are not exclusive of any rights or remedies provided by law.
BCInet — Security Agreement
-4-
10. Miscellaneous.
(a) Amendments and Waivers. Any amendment or waiver of any provision under this
Agreement shall be in writing and signed by the Debtor and Secured Party.
(b) Transfer; Successors and Assigns. This Agreement will be binding upon and inure
to the benefit of the Debtor and its successors or assigns. The Debtor may not assign any of its
rights or delegate any of its duties under this Agreement.
(c) Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of California without regard to the laws that might be applicable under
conflicts of laws principles.
(d) Counterparts. This Agreement may be executed in any number of counterparts
(including by facsimile), each of which will be an original, but all of which together will
constitute one instrument.
(e) Notices. All notices, requests, demands and other communications that are
required or may be given under this Agreement shall be in writing and shall be deemed to have been
duly given (i) when received if personally delivered, (ii) upon electronic confirmation of receipt,
if transmitted by telecopy, (iii) the day after it is sent, if sent for next day delivery to a
domestic address by a nationally recognized overnight delivery service (i.e., Federal Express), and
(iv) three days from the date of deposit in the U.S. mails, if sent by certified or registered U.S.
mail, return receipt requested.
(f) Severability. In the event that any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect,
such provision(s) shall be ineffective only to the extent of such invalidity, illegality or
unenforceability without invalidating the remainder of such provision or the remaining provisions
of this Agreement and such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, which shall remain in full force and effect.
(g) Entire Agreement. This Agreement, and the documents referred to herein constitute
the entire understanding and agreement between the parties with regard to the subjects hereof and
thereof and supersede all prior agreements, representations, and undertakings of the parties,
whether oral or written, with respect to such subject matter.
[Signature pages to follow.]
BCInet — Security Agreement
-5-
The Debtor and Secured Party have caused this Agreement to be duly executed and delivered as
of the date first above written.
DEBTOR:
| BCInet, Inc. |
||||
| By: | /s/ Xxxxxx X. Xxxxxxxx | |||
| Xxxxxx X. Xxxxxxxx | ||||
| President & CEO | ||||
SECURED PARTY:
| OCZ Technology Group, Inc. |
||||
| By: | /s/ Xxxx X. Xxxxxxxx | |||
| Xxxx X. Xxxxxxxx | ||||
| President & CEO | ||||
Security Agreement—BCInet, Inc.
Signature Page
BCInet — Security Agreement
EXHIBITA
DESCRIPTION OF COLLATERAL
This financing statement covers all right, title, and interest of Debtor in, to, and under all
of the following described personal property, whether now or hereafter owned by, owing to, or
acquired by or arising in favor of, Debtor (including, without limitation, under any trade names,
styles, or divisions of Debtor), and whether owned or consigned by or to, or leased by or to,
Debtor, and regardless of where located (all of which being hereinafter collectively referred to as
the “Collateral”):
(a) all “accounts,” as such term is defined in the Uniform Commercial Code as in effect in the
State in which this Financing Statement is filed (“UCC”), including (i) all accounts
receivable, other receivables, book debts, and other forms of obligations (other than forms of
obligations evidenced by chattel paper, documents, or instruments), whether arising out of goods
sold or services rendered by it or from any other transaction (including any such obligations that
may be characterized as an account or contract right under the UCC), (ii) all purchase orders or
receipts for goods or services, (iii) all rights to any goods represented by any of the foregoing
(including unpaid sellers’ rights of rescission, replevin, reclamation, and stoppage in transit and
rights to returned, reclaimed, or repossessed goods), (iv) all monies due or to become due to
Debtor under all purchase orders and contracts for the sale of goods or the performance of services
or both by Debtor or in connection with any other transaction (whether or not yet earned by
performance on the part of Debtor), including the right to receive the proceeds of said purchase
orders and contracts, and (v) all collateral security and guaranties of any kind given by any
person or entity with respect to any of the foregoing;
(b) all “chattel paper,” as such term is defined in the UCC;
(c) all “contracts,” as such term is defined in the UCC, including all contracts,
undertakings, or agreements (other than rights evidenced by chattel paper, documents, or
instruments), including any agreement relating to the terms of payment or the terms of performance
of any account of Debtor;
(d) all “documents,” as such term is defined in the UCC;
(e) all “equipment,” as such term is defined in the UCC, including all machinery and equipment,
including processing equipment, conveyors, machine tools, data processing and computer equipment
with software and peripheral equipment, and all engineering, processing, and manufacturing
equipment, office machinery, furniture, materials handling equipment, tools, attachments,
accessories, automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor
vehicles, rolling stock, and other equipment of every kind and nature, trade fixtures, and
fixtures, together with all additions and accessions thereto, replacements therefor, all parts
therefor, all substitutes for any of the foregoing, fuel therefor, and all manuals, drawings,
instructions, warranties, and rights with respect thereto;
Security Agreement—BCInet, Inc.
