SECURITY AGREEMENT

As of April 16, 2015, in connection with that certain Amended and Restated
Credit Agreement and Amended and Restated Advance Formula Agreement, each dated
April 16, 2015 by and among Owens Realty Mortgage, Inc., a Maryland corporation
("Borrower”), California Bank & Trust, as administrative agent for and on behalf
of the Lenders (as defined therein) (in such capacity, the "Agent") and the
Lenders party thereto, as amended, modified, extended, renewed or restated from
time to time (collectively, the “Credit Agreement”), and for value received, the
undersigned Borrower pledges, assigns and grants to Agent for and on behalf of
the Lenders, a continuing security interest and lien (any pledge, assignment,
security interest or other lien arising hereunder is sometimes referred to
herein as a "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 (as defined in the Credit
Agreement).  Any reference in this Agreement to attorneys' fees shall be deemed
a reference to reasonable fees, charges, costs and expenses of counsel and
paralegals, whether inside or outside counsel is used, and whether or not a suit
or action is instituted, and to court costs if a suit or action is instituted,
and whether attorneys' fees or court costs are incurred at the trial court
level, on appeal, in a bankruptcy, administrative or probate proceeding or
otherwise.  All costs and expenses shall be payable immediately by the Borrower
to Agent when incurred by the Agent or Lenders, immediately upon demand, and
until paid 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.

Borrower further covenants, agrees, represents and warrants as follows:

1.      Collateral. Collateral shall mean all personal property of Borrower
including, without limitation, all of the following property Borrower now or
later owns or has an interest in, wherever located:

all Accounts Receivable (for purposes of this Agreement, "Accounts Receivable"
consists of all accounts, general intangibles (including, without limit, payment
intangibles and software), chattel paper (including, without limit, electronic
chattel paper and tangible chattel paper), contract rights, deposit accounts,
documents (including, without limit, negotiable documents), instruments
(including, without limit, promissory notes) and rights to payment evidenced by
chattel paper, documents or instruments, health care insurance receivables,
commercial tort claims, letters of credit, letter of credit rights, supporting
obligations, money and rights to payment for money or funds advanced or sold),

all Inventory (including, without limit, returns and repossessions),

all Equipment and Fixtures,

all investment property (including, without limit, securities, securities
entitlements, and financial assets), all securities accounts and all investment
property contained therein, including, without limitation, all securities and
securities entitlements, financial assets, instruments or other property
contained in such securities accounts, and all other investment property,
financial assets, instruments or other property at any time held or maintained
in such securities accounts, together with all investment property, financial
assets, instruments or other property at any time substituted for all or for any
part of the foregoing, and all interest, dividends, increases, profits, new
investment property, financial assets, instruments or other property and or
other increments, distributions or rights of any kind received on account of any
of the foregoing, and all other income received in connection therewith,

all Software (for purposes of this Agreement "Software" consists of all (i)
computer programs and supporting information provided in connection with a
transaction relating to the program, and (ii) computer programs embedded in
goods and any supporting information provided in connection with a transaction
relating to the program whether or not the program is associated with the goods
in such a manner that it customarily is considered part of the goods, and
whether or not, by becoming the owner of the goods, a person acquires a right to
use the program in connection with the goods, and whether or not the program is
embedded in goods that consist solely of the medium in which the program is
embedded),

all general intangibles (including, without limit, software) acquired or used in
connection with any of the Collateral,

all goods, instruments (including, without limit, promissory notes), documents
(including, without limit, negotiable documents), policies and certificates of
insurance, deposit accounts, deposits, money, investment property or other
property (except real property which is not a fixture) which are now or later in
possession or control of Agent, or as to which Agent now or later controls
possession by documents or otherwise,

 
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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 all cash and non-cash proceeds of or pertaining to the above,
including, without limit, insurance and condemnation proceeds, and cash or other
property which were proceeds and are recovered by a bankruptcy trustee or
otherwise as a preferential transfer by Borrower, and

all of Borrower’s books and records with respect to any of the foregoing
(including, without limit, computer software and the computers and equipment
containing said books and records).

In the definition of Collateral, a reference to a type of collateral shall not
be limited by a separate reference to a more specific or narrower type of that
collateral.

2.    Warranties, Covenants and Agreements. Borrower warrants, covenants and
agrees as follows:

 
2.1
Borrower shall furnish to Agent, in form and at intervals as Agent may request,
any information Agent may reasonably request and allow Agent and Lenders to
examine, inspect, and copy any of Borrower's books and records. Borrower shall,
at the request of Agent, mark its records and the Collateral to clearly indicate
the security interest of Agent under this Agreement.

