Common use of Covenants Concerning Collateral Clause in Contracts

Covenants Concerning Collateral. Borrower covenants that: a. Borrower will keep the Accounts and Inventory free and clear of any and all security interests, liens, assignments or other encumbrances, except Permitted Encumbrances. b. Borrower will immediately notify Lender of any dispute concerning any Account and of any bankruptcy filing, lien, garnishment, or other legal action concerning any Account or Account Debtor. c. Borrower hereby authorizes Lender to file UCC Financing Statements concerning the Collateral. Borrower will execute and deliver any documents (properly endorsed, if necessary) reasonably requested by Lender for perfection or enforcement of any security interest or lien, give good faith, diligent cooperation to Lender, and perform such other acts reasonably requested by Lender for perfection and enforcement of any security interest or lien, including, without limitation, obtaining control for purposes of perfection with respect to Collateral consisting of deposit accounts, investment property, letter-of-credit rights, and electronic chattel paper. Lender is authorized to file, record, or otherwise utilize such documents as it deems necessary to perfect and/or enforce any security interest or lien granted hereunder. d. Borrower shall keep the Equipment in good repair, ordinary wear and tear and obsolescence excepted, and be responsible for any loss or damage to the Equipment. Borrower shall pay when due all taxes, license fees, and other charges on the Equipment. Borrower shall not sell, convey, transfer, assign, conceal, or in any way dispose of the Equipment. Borrower shall not misuse or permit the Equipment to be used unlawfully or for hire or contrary to the provisions of any insurance coverage. Risk of loss of the Equipment shall be on Borrower at all times unless Lender takes possession of the Equipment. Loss of or damage to the Equipment or any part thereof shall not release Borrower from any of the obligations secured by the Equipment. e. Borrower agrees to insure the Equipment and Inventory, at Borrower’s expense, against loss, damage, theft, and such other risks as Lender may request to the full insurable value thereof with insurance companies and policies satisfactory to Lender. Proceeds from such insurance shall be payable to Lender as its interest may appear. Such policies shall name Lender as an additional insured and as lender loss payee and shall provide for a minimum thirty (30) days written cancellation notice to Lender. Upon request, policies or certificates attesting to such coverage shall be delivered to Lender. Insurance proceeds may be applied by Lender toward payment of any obligation secured by this Loan and Security Agreement, whether or not due, in such order of application as Lender may elect. f. Borrower will at all times keep accurate and complete records of the Collateral. Lender or its representatives may, at any time and from time to time, enter any premises where the Collateral and/or the records pertaining to the Collateral are located and inspect, inventory, audit, check, copy, and otherwise review the Collateral and the records concerning the Collateral. g. So long as no Event of Default has occurred, Borrower shall have the right to sell or otherwise dispose of the Inventory in the ordinary course of business. No other disposition of the Inventory may be made without the prior written consent of Lender. h. So long as no Event of Default has occurred, Borrower is authorized to collect payment on all Financial Obligations Collateral in a commercially reasonable manner. Borrower agrees to use diligent and good faith efforts to collect the Financial Obligations Collateral.

Covenants Concerning Collateral. Borrower covenants that: a. Borrower will keep the Accounts and Inventory Collateral free and clear of any and all security interests, liens, assignments or other encumbrances, except Permitted Encumbrances. b. Borrower will immediately notify Lender of any dispute concerning any Account and of any bankruptcy filing, lien, garnishment, or other legal action concerning any Account or Account Debtor. c. Borrower hereby authorizes Lender to file UCC Financing Statements concerning the Collateral. Borrower will execute and deliver any documents (properly endorsed, if necessary) reasonably requested by Lender for perfection or enforcement of any security interest or lien, give good faith, diligent cooperation to Lender, and perform such other acts reasonably requested by Lender for perfection and enforcement of any security interest or lien, including, without limitation, obtaining control for purposes of perfection with respect to Collateral consisting of deposit accounts, investment property, letter-of-credit rights, and electronic chattel paper. Lender is authorized to file, record, or otherwise utilize such documents as it deems necessary to perfect and/or enforce any security interest or lien granted hereunder. d. c. Borrower shall keep the Equipment in good repair, ordinary wear and tear and obsolescence excepted, and be responsible for any loss or damage to the Equipment. Borrower shall pay when due all taxes, license fees, fees and other charges on the Equipment. Borrower shall not sell, convey, transfer, assignmisuse, conceal, or in any way dispose of the Equipment. Equipment (except for sales or transfers of worn-out, obsolete or surplus Equipment (each as determined by the Borrower shall not misuse in its reasonable judgment)) or permit the Equipment it to be used unlawfully or for hire or contrary to the provisions of any insurance coverage. Risk of loss of the Equipment shall be on Borrower at all times unless Lender takes possession of the Equipment. Loss of or damage to the Equipment or any part thereof shall not release Borrower from any of the obligations secured by the Equipment. Lender or its representatives may, at any time and from time to time, enter any premises where the Equipment is located and inspect, audit and check the Equipment. d. Borrower agrees to insure the Equipment, at Borrower’s expense, against loss, damage, theft, and such other risks as Lender may request to the full insurable value thereof with insurance companies and policies satisfactory to Lender. Proceeds from such insurance shall be payable to Lender as its interest may appear, shall name Lender as an additional insured and as a loss payee, and such policies shall provide for a minimum ten days written cancellation notice to Lender. Upon request, policies or certificates attesting to such coverage shall be delivered to Lender. Insurance proceeds may be applied by Lender toward payment of any obligation secured by this Security Agreement, whether or not due, in such order of application as Lender may elect. e. Borrower agrees to insure the Equipment and Inventory, at Borrower’s expense, against loss, damage, theft, and such other risks as Lender may request to the full insurable value thereof with insurance companies and policies satisfactory to Lender. Proceeds from such insurance shall be payable to Lender as its interest may appear. Such policies , shall name Lender as an additional insured and as lender a loss payee payee, and such policies shall provide for a minimum thirty (30) ten days written cancellation notice to Lender. Upon request, policies or certificates attesting to such coverage shall be delivered to Lender. Insurance proceeds may be applied by Lender toward payment of any obligation secured by this Loan and Security Agreement, whether or not due, in such order of application as Lender may elect. f. Borrower shall submit to Lender reports as to the Collateral, at such times and in such form as Lender may reasonably request. Borrower will at all times keep accurate and complete records of the Collateral. Lender or its representatives may, at any time and from time to time, enter any premises where the Collateral and/or the records pertaining to the Collateral are located and inspect, inventory, audit, check, copy, and otherwise review the Collateral and the records concerning the Collateral. g. So long as no Event of Default has occurredexists, Borrower shall have the right to sell or otherwise dispose of the Inventory in the ordinary course of business. No other disposition of the Inventory may be made without the prior written consent of Lender. h. So long as no At any time an Event of Default has occurredexists, Borrower is authorized to collect payment on all proceeds from the sale or other disposition of the Inventory, and all collections and other proceeds from the Accounts and Financial Obligations Collateral, if any, shall be deposited into an account designated by Lender (the “Cash Collateral Account”), which account shall be under the sole and exclusive control of Lender. Such proceeds and collections shall not be commingled with any other funds and shall be promptly and directly deposited