Exhibit 10.5

 

Execution Copy

 

SECURITY AGREEMENT

 

This Security Agreement (“Agreement”) is made this 17th day of January, 2002
(the “Effective Date”), by and between Chaparral Network Storage, Inc., a
Delaware corporation (“Borrower”), and Xyratex Technology Limited, a company
organized under the laws of England and Wales (“Lender”). Capitalized terms used
herein without definition have the meaning given to them in the Securities
Purchase Agreement dated as of the Effective Date, by and between Borrower and
Lender (the “Securities Purchase Agreement”).

 

RECITALS

 

A.                                   This Agreement is entered into in
connection with Lender’s loan to Borrower of US$6,000,000 (the “Loan”) pursuant
to a Secured Convertible Promissory Note dated the Effective Date (the “Note”)
and the execution and delivery of the Securities Purchase Agreement and the
Commercial Agreements, dated as of the Effective Date, between Borrower and
Lender.

 

B.                                     Borrower and Lender intend to secure all
of the payment obligations of Borrower to Lender under the Transaction Documents
as provided in Section A.10.

 

Lender and Borrower agree as follows:

 

A.                                 Definitions.

 

1.                                       “Affiliate.” Affiliate means, as
applied to any Person, any other Person directly or indirectly controlling,
controlled by, or under common control with, that Person.  For purposes of this
definition, “control” as applied to any Person means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities, by
contract, or otherwise.

 

2.                                       “Assignment Agreement.” Assignment
Agreement means the Assignment Agreement between Borrower and Lender, a form of
which is attached as Exhibit XI to the Master Alliance Agreement.

 

3.                                       “Bankruptcy Code.” Bankruptcy Code
means the United States Bankruptcy Code, as amended and in effect at any
relevant time.

 

4.                                       “Business Day.” Business Day means any
day other than Saturday, Sunday or a day on which banks are required to be
closed in the State of Colorado and/or London, England.

 

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5.                                       “Collateral.” The Collateral shall
consist of:

 

(i)                                     All Intellectual Property now (or
hereafter at any time during the term of this Security Agreement) owned by
Borrower and which relates to or is used in (x) any member of the Family of
FC-FC Integrated Controllers (as defined in the Joint Development Agreement)
developed pursuant to the Joint Development Agreement between Borrower and
Lender dated as of the Effective Date, (y) any RIO Product (as defined in the
Securities Purchase Agreement) and (z) any Successor Products, excluding in each
case any Adaptec IP (as defined in the Master Alliance Agreement). The
Collateral includes, but is not limited to, the related Chaparral IP (as defined
in the Master Alliance Agreement) as the same may exist from time to time; and

 

(ii)                                  All such right, title and interest as
Borrower may now (or hereafter at any time during the term of this Security
Agreement) have in the Intellectual Property of third parties which relates to
or is used in (x) any member of the Family of FC-FC Integrated Controllers (as
defined in the Joint Development Agreement) developed pursuant to the Joint
Development Agreement between Borrower and Lender dated as of the Effective
Date, (y) any RIO Product (as defined in the Securities Purchase Agreement) and
(z) any Successor Products (excluding in each case any Adaptec IP (as defined in
the Master Alliance Agreement)) and which is capable of being secured,
encumbered or to which a security interest may attach without breach of any
obligation upon Borrower, including but not limited to all of Borrower’s right,
title and interest in and under the Technology Cross License Agreement.

 

6.                                       “Insolvency Event.” “Insolvency Event”
means any of the following: (1) Borrower (a) commences a voluntary case under
Title 11 of the United States Code (“Bankruptcy Code”) or any other applicable
bankruptcy, insolvency or other similar law, (b) consents to the entry of an
order for relief in an involuntary case under any such law, (c) consents to the
appointment of with respect to, or taking possession of, the Borrower, or any
substantial part of its assets, by a receiver, liquidator, assignee, trustee,
custodian, or similar party, or (d) makes a general assignment for the benefit
of creditors, or (e) takes any action in furtherance of any of the foregoing;
(2) a proceeding shall have been instituted against the Borrower (a) seeking an
order for relief under the Bankruptcy Code or any other applicable bankruptcy,
insolvency or other similar law, (b) seeking the appointment of with respect to,
or taking possession of, the Borrower or any

 

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substantial part of its assets a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar party), or (c) seeking the winding-up or
liquidation of the Borrower’s affairs, and such proceeding remains undismissed
or unstayed and in effect for a period of 30 days; or (3) the Borrower is
adjudicated pursuant to a judgment by any court of competent jurisdiction to be
insolvent or admits in writing its inability to generally pay its debts as they
come due.