 
2.2
At the time any Collateral becomes, or is represented to be, subject to a
security interest in favor of Agent, Borrower shall be deemed to have warranted
that: (a) Borrower is the lawful owner of the Collateral and has the right and
authority to subject it to a security interest granted to Agent; (b) except to
the extent that Agent has previously consented otherwise in writing, none of the
Collateral is subject to any security interest other than that in favor of
Agent; (c) except to the extent that Agent has previously consented otherwise in
writing, there are no financing statements on file in respect of any of the
Collateral, other than in favor of Agent; (d) except to the extent that Agent
has previously consented otherwise in writing, no person, other than Agent (or
any Lender with Agent’s consent), has possession or control (as defined in the
Uniform Commercial Code) of any Collateral of such nature that perfection of a
security interest may be accomplished by control; and (e) Borrower acquired its
rights in the Collateral in the ordinary course of its business.

 
2.3
Borrower will keep the Collateral free at all times from all claims, liens,
security interests and encumbrances other than those in favor of Agent, except
as Agent agrees otherwise in writing.  Borrower will not, without the prior
written consent of Agent, sell, transfer or lease, or permit to be sold,
transferred or leased, any or all of the Collateral, except for Inventory in the
ordinary course of its business and will not return any Inventory to its
supplier. Agent, any Lender or their representatives may, at all reasonable
times inspect the Collateral and may enter upon all premises where the
Collateral is kept or might be located. Borrower shall reimburse Agent for all
reasonable costs and expenses incurred by Agent or any Lender in connection with
such inspections.  

 
2.4
Borrower will do all acts and will execute and/or deliver or cause to be
executed and/or delivered all writings requested by Agent to establish, maintain
and continue an exclusive, perfected and first security interest of Agent in the
Collateral. By executing this Agreement and becoming bound by the terms hereof,
Borrower expressly authorizes the filing of financing statements and any
amendments thereto covering the Collateral, and authorizes Agent or its
representatives to take such other actions as may be necessary or appropriate to
perfect and maintain Agent’s security interest in the Collateral. Borrower
acknowledges and agrees that neither Agent nor Lenders have any 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 Borrower is not
relying upon assets in which the Agent or any Lender has or may have a lien or
security interest for payment of the Indebtedness. In the event that any
Collateral, or any of Borrower’s books or records relating to any Collateral, is
at any time located or stored at or upon leased premises or with a bailee,
warehouseman or other third party, Borrower shall promptly provide written
notice thereof to Agent and, upon Agent’s request, cause such lessor, bailee,
warehouseman or other third party to execute and deliver unto Agent such
documents, instruments or agreements as Agent may reasonably require, in each
case in form and substance acceptable to Agent, pursuant to which such lessor,
bailee, warehouseman or other third party acknowledges Agent’s security interest
in such Collateral and that it is holding such Collateral for the benefit of
Agent and permits Agent access to and possession of such Collateral.

 
2.5
Borrower 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 Agent. If
Borrower fails to pay any of these taxes, assessments, or other charges in the
time provided above, Agent has the option (but not the obligation) to do so and
Borrower agrees to repay all amounts so expended by Agent or Lenders immediately
upon demand, together with interest at the highest lawful default rate which
could be charged by Agent or Lenders on any Indebtedness. Any such payments made
by Agent or Lenders shall not constitute (a) any agreement by Agent or Lenders
to make similar payments in the future, or (b) a waiver by Agent or Lenders of
any Event of Default under this Agreement. Agent need not inquire as to, or
contest the validity of, any such taxes, assessments and similar charges, and
the usual official notice of such taxes, assessments and similar charges shall
be conclusive evidence that the same are validly due and owing. Such payments
shall constitute Indebtedness secured by this Agreement.

 
 
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2.6
Borrower will keep the Collateral in good condition and will protect it from
loss, damage, or deterioration from any cause. Borrower 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 Agent. All of such insurance policies shall be in amount, form and
content, and written by companies as may be satisfactory to Agent, and shall
contain a lender's loss payable endorsement in favor of and acceptable to Agent.
All such policies shall contain a provision whereby they may not be canceled or
materially amended except upon thirty (30) days’ prior written notice to
Agent.  Borrower will promptly deliver to Agent, at Agent’s request, evidence
satisfactory to Agent that such insurance has been so procured and, with respect
to casualty insurance, made payable to Agent.  Borrower hereby appoints Agent,
or any employee or agent of Agent, as Borrower’s attorney-in-fact, which
appointment is coupled with an interest and irrevocable, and authorizes Agent,
or any employee or agent of Agent, on behalf of Borrower, to adjust and
compromise any loss under said insurance and to endorse any check or draft
payable to Borrower in connection with returned or unearned premiums on said
insurance or the proceeds of said insurance, and any amount so collected may be
applied toward satisfaction of the Indebtedness; provided, however, that Agent
shall not be required hereunder so to act. If Borrower fails to maintain
satisfactory insurance, Agent has the option (but not the obligation) to do so
and Borrower agrees to repay all amounts so expended to Agent immediately upon
demand, together with interest at the highest lawful default rate which could be
charged by Agent or any Lender on any Indebtedness. Such amounts so expended by
Agent or any Lender shall constitute Indebtedness secured by this Agreement.

