Sample Business Contracts

Security Agreement - Wells Fargo Bank NA and Handspring Inc.

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        1. GRANT OF SECURITY INTEREST. For valuable consideration, the
undersigned Handspring, Inc. (Delaware), or any of them ("Debtor"), hereby
grants and transfers to WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank") a
security interest in (a) Debtor's Wells Capital Management Account No. 10650900
(whether held in Debtor's name or as a Bank collateral account for the benefit
of Debtor), and all replacements or substitutions therefor, including any
account resulting from a renumbering or other administrative re-identification
thereof (collectively, the "Securities Account") maintained with WELLS FARGO
BANK, NATIONAL ASSOCIATION, acting through its Investment Group
("Intermediary"), (b) all financial assets credited to the Securities Account,
(c) all security entitlements with respect to the financial assets credited to
the Securities Account, and (d) any and all other investment property or assets
maintained or recorded in the Securities Account (with all the foregoing defined
as "Collateral"), together with whatever is receivable or received when any of
the Collateral or proceeds thereof are sold, collected, exchanged or otherwise
disposed of, whether such disposition is voluntary or involuntary, including
without limitation, (i) all rights to payment, including returned premiums, with
respect to any insurance relating to any of the foregoing, (ii) all rights to
payment with respect to any cause of action affecting or relating to any of the
foregoing, and (iii) all stock rights, rights to subscribe, stock splits,
liquidating dividends, cash dividends, dividends paid in stock, new securities
or other property of any kind which Debtor is or may hereafter be entitled to
receive on account of any securities pledged hereunder, including without
limitation, stock received by Debtor due to stock splits or dividends paid in
stock or sums paid upon or in respect of any securities pledged hereunder upon
the liquidation or dissolution of the issuer thereof (hereinafter called
"Proceeds"). Except as otherwise expressly permitted herein, in the event Debtor
receives any such Proceeds, Debtor will hold the same in trust on behalf of and
for the benefit of Bank and will immediately deliver all such Proceeds to Bank
in the exact form received, with the endorsement of Debtor if necessary and/or
appropriate undated stock powers duly executed in blank, to be held by Bank as
part of the Collateral, subject to all terms hereof. As used herein, the terms
"security entitlement," "financial asset" and "investment property" shall have
the respective meanings set forth in the California Uniform Commercial Code.

        2. OBLIGATIONS SECURED. The obligations secured hereby are the payment
and performance of: (a) all present and future Indebtedness of Debtor to Bank;
and (b) all obligations of Debtor and rights of Bank under this Agreement. The
word "Indebtedness" is used herein in its most comprehensive sense and includes
any and all advances, debts, obligations and liabilities of Debtor under or with
respect to that certain Securities Account Control Agreement of even date
herewith and those certain Standby Letter of Credit Agreements of even date
herewith between Debtor and Bank (collectively, as amended or replaced, the
"Agreements"), or any of them, heretofore, now or hereafter made, incurred or
created, whether voluntary or involuntary and however arising, whether due or
not due, absolute or contingent, liquidated or unliquidated, determined or
undetermined, and whether Debtor may be liable individually or jointly with
others, or whether recovery upon such Indebtedness may be or hereafter becomes

        3. TERMINATION. This Agreement will terminate upon the performance of
all obligations of Debtor to Bank under the Agreements, including without
limitation, the payment of all Indebtedness of Debtor to Bank, and the
termination of all commitments of Bank to extend credit to Debtor, existing at
the time Bank receives written notice from Debtor of the termination of this

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        4. OBLIGATIONS OF BANK. Bank shall have no duty to take any steps
necessary to preserve the rights of Debtor against prior parties, or to initiate
any action to protect against the possibility of a decline in the market value
of the Collateral or Proceeds. Bank shall not be obligated to take any action
with respect to the Collateral or Proceeds requested by Debtor unless such
request is made in writing and Bank determines, in its sole discretion, that the
requested action would not unreasonably jeopardize the value of the Collateral
and Proceeds as security for the Indebtedness.

        5. REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants to
Bank that: (a) Debtor is the sole owner of the Collateral and Proceeds; (b)
Debtor has the right to grant a security interest in the Collateral and
Proceeds; (c) all Collateral and Proceeds are genuine, free from liens, adverse
claims, setoffs, default, prepayment, defenses and conditions precedent of any
kind or character, except the lien created hereby or as otherwise agreed to by
Bank, or heretofore disclosed by Debtor to Bank, in writing; (d) all statements
contained herein and, where applicable, in the Collateral, are true and complete
in all material respects; (e) no financing statement or control agreement
covering any of the Collateral or Proceeds, and naming any secured party other
than Bank, exists or is on file in any public office or remains in effect; (f)
no person or entity, other than Debtor, Bank and Intermediary, has any interest
in or control over the Collateral; and (g) specifically with respect to
Collateral and Proceeds consisting of investment securities, instruments,
chattel paper, documents, contracts, insurance policies or any like property,
(i) all persons appearing to be obligated thereon have authority and capacity to
contract and are bound as they appear to be, and (ii) the same comply with
applicable laws concerning form, content and manner of preparation and