BCInet — Security Agreement
A-1
(f) all “fixtures,” as such term is defined in the UCC;
(g) all “general intangibles,” as such term is defined in the UCC, including all customer
lists, licenses, copyrights, trademarks, patents, websites, domain names, and all applications
therefor and reissues, extensions, or renewals thereof, rights in intellectual property, interests
in partnerships, joint ventures, and other business associations, licenses, permits, trade secrets,
proprietary or confidential information, inventions (whether or not patented or patentable),
technical information, procedures, designs, knowledge, know how, software, data bases, data, skill,
expertise, experience, processes, models, drawings, materials and records, goodwill (including the
goodwill associated with any trademark or trademark license), all rights and claims in or under
insurance policies (including insurance for fire, damage, loss, and casualty, whether covering
personal property, real property, tangible rights or intangible rights, all liability, life, key
man, and business interruption insurance, and all unearned premiums), uncertificated securities,
certificated securities, choses in action, deposit, checking, and other bank accounts, rights to
receive tax refunds and other payments, rights to receive dividends, distributions, cash,
instruments, and other property in respect of or exchange for pledged shares or other equity
interests, rights of indemnification, all books and records, correspondence, credit files, invoices
and other papers, including, without limitation, all tapes, cards, computer runs, and other papers
and documents in the possession or under the control of Debtor or any computer bureau or service
company from time to time acting for Debtor;
(h) all “goods,” as such term in defined in the UCC;
(i) all “instruments,” as such term is defined in the UCC, including all certificated
securities, all certificates of deposit, and all notes and other evidences of indebtedness, other
than instruments that constitute, or are a part of a group of writings that constitute, chattel
paper;
(j) all “inventory,” as such term is defined in the UCC, including inventory, merchandise,
goods, and other personal property that are held by or on behalf of Debtor for sale or lease or are
furnished or are to be furnished under a contract of service, or that constitute raw materials,
work in process, or materials used or consumed or to be used or consumed in Debtor’s business or in
the processing, production, packaging, promotion, delivery, or shipping of the same, including
other supplies;
(k) all “investment property,” as such term is defined in the UCC, including: (i) all securities,
whether certificated or uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and mutual fund shares; (ii)
all securities entitlements of Debtor, including the rights of Debtor to any securities account and
the financial assets held by a securities intermediary in such securities account and any free
credit balance or other money owing by any securities intermediary with respect to that account;
(iii) all securities accounts held by Debtor; (iv) all commodity contracts held by any person or
entity; and (v) all commodity accounts held by any person or entity;
(1) all letters of credit;
(m) all money, cash, or cash equivalents of Debtor;
Security Agreement—BCInet, Inc.
BCInet — Security Agreement
A-2
(n) all books and records (including, without limitation, customer lists, credit files,
computer programs, printouts, and other computer materials and records) of Debtor pertaining to any
of the foregoing; and
(o) to the extent not otherwise included, all “proceeds,” as such term is defined in the UCC,
of the foregoing in any form, including, without limitation: (i) any and all proceeds of any
insurance, indemnity, warranty, or guaranty payable to any person or entity from time to time with
respect to any of the foregoing, (ii) any and all payments (in any form whatsoever) made or due and
payable to any person or entity from time to time in connection with any requisition, confiscation,
condemnation, seizure, or forfeiture of all or any part of the foregoing by any governmental
authority (or any person or entity acting under color of governmental authority), (iii) any claim
of any person or entity against third parties (A) for past, present, or future infringement of any
patent or patent license, or (B) for past, present, or future infringement or dilution of any
copyright, copyright license, trademark, or trademark license, or for injury to the goodwill
associated with any trademark or trademark license, (iv) any recoveries by any person or entity
against third parties with respect to any litigation or dispute concerning any of the foregoing,
and (v) any and all other amounts from time to time paid or payable under or in connection with any
of the foregoing, upon disposition or otherwise.
Security Agreement—BCInet, Inc.
BCInet — Security Agreement
A-3