 
2.7
On each occasion on which Borrower evidences to Agent the account balances on
and the nature and extent of the Accounts Receivable, Borrower shall be deemed
to have warranted that, except as otherwise indicated: (a) each of those
Accounts Receivable is valid and enforceable without performance by Borrower 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 has/have been endorsed and/or delivered by
Borrower to Agent; (e) Borrower 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, except as may be expressly permitted by Agent
to the contrary in another document, the account debtor is not an affiliate of
Borrower, 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. Borrower will do all acts and will execute all writings
requested by Agent to perform, enforce performance of, and collect all Accounts
Receivable. Borrower will deliver to Agent such documents, instruments and other
writings evidencing or otherwise relating to the Accounts Receivable as Agent
may reasonably request from time to time. Borrower shall neither make nor permit
any modification, compromise or substitution for any Account Receivable without
the prior written consent of Agent. Agent may at any time and from time to time
verify Accounts Receivable directly with account debtors or by other methods
acceptable to Agent without notifying Borrower. Borrower agrees, at Agent’s
request, to arrange or cooperate with Agent in arranging for verification of
Accounts Receivable.

 
2.8
Borrower at all times shall be in strict compliance with all applicable laws,
including, without limit, any laws, 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 Agent, acting in its sole discretion, redelivers Collateral to Borrower or
Borrower'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 Agent and shall
not constitute a release of Agent’s security interest in it or in the proceeds
or products of it, unless Agent specifically so agrees in writing. If Borrower
requests any such redelivery, Borrower expressly authorizes Agent to file a
financing statement in form and substance satisfactory to Agent in respect of
such Collateral. Any proceeds of Collateral coming into Borrower's possession as
a result of any such redelivery shall be held in trust for Agent and immediately
delivered to Agent for application on the Indebtedness. Agent may (in its sole
discretion) deliver any or all of the Collateral to Borrower, and such delivery
by Agent shall discharge Agent from all liability or responsibility for such
Collateral. Agent, at its option, may require delivery of any Collateral to
Agent at any time with such endorsements or assignments of the Collateral as
Agent may request.

 
 
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2.10
At any time and without notice, Agent may, as to any Collateral: (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
Agent; (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; and (d) take such
actions in its own name or in Borrower's name as Agent, in its sole discretion,
deems necessary or appropriate to establish exclusive control (as defined in the
Uniform Commercial Code) over any Collateral of such nature that perfection of
the Agent’s security interest may be accomplished by control.

 
2.11
Agent 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 Agent under this Agreement, and after
that Agent shall be fully discharged from all liability and responsibility with
respect to Collateral so delivered.

 
2.12
Borrower agrees that no security or guarantee now or later held by Agent or any
Lender for the payment of any indebtedness, whether from Borrower, any guarantor
or otherwise, and whether in the nature of a security interest, pledge, lien,
assignment, setoff, suretyship, guaranty, indemnity, insurance or otherwise,
shall affect in any manner the security interests or other rights or interests
of Agent or Lenders under this Agreement or any of the obligations of Borrower
under this Agreement, and Agent, in its sole discretion, without notice to
Borrower, may release, exchange, modify, enforce and otherwise deal with any
security or guaranty without affecting in any manner the unconditional pledge of
Borrower under this Agreement.

        2.13
Borrower shall defend, indemnify and hold harmless Agent, each Lender and each
of their 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 attorneys 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,
except and to the extent (but only to the extent) caused by Agent’s gross
negligence or willful misconduct.  The obligations contained in this Section
shall survive termination of this Agreement.

 
2.14
Borrower delivers this Agreement based solely on Borrower's independent
investigation of (or decision not to investigate) the financial condition of
Borrower and is not relying on any information furnished by Agent or any Lender.
Borrower 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 Borrower may deem necessary or appropriate now or
later. Borrower waives any duty on the part of Agent and Lenders, and agrees
that Borrower is not relying upon nor expecting Agent or any Lender to disclose
to Borrower any fact now or later known by Agent or such Lender, 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 Borrower's risk or Borrower's rights against
Borrower. Borrower knowingly accepts the full range of risk encompassed in this
Agreement, which risk includes, without limit, the possibility that Borrower may
incur Indebtedness to Agent or Lenders after the financial condition of
Borrower, or Borrower's ability to pay debts as they mature, has deteriorated.

 
2.15
Borrower agrees that no security or guarantee now or later held by Agent for the
payment of any Indebtedness, whether from Borrower, any guarantor, or otherwise,
and whether in the nature of a security interest, pledge, lien, assignment,
setoff, suretyship, guaranty, indemnity, insurance or otherwise, shall affect in
any manner the security interests or other interests granted by Borrower to or
in favor of Agent or Lenders under this Agreement, or any obligations of
Borrower hereunder or pursuant hereto, and Agent, in its sole discretion,
without notice to Borrower, may release, exchange, modify, enforce and otherwise
deal with any security or guaranty without affecting in any manner such security
interests or other interests of Agent or any such obligations of Borrower under
this Agreement.  Borrower acknowledges and agrees that neither Agent nor any
Lender have any obligation to acquire or perfect any lien on or security
interest in any assets, whether realty or personalty, or to obtain any guaranty
to secure payment of the Indebtedness, and Borrower is not relying upon any
guaranty which Agent or any Lender has or may have or assets in which Agent or
any Lender has or may have a lien or security interest for payment of the
Indebtedness.