        (a) Debtor agrees in general: (i) to pay Indebtedness secured hereby
when due; (ii) to indemnify Bank against all losses, claims, demands,
liabilities and expenses of every kind caused by property subject hereto; (iii)
to pay all costs and expenses, including reasonable attorneys' fees, incurred by
Bank in the perfection and preservation of the Collateral or Bank's interest
therein and/or the realization, enforcement and exercise of Bank's rights,
powers and remedies hereunder; (iv) to permit Bank to exercise its powers; (v)
to execute and deliver such documents as Bank deems necessary to create, perfect
and continue the security interests contemplated hereby; and (vi) not to change
its chief place of business (or personal residence, if applicable) or the places
where Debtor keeps any of Debtor's records concerning the Collateral and
Proceeds without first giving Bank written notice of the address to which Debtor
is moving same.

        (b) Debtor agrees with regard to the Collateral and Proceeds, unless
Bank agrees otherwise in writing: (i) not to permit any security interest in or
lien on the Collateral or Proceeds, except in favor of Bank and except liens in
favor of Intermediary to the extent expressly permitted by Bank in writing; (ii)
not to hypothecate or permit the transfer by operation of law of any of the
Collateral or Proceeds or any interest therein; (iii) to keep, in accordance
with generally accepted accounting principles, complete and accurate records
regarding all Collateral and Proceeds, and to permit Bank to inspect the same
and make copies thereof at any reasonable time; (iv) if requested by Bank, to
receive and use reasonable diligence to collect Proceeds, in trust and as the
property of Bank, and to immediately endorse as appropriate and deliver such
Proceeds to Bank daily in the exact form in which they are received together
with a collection report in form satisfactory to Bank; (v) in the event Bank
elects to receive payments of Proceeds hereunder, to pay all expenses incurred
by Bank in

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connection therewith, including expenses of accounting, correspondence,
collection efforts, filing, recording, record keeping and expenses incidental
thereto; (vi) to provide any service and do any other acts which may be
necessary to keep all Collateral and Proceeds free and clear of all defenses,
rights of offset and counterclaims; and (vii) if the Collateral or Proceeds
consists of securities and so long as no Event of Default exists, to vote said
securities and to give consents, waivers and ratifications with respect thereto,
provided that no vote shall be cast or consent, waiver or ratification given or
action taken which would impair Bank's interests in the Collateral and Proceeds
or be inconsistent with or violate any provisions of this Agreement. Debtor
further agrees that any party now or at any time hereafter authorized by Debtor
to advise or otherwise act with respect to the Securities Account shall be
subject to all terms and conditions contained herein and in any control,
custodial or other similar agreement at any time in effect among Bank, Debtor
and Intermediary relating to the Collateral.

        7. POWERS OF BANK. Debtor appoints Bank its true attorney in fact to
perform any of the following powers, which are coupled with an interest, are
irrevocable until termination of this Agreement and may be exercised from time
to time by Bank's officers and employees, or any of them, whether or not Debtor
is in default: (a) to perform any obligation of Debtor hereunder in Debtor's
name or otherwise; (b) to notify any person obligated on any security,
instrument or other document subject to this Agreement of Bank's rights
hereunder; (c) to collect by legal proceedings or otherwise all dividends,
interest, principal or other sums now or hereafter payable upon or on account of
the Collateral or Proceeds; (d) to enter into any extension, reorganization,
deposit, merger or consolidation agreement, or any other agreement relating to
or affecting the Collateral or Proceeds, and in connection therewith to deposit
or surrender control of the Collateral and Proceeds, to accept other property in
exchange for the Collateral and Proceeds, and to do and perform such acts and
things as Bank may deem proper, with any money or property received in exchange
for the Collateral or Proceeds, at Bank's option, to be applied to the
Indebtedness or held by Bank under this Agreement; (e) to make any compromise or
settlement Bank deems desirable or proper in respect of the Collateral and
Proceeds; (f) to insure, process and preserve the Collateral and Proceeds; (g)
to exercise all rights, powers and remedies which Debtor would have, but for
this Agreement, with respect to all Collateral and Proceeds subject hereto; and
(h) to do all acts and things and execute all documents in the name of Debtor or
otherwise, deemed by Bank as necessary, proper and convenient in connection with
the preservation, perfection or enforcement of its rights hereunder. To effect
the purposes of this Agreement or otherwise upon instructions of Debtor, or any
of them, Bank may cause any Collateral and/or Proceeds to be transferred to
Bank's name or the name of Bank's nominee. If an Event of Default has occurred
and is continuing, any or all Collateral and/or Proceeds consisting of
securities may be registered, without notice, in the name of Bank or its
nominee, and thereafter Bank or its nominee may exercise, without notice, all
voting and corporate rights at any meeting of the shareholders of the issuer
thereof, any and all rights of conversion, exchange or subscription, or any
other rights, privileges or options pertaining to such Collateral and/or
Proceeds, all as if it were the absolute owner thereof. The foregoing shall
include, without limitation, the right of Bank or its nominee to exchange, at
its discretion, any and all Collateral and/or Proceeds upon the merger,
consolidation, reorganization, recapitalization or other readjustment of the
issuer thereof, or upon the exercise by the issuer thereof or Bank of any right,
privilege or option pertaining to any shares of the Collateral and/or Proceeds,
and in connection therewith, the right to deposit and deliver any and all of the
Collateral and/or Proceeds with any committee, depository, transfer agent,
registrar or other designated agency upon such terms and conditions as Bank may
determine. All of the foregoing rights, privileges or options may be exercised
without liability on the part of Bank or its nominee except to account for
property actually received by Bank. Bank shall have no duty to exercise any of
the foregoing, or any other rights, privileges or options with