 

7.                                       “Intellectual Property.” Intellectual
Property means (1) all patents and patent applications, domestic or foreign, all
licenses relating to any of the foregoing and all income and royalties with
respect to any licenses (including such patents and patent applications as
described in Schedule A), all rights to sue for past, present or future
infringement thereof, all rights arising therefrom and pertaining thereto and
all reissues, divisions, continuations, certificates of invention, renewals,
reexaminations, extensions and continuations-in-part thereof; (2) trademarks,
service marks, logos, mask works, trade names, and corporate names and
applications for registration thereof, whether domestic or foreign; (3) computer
software (in both source code and object code form), data, database rights and
documentation, other than “off-the-shelf,” click to accept and/or shrink-wrap
software generally available to the public; (4) trade secrets and information,
whether or not patentable and whether or not reduced to practice, know-how,
manufacturing and production processes and techniques; and (5) any other
proprietary rights and processes.

 

8.                                       “License Agreement.” License Agreement
means the Manufacturing and Chaparral IP License Agreement dated as of the
Effective Date, between Borrower and Lender.

 

9.                                       “Master Alliance Agreement.” Master
Alliance Agreement means the Master Alliance Agreement dated as of the Effective
Date, between Borrower and Lender.

 

10.                                 “Obligations.” This Agreement secures the
following:

 

(i)                                     Borrower’s obligations under the Note;

 

(ii)                                  Borrower’s obligations to make payments to
Lender pursuant to the Transaction Documents;

 

(iii)                               any other or future advances or extensions
of credit that Lender may make to Borrower after the Effective Date, whether or
not the instrument evidencing such advance or extension of credit expressly
refers to this Agreement;

 

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(iv)                              any other amount that Borrower may become
obligated to pay to Lender whether for payment of goods or services or
otherwise;

 

(v)                                 the repayment of (a) any amounts that Lender
may advance or spend for the maintenance or preservation of the Collateral, and
(b) any other expenditures that Lender may make under the provisions of this
Agreement or for the benefit of Borrower; and

 

(vi)                              all amounts owed under any modifications,
renewals or extensions of any of the foregoing obligations;

 

in all instances whether before or after any Insolvency Event of Borrower.  For
avoidance of doubt, Borrower’s failure to make payments, if any, under those of
the Transaction Documents which are Commercial Agreements (except to the extent
such failure is an Event of Default as defined in Section 9.1.7 and 9.1.8 of the
Securities Purchase Agreement) and under Section 10 (iii) or (iv) above shall
not be deemed to be an Event of Default under the Securities Purchase Agreement.

 

11.                                 “Person.” Person means and includes natural
persons, corporations, limited liability companies, limited partnerships,
general partnerships, joint ventures, trusts, land trusts, business trusts, or
other organizations, irrespective of whether they are legal entities, and
governments and agencies and political subdivisions thereof.

 

12.                                 “PTO.” PTO means the United States Patent
and Trademark Office

 

13.                                 “Successor Product” shall mean and include
any product developed by the Borrower (either alone or with others) that uses or
incorporates any Intellectual Property used or incorporated in any Family of the
FC-FC Integrated Controllers (as defined in the Joint Development Agreement)
developed pursuant to the Joint Development Agreement and/or any RIO Product (as
defined in the Securities Purchase Agreement) which existed at any time during
the term of the Joint Development Agreement.

 

14.                                 “Technology Cross License Agreement.”
Technology Cross License Agreement means the Technology Cross License Agreement
between Adaptec, Inc. and Borrower dated November 25, 1998, as amended, and
specifically without limitation, Amendment No. 2 to the Technology Cross License
Agreement dated December 5, 2001.