 
 
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2.16
Borrower absolutely, unconditionally, knowingly, and expressly waives:

 
(a)
Notice of: (i) acceptance hereof; (ii) any loans or other financial
accommodations made or extended to Borrower or the creation or existence of any
Indebtedness; (iii) notice of the amount of the Indebtedness, subject, however,
to Borrower’s right to make inquiry of Agent or any Lender to ascertain the
amount of the Indebtedness at any reasonable time; and (iv) any default or
breach under the terms of any of the Indebtedness; and all other notices (except
if such notice is specifically required to be given to Borrower hereunder) and
demands to which Borrower might otherwise be entitled.

 
(b)
Its right under Sections 2845 or 2850 of the California Civil Code, or
otherwise, to require Agent to institute suit against, or to exhaust any rights
and remedies which Agent or any Lender has or may have against, Borrower or any
third party, or against any collateral for the Indebtedness provided by Borrower
or any third party.  In this regard, Borrower is bound to the payment of all
Indebtedness whether now existing or hereafter accruing, as fully as if such
Indebtedness were directly owing to Agent by Borrower.  Borrower waives any
defense arising by reason of any disability or other defense (other than the
defense that the Indebtedness shall have been fully and finally performed and
indefeasibly paid) of Borrower or by reason of the cessation from any cause
whatsoever of the liability of Borrower in respect thereof.

 
(c)
(i) Any rights to assert against Agent or any Lender any defense (legal or
equitable), set-off, counterclaim, or claim which Borrower may now or at any
time hereafter have against the Borrower or any other party liable to Agent or
any Lender; (ii) any defense, set-off, counterclaim, or claim, of any kind or
nature, arising directly or indirectly from the present or future lack of
perfection, sufficiency, validity, or enforceability of the Indebtedness or any
security therefor; (iii) any defense Borrower has to performance hereunder, and
any right Borrower has to be exonerated, provided by Sections 2819, 2822, or
2825 of the California Civil Code, or otherwise, arising by reason of: the
impairment or suspension of Agent’s or any Lender’s rights or remedies against
Borrower; the alteration by Agent or Lenders of the Indebtedness; any discharge
of the Indebtedness by operation of law as a result of Agent’s or any Lender’s
intervention or omission; or the acceptance by Agent or any Lender of anything
in partial satisfaction of the Indebtedness; (iv) the benefit of any statute of
limitations affecting Borrower’s liability hereunder or the enforcement thereof,
and any act which shall defer or delay the operation of any statute of
limitations applicable to the Indebtedness shall similarly operate to defer or
delay the operation of such statute of limitations applicable to Borrower’s
liability hereunder.

 
(d)
Any defense arising by reason of or deriving from (i) any claim or defense based
upon an election of remedies by Agent or any Lender; or (ii) any election by
Agent or the Lenders under the Bankruptcy Code Section 1111(b) to limit the
amount of, or any collateral securing, its claim against Borrower.

        2.17
Without notice to or by Borrower, and without affecting or impairing the
obligations of Borrower hereunder, Agent may (or authorize Lenders to), by
action or inaction:

 
(a)
compromise, settle, extend the duration or the time for the payment of, or
discharge the performance of, or may refuse to or otherwise not enforce this
Agreement, the Indebtedness, or any part thereof, with respect to Borrower or
any other person;

 
 
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(b)
release Borrower or any other person or grant other indulgences to Borrower or
any other person in respect thereof;

 
(c)
amend or modify in any manner and at any time (or from time to time) any
documents, instruments or agreements evidencing, governing, securing or
otherwise relating to any of the Indebtedness; or

 
(d)
release or substitute any guarantor, if any, of the Indebtedness, or enforce,
exchange, release, or waive any security for the Indebtedness or any guaranty of
the Indebtedness, or any portion thereof.

        2.18
Agent and Lenders shall have all of the rights to seek recourse against Borrower
to the fullest extent provided for herein and the Loan Documents.  No election
by Agent to proceed in one form of action or proceeding, or against any party,
or on any obligation, shall constitute a waiver of the Agent’s right to proceed
in any other form of action or proceeding or against other parties, unless the
Agent has expressly waived such right in writing.  Specifically, but without
limiting the generality of the foregoing, no action or proceeding by Agent or
any Lender under any document or instrument evidencing the Indebtedness shall
serve to diminish the liability of the Borrower under this Agreement, except to
the extent that Agent and Lenders finally and unconditionally shall have
realized indefeasible payment by such action or proceeding.