into such account in a commercially reasonable mannerthe form in which received by Borrower. Such proceeds and collections shall not be deposited in any other account and said Cash Collateral Account shall contain no funds other than such proceeds and collections. All or any portion of the funds on deposit in said Cash Collateral Account may, in the sole discretion of Lender, be applied from time to time as Lender elects to payment of obligations secured by this Security Agreement or Lender may elect to turn over to Borrower, from time to time, all or any portion of such funds. i. Borrower agrees to use diligent and good faith efforts to collect the Accounts and Financial Obligations Collateral, if any. At any time an Event of Default exists, Borrower is authorized to collect the Accounts and Financial Obligations Collateral in a commercially reasonable manner. Lender, in its discretion, may terminate such authority at any time whereupon Lender is authorized by Borrower, without further act, to notify any and all account debtors and obligors to make payment thereon directly to Lender, and to take possession of all proceeds from the Accounts and Financial Obligations Collateral, and to take any action which Borrower might or could take to collect the Accounts and Financial Obligations Collateral, including the right to make any compromise, discharge, or extension. At any time an Event of Default exists, upon request of Lender, Borrower agrees to execute and deliver to Lender a notice to the account debtors and obligors instructing said account debtors and obligors to pay Lender. At any time an Event of Default exists, Borrower further agrees to execute and deliver to Lender all other notices and similar documents requested by Lender to facilitate collection of the Accounts and Financial Obligations Collateral. j. All costs of collection of the Accounts and Financial Obligations Collateral, if any, including attorneys fees and legal expenses, shall be borne solely by Borrower, whether such costs are incurred by or for Borrower or Lender. In the event Lender elects to undertake direct collection of the Accounts and Financial Obligations Collateral, Borrower agrees to deliver to Lender, if so requested, all books, records, and documents in Borrower’s possession or under its control as may relate to the Accounts and Financial Obligations Collateral or as may be helpful to facilitate such collection. Lender shall have no obligation to cause an attorneys demand letter to be sent, to file any lawsuit, or to take any other legal action in collection of the Accounts and Financial Obligations Collateral. It is agreed that collection of the Accounts and Financial Obligations Collateral in a commercially reasonable manner does not require that any such legal action be taken. k. Borrower does hereby make, constitute, and appoint Lender and its designees as Borrower’s true and lawful attorney in fact, with full power of substitution, such power to be exercised in the following manner (and in the cases of clauses (1) though (4), only during the existence of an Event of Default): (1) Lender may receive and open all mail addressed to Borrower and remove therefrom any payments of the Accounts and Financial Obligations Collateral, if any; (2) Lender may cause mail relating to the Accounts and Financial Obligations Collateral to be delivered to a designated address of Lender where Lender may open all such mail and remove therefrom any payments of the Accounts and Financial Obligations Collateral; (3) Lender may endorse Borrower’s name upon notes, checks, acceptances, drafts, money orders, or other forms of payment of the Accounts and Financial Obligations Collateral; (4) Lender may settle or adjust disputes or claims in respect to the Accounts and Financial Obligations Collateral for amounts and upon such terms as Lender, in its sole discretion and in good faith, deems to be advisable, in such case crediting Borrower with only the proceeds received and collected by Lender after deduction of Lender’s costs, including reasonable attorneys fees and legal expenses; and (5) Lender may do any and all other things necessary or proper to carry out the intent of this Security Agreement and to perfect and protect the liens and rights of Lender created under this Security Agreement. l. Immediately upon request, Borrower shall endorse and deliver to Lender all instruments and chattel paper, if any, which are Collateral. Upon creation of any instruments or chattel paper in the future, immediately upon creation Borrower shall endorse and deliver the instruments and chattel paper to Lender. m. Borrower shall, immediately upon obtaining knowledge thereof, report to Lender in writing any default on any item of Financial Obligations Collateral, any material claim or dispute asserted by any obligor on any item of that Collateral, and any other material matters that may affect the value, enforceability or collectability of any of that Collateral. n. Borrower shall not, without Lender’s written consent, make any material settlement, compromise or adjustment of any item of Financial Obligations Collateral or grant any material discounts, extensions, allowances or credits thereon, except in the ordinary course of Borrower’s business.

Covenants Concerning Collateral. Borrower Guarantor covenants that: a. Borrower Guarantor will keep the Accounts and Inventory Collateral free and clear of any and all security interests, liens, assignments or other encumbrancesLiens, except Permitted Encumbrances. b. Borrower will immediately notify Guarantor hereby authorizes Lender at any time and from time to time to file in any filing office in any Uniform Commercial Code jurisdiction any initial financing statements and amendments thereto concerning the Collateral, including, without limitation, those that (i) indicate the Collateral (A) as all assets of Guarantor or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9a of the Uniform Commercial Code, or (B) as being of an equal or lesser scope or with greater detail, and (ii) provide any other information required by part 5 of Article 9a of the Uniform Commercial Code, for the sufficiency or filing office acceptance of any dispute concerning financing statement or amendment, including, in the case of a financing statement filed as a fixture filing or indicating Collateral as as-extracted collateral or timber to be cut, a sufficient description of real property to which the Collateral relates. Guarantor agrees to furnish any Account and of such information to Lender promptly upon Lender’s request. Guarantor also ratifies its authorization for Lender to have filed in any bankruptcy filing, lien, garnishment, Uniform Commercial Code jurisdiction any like initial financing statements or other legal action concerning any Account or Account Debtoramendments thereto if filed prior to the date hereof. c. Borrower hereby authorizes Lender to file UCC Financing Statements concerning the Collateral. Borrower Guarantor will execute and deliver any documents (properly endorsed, if necessary) reasonably requested by Lender for perfection or enforcement of any security interest or lien, give good faith, diligent cooperation to Lender, and perform such other acts reasonably requested by Lender for perfection and enforcement of any security interest or lien, including, without limitation, obtaining control for purposes of perfection with respect to Collateral consisting of deposit accounts, investment property, letter-of-credit rights, and electronic chattel paper. Lender is authorized to file, record, or otherwise utilize such documents as it deems necessary to perfect and/or enforce any security interest or lien granted hereunder. d. Borrower Guarantor shall keep the Equipment in good repair, ordinary wear and tear and obsolescence excepted, and be responsible for any loss or damage to the Equipment. Borrower Guarantor shall pay when due all taxes, license fees, fees and other charges on the Equipment. Borrower Guarantor shall not sell, convey, transfer, assignmisuse, conceal, or in any way dispose of the Equipment. Borrower shall not misuse Equipment (except for sales or transfers of worn-out, obsolete or surplus Equipment (each as determined by the Guarantor in its reasonable judgment)) or permit the Equipment it to be used unlawfully or for hire or contrary to the provisions of any insurance coverage. Risk of loss of the Equipment shall be on Borrower Guarantor at all times unless Lender takes possession of the Equipment. Loss of or damage to the Equipment or any part thereof shall not release Borrower Guarantor from any of the obligations secured by the Equipment. Lender or its representatives may, at any time and from time to time, enter any premises where the Equipment is located and inspect, audit and check the Equipment. e. Borrower Guarantor agrees to insure the Equipment and InventoryEquipment, at BorrowerGuarantor’s