 

15.                                 “UCC.” Any term used in the California
Uniform Commercial Code (“UCC”) and not defined in this Agreement has the
meaning given to the term in the UCC.

 

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B.                                     Grant and Continuation of Security
Interest.

 

1.                                       Grant of Security Interest.  As
security for the payment and performance of the Obligations, Borrower hereby
assigns, transfers and conveys to Lender, and grants to Lender a security
interest in and mortgage to, all of Borrower’s right, title and interest in, to
and under the Collateral.

 

2.                                       Continuing Security Interest. Borrower
agrees that this Agreement shall create a continuing security interest in the
Collateral which shall remain in effect until terminated in accordance with
Section D.1.

 

C.                                     Perfection of Security Interests and
Further Acts.

 

1.                                       Filing of Financing Statement.  On a
continuing basis, Borrower shall make, execute, acknowledge and deliver, and
file and record in the proper filing and recording places, all such instruments
and documents, and take all such action as may be necessary or advisable or may
be requested by Lender to carry out the intent and purposes of this Agreement,
or for assuring, confirming or protecting the grant or perfection of the
security interest granted or purported to be granted hereby, to ensure
Borrower’s compliance with this Agreement or to enable Lender to exercise and
enforce its rights and remedies hereunder with respect to the Collateral,
including any documents for filing with the PTO or any applicable state office. 
Lender may record this Agreement, an abstract thereof, or any other document
describing Lender’s interest in the Collateral with the PTO, at the expense of
Borrower. In addition, Borrower authorizes Lender to file financing statements
describing the Collateral in any UCC filing office deemed appropriate by Lender.
If Borrower shall at any time hold or acquire a commercial tort claim arising
with respect to the Collateral, the Borrower shall immediately notify Lender in
a writing signed by the Borrower of the brief details thereof and Borrower
acknowledges that the proceeds of such tort claim (net of reasonable attorney’s
fees and costs) are proceeds of the Collateral and as such are subject to the
security interest granted to Lender herein.

 

D.                                    Term of Agreement.

 

1.                                       Term.  This Agreement shall become
effective upon the Effective Date, and shall continue in full force and effect
until the full payment, conversion or other satisfaction of all Principal and
Interest under the Note, each in accordance with the terms of the Securities
Purchase Agreement.

 

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2.                                       Effect of Termination. Upon payment in
full of all Principal and Interest under the Note, the security interests
created by this Agreement shall terminate and Lender (at Borrower’s expense)
shall promptly execute and deliver to Borrower such documents and instruments
reasonably requested by Borrower as shall be necessary to evidence termination
of all such security interests given by Borrower to Lender hereunder, including
cancellation of this Agreement by written notice from Lender to the PTO.

 

E.                                      Covenants and Rights Concerning the
Collateral.

 

1.                                       Personal Property. The Collateral shall
remain personal property at all times.

 

2.                                       Limitations on Obligations Concerning
Maintenance of Collateral.

 

(i)                                     Risk of Loss. Borrower has the risk of
loss of the Collateral.

 

(ii)                                  No Collection Obligation. Lender has no
duty to collect any income accruing on the Collateral or to preserve any rights
relating to the Collateral.

 

3.                                       No Disposition of Collateral. Lender
does not authorize, and Borrower may not:

 

(i)                                     sell any of the Collateral other than a
sale to the Lender;

 

(ii)                                  transfer or grant any rights in the
Collateral other than to the Lender except in connection with arms-length
commercial transactions (including joint development agreements) occurring in
the Borrower’s normal course of business consistent with past practice of which
Lender has been notified; or

 

(iii)                               grant a security interest in any of the
Collateral to any party other than Lender other than a security interest which
is subordinated to Lender’s security interest, subject to prior written approval
by Lender of any subordination, inter-creditor or similar agreement that the
Lender may deem desirable and/or necessary, in its sole and absolute discretion.

 

F.                                      Borrower’s Representations and
Warranties.

 

Borrower warrants and represents that except as set forth in the Disclosure
Schedule:

 

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1.                                       Title to and transfer of Collateral. It
has rights in or the power to transfer the Collateral and its title to the
Collateral is free of all adverse claims, liens, security interests and
restrictions on transfer or pledge except as created by this Agreement.