 
2.19
Borrower waives all rights and defenses arising out of an election of remedies
by the Agent or Lenders.

        2.20
WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER PROVISION SET FORTH
IN THIS AGREEMENT, BORROWER HEREBY ABSOLUTELY, KNOWINGLY, UNCONDITIONALLY, AND
EXPRESSLY WAIVES AND AGREES NOT TO ASSERT ANY AND ALL BENEFITS OR DEFENSES
ARISING DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF CALIFORNIA CIVIL CODE
SECTIONS 2799, 2808, 2809, 2810, 2815, 2819, 2820, 2821, 2822, 2825, 2839, 2845,
2848, 2849, AND 2850, CALIFORNIA UNIFORM COMMERCIAL CODE SECTIONS 3116, 3118,
3119, 3419, 3605, 9610, 9611, 9615, 9617, 9618, 9624, 9625, AND 9627, AND
CHAPTER 2 OF TITLE 14 OF PART 4 OF DIVISION 3 OF THE CALIFORNIA CIVIL CODE.

3.    Collection of Proceeds.

 
3.1
Borrower agrees to collect and enforce payment of all Collateral until Agent
shall direct Borrower to the contrary. Immediately upon notice to Borrower by
Agent and at all times after that, Borrower agrees to fully and promptly
cooperate and assist Agent in the collection and enforcement of all Collateral
and to hold in trust for Agent 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 Borrower now or later has regarding Collateral.
Immediately upon and after such notice, Borrower agrees to (a) endorse to Agent
and immediately deliver to Agent 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 Borrower in the Collateral, in the form received by
Borrower without commingling with any other funds, and (b) immediately deliver
to Agent all property in Borrower's possession or later coming into Borrower's
possession through enforcement of Borrower's rights or interests in the
Collateral. Borrower irrevocably authorizes Agent or any Agent employee or agent
to endorse the name of Borrower 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. Agent 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 Agent. Borrower
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 Agent or Lenders to any sale, lease or other disposition of any Collateral.

 
3.2
Borrower agrees that immediately upon Agent’s request (if an Event of Default
has occurred and then exists), the Indebtedness shall be on a "remittance basis"
in accordance with the following. In connection therewith, Borrower shall at its
sole expense establish and maintain (and Agent, at Agent’s option, may establish
and maintain at Borrower's expense):

 
(a)
A United States Post Office lock box (the "Lock Box"), to which Agent shall have
exclusive access and control. Borrower expressly authorizes Agent, from time to
time, to remove contents from the Lock Box, for disposition in accordance with
this Agreement. Borrower agrees to notify all account debtors and other parties
obligated to Borrower that all payments made to Borrower (other than payments by
electronic funds transfer) shall be remitted, for the credit of Borrower, to the
Lock Box, and Borrower shall include a like statement on all invoices; and

 
 
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(b)
A non-interest bearing deposit account with Agent which shall be titled as
designated by Agent (the "Cash Collateral Account") to which Agent shall have
exclusive access and control. Borrower agrees to notify all account debtors and
other parties obligated to Borrower that all payments made to Borrower by
electronic funds transfer shall be remitted to the Cash Collateral Account, and
Borrower, at Agent’s request, shall include a like statement on all invoices.
Borrower shall execute all documents and authorizations as required by Agent to
establish and maintain the Lock Box and the Cash Collateral Account.

 
 

 
3.3
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 Borrower to Agent on
account of partial or full payment of, or with respect to, any Collateral shall,
at Agent’s option, (a) be applied to the payment of the Indebtedness, whether
then due or not, in such order or at such time of application as Agent may
determine in its sole discretion, or, (b) be deposited to the Cash Collateral
Account. Borrower agrees that neither Agent nor Lenders shall be liable for any
loss or damage which Borrower may suffer as a result of Agent’s processing of
items or its or any Lender’s 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. Borrower agrees
to indemnify and hold Agent and each Lender harmless from and against all such
third party claims, demands or actions, and all related expenses or liabilities,
including, without limitation, attorney's fees, except to the extent (but only
to the extent) caused by Agent’s gross negligence or willful misconduct.

4.
Defaults, Enforcement and Application of Proceeds.

 
4.1
The occurrence or existence of any of the following conditions or events shall
constitute an "Event of Default" under this Agreement:

 
(a)
Any failure to pay the 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
or provision of this Agreement or any of the Loan Documents; or any failure or
neglect to comply with, or breach of or default under, any term or provision of
any other agreement or commitment between Borrower or any guarantor of any of
the Indebtedness ("Guarantor") and Agent or any Lender, and any such failure,
neglect, breach or default continues beyond any applicable grace or cure period
(if any) expressly provided with respect thereto; or

 
(c)
Any warranty, representation, financial statement, or other information made,
given or furnished to Agent or any Lender by or on behalf of Borrower 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, any Guarantor, or any Collateral; or

 
(e)
Sale or other disposition by Borrower or any Guarantor of any substantial
portion of its assets or property or voluntary suspension of the transaction of
business by Borrower 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 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 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 or any Guarantor; or

 
(f)
Agent deems the margin of Collateral insufficient or itself insecure, in good
faith believing that the prospect of payment or performance of the Indebtedness
or performance of this Agreement is impaired or shall fear deterioration,
removal, or waste of Collateral; or

 
(g)
Any default or event of default shall occur under any instrument, agreement or
other document evidencing, securing or otherwise relating to any of the
Indebtedness.