expense, against loss, damage, theft, and such other risks as Lender may request to the full insurable value thereof with insurance companies and policies satisfactory to Lender. Proceeds from such insurance shall be payable to Lender as its interest may appear. Such policies , shall name Lender as an additional insured and as lender a loss payee payee, and such policies shall provide for a minimum thirty (30) ten days written cancellation notice to Lender. Upon request, policies or certificates attesting to such coverage shall be delivered to Lender. Insurance proceeds may be applied by Lender toward payment of any obligation secured by this Loan and Security Agreement, whether or not due, in such order of application as Lender may elect. f. Borrower Guarantor agrees to insure the Inventory, at Guarantor’s expense, against loss, damage, theft, and such other risks as Lender may request to the full insurable value thereof with insurance companies and policies satisfactory to Lender. Proceeds from such insurance shall be payable to Lender as its interest may appear, shall name Lender as an additional insured and as a loss payee, and such policies shall provide for a minimum ten days written cancellation notice to Lender. Upon request, policies or certificates attesting to such coverage shall be delivered to Lender. Insurance proceeds may be applied by Lender toward payment of any obligation secured by this Agreement, whether or not due, in such order of application as Lender may elect. g. Guarantor shall submit to Lender reports as to the Collateral, at such times and in such form as Lender may reasonably request. Guarantor will at all times keep accurate and complete records of the Collateral. Lender or its representatives may, at any time and from time to time, enter any premises where the Collateral and/or the records pertaining to the Collateral are located and inspect, inventory, audit, check, copy, and otherwise review the Collateral and the records concerning the Collateral. g. h. So long as no Event of Default has occurredexists, Borrower Guarantor shall have the right to sell or otherwise dispose of the Inventory in the ordinary course of business. No other disposition of the Inventory may be made without the prior written consent of Lender. h. So long as no i. At any time an Event of Default has occurredexists, Borrower is authorized to collect payment on all proceeds from the sale or other disposition of the Inventory, and all collections and other proceeds from the Accounts and Financial Obligations Collateral, if any, shall be deposited into an account designated by Lender (the “Cash Collateral Account”), which account shall be under the sole and exclusive control of Lender. Such proceeds and collections shall not be commingled with any other funds and shall be promptly and directly deposited into such account in a commercially reasonable mannerthe form in which received by Guarantor. Borrower Such proceeds and collections shall not be deposited in any other account and said Cash Collateral Account shall contain no funds other than such proceeds and collections. All or any portion of the funds on deposit in said Cash Collateral Account may, in the sole discretion of Lender, be applied from time to time as Lender elects to payment of obligations secured by this Agreement or Lender may elect to turn over to Guarantor, from time to time, all or any portion of such funds. j. Guarantor agrees to use diligent and good faith efforts to collect the Accounts and Financial Obligations Collateral, if any. At any time an Event of Default exists, Guarantor is authorized to collect any Accounts and Financial Obligations Collateral in a commercially reasonable manner. Lender, in its discretion, may terminate such authority at any time whereupon Lender is authorized by Guarantor, without further act, to notify any and all account debtors and obligors to make payment thereon directly to Lender, and to take possession of all proceeds from the Accounts and Financial Obligations Collateral, and to take any action which Guarantor might or could take to collect the Accounts and Financial Obligations Collateral, including the right to make any compromise, discharge, or extension. At any time an Event of Default exists, upon request of Lender, Guarantor agrees to execute and deliver to Lender a notice to the account debtors and obligors instructing said account debtors and obligors to pay Lender. At any time an Event of Default exists, Guarantor further agrees to execute and deliver to Lender all other notices and similar documents requested by Lender to facilitate collection of the Accounts and Financial Obligations Collateral. k. All costs of collection of the Accounts and Financial Obligations Collateral, if any, including attorneys fees and legal expenses, shall be borne solely by Guarantor, whether such costs are incurred by or for Guarantor or Lender. In the event Lender elects to undertake direct collection of the Accounts and Financial Obligations Collateral, Guarantor agrees to deliver to Lender, if so requested, all books, records, and documents in Guarantor’s possession or under its control as may relate to the Accounts and Financial Obligations Collateral or as may be helpful to facilitate such collection. Lender shall have no obligation to cause an attorneys demand letter to be sent, to file any lawsuit, or to take any other legal action in collection of the Accounts and Financial Obligations Collateral. It is agreed that collection of the Accounts and Financial Obligations Collateral in a commercially reasonable manner does not require that any such legal action be taken. l. Guarantor does hereby make, constitute, and appoint Lender and its designees as Guarantor’s true and lawful attorney in fact, with full power of substitution, such power to be exercised in the following manner (and in the cases of clauses (1) though (4), only during the existence of an Event of Default): (1) Lender may receive and open all mail addressed to Guarantor and remove therefrom any payments of the Accounts and Financial Obligations Collateral, if any; (2) Lender may cause mail relating to the Accounts and Financial Obligations Collateral to be delivered to a designated address of Lender where Lender may open all such mail and remove therefrom any payments of the Accounts and Financial Obligations Collateral; (3) Lender may endorse Guarantor’s name upon notes, checks, acceptances, drafts, money orders, or other forms of payment of the Accounts and Financial Obligations Collateral; (4) Lender may settle or adjust disputes or claims in respect to the Accounts and Financial Obligations Collateral for amounts and upon such terms as Lender, in its sole discretion and in good faith, deems to be advisable, in such case crediting Guarantor with only the proceeds received and collected by Lender after deduction of Lender’s costs, including reasonable attorneys fees and legal expenses; and (5) Lender may do any and all other things necessary or proper to carry out the intent of this Agreement and to perfect and protect the liens and rights of Lender created under this Agreement. m. Immediately upon request, Guarantor shall endorse and deliver to Lender all instruments and chattel paper, if any, which are Collateral. Upon creation of any instruments or chattel paper in the future, immediately upon creation Guarantor shall endorse and deliver the instruments and chattel paper to Lender. n. Guarantor shall, immediately upon obtaining knowledge thereof, report to Lender in writing any default on any item of Financial Obligations Collateral, any material claim or dispute asserted by any obligor on any item of that Collateral, and any other material matters that may affect the value, enforceability or collectability of any of that Collateral. o. Guarantor shall promptly, and in any event within ten Banking Business Days after the same is acquired by it, notify Lender of any commercial tort claim (as such term is defined in the Uniform Commercial Code) acquired by it, which notice shall, unless otherwise consented to by Lender, (i) set forth in reasonable detail the basis for and nature of such commercial tort claim, and (ii) include the express grant by Guarantor to Lender of a security interest in such commercial tort claim and the proceeds thereof. In the event that such notice does not include such grant of a security interest, the sending thereof by Guarantor to Lender shall be deemed to constitute such grant to Lender. Upon the sending of such notice, any commercial tort claim described therein shall constitute part of the Collateral and shall be deemed included herein. p. Guarantor shall not, without Lender’s written consent, make any material settlement, compromise or adjustment of any item of Financial Obligations Collateral or grant any material discounts, extensions, allowances or credits thereon, except in the ordinary course of Guarantor’s business.