 

2.                                       Patents and Patent Applications. A true
and correct list of all of the existing Collateral consisting of patents and
patent applications or registrations owned by Borrower, in whole or in part, is
set forth in Schedule A.

 

3.                                       Location and Name of Borrower.
Borrower’s:

 

(i)                                     state of incorporation is the state of
Delaware; and

 

(ii)                                  exact legal name is as set forth in the
first paragraph of this Agreement.

 

4.                                       Authority. Borrower has the authority
to enter into and perform the Transaction Documents and to execute all documents
and perform all other acts as may be necessary to perform all of Borrower’s
obligations under the Transaction Documents.

 

5.                                       Valid and Binding Obligation. Each of
the Transaction Documents is a valid and binding obligation of Borrower
enforceable in accordance with its respective terms.

 

6.                                       No Approvals or Consents. No approval
or consent by any Person or entity is necessary in connection with the execution
of the Transaction Documents by Borrower or the performance of Borrower’s
obligations under the Transaction Documents. The consummation of the
transactions contemplated by the Transaction Documents does not and will not
violate any statute, law, ordinance or regulation.

 

7.                                       No Violation of Other Obligations.
Neither the Transaction Documents nor anything provided to be done under the
Transaction Documents violates or shall violate, or shall cause the acceleration
of any debt or obligation of Borrower under, any contract, document,
understanding, agreement or instrument to which Borrower is a party or by which
it may be bound.

 

G.                                     Events of Default.

 

The occurrence of any of the events of default set forth in Section 9.1 of the
Securities Purchase Agreement shall constitute an event of default (each, an
“Event of Default”) under this Agreement.

 

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H.                                Default Costs.

 

Should an Event of Default occur, Borrower will pay to Lender all costs
reasonably incurred by the Lender for the purpose of enforcing its rights
hereunder, including:

 

1.                                       costs of foreclosure;

 

2.                                       costs of obtaining money damages; and

 

3.                                       a reasonable fee for the services of an
attorney employed by Lender for any purpose related to this Agreement or the
Obligations, including consultation, drafting documents, sending notices or
instituting, prosecuting or defending litigation or arbitration and including,
without limitation, such costs and expenses incurred by Lender in pursuing
recovery and protecting any of its rights or interests, in any bankruptcy or
other insolvency proceeding in which Borrower is the debtor.

 

I.                                         Remedies Upon Default.

 

1.                                       General. Upon any Event of Default, all
Obligations shall immediately become due and payable without notice or demand.
In addition, Lender may pursue any remedy available at law (including those
available under the provisions of the UCC), or in equity to collect, enforce, or
satisfy any Obligations then owing, whether by acceleration or otherwise.

 

2.                                       Exceptions for Loan Collection.  If
Borrower fails to repay the Principal and Interest when due pursuant to Section
9.2.1 of the Securities Purchase Agreement, then Lender may, at its sole
election, with at least 30 Business Days’ written notice elect as a remedy that
(a) the license granted by Borrower to Lender under Section 4 of the License
Agreement shall come into full force and effect, (b) the Assignment Agreement
shall come into full force and effect so that in particular but without
limitation Lender shall enjoy the full benefit of the license of the Chaparral
IP (as defined in the Master Alliance Agreement) in accordance with the terms
set forth in Section 4 of the License Agreement and the full benefit of the
Technology Cross License Agreement and the Adaptec IP (as defined in the Master
Alliance Agreement) in accordance with the terms thereof and (c) Lender shall
sub-license, and shall be deemed to have sub-licensed in accordance with the
Assignment Agreement, to Borrower the rights provided in the Technology Cross
License Agreement solely for the purpose of enabling Borrower to continue with
its business operations. So long as the License

 