 
4.2
Upon the occurrence and at any time during the continuance or existence of any
Event of Default, Agent may at its discretion and without prior notice to
Borrower declare any or all of the Indebtedness to be immediately due and
payable, and shall have and may exercise any right or remedy available to it
including, without limitation, any one or more of the following rights and
remedies:

 
 
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(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, ship, reclaim, recover, store,
finish, maintain, repair, lease, or dispose of all or any Collateral at one or
more public or private sales, leasings or other dispositions, at places
(including, without limit, Borrower’s premises) and times and on terms and
conditions as Agent 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 Agent to sell, lease, or otherwise
dispose of the Collateral or as to the application by Agent or Lenders of the
proceeds of sale or otherwise, which would otherwise be required by, or
available to Borrower under, applicable law are expressly waived by Borrower 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
Agent, 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 Agent 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 Agent 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 Borrower with respect to that Collateral. At any sale
or other disposition of the Collateral pursuant to this Section 4.2, Agent and
Lenders disclaim all warranties which would otherwise be given under the Uniform
Commercial Code, including, without limit, a disclaimer of any warranty relating
to title, possession, quiet enjoyment or the like, and Agent may communicate
these disclaimers to a purchaser at such disposition. This disclaimer of
warranties will not render the sale commercially unreasonable. Agent may, in its
discretion, bid and purchase any of the Collateral at any sale pursuant to this
Section 4.2.
 
 

 
4.3
Borrower shall at the request of Agent, notify the account debtors or obligors
of Agent’s security interest in the Collateral and direct payment of it to
Agent. Agent may, itself, upon the occurrence and at any time during the
continuance or existence of any Event of Default, so notify the account debtors
or obligors of Agent’s security interest in the Collateral and direct such
account debtors or obligors to make payments directly to Agent. At the request
of Agent, whether or not an Event of Default shall have occurred, Borrower shall
immediately take such actions as the Agent shall request to establish exclusive
control (as defined in the Uniform Commercial Code) by Agent over any Collateral
which is of such a nature that perfection of a security interest may be
accomplished by control.

 
4.4
The proceeds of any sale or other disposition of Collateral authorized by this
Agreement shall be applied by Agent first upon all expenses authorized by the
Uniform Commercial Code and all reasonable attorney fees and legal expenses
incurred by Agent or Lenders; 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 Borrower or to such other person(s) as may be
entitled to it under applicable law. Borrower shall remain liable for any
deficiency, which it shall pay to Agent immediately upon demand. Borrower agrees
that Agent shall be under no obligation to accept any noncash proceeds in
connection with any sale or disposition of Collateral unless failure to do so
would be commercially unreasonable. If Agent agrees in its sole discretion to
accept noncash proceeds (unless the failure to do so would be commercially
unreasonable), Agent may ascribe any commercially reasonable value to such
proceeds. Without limiting the foregoing, Agent may apply any discount factor in
determining the present value of proceeds to be received in the future or may
elect to apply proceeds to be received in the future only as and when such
proceeds are actually received in cash by Agent.

 
 
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4.5
Nothing in this Agreement is intended, nor shall it be construed, to preclude
Agent or Lenders from pursuing any other right or remedy provided by law or in
equity for the collection of the Indebtedness or for the recovery of any other
sum to which Agent or Lenders may be entitled for the breach of this Agreement
by Borrower. Nothing in this Agreement shall reduce or release in any way any
rights or security interests of Agent contained in any existing agreement
between Borrower or any Guarantor and Agent.

 
4.6
No waiver of default or consent to any act by Borrower shall be effective unless
in writing and signed by an authorized officer of Agent. No waiver of any
default or forbearance on the part of Agent or any Lender 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
Borrower (a) irrevocably appoints Agent or any agent of Agent (which appointment
is coupled with an interest) the true and lawful attorney-in-fact of Borrower
(with full power of substitution) in the name, place and stead of, and at the
expense of, Borrower and (b) authorizes Agent or any agent of Agent, in its own
name, at Borrower's expense, to do any of the following, as Agent, in its sole
discretion, deems appropriate:

 
(i)
to demand, receive, sue 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;

 
(ii)
to execute and/or file in the name of and on behalf of Borrower all financing
statements or other filings deemed necessary or desirable by Agent to evidence,
perfect, or continue the security interests granted in this Agreement; and

 
(iii)
to do and perform any act on behalf of Borrower permitted or required under this
Agreement.

 
4.8
Upon the occurrence and at any time during the continuance or existence of an
Event of Default, Borrower also agrees, upon request of Agent, to assemble the
Collateral and make it available to Agent at any place designated by Agent which
is reasonably convenient to Agent and Borrower. Agent may take any and all
actions that it deems necessary or appropriate to protect the Collateral and its
security interest in the Collateral, and all costs and expenses for the same
shall be added to the Indebtedness and shall be payable upon demand. All risks
of loss, damage or destruction to the Collateral shall be borne by Borrower.