Covenants Concerning Collateral. Borrower covenants that: a. Borrower will keep the Accounts and Inventory Collateral free and clear of any and all security interests, liens, assignments or other encumbrances, except Permitted Encumbrances. b. Borrower will immediately notify Lender of any dispute concerning any Account and of any bankruptcy filing, lien, garnishment, or other legal action concerning any Account or Account Debtor. c. Borrower hereby authorizes Lender to file UCC Financing Statements concerning the Collateral. Borrower will execute and deliver any financing statements and other documents (properly endorsed, if necessary) reasonably requested by Lender for perfection or enforcement of any security interest or lienlien in the Collateral, give good faith, diligent cooperation to Lender, and perform such other acts reasonably requested by Lender for perfection and enforcement of any security interest or lienlien in the Collateral, including, without limitation, obtaining control for purposes of perfection with respect perfection. Borrower hereby authorizes Lender to Collateral consisting of deposit accounts, investment property, letter-of-credit rights, and electronic chattel paperfile financing statements concerning the Collateral. Lender is authorized to file, record, or otherwise utilize such documents as it deems necessary to perfect and/or enforce any security interest or lien granted hereunder. c. Borrower will deliver any and all stock certificates or similar instruments evidencing the Stock Collateral to Lender at the time of execution of this Security Agreement. d. Except as otherwise expressly provided herein, Borrower shall keep the Equipment in good repairwill promptly deliver to Lender all written notices, ordinary wear and tear and obsolescence excepteddividends, and be responsible for any loss or damage to the Equipment. Borrower shall pay when due all taxes, license feesstock certificates, and other charges on the Equipment. Borrower shall not sell, convey, transfer, assign, conceal, documents constituting or in any way dispose of the Equipment. Borrower shall not misuse or permit the Equipment to be used unlawfully or for hire or contrary relating to the provisions Stock Collateral and all Debt Instruments, which are received in the future and will promptly give Lender written notice of any insurance coverage. Risk of loss of other notices which are received in the Equipment shall be on future by Borrower at all times unless Lender takes possession of the Equipment. Loss of or damage with respect to the Equipment or any part thereof shall not release Borrower from any of the obligations secured by the Equipment. e. Borrower agrees to insure the Equipment and Inventory, at Borrower’s expense, against loss, damage, theft, and such other risks as Lender may request to the full insurable value thereof with insurance companies and policies satisfactory to Lender. Proceeds from such insurance shall be payable to Lender as its interest may appear. Such policies shall name Lender as an additional insured and as lender loss payee and shall provide for a minimum thirty (30) days written cancellation notice to Lender. Upon request, policies or certificates attesting to such coverage shall be delivered to Lender. Insurance proceeds may be applied by Lender toward payment of any obligation secured by this Loan and Security Agreement, whether or not due, in such order of application as Lender may elect. f. Borrower will at all times keep accurate and complete records of the Collateral. Lender or its representatives may, at any time and from time to time, enter any premises where the Collateral and/or the records pertaining to the Collateral are located and inspect, inventory, audit, check, copy, and otherwise review the Collateral and the records concerning the Collateral. g. So long as no Event of Default has occurred, Borrower shall have the right to sell or otherwise dispose of the Inventory in the ordinary course of business. No other disposition of the Inventory may be made without the prior written consent of Lender. h. So long as no Event of Default has occurred, Borrower is authorized to collect payment on all Financial Obligations Collateral in a commercially reasonable manner. e. Borrower agrees to use diligent and good faith efforts to collect the Financial Obligations CollateralDebt Instruments. Until the occurrence of an Event of Default, Borrower is authorized to collect the Debt Instruments in a commercially reasonable manner. Upon the occurrence of an Event of Default, Lender may at any time terminate such authority. Upon such termination, Lender is authorized by Borrower, without further act, to notify Acquisition to make payment thereon directly to Lender, to take possession of all proceeds from any such payments, and to take any action which Borrower might or could take to collect on the Debt Instruments, including the right to make any compromise, discharge or extension of the Debt Instruments. Upon request of Lender and occurrence of an Event of Default, Borrower agrees to execute and deliver to Lender a notice to Acquisition instructing Acquisition to pay Lender and further agrees to execute and deliver to Lender all other notices and similar documents requested by Lender to facilitate collection of the Debt Instruments. f. Borrower hereby irrevocably makes, constitutes, and appoints Lender and its designees as Borrower's true and lawful attorney in fact, with full power of substitution, to endorse Borrower's name upon checks, drafts, money orders, or other forms of payment of the Debt Instruments or on any other documents relating to collection of the Debt Instruments, such power to be exercisable only upon occurrence of an Event of Default. g. All costs of collection of the Debt Instruments, including reasonable attorneys fees and legal expenses, shall be borne solely by Borrower, whether such costs are incurred by or for Borrower or Lender. In the event Lender elects to undertake direct collection of the Debt Instruments, Borrower agrees to deliver to Lender, upon request, all books, records, and documents in Borrower's possession or under its control as may relate to the Debt Instruments or as may be helpful to facilitate such collection. h. Within twenty (20) Banking Business Days of execution of this Security Agreement, Borrower shall endorse and deliver to Lender all Debt Instruments. Upon creation of any Debt Instruments in the future, within ten (10) Banking Business Days of creation Borrower shall endorse and deliver the Debt Instruments to Lender. i. Borrower shall, immediately upon obtaining knowledge thereof, report to Lender in writing any default on any of the Debt Instruments, any claim or dispute asserted by Acquisition on the Debt Instruments, and any other material matters that may affect the value, enforceability or collectibility of the Debt Instruments. j. Borrower shall not, without Lender's written consent, settle, compromise or adjust any Debt Instruments or grant any discounts, extensions, allowances or credits thereon. k. Borrower will at all times keep accurate and complete records as to the Debt Instruments and payments thereon and will allow Lender or its representatives, from time to time, upon two (2) Banking Business Days notice during normal business hours to inspect, audit, check, copy and otherwise review those records.

