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EXHIBIT 10.17
Comerica
SECURITY AGREEMENT
As of September 16, 1999, for value received, the undersigned ("Debtor") grants
to Comerica Bank-California ("Bank"), a California banking corporation, a
continuing 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") ?? the Bank of Avanex
Corporation ("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 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.
1. Collateral shall mean all of the following property Debtor now or later
owns or has an interest in, wherever located:
* specific items listed below and/or on attached Schedule A, if
any, is/are also included in Collateral: A Certificate of
Deposit (#850750000070251) dated, in the name of Avanex
Corporation, in the amount of $800,000.00 and any and all
subsequent renewals thereof.
* 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.
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 and there are no financing statements on file, other than
in favor of Bank; and (c) 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 a 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 expanded 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 If Accounts Receivable are pledged as Collateral under this
Agreement, then 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, 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,
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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 marketable securities are pledged as Collateral under this
Agreement and if at any time the outstanding principal balance
of the Indebtedness exceeds N/A of the value of the Collateral,
as such value is determined from time to time by Bank (herein
called the "Margin Requirement"), Debtor shall immediately pay
or cause to be paid to Bank an amount sufficient to reduce the
Indebtedness such that the remaining principal outstanding
thereunder is equal to or less than the Margin Requirement. Bank
shall apply payments made under this paragraph in payment of the
Indebtedness in such order and manner of application as Bank in
its sole discretion elects. In the alternative, Debtor may
provide or cause to be provided to Bank additional collateral in
the form of cash or other property acceptable to Bank and with a
value, as determined by Bank, that when added to the Collateral
will constitute compliance with the Margin Requirement.
2.10 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.
2.11 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.
2.12 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.
2.13 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.
2.16 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.
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 If Accounts Receivable are pledged as Collateral, this Section
3.2 shall be applicable and 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
agrees to 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 authorization
as required by Bank to establish and maintain the Lock Box and
the Cash Collateral Account.
3.3 If Accounts Receivable are pledged as Collateral, this Section
3.3 shall be applicable, and 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, (i) 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, (ii) 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
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such third party claims, demands or actions, and all related
expenses or liabilities, including, without limitation, attorney
fees.
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.
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.
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.
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.
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 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:
(a) 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;
(b) 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
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Agreement; and
(c) 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.
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, chief executive
office location, 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.
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; 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.
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 five 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 dispostion 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,
disagreed, 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 of the date of this Agreement.
"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 principles.
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's chief executive office is located and shall be
maintained at 00000 Xxxxxx Xxxxxx
-------------------
XXXXXX XXXXXXX
Xxxxxxx Xx 00000
---------------------------------------------------------------
CITY STATE ZIP CODE COUNTY
If Collateral is located at other than the chief executive
office, such Collateral is located and shall be maintained at
----------------------------------------------------------------
XXXXXX XXXXXXX
---------------------------------------------------------------
XXXX XXXXX ZIP CODE COUNTY
5
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 2.14 of this Agreement shall survive
termination.
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: Avanex Corporation
----------------------------------
DEBTOR NAME TYPED/PRINTED
By: /s/ XXXXX XXXX
---------------------------------------
SIGNATURE OF Xxxxx Xxxx
Its: Director Of Finance
---------------------------------------
TITLE (If applicable)
By: /s/ XXXXXX XXXXXXXXXXXX
---------------------------------------
SIGNATURE OF Xxxxxx Xxxxxxxxxxxx
Its: CEO
---------------------------------------
TITLE (If applicable)
By:
---------------------------------------
SIGNATURE OF
Its:
---------------------------------------
TITLE (If applicable)
By:
---------------------------------------
SIGNATURE OF
Its:
---------------------------------------
TITLE (If applicable)
Borrower(s):
Avanex Corporation