 
4.9
The following shall be the basis for any finder of fact's determination of the
value of any Collateral which is the subject matter of a disposition giving rise
to a calculation of any surplus or deficiency under Section 9.615(f) of the
Uniform Commercial Code (as in effect on or after July 1, 2001): (a) the
Collateral which is the subject matter of the disposition shall be valued in an
"as is" condition as of the date of the disposition, without any assumption or
expectation that such Collateral will be repaired or improved in any manner; (b)
the valuation shall be based upon an assumption that the transferee of such
Collateral desires a resale of the Collateral for cash promptly (but no later
than 30 days) following the disposition; (c) all reasonable closing costs
customarily borne by the seller in commercial sales transactions relating to
property similar to such Collateral shall be deducted, including, without
limitation, brokerage commissions, tax prorations, attorney's fees, whether
inside or outside counsel is used, and marketing costs; (d) the value of the
Collateral which is the subject matter of the disposition shall be further
discounted to account for any estimated holding costs associated with
maintaining such Collateral pending sale (to the extent not accounted for in (c)
above), and other maintenance, operational and ownership expenses; and (e) any
expert opinion testimony given or considered in connection with a determination
of the value of such Collateral must be given by persons having at least 5 years
experience in appraising property similar to the Collateral and who have
conducted and prepared a complete written appraisal of such Collateral taking
into consideration the factors set forth above. The "value" of any such
Collateral shall be a factor in determining the amount of proceeds which would
have been realized in a disposition to a transferee other than a secured party,
a person related to a secured party or a secondary obligor under Section
9.615(f) of the Uniform Commercial Code.

5.
Miscellaneous.

 
 
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5.1
Until Agent is advised in writing by Borrower to the contrary, all notices,
requests and demands required under this Agreement or by law shall be given to,
or made upon, Borrower at the following address:  2221 Olympic Boulevard, Walnut
Creek, California 94595.

 
5.2
Borrower will give Agent not less than ninety (90) days’ prior written notice of
all contemplated changes in Borrower's name, location, chief executive office,
principal place of business, 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
Agent assumes no duty of performance or other responsibility under any contracts
contained within the Collateral.

 
5.4
Agent 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, Agent may disclose all documents and information which Agent now or
later has relating to Borrower, the Indebtedness or this Agreement, however
obtained. Borrower further agrees that Agent and Lenders may provide information
relating to this Agreement or relating to Borrower or the Indebtedness to
Agent’s and each Lender’s parent, affiliates, subsidiaries, and service
providers.

 
5.5
In addition to Agent’s and Lender’s other rights, any indebtedness owing from
Agent or any Lender to Borrower (including, without limitation, amounts
maintained by Borrower as deposit accounts (as such term is defined in the
Uniform Commercial Code) with Agent or a Lender) can be set off and applied by
Agent or such Lender (subject to the terms of the Credit Agreement and approval
of Agent) on any Indebtedness at any time(s) either before or after maturity or
demand without notice to anyone. Any such action shall not constitute (a)
acceptance of collateral in discharge of any portion of the Indebtedness, (b) a
retention of collateral in satisfaction of an obligation within the meaning of
the Uniform Commercial Code, or (c) if the Indebtedness is secured by California
real estate, an action under California Code of Civil Procedure 726.

 
5.6
Borrower, to the extent not expressly prohibited by applicable law, waives any
right to require the Agent or any Lender 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 in effect prior to July 1, 2001 or its successor provisions thereafter; or
(c) pursue any other remedy in the Agent’s or any Lender’s power. Borrower
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 Borrower might otherwise be entitled, and diligence in
collecting any Indebtedness, and agrees that the Agent and Lenders 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 Borrower and without affecting in any manner the unconditional
obligation of Borrower under this Agreement. Borrower 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 Borrower 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 Borrower now or later
securing the Indebtedness, and acknowledges that as of the date of this
Agreement no such defense or setoff exists. Borrower ratifies and approves all
acts of Agent acting in its capacity as Borrower’s attorney-in-fact under this
Agreement.  Neither Agent nor its attorney-in-fact will be liable for any acts
or omissions or for any error of judgment or mistake of fact or law.

 
5.7
Borrower hereby absolutely, unconditionally, knowingly, and expressly waives any
and all rights (whether by subrogation, indemnity, reimbursement, or otherwise)
to recover from Borrower or any other person any amounts paid or the value of
any Collateral given by Borrower pursuant to this Agreement until such time as
all of the Indebtedness has been fully paid.

 
5.8
In the event that applicable law shall obligate Agent to give prior notice to
Borrower of any action to be taken under this Agreement, Borrower agrees that a
written notice given to Borrower at least ten (10) 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 disposition is to be made, unless a shorter
notice period is reasonable under the circumstances (including, without
limitation, if the Collateral, or any portion thereof, is perishable or
threatens to decline speedily in value). A notice shall be deemed to be given
under this Agreement when delivered to Borrower or when placed in an envelope
addressed to Borrower 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.

