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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, hypoth
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