SECURITY AGREEMENT
1.
GRANT OF SECURITY INTEREST. For valuable consideration, the
undersigned SBS Technologies, Inc., a New Mexico corporation,
("Debtor"), hereby grants and transfers to WELLS FARGO BANK,
NATIONAL ASSOCIATION ("Bank") a security interest in all of the
property of Debtor located in the United States described as
follows (collectively, the "Collateral"):
(a)
all accounts, deposit accounts, contract rights, chattel paper
(whether electronic or tangible), instruments, documents, general
intangibles, payment intangibles, software, letter of credit
rights, health-care insurance receivables and other rights to
payment of every kind now existing or at any time hereafter
arising;
(b)
all inventory, goods held for sale or lease or to be furnished
under contracts for service, or goods so leased or furnished, raw
materials, component parts, work in process and other materials
used or consumed in Debtor's business, now or at any time hereafter
owned or acquired by Debtor, wherever located, and all products
thereof, whether in the possession of Debtor, any warehousemen, any
bailee or any other person, or in process of delivery, and whether
located at Debtor's places of business or elsewhere;
(c)
all warehouse receipts, bills of sale, bills of lading and other
documents of every kind (whether or not negotiable) in which Debtor
now has or at any time hereafter acquires any interest, and all
additions and accessions thereto, whether in the possession or
custody of Debtor, any bailee or any other person for any
purpose;
(d)
all money and property heretofore, now or hereafter delivered to or
deposited with Bank or otherwise coming into the possession,
custody or control of Bank (or any agent or bailee of Bank) in any
manner or for any purpose whatsoever during the existence of this
Agreement and whether held in a general or special account or
deposit for safekeeping or otherwise;
(e)
all right, title and interest of Debtor under licenses, guaranties,
warranties, management agreements, marketing or sales agreements,
escrow contracts, indemnity agreements, insurance policies, service
or maintenance agreements, supporting obligations and other similar
contracts of every kind in which Debtor now has or at any time
hereafter shall have an interest;
(f)
all goods, tools, machinery, furnishings, furniture and other
equipment and fixtures of every kind now existing or hereafter
acquired, and all improvements, replacements, accessions and
additions thereto and embedded software included therein, whether
located on any property owned or leased by Debtor or elsewhere,
including without limitation, any of the foregoing now or at any
time hereafter located at or installed on the land or in the
improvements at any of the real property owned or leased by Debtor,
and all such goods after they have been severed and removed from
any of said real property; and
(g)
all motor vehicles, trailers, mobile homes, manufactured homes,
boats, other rolling stock and related equipment of every kind now
existing or hereafter acquired and all additions and accessories
thereto, whether located on any property owned or leased by Debtor
or elsewhere;
together with whatever is receivable or received when any of the
foregoing or the proceeds thereof are sold, leased, collected,
exchanged or otherwise disposed of, whether such disposition is
voluntary or involuntary, including without limitation, all rights
to payment, including returned premiums, with respect to any
insurance relating to any of the foregoing, and all rights to
payment with respect to any claim or cause of action affecting or
relating to any of the foregoing (collectively, "Proceeds").
2.
OBLIGATIONS SECURED. The obligations secured hereby are the payment
and performance of: (a) all present and future Indebtedness of
Debtor to Bank; (b) all obligations of Debtor and rights of
Bank under this Agreement; and (c) all present and future
obligations of Debtor to Bank of other kinds. The word
"Indebtedness" is used herein in its most comprehensive sense and
includes any and all advances, debts, obligations and liabilities
of Debtor, or any of them, heretofore, now or hereafter made,
incurred or created, whether voluntary or involuntary and however
arising, whether due or not due, absolute or contingent, liquidated
or unliquidated, determined or undetermined, and whether Debtor may
be liable individually or jointly with others, or whether recovery
upon such Indebtedness may be or hereafter becomes
unenforceable.
3.
TERMINATION. This Agreement will terminate upon the performance of
all obligations of Debtor to Bank, including without limitation,
the payment of all Indebtedness of Debtor to Bank, and the
termination of all commitments of Bank to extend credit to Debtor,
existing at the time Bank receives written notice from Debtor of
the termination of this Agreement.
4.
OBLIGATIONS OF BANK. Bank has no obligation to make any loans
hereunder. Upon the occurrence of an Event of Default or other
event which with the passage of time or the giving of notice would
constitute an Event of Default that Bank believes in good faith
will not be timely cured, any money received by Bank in respect of
the Collateral may be deposited, at Bank's option, into an interest
bearing account over which Debtor shall have no control, and the
same shall, for all purposes, be deemed Collateral hereunder.