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respect to the Collateral or Proceeds and shall not be responsible for any
failure to do so or delay in so doing.

agrees to pay, prior to delinquency, all insurance premiums, taxes, charges,
liens and assessments against the Collateral and Proceeds, and upon the failure
of Debtor to do so, Bank at its option may pay any of them and shall be the sole
judge of the legality or validity thereof and the amount necessary to discharge
the same. Any such payments made by Bank shall be obligations of Debtor to Bank,
due and payable immediately upon demand, together with interest at a rate
determined in accordance with the provisions of Section 15 hereof, and shall be
secured by the Collateral and Proceeds, subject to all terms and conditions of
this Agreement.

        9. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default" under this Agreement: (a) any default in the
payment or performance of any obligation, or any defined event of default, under
(i) any contract or instrument evidencing any Indebtedness, (ii) any of the
Agreements between any Debtor and Bank, including without limitation any loan
agreement, relating to or executed in connection with any Indebtedness, or (iii)
any control, custodial or other similar agreement in effect among Bank, Debtor
and Intermediary relating to the Collateral; (b) any representation or warranty
made by any Debtor herein shall prove to be incorrect, false or misleading in
any material respect when made; (c) any Debtor shall fail to observe or perform
any obligation or agreement contained herein; (d) any attachment or like levy on
any property of any Debtor; and (e) Bank, in good faith, believes any or all of
the Collateral and/or Proceeds to be in danger of misuse, dissipation,
commingling, loss, theft, damage or destruction, or otherwise in jeopardy or
unsatisfactory in character or value.

        10. REMEDIES. Upon the occurrence of any Event of Default, Bank shall
have the right to declare immediately due and payable all or any Indebtedness
secured hereby and to terminate any commitments to make loans or otherwise
extend credit to Debtor. Bank shall have all other rights, powers, privileges
and remedies granted to a secured party upon default under the California
Uniform Commercial Code or otherwise provided by law, including without
limitation, the right to contact Intermediary and to instruct Intermediary to
deliver all Collateral and/or Proceeds directly to Bank. All rights, powers,
privileges and remedies of Bank shall be cumulative. No delay, failure or
discontinuance of Bank in exercising any right, power, privilege or remedy
hereunder shall affect or operate as a waiver of such right, power, privilege or
remedy; nor shall any single or partial exercise of any such right, power,
privilege or remedy preclude, waive or otherwise affect any other or further
exercise thereof or the exercise of any other right, power, privilege or remedy.
Any waiver, permit, consent or approval of any kind by Bank of any default
hereunder, or any such waiver of any provisions or conditions hereof, must be in
writing and shall be effective only to the extent set forth in writing. It is
agreed that public or private sales, for cash or on credit, to a wholesaler or
retailer or investor, or user of property of the types subject to this
Agreement, or public auction, are all commercially reasonable since differences
in the sales prices generally realized in the different kinds of sales are
ordinarily offset by the differences in the costs and credit risks of such
sales. While an Event of Default exists: (a) Debtor will not dispose of any of
the Collateral or Proceeds except on terms approved by Bank; (b) Bank may
appropriate the Collateral and apply all Proceeds toward repayment of the
Indebtedness in such order of application as Bank may from time to time elect;
(c) Bank may take any action with respect to the Collateral contemplated by any
control, custodial or other similar agreement then in effect among Bank, Debtor
and Intermediary; and (d) at Bank's request, Debtor will assemble and deliver
all books and records pertaining to the

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Collateral or Proceeds to Bank at a reasonably convenient place designated by
Bank. For any Collateral or Proceeds consisting of securities, Bank shall have
no obligation to delay a sale of any portion thereof for the period of time
necessary to permit the issuer thereof to register such securities for public
sale under any applicable state or Federal law, even if the issuer thereof would
agree to do so.