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Agreement and the Assignment Agreement come into full force and effect as
contemplated by Section 4 of the License Agreement and at that time Borrower is
not in “liquidation” (as that expression is defined in the Master Alliance
Agreement) and for so long as each of the License Agreement and the Assignment
Agreement remain in full force and effect as aforesaid, Lender shall not seek to
recover the Principal and accrued Interest thereon due and payable pursuant to
Section 9.2.1 of the Securities Purchase Agreement and Interest shall not
continue to accrue on the Principal; provided, however that if Lender has not
received a claim that the License Agreement and/or the Assignment Agreement is
not in full force and effect within 12 months of the Principal and Interest
becoming due as aforesaid or if Lender has received such claim then when such
claim has been withdrawn or adjudicated by a court of final appeal and the
result of that adjudication is that the aforesaid full benefit of the license of
the Chaparral IP (as defined in the Master Alliance Agreement) and the
Technology Cross License Agreement and Adaptec IP (as defined in the Master
Alliance Agreement) remains available to Lender, then Borrower shall no longer
be obligated to repay the Principal and Interest nor shall the Lender seek
damages solely with respect to the Borrower’s failure to repay Principal and
Interest as aforesaid, except for an amount equal to the reasonable costs and
expenses of litigating, arbitrating and/or settling such claim, all of which
shall be recoverable from Borrower by Lender and, upon such recovery, the Lender
shall return the Note to the Borrower in accordance with Section 7.3.3 of the
Securities Purchase Agreement.

 

3.                                       Concurrent Remedies. Upon an Event of
Default, subject to the election of remedies by Lender set forth in Section I.2
above, Lender shall have the right to pursue any of the following remedies
separately, successively, or simultaneously:

 

(i)                                     File suit and obtain judgment, and, in
conjunction with any action, Lender may seek any ancillary remedies provided by
law, including levy of attachment and garnishment.

 

(ii)                                  Take possession of and use any Collateral
if not already in its possession without demand and without legal process.

 

(iii)                               Sell or otherwise dispose of the Collateral
at public or private sale in accordance with the UCC.

 

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J.                                        Foreclosure Procedures.

 

1.                                       No Waiver. No delay or omission by the
Lender to exercise any right or remedy accruing upon any Event of Default shall
(a) impair any right or remedy, (b) waive any default or operate as an
acquiescence to the Event of Default, or (c) affect any subsequent default of
the same or of a different nature.

 

2.                                       Notices. Lender shall give Borrower
such notice of any private or public sale as may be required by the UCC.

 

3.                                       No Obligation to Pursue Others. Lender
has no obligation to attempt to satisfy the Obligations by collecting them from
any other Person liable for them and Lender may release, modify or waive any
collateral provided by any other Person to secure any of the Obligations, all
without affecting Lender’s rights against Borrower. Borrower waives any right it
may have to require Lender to pursue any third person for any of the
Obligations.

 

4.                                       Compliance With Laws. Lender may comply
with any applicable state or federal law requirements in connection with a
disposition of the Collateral and compliance will not be considered to adversely
affect the commercial reasonableness of any sale of the Collateral.

 

5.                                       Warranties. Lender may sell the
Collateral without giving any warranties as to the Collateral. Lender may
specifically disclaim any warranties of title or the like. This procedure will
not be considered adversely to affect the commercial reasonableness of any sale
of the Collateral.

 

6.                                       No Marshaling. Lender has no obligation
to marshal any assets in favor of Borrower, or against or in payment of:

 

(i)                                     the Note,

 

(ii)                                  any of the other Obligations, or

 

(iii)                               any other obligation owed to Lender by
Borrower or any other Person.

 

K.                                    Miscellaneous.

 

1.                                       Assignment.

 

(i)                                     Binds Assignees. This Agreement shall
bind and shall inure to the benefit of the heirs, legatees, executors,
administrators, successors, and assigns of Lender and shall bind all Persons who
become bound as a Borrower to this Agreement.

 

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(ii)                                  Assignments. Except as otherwise set forth
herein, no party hereto shall transfer or assign any of its rights or
obligations hereunder without the prior written consent of each of the other
parties hereto, except (A) in the event of an assignment by operation of law, or
(B) by the Lender in connection with (X) a reorganization of its business, (Y)
transfer of the Lender’s RAID Controller or storage business in a sale or in
demerger, a “spin-off” or similar transaction or (Z) in a capital financing
transaction or providing security to a financing source for the Lender’s
business or the business of another member of the same group as the Lender.