Covenants Concerning Collateral. Borrower covenants that: a. Borrower will keep the Accounts and Inventory free and clear of any and all security interests, liens, assignments or other encumbrances, except Permitted Encumbrances. b. Borrower will immediately notify Lender of any dispute concerning any Account and of any bankruptcy filing, lien, garnishment, or other legal action concerning any Account or Account Debtor. c. Borrower hereby authorizes Lender to file UCC Financing Statements concerning the Collateral. Borrower will execute and deliver any documents (properly endorsed, if necessary) reasonably requested by Lender for perfection or enforcement of any security interest or lien, give good faith, diligent cooperation to Lender, and perform such other acts reasonably requested by Lender for perfection and enforcement of any security interest or lien, including, without limitation, obtaining control for purposes of perfection with respect to Collateral consisting of deposit accounts, investment property, letter-of-credit rights, and electronic chattel paper. Lender is authorized to file, record, or otherwise utilize such documents as it deems necessary to perfect and/or enforce any security interest or lien granted hereunder. d. b. Borrower shall keep the Equipment in good repair, ordinary wear and tear and obsolescence excepted, and be responsible for any loss or damage to the Equipment. Borrower shall pay when due all taxes, license fees, fees and other charges on the Equipment. Borrower shall not sell, convey, transfer, assignmisuse, conceal, or in any way dispose of the Equipment. Borrower shall not misuse Equipment or permit the Equipment it to be used unlawfully or for hire or contrary to the provisions of any insurance coverage. Risk of loss of the Equipment shall be on Borrower at all times unless Lender takes possession of the Equipment. Loss of or damage to the Equipment or any part thereof shall not release Borrower from any of the obligations secured by the Equipment. Lender or its representatives may, at any time and from time to time, enter any premises where the Equipment is located and inspect, audit and check the Equipment; provided, however, that so long as no Event of Default has occurred, Lender will only enter any premises where the Equipment is located upon twenty-four (24) hours notice to Borrower. e. c. Borrower agrees to insure the Equipment and InventoryEquipment, at Borrower’s expense, against loss, damage, theft, and such other risks as Lender may request to the full insurable value thereof with insurance companies and policies satisfactory to Lender. Proceeds from such insurance shall be payable to Lender as its interest may appear. Such policies , shall name Lender as an additional insured and as lender a loss payee payee, and such policies shall provide for a minimum thirty ten (3010) days written cancellation notice to Lender. Upon request, policies or certificates attesting to such coverage shall be delivered to Lender. Insurance proceeds may be applied by Lender toward payment of any obligation secured by this Loan and Security Agreement, whether or not due, in such order of application as Lender may elect. f. d. Borrower will at all times keep accurate and complete records of the Collateral. Lender or its representatives may, at any time and from time to time, enter any premises where the Collateral and/or the records pertaining to the Collateral are located and inspect, inventory, audit, check, copy, and otherwise review the Collateral and the records concerning the Collateral. g. So ; provided, however, that so long as no Event of Default has occurred, Borrower shall have Lender will enter any premise where the right Collateral and/or records pertaining to sell or otherwise dispose of the Inventory in the ordinary course of business. No other disposition of the Inventory may be made without the prior written consent of LenderCollateral are located upon twenty-four (24) hours notice to Borrower. h. So long as no Event of Default has occurred, Borrower is authorized to collect payment on all Financial Obligations Collateral in a commercially reasonable manner. Borrower agrees to use diligent and good faith efforts to collect the Financial Obligations Collateral.

Covenants Concerning Collateral. Borrower covenants that: a. Borrower will keep the Accounts and Inventory free and clear of any and all security interests, liens, assignments or other encumbrances, except Permitted Encumbrances. b. Borrower will immediately notify Lender of any dispute concerning any Account and of any bankruptcy filing, lien, garnishment, or other legal action concerning any Account or Account Debtor. c. Borrower hereby authorizes Lender to file UCC Financing Statements concerning the Collateral. Borrower will execute and deliver any documents (properly endorsed, if necessary) reasonably requested by Lender for perfection or enforcement of any security interest or lien, give good faith, diligent cooperation to Lender, and perform such other acts reasonably requested by Lender for perfection and enforcement of any security interest or lien, including, without limitation, obtaining control for purposes of perfection with respect to Collateral consisting of deposit accounts, investment property, letter-of-credit rights, and electronic chattel paper. Lender is authorized to file, record, or otherwise utilize such documents as it deems necessary to perfect and/or enforce any security interest or lien granted hereunder, and Lender will provided Borrower copies of any such documents filed or recorded after the Effective Date. d. c. Borrower shall keep the Equipment in good repair, ordinary wear and tear and obsolescence excepted, and be responsible for any loss or damage to the Equipment. Borrower shall pay when due all taxes, license fees, fees and other charges on the Equipment. Borrower shall not sell, convey, transfer, assignmisuse, conceal, or in any way dispose of the Equipment. Borrower shall not misuse Equipment or permit the Equipment it to be used unlawfully or for hire or contrary to the provisions of any insurance coverage. Risk of loss of the Equipment shall be on Borrower at all times unless Lender takes possession of the Equipment. Loss of or damage to the Equipment or any part thereof shall not release Borrower from any of the obligations secured by the Equipment. Lender or its representatives may, at any time and from time to time, enter any premises where the Equipment is located and inspect, audit and check the Equipment; provided, however, that so long as no Event of Default has occurred, Lender will only enter any premises where the Equipment is located at reasonable times, during regular business hours, and after providing reasonable notice to Borrower. e. d. Borrower agrees to insure the Equipment and InventoryEquipment, at Borrower’s expense, against loss, damage, theft, and such other risks as Lender may request to the full insurable value thereof with insurance companies and policies satisfactory to Lender. Proceeds from such insurance shall be payable to Lender as its interest may appear. Such policies , shall name Lender as an additional insured and as lender a loss payee payee, and such policies shall provide for a minimum thirty (30) ten days written cancellation notice to Lender. Upon request, policies or certificates attesting to such coverage shall be delivered to Lender. Insurance proceeds may be applied by Lender toward payment of any obligation secured by this Loan and Security Agreement, whether or not due, in such order of application as Lender may elect. Upon Lender’s consent and so long as no Event of Default has occurred, insurance proceeds may be used by Borrower to repair and/or replace Equipment. e. Borrower agrees to insure the Inventory, at Borrower’s expense, against loss, damage, theft, and such other risks as Lender may request to the full insurable value thereof with insurance companies and policies satisfactory to Lender. Proceeds from such insurance shall be payable to Lender as its interest may appear, shall name Lender as an additional insured and as a loss payee, and such policies shall provide for a minimum ten days written cancellation notice to Lender. Upon request, policies or certificates attesting to such coverage shall be delivered to Lender. Insurance proceeds may be applied by Lender toward payment of any obligation secured by this Loan and Security Agreement, whether or not due, in such order of application as Lender may elect. Upon Lender’s consent and so long as no Event of Default has occurred, insurance proceeds may be used by Borrower to repair and/or replace Inventory. f. Borrower will at all times keep accurate and complete records of the Collateral. Lender or its representatives may, at any time and from time to time, enter any premises where the Collateral and/or the records pertaining to the Collateral are located and inspect, inventory, audit, check, copy, and otherwise review the Collateral and the records concerning the Collateral; provided, however, that so long as no Event of Default has occurred, Lender will only enter any premise where the Collateral and/or records pertaining to the Collateral are located at reasonable times, during regular business hours, and after providing reasonable notice to Borrower. g. So long as no Event of Default has occurred, Borrower shall have the right to sell or otherwise dispose of the Inventory in the ordinary course of business. No other disposition of the Inventory may be made without the prior written consent of Lender. h. So long as no Event of Default has occurred, Borrower is authorized to collect payment on all Financial Obligations Collateral in a commercially reasonable manner. Borrower agrees to use diligent and good faith efforts to collect the Financial Obligations Collateral.