5.
REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants to
Bank that: (a) Debtor's legal name is exactly as set forth on
the first page of this Agreement, and all of Debtor's
organizational documents or agreements delivered to Bank are
complete and accurate in every respect; (b) Debtor is the
owner and has possession or control of the Collateral and Proceeds;
(c) Debtor has the exclusive right to grant a security
interest in the Collateral and Proceeds; (d) all Collateral
and Proceeds are genuine, free from liens, adverse claims, setoffs,
default, prepayment, defenses and conditions precedent of any kind
or character, except the lien created hereby or purchase money
security interests arising in the ordinary course of business
securing amounts aggregating less than $250,000 per annum or as
otherwise agreed to by Bank, or as heretofore disclosed by Debtor
to Bank, in writing; (e) all statements contained herein and,
where applicable, in the Collateral are true and complete in all
material respects; (f) no financing statement covering any
of the Collateral or Proceeds, and naming any secured party other
than Bank, is on file in any public office except financing
statements for purchase money security interests arising in the
ordinary course of business securing amounts aggregating less than
$250,000 per annum; (g) where Collateral consists of rights to
payment, all persons appearing to be obligated on the Collateral
and Proceeds have authority and capacity to contract and are bound
as they appear to be, all property subject to chattel paper has
been properly registered and filed in compliance with law and to
perfect the interest of Debtor in such property, and all such
Collateral and Proceeds comply with all applicable laws concerning
form, content and manner of preparation and execution, including
where applicable Federal Reserve Regulation Z and any State
consumer credit laws; and (h) where the Collateral consists of
equipment, Debtor is not in the business of selling goods of the
kind included within such Collateral, and Debtor acknowledges that
no sale or other disposition of any such Collateral, including
without limitation, any such Collateral which Debtor may deem to be
surplus, has been consented to or acquiesced in by Bank, except as
specifically set forth in writing by Bank.
6.
COVENANTS OF DEBTOR.
(a)
Debtor agrees in general: (i) to pay Indebtedness secured
hereby when due; (ii) to indemnify Bank against all losses,
claims, demands, liabilities and expenses of every kind caused by
property subject hereto; (iii) to pay all costs and expenses,
including reasonable attorneys' fees, incurred by Bank in the
perfection and preservation of the Collateral or Bank's interest
therein and/or the realization, enforcement and exercise of Bank's
rights, powers and remedies hereunder; (iv) to permit Bank to
exercise its powers; (v) to execute and deliver such documents
as Bank deems necessary to create, perfect and continue the
security interests contemplated hereby; (vi) not to change its
name, and as applicable, its chief executive office, its principal
residence or the jurisdiction in which it is organized and/or
registered without giving Bank prior written notice thereof;
(vii) not to change the places where Debtor keeps any
Collateral or Debtor's records concerning the Collateral and
Proceeds without giving Bank prior written notice of the address to
which Debtor is moving same; and (viii) to cooperate with Bank
in perfecting all security interests granted herein and in
obtaining such agreements from third parties as Bank deems
necessary, proper or convenient in connection with the
preservation, perfection or enforcement of any of its rights
hereunder.
(b)
Debtor agrees with regard to the Collateral and Proceeds, unless
Bank agrees otherwise in writing: (i) that Bank is authorized
to file financing statements in the name of Debtor to perfect
Bank's security interest in Collateral and Proceeds;
(ii) where applicable, to insure the Collateral with Bank
named as loss payee, in form, substance and amounts, under
agreements, against risks and liabilities, and with insurance
companies satisfactory to Bank; (iii) where applicable, to
operate the Collateral in accordance with all applicable statutes,
rules and regulations relating to the use and control thereof, and
not to use any Collateral for any unlawful purpose or in any way
that would void any insurance required to be carried in connection
therewith; (iv) not to remove the Collateral from Debtor's
premises, except (A) for deliveries to buyers in the ordinary
course of Debtor's business and (B) Collateral which consists of
mobile goods as defined in the New Mexico Uniform Commercial Code,
in which case Debtor agrees not to remove or permit the removal of
such Collateral from its state of domicile for a period in excess
of thirty (30) calendar days; (v) to pay when due all license
fees, registration fees and other charges in connection with any
Collateral; (vi) not to permit any lien on the Collateral or
Proceeds, including without limitation, liens arising from repairs
to or storage of the Collateral, except in favor of Bank and except
purchase money security interests arising in the ordinary course of
business and securing amounts aggregating less than $250,000 per
annum; (vii) not to sell, hypothecat