 

2.                                       Severability. Should any provision of
this Agreement be found to be void, invalid or unenforceable by a court or panel
of arbitrators of competent jurisdiction, that finding shall only affect the
provisions found to be void, invalid or unenforceable and shall not affect the
remaining provisions of this Agreement.

 

3.                                       Notices. Any notices required by this
Agreement and/or the Note shall be deemed to be delivered when (a) if to Lender,
deposited in any United States postal box and if to Borrower, deposited in any
United Kingdom post box, airmail postage prepaid, and the notice properly
addressed to the appropriate recipient, three Business Days after such deposit,
(b) received by telecopy if received during the recipient’s normal business
hours or other wise at the opening of the next Business Day after such receipt,
(c) received through the Internet and such receipt is confirmed by the
recipient, and (d) when personally delivered.

 

If to Borrower:

 

Chaparral Network Storage, Inc.
7420 East Dry Creek Parkway
Longmont, Colorado 80503
Attn: Victor Perez, President
Telephone: (303) 845-3200
Facsimile: (303) 845-3636

 

with a copy to (which copy shall not constitute notice):

 

Davis Graham & Stubbs LLP
Suite 500
1550 Seventeenth Street
Denver, Colorado 80202

 

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Attn: Ron Levine, Esq.
Telephone: (303) 892-9400
Facsimile: (303) 893-1379

 

If to Lender:

 

Xyratex Technology Limited
Langstone Road
Havant
PO9 1SA
United Kingdom
Attn: David Bradley
Telephone: 023 92 496000
Facsimile: 023 92 453654

 

with a copy to (which copy shall not constitute notice):

 

Heller Ehrman White & McAuliffe LLP
601 S. Figueroa St., 40th Floor
Los Angeles, California 90017
Attn: Stephen E. Newton, Esq.
Telephone: (213) 689-0200
Facsimile: (213) 614-1868

 

4.                                       Headings. Section headings used in this
Agreement are for convenience only. They are not a part of this Agreement and
shall not be used in construing it.

 

5.                                       Governing Law. This Agreement shall be
construed and enforced in accordance with the laws of California except to the
extent that the UCC provides for the application of the law of any other state.

 

6.                                       Venue, Jurisdiction; Waiver of Trial by
Jury. EXCEPT TO THE EXTENT THAT THE UCC PROVIDES OTHERWISE, THE PARTIES AGREE
THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL
BE TRIED AND LITIGATED ONLY IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF CALIFORNIA. EACH OF BORROWER AND LENDER WAIVES, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENIENS OR TO

 

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OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS
SECTION K.6. BORROWER AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THE AGREEMENT
OR THE NOTE OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. BORROWER AND LENDER REPRESENT THAT EACH HAS REVIEWED THIS
WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

7.                                       Rules of Construction.

 

a.                                       Except as otherwise expressly provided
in this Agreement, no reference to “proceeds” in this Agreement authorizes any
sale, transfer, or other disposition of the Collateral by the Borrower.

 

b.                                      “Includes” and “including” are not
limiting.

 

c.                                       “Or” is not exclusive.

 

d.                                      “All” includes “any” and “any” includes
“all.”

 

8.                                       Integration and Modifications.

 

(i)                                     The Transaction Documents, together with
the Exhibits and Schedules hereto and thereto, constitutes the entire agreement
of the Borrower and Lender concerning the subject matter hereof and supersedes
all prior drafts and communications relating to such subject matter.

 

(ii)                                  Any modification to this Agreement must be
made in writing and signed by the party adversely affected.

 

9.                                       Waiver. Any party to this Agreement may
waive in a signed writing the enforcement of any provision to the extent the
provision is for its benefit.