Covenants Concerning Collateral. Borrower covenants that: a. Borrower will keep the Accounts and Inventory Collateral free and clear of any and all security interests, liens, assignments or other encumbrances, except Permitted Encumbrances. b. Borrower will immediately notify Lender of any dispute concerning any Account and of any bankruptcy filing, lien, garnishment, or other legal action concerning any Account or Account Debtor. c. Borrower hereby authorizes Lender to file UCC Financing Statements concerning the Collateral. Borrower will execute and deliver any financing statements and other documents (properly endorsed, if necessary) reasonably requested by Lender for perfection or enforcement of any security interest or lienlien in the Collateral, give good faith, diligent cooperation to Lender, and perform such other acts reasonably requested by Lender for perfection and enforcement of any security interest or lienlien in the Collateral, including, without limitation, obtaining control for purposes of perfection with respect to Collateral consisting of deposit accounts, investment property, letter-of-credit rights, and electronic chattel paper. Borrower hereby authorizes Lender to file financing statements concerning the Collateral. Lender is authorized to file, record, or otherwise utilize such documents as it deems necessary to perfect and/or enforce any security interest or lien granted hereunder. d. c. Borrower shall keep the Equipment in good repair, ordinary wear and tear and obsolescence excepted, and be responsible for any loss or damage to the Equipment. Borrower shall pay when due all taxes, license fees, fees and other charges on the Equipment. Borrower shall not sell, convey, transfer, assignmisuse, conceal, or in any way dispose of the Equipment. Borrower shall not misuse Equipment or permit the Equipment it to be used unlawfully or for hire or contrary to the provisions of any insurance coverage. Notwithstanding the foregoing, Borrower may in the ordinary course of business sell Equipment with a replacement cost of up to $250,000 without Lender's prior written consent. Risk of loss of the Equipment shall be on Borrower at all times unless Lender takes possession of the Equipment. Loss of or damage to the Equipment or any part thereof shall not release Borrower from any of the obligations secured by the Equipment. Lender or its representatives may, from time to time, upon two Banking Business Days notice to Borrower and during normal business hours, enter any premises where the Equipment is located and inspect, audit and check the Equipment. e. d. Borrower agrees to insure the Equipment and InventoryEquipment, at Borrower’s 's expense, against loss, damage, theft, and such other risks as Lender may reasonably request to the full insurable value thereof with insurance companies and policies reasonably satisfactory to Lender. Proceeds from such insurance shall be payable to Lender as its interest may appear. Such appear and such policies shall name Lender as an additional insured and as lender loss payee and shall provide for a minimum thirty (30) ten days written cancellation notice to Lender. Upon request, policies or certificates attesting to such coverage shall be delivered to Lender. Insurance proceeds may be applied by Lender toward payment of any obligation secured by this Loan Security Agreement, whether or not due, in such order of application as Lender may elect. e. Borrower agrees to insure the Inventory, at Borrower's expense, against loss, damage, theft, and such other risks as Lender may reasonably request to the full insurable value thereof with insurance companies and policies reasonably satisfactory to Lender. Proceeds from such insurance shall be payable to Lender as its interest may appear and such policies shall provide for a minimum ten days written cancellation notice to Lender. Upon request, policies or certificates attesting to such coverage shall be delivered to Lender. Insurance proceeds may be applied by Lender toward payment of any obligation secured by this Security Agreement, whether or not due, in such order of application as Lender may elect. f. Borrower shall submit to Lender reports as to the Collateral, at such times and in such form as Lender may reasonably request. Borrower will at all times keep accurate and complete records of the Collateral. Lender or its representatives may, at any time and from time to time, upon two Banking Business Days notice during normal business hours enter any premises where the Collateral and/or the records pertaining to the Collateral are located and inspect, inventory, audit, check, copy, and otherwise review the Collateral and the records concerning the Collateral. g. So long as no Event of Default has occurred, Borrower shall have the right to sell or otherwise dispose of the Inventory in the ordinary course of business. No other disposition of the Inventory may be made without the prior written consent of Lender. h. So long as no Event If at any time Lender so reasonably requests, all proceeds from the sale or other disposition of Default has occurredthe Inventory, Borrower is authorized to collect payment on and all collections and other proceeds from the Accounts and Financial Obligations Collateral, if any, shall be deposited into an account designated by Lender (the "Cash Collateral Account"), which account shall be under the sole and exclusive control of Lender. Such proceeds and collections shall not be commingled with any other funds and shall be promptly and directly deposited into such account in a commercially reasonable mannerthe form in which received by Borrower. Such proceeds and collections shall not be deposited in any other account and said Cash Collateral Account shall contain no funds other than such proceeds and collections. All or any portion of the funds on deposit in said Cash Collateral Account may, in the sole discretion of Lender, be applied from time to time as Lender elects to payment of obligations secured by this Security Agreement or Lender may elect to turn over to Borrower, from time to time, all or any portion of such funds. i. Borrower agrees to use diligent and good faith efforts to collect the Accounts and Financial Obligations Collateral, if any. Until the occurrence of an Event of Default, Borrower is authorized to collect the Accounts and Financial Obligations Collateral in a commercially reasonable manner. Upon the occurrence of an Event of Default, Lender may terminate such authority at any time whereupon Lender is authorized by Borrower, without further act, to notify any and all account debtors and obligors to make payment thereon directly to Lender, and to take possession of all proceeds from the Accounts and Financial Obligations Collateral, and to take any action which Borrower might or could take to collect the Accounts and Financial Obligations Collateral, including the right to make any compromise, discharge, or extension. Upon occurrence of an Event of Default and upon request of Lender, Borrower agrees to execute and deliver to Lender a notice to the account debtors and obligors instructing said account debtors and obligors to pay Lender. Borrower further agrees to execute and deliver to Lender all other notices and similar documents requested by Lender to facilitate collection of the Accounts and Financial Obligations Collateral. j. All costs of collection of the Accounts and Financial Obligations Collateral, if any, including reasonable attorneys fees and legal expenses, shall be borne solely by Borrower, whether such costs are incurred by or for Borrower or Lender. In the event Lender elects to undertake direct collection of the Accounts and Financial Obligations Collateral, Borrower agrees to deliver to Lender, if so requested, all books, records, and documents in Borrower's possession or under its control as may relate to the Accounts and