 
 
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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, as the case may be, in the event that
any payment received or credit given by Agent or any Lender in respect of the
Indebtedness is returned, disgorged, or rescinded under any applicable law,
including, without limitation, bankruptcy or insolvency laws, in which case this
Agreement, shall be enforceable against Borrower as if the returned, disgorged,
or rescinded payment or credit had not been received or given by Agent or such
Lender, and whether or not Agent or such Lender 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, Borrower agrees upon demand by
Agent to execute and deliver to Agent those documents which Agent determines are
appropriate to further evidence (in the public records or otherwise) this
continuation or reinstatement, although the failure of Borrower to do so shall
not affect in any way the reinstatement or continuation.

 
5.10
This Agreement and all the rights and remedies of Agent under this Agreement
shall inure to the benefit of Agent’s successors and assigns and to any other
holder who derives from Agent title to or an interest in the Indebtedness or any
portion of it, and shall bind Borrower and the heirs, legal representatives,
successors, and assigns of Borrower. Nothing in this Section 5.10 is deemed a
consent by Agent to any assignment by Borrower.

 
5.11
If there is more than one Borrower, each Borrower agrees that all undertakings,
warranties and covenants made by Borrower and all rights, powers and authorities
given to or conferred upon Agent are made or given jointly and severally, and
each reference to the term Borrower shall mean each and every Borrower a party
hereto, individually and collectively, 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 those meanings may
be amended, supplemented, revised or replaced from time to time. "Uniform
Commercial Code" means the California Uniform Commercial Code, as amended,
supplemented, revised or replaced from time to time. Notwithstanding the
foregoing, the parties intend that the terms used herein which are defined in
the Uniform Commercial Code have, at all times, the broadest and most inclusive
meanings possible. Accordingly, if the Uniform Commercial Code shall in the
future be amended or held by a court to define any term used herein more broadly
or inclusively than the Uniform Commercial Code in effect on the date of this
Agreement, then such term, as used herein, shall be given such broadened
meaning. If the Uniform Commercial Code shall in the future be amended or held
by a court to define any term used herein more narrowly, or less inclusively,
than the Uniform Commercial Code in effect on the date of this Agreement, such
amendment or holding shall be disregarded in defining terms used in this
Agreement.

 
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 Borrower and Agent
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 Borrower and an authorized officer of Agent. 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 Agent or
Lenders 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
Borrower represents and warrants that Borrower's exact name is the name set
forth in this Agreement and that it is a corporation organized and existing
under the laws of the State of Maryland.  Borrower further represents and
warrants the following and agrees that Borrower is, and at all times shall be,
located in the following place:   2221 Olympic Boulevard, Walnut Creek,
California 94595.

 
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 Agent in any filing office.

 
 
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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.

 
5.18
Borrower agrees to reimburse the Agent upon demand for any and all costs and
expenses (including, without limit, court costs, legal expenses and reasonable
attorneys' fees, whether inside or outside counsel is used, whether or not suit
is instituted and, if suit is instituted, whether at the trial court level,
appellate level, in a bankruptcy, probate or administrative proceeding or
otherwise) incurred in enforcing or attempting to enforce this Agreement or any
of the duties or obligations of Borrower under this Agreement or in
establishing, determining, continuing or defending the validity or priority of
Agent’s security interest under this Agreement or in exercising or attempting to
exercise any right or remedy under this Agreement or incurred in any other
matter or proceeding relating to this Agreement.

 
5.19
All payments to be made hereunder by Borrower shall be made in lawful money of
the United States of America at the time of payment, shall be made in
immediately available funds, and shall be made without deduction (whether for
taxes or otherwise) or offset.

        5.20
No right or remedy under this Agreement is intended to be exclusive of any other
remedy, but each and every right and remedy shall be cumulative and in addition
to any and every other right or remedy given under this Agreement, under any
other agreement(s) and those provided by law or in equity. No exercise by Agent
or any Lender of one right or remedy shall be deemed to be an election. No delay
or omission by Agent or Lenders to exercise any right under this Agreement shall
impair any such right nor be construed to be a waiver thereof.  No failure on
the part of Agent or Lenders to exercise, and no delay in exercising, any right
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right.

6.
BORROWER AND AGENT ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED UNDER CERTAIN CIRCUMSTANCES. TO
THE EXTENT PERMITTED BY LAW, 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.

This Agreement amends and restates in its entirety, that certain Security
Agreement dated February 5, 2014, made by Borrower in favor of California Bank &
Trust.

[Signatures on following page(s)]

 
 
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IN WITNESS WHEREOF, Borrower and Agent have executed this Agreement as of the
day and year first above written.

BORROWER:

OWENS REALTY MORTGAGE, INC.,
a Maryland corporation

By: ______________________________________
         William C. Owens
         President

CALIFORNIA BANK & TRUST, as Agent

By: ______________________________________
         Thomas C. Paton, Jr.
         Senior Vice President and Manager
ACKNOWLEDGED AND AGREED:
 
CALIFORNIA BANK & TRUST

By: _______________________________
          Thomas C. Paton, Jr.,
    Senior Vice President and Manager

 
 
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