 

10.                                 Further Assurances. Borrower agrees to
execute any further documents, and to take any further actions, reasonably
requested by Lender to evidence or perfect the security interest granted herein,
to maintain the first priority of the security interests, or to effectuate the
rights granted to Lender herein

 

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11.                                 Attorneys’ Fees. In any dispute, contest,
suit, action, or proceeding by a party to this Agreement to enforce its rights
under this Agreement (whether arising in contract, tort, or both), or seeking a
declaration of any rights or obligations under this Agreement, against any other
party to this Agreement, including any litigation, arbitration, mediation,
contested matter, dispute, suit, action, or adversary proceeding, and any appeal
or review thereof, in connection with a case, action, or proceeding commenced in
any state or federal court or agency, or before an arbitration panel or
mediator, or under the Bankruptcy Code, or any other applicable federal, state,
or foreign bankruptcy or other similar law, the prevailing party shall be
awarded its reasonable attorneys’ fees, together with any costs and expenses
(including the cost of employing expert witnesses). The Borrower and Lender
intend that the preceding sentence be severable from the other provisions of
this Agreement, survive any judgment and, to the maximum extent permitted by
law, not be deemed merged into such judgment.

 

12.                                 Counterparts. This Agreement may be executed
in one or more counterparts all of which together shall constitute one
instrument.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the Borrower and Lender have executed this Agreement as of
the date first above written.

 

 

 

Borrower:

 

 

 

CHAPARRAL NETWORK STORAGE, INC.

 

 

 

By:

/s/ Victor M. Perez

 

Name:

Victor M. Perez

 

Title:

Chief Executive Officer and President

 

 

 

Lender:

 

 

XYRATEX TECHNOLOGY LIMITED

 

 

 

By:

/s/ Paul W Hannah

 

Name:

PAUL W HANNAH

 

Title:

EXEC VP OPERATIONS

 

 

[SIGNATURE PAGE TO SECURITY AGREEMENT]

 

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SCHEDULE A (1 of 3)

to the Security Agreement

 

Issued U.S. Patents owned by Borrower

 

 

Patent No.

 

Issue Date

 

Title

 

 

 

 

 

 

 

None.

 

 

 

 

 

 

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SCHEDULE A (2 of 3)

 

Pending U.S. Patent Applications or Registrations of Borrower

 

 

Docket No.

 

Serial No.

 

Filing
Date

 

Title

 

 

 

 

 

 

 

 

 

USA 4430-22

 

09751090

 

12/31/00

 

Recovering Data from Arrays of Storage Devices after certain failures

 

 

 

 

 

 

 

 

 

USA 4430-23

 

09799480

 

3/5/01

 

Utilizing Parity Caching and Parity Logging while closing the RAID 5 Write Hole

 

 

 

 

 

 

 

 

 

USA 4430-24

 

09852858

 

5/9/01

 

Mirroring between Controllers in an Active-Active Controller pair

 

 

 

 

 

 

 

 

 

USA 4430-26

 

09942391

 

8/29/01

 

Initialization of a Storage System

 

 

 

 

 

 

 

 

 

USA 4430-27

 

09861308

 

5/17/01

 

Method for Automatically detecting and correcting duplicate controller SCSI Ids

 

 

 

 

 

 

 

 

 

USA 4430-28

 

09967027

 

9/28/01

 

Bus Zoning in a Channel Independent Controller Architecture

 

 

 

 

 

 

 

 

 

USA 4430-29

 

09967126

 

9/28/01

 

Controller Data Sharing using a Modular DMA Architecture

 

 

 

 

 

 

 

 

 

USA 4430-30

 

—

 

11/8/01

 

Obtaining Information to facilitate System Usage

 

 

 

 

 

 

 

 

 

USA 4430-32

 

09967194

 

9/28/01

 

Modular Architecture for a Network Storage Controller

 

 

 

 

 

 

 

 

 

USA 4430-34

 

—

 

10/29/01

 

Data Mirroring between Controllers in an Active-Active Controller pair

 

 

 

 

 

 

 

 

 

USA 4430-35

 

—

 

11/8/01

 

Data Mirroring using Shared Buses

 

 

 

 

 

 

 

 

 

USA 4430-38

 

—

 

11/9/01

 

Method and Apparatus for transferring data using Direct Memory Access

 

 

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SCHEDULE A (3 of 3)

 

Patent Cooperation Treaty Application

 

Title of invention:  Recovering Data From Arrays of Storage Devices After

Certain Failures.

Priority Date Claim-12-29-2000

Number us application-9/751.090

Date of filing international-12-21-01

 

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