Financial Obligations Collateral or as may be helpful to facilitate such collection. Lender shall have no obligation to cause an attorneys demand letter to be sent, to file any lawsuit, or to take any other legal action in collection of the Accounts and Financial Obligations Collateral. It is agreed that collection of the Accounts and Financial Obligations Collateral in a commercially reasonable manner does not require that any such legal action be taken. k. Borrower does hereby make, constitute, and appoint Lender and its designees as Borrower's true and lawful attorney in fact, with full power of substitution, such power to be exercised in the following manner upon the occurrence of an Event of Default: (1) Lender may receive and open all mail addressed to Borrower and remove therefrom any payments of the Accounts and Financial Obligations Collateral, if any; (2) Lender may cause mail relating to the Accounts and Financial Obligations Collateral to be delivered to a designated address of Lender where Lender may open all such mail and remove therefrom any payments of the Accounts and Financial Obligations Collateral; (3) Lender may endorse Borrower's name upon notes, checks, acceptances, drafts, money orders, or other forms of payment of the Accounts and Financial Obligations Collateral; (4) Lender may settle or adjust disputes or claims in respect to the Accounts and Financial Obligations Collateral for amounts and upon such terms as Lender, in its sole discretion and in good faith, deems to be advisable, in such case crediting Borrower with only the proceeds received and collected by Lender after deduction of Lender's costs, including reasonable attorneys fees and legal expenses; and (5) Lender may do any and all other things necessary or proper to carry out the intent of this Security Agreement and to enforce, exercise, perfect and protect the liens and rights of Lender created under this Security Agreement.

Covenants Concerning Collateral. Borrower covenants that: a. Borrower will keep the Accounts and Inventory free and clear of any and all security interests, liens, assignments or other encumbrances, except Permitted Encumbrances. b. Borrower will immediately notify Lender of any dispute concerning any Account and of any bankruptcy filing, lien, garnishment, or other legal action concerning any Account or Account Debtor. c. Borrower hereby authorizes Lender to file UCC Financing Statements concerning the Collateral. Borrower will execute and deliver any documents (properly endorsed, if necessary) reasonably requested by Lender for perfection or enforcement of any security interest or lien, give good faith, diligent cooperation to Lender, and perform such other acts reasonably requested by Lender for perfection and enforcement of any security interest or lien, including, without limitation, obtaining control for purposes of perfection with respect to Collateral consisting of deposit accounts, investment property, letter-of-credit rights, and electronic chattel paper. Lender is authorized to file, record, or otherwise utilize such documents as it deems necessary to perfect and/or enforce any security interest or lien granted hereunder. d. Borrower shall keep the Equipment in good repair, ordinary wear and tear and obsolescence excepted, and be responsible for any loss or damage to the Equipment. Borrower shall pay when due all taxes, license fees, and other charges on the Equipment. Borrower shall not sell, convey, transfer, assign, conceal, or in any way dispose of the Equipment. Borrower shall not misuse or permit the Equipment to be used unlawfully or for hire or contrary to the provisions of any insurance coverage. Risk of loss of the Equipment shall be on Borrower at all times unless Lender takes possession of the Equipment. Loss of or damage to the Equipment or any part thereof shall not release Borrower from any of the obligations secured by the Equipment. e. Borrower agrees to insure the Equipment and Inventory, at Borrower’s expense, against loss, damage, theft, and such other risks as Lender may request to the full insurable value thereof with insurance companies and policies satisfactory to Lender. Proceeds from such insurance shall be payable to Lender as its interest may appear. Such policies shall name Lender as an additional insured and as lender loss payee and shall provide for a minimum thirty (30) days written cancellation notice to Lender. Upon request, policies or certificates attesting to such coverage shall be delivered to Lender. Insurance proceeds may be applied by Lender toward payment of any obligation secured by this Loan and Security Agreement, whether or not due, in such order of application as Lender may elect. f. e. Borrower will at all times keep accurate and complete records of the Collateral. Lender or its representatives may, at any time and from time to time, enter any premises where the Collateral and/or the records pertaining to the Collateral are located and inspect, inventory, audit, check, copy, and otherwise review the Collateral and the records concerning the Collateral. g. f. So long as no Event of Default has occurred, Borrower shall have the right to sell or otherwise dispose of the Inventory in the ordinary course of businessbusiness so long as all Accounts and all payments arising therefrom are tendered directly to Lender. No other disposition of the Inventory may be made without the prior written consent of Lender. h. So long as no Event of Default has occurred. ALLIED HEALTHCARE PRODUCTS, Borrower is authorized to collect payment on all Financial Obligations Collateral in a commercially reasonable mannerINC. Borrower agrees to use diligent and good faith efforts to collect the Financial Obligations Collateral.7

Covenants Concerning Collateral. Borrower covenants that: a. Borrower will keep the Accounts and Inventory Collateral free and clear of any and all security interests, liens, assignments or other encumbrances, except Permitted Encumbrances. b. Borrower will immediately notify Lender of any dispute concerning any Account and of any bankruptcy filing, lien, garnishment, or other legal action concerning any Account or Account Debtor. c. Borrower hereby authorizes Lender to file UCC Financing Statements concerning the Collateral. Borrower will execute and deliver any documents (properly endorsed, if necessary) reasonably requested by Lender for perfection or enforcement of any security interest or lien, give good faith, diligent cooperation to Lender, and perform such other acts reasonably requested by Lender for perfection and enforcement of any security interest or lien, including, without limitation, obtaining control for purposes of perfection with respect to Collateral consisting of deposit accounts, investment property, letter-of-credit rights, and electronic chattel paper. Lender is authorized to file, record, or otherwise utilize such documents as it deems necessary to perfect and/or enforce any security interest or lien granted hereunder. d. c. Borrower shall keep the Equipment in good repair, ordinary wear and tear and obsolescence excepted, and be responsible for any loss or damage to the Equipment. Borrower shall pay when due all taxes, license fees, fees and other charges on the Equipment. Borrower shall not sell, convey, transfer, assignmisuse, conceal, or in any way dispose of the Equipment. Equipment (except for sales or transfers of worn-out, obsolete or surplus Equipment (each as determined by the Borrower shall not misuse in its reasonable judgment)) or permit the Equipment it to be used unlawfully or for hire or contrary to the provisions of any insurance coverage. Risk of loss of the Equipment shall be on Borrower at all times unless Lender takes possession of the Equipment. Loss of or damage to the Equipment or any part thereof shall not release Borrower from any of the obligations secured by the Equipment. Lender