        11. DISPOSITION OF COLLATERAL AND PROCEEDS. Upon the transfer of all or
any part of the Indebtedness, Bank may transfer all or any part of the
Collateral or Proceeds and shall be fully discharged thereafter from all
liability and responsibility with respect to any of the foregoing so
transferred, and the transferee shall be vested with all rights and powers and
obligations of Bank hereunder with respect to any of the foregoing so
transferred; but with respect to any Collateral or Proceeds not so transferred,
Bank shall retain all rights, powers, privileges and remedies herein given. Any
proceeds of any disposition of any of the Collateral or Proceeds, or any part
thereof, may be applied by Bank to the payment of expenses incurred by Bank in
connection with the foregoing, including reasonable attorneys' fees, and the
balance of such proceeds may be applied by Bank toward the payment of the
Indebtedness in such order of application as Bank may from time to time elect.

        12. STATUTE OF LIMITATIONS. Until all Indebtedness shall have been paid
in full and all commitments by Bank to extend credit to Debtor under the
Agreements have been terminated, the power of sale and all other rights, powers,
privileges and remedies granted to Bank hereunder shall continue to exist and
may be exercised by Bank at any time and from time to time irrespective of the
fact that the Indebtedness or any part thereof may have become barred by any
statute of limitations, or that the personal liability of Debtor may have
ceased, unless such liability shall have ceased due to the payment in full of
all Indebtedness secured hereunder.

        13. MISCELLANEOUS. (a) The obligations of Debtor are joint and several;
(b) Debtor waives any right (i) to require Bank to make any presentment or
demand, or give any notice of nonpayment or nonperformance, protest, notice of
protest or notice of dishonor hereunder, (ii) to direct the application of
payments or security for any Indebtedness of Debtor, or indebtedness of
customers of Debtor, or (iii) to require proceedings against others or to
require exhaustion of security; and (c) Debtor hereby consents to extensions,
forbearances or alterations of the terms of Indebtedness, the release or
substitution of security, and the release of any guarantors; provided however,
that in each instance, Bank believes in good faith that the action in question
is commercially reasonable in that it does not unreasonably increase the risk of
nonpayment of the Indebtedness to which the action applies.

        14. NOTICES. All notices, requests and demands required under this
Agreement must be in writing, addressed to Bank at the address specified in any
other loan documents entered into between Debtor and Bank and to Debtor at the
address of its chief executive office (or personal residence, if applicable)
specified below or to such other address as any party may designate by written
notice to each other party, and shall be deemed to have been given or made as
follows: (a) if personally delivered, upon delivery; (b) if sent by mail, upon
the earlier of the date of receipt or three (3) days after deposit in the U.S.
mail, first class and postage prepaid; and (c) if sent by telecopy, upon

        15. COSTS, EXPENSES AND ATTORNEYS' FEES. Debtor shall pay to Bank
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of Bank's in-house counsel), expended or
incurred by Bank in exercising any

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right, power, privilege or remedy conferred by this Agreement or in the
enforcement thereof, whether incurred at the trial or appellate level, in an
arbitration proceeding or otherwise, and including any of the foregoing incurred
in connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to Debtor or in any way affecting any of the Collateral or
Bank's ability to exercise any of its rights or remedies with respect thereto.
All of the foregoing shall be paid by Debtor with interest from the date of
demand until paid in full at a rate per annum equal to the greater of ten
percent (10%) or the Prime Rate in effect from time to time.

        16. SUCCESSORS; ASSIGNS; AMENDMENT. This Agreement shall be binding upon
and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties, and may be amended or
modified only in writing signed by Bank and Debtor.

        17. OBLIGATIONS OF MARRIED PERSONS. Any married person who signs this
Agreement as Debtor hereby expressly agrees that recourse may be had against his
or her separate property for all his or her Indebtedness to Bank secured by the
Collateral and Proceeds under this Agreement.

        18. SEVERABILITY OF PROVISIONS. If any provision of this Agreement shall
be held to be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or any remaining provisions
of this Agreement.

        19. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.

        20. ADDENDUM. Additional terms and conditions relating to the Securities
Account are set forth in an Addendum attached hereto and incorporated herein by
this reference.

        Debtor warrants that its chief executive office (or personal residence,
if applicable) is located at the following address: 189 Bernardo Avenue,
Mountain View, CA 94043

        IN WITNESS WHEREOF, this Agreement has been duly executed as of February
16, 2001.

Handspring, Inc.

By:  /s/  Bernard Whitney, CFO

By:  /s/  David Pine, VP, General Counsel