or its representatives may, at any time and from time to time, enter any premises where the Equipment is located and inspect, audit and check the Equipment. d. Borrower agrees to insure the Equipment, at Borrower’s expense, against loss, damage, theft, and such other risks as Lender may request to the full insurable value thereof with insurance companies and policies satisfactory to Lender. Proceeds from such insurance shall be payable to Lender as its interest may appear, shall name Lender as an additional insured and as a loss payee, and such policies shall provide for a minimum ten days written cancellation notice to Lender. Upon request, policies or certificates attesting to such coverage shall be delivered to Lender. Insurance proceeds may be applied by Lender toward payment of any obligation secured by this Security Agreement, whether or not due, in such order of application as Lender may elect. e. Borrower agrees to insure the Equipment and Inventory, at Borrower’s expense, against loss, damage, theft, and such other risks as Lender may request to the full insurable value thereof with insurance companies and policies satisfactory to Lender. Proceeds from such insurance shall be payable to Lender as its interest may appear. Such policies , shall name Lender as an additional insured and as lender a loss payee payee, and such policies shall provide for a minimum thirty (30) ten days written cancellation notice to Lender. Upon request, policies or certificates attesting to such coverage shall be delivered to Lender. Insurance proceeds may be applied by Lender toward payment of any obligation secured by this Loan and Security Agreement, whether or not due, in such order of application as Lender may elect. f. Borrower shall submit to Lender reports as to the Collateral, at such times and in such form as Lender may reasonably request. Borrower will at all times keep accurate and complete records of the Collateral. Lender or its representatives may, at any time and from time to time, enter any premises where the Collateral and/or the records pertaining to the Collateral are located and inspect, inventory, audit, check, copy, and otherwise review the Collateral and the records concerning the Collateral. g. So long as no Event of Default has occurredoccurred and is continuing, Borrower shall have the right to sell or otherwise dispose of the Inventory in the ordinary course of business. No other disposition of the Inventory may be made without the prior written consent of Lender. h. So long as no If an Event of Default has occurredoccurred and is continuing, Borrower is authorized to collect payment on if at any time Lender so requests, all proceeds from the sale or other disposition of the Inventory, and all collections and other proceeds from the Accounts and Financial Obligations Collateral, if any, shall be deposited into an account designated by Lender (the “Cash Collateral Account”), which account shall be under the sole and exclusive control of Lender. Such proceeds and collections shall not be commingled with any other funds and shall be promptly and directly deposited into such account in a commercially reasonable mannerthe form in which received by Borrower. Such proceeds and collections shall not be deposited in any other account and said Cash Collateral Account shall contain no funds other than such proceeds and collections. All or any portion of the funds on deposit in said Cash Collateral Account may, in the sole discretion of Lender, be applied from time to time as Lender elects to payment of obligations secured by this Security Agreement or Lender may elect to turn over to Borrower, from time to time, all or any portion of such funds. i. Borrower agrees to use diligent and good faith efforts to collect the Accounts and Financial Obligations Collateral, if any. Until written notice is given by Lender, Borrower is authorized to collect the Accounts and Financial Obligations Collateral in a commercially reasonable manner. If an Event of Default has occurred and is continuing, Lender, in its discretion, may terminate such authority at any time whereupon Lender is authorized by Borrower, without further act, to notify any and all account debtors and obligors to make payment thereon directly to Lender, and to take possession of all proceeds from the Accounts and Financial Obligations Collateral, and to take any action which Borrower might or could take to collect the Accounts and Financial Obligations Collateral, including the right to make any compromise, discharge, or extension. If an Event of Default has occurred and is continuing, upon request of Lender, Borrower agrees to execute and deliver to Lender a notice to the account debtors and obligors instructing said account debtors and obligors to pay Lender. If an Event of Default has occurred and is continuing, Borrower further agrees to execute and deliver to Lender all other notices and similar documents requested by Lender to facilitate collection of the Accounts and Financial Obligations Collateral. j. All costs of collection of the Accounts and Financial Obligations Collateral, if any, including attorneys fees and legal expenses, shall be borne solely by Borrower, whether such costs are incurred by or for Borrower or Lender. In the event Lender elects to undertake direct collection of the Accounts and Financial Obligations Collateral, Borrower agrees to deliver to Lender, if so requested, all books, records, and documents in Borrower’s possession or under its control as may relate to the Accounts and Financial Obligations Collateral or as may be helpful to facilitate such collection. Lender shall have no obligation to cause an attorneys demand letter to be sent, to file any lawsuit, or to take any other legal action in collection of the Accounts and Financial Obligations Collateral. It is agreed that collection of the Accounts and Financial Obligations Collateral in a commercially reasonable manner does not require that any such legal action be taken. k. Borrower does hereby make, constitute, and appoint Lender and its designees as Borrower’s true and lawful attorney in fact, with full power of substitution, such power to be exercised in the following manner (and in the cases of clause (1) through (4), only upon the occurrence and during the continuation of an Event of Default): (1) Lender may receive and open all mail addressed to Borrower and remove therefrom any payments of the Accounts and Financial Obligations Collateral, if any; (2) Lender may cause mail relating to the Accounts and Financial Obligations Collateral to be delivered to a designated address of Lender where Lender may open all such mail and remove therefrom any payments of the Accounts and Financial Obligations Collateral; (3) Lender may endorse Borrower’s name upon notes, checks, acceptances, drafts, money orders, or other forms of payment of the Accounts and Financial Obligations Collateral; (4) Lender may settle or adjust disputes or claims in respect to the Accounts and Financial Obligations Collateral for amounts and upon such terms as Lender, in its sole discretion and in good faith, deems to be advisable, in such case crediting Borrower with only the proceeds received and collected by Lender after deduction of Lender’s costs, including reasonable attorneys fees and legal expenses; and (5) Lender may do any and all other things necessary or proper to carry out the intent of this Security Agreement and to perfect and protect the liens and rights of Lender created under this Security Agreement. l. Immediately upon request, Borrower shall endorse and deliver to Lender all instruments and chattel paper, if any, which are Collateral. Upon creation of any instruments or chattel paper in the future, immediately upon creation Borrower shall endorse and deliver the instruments and chattel paper to Lender. m. Borrower shall, immediately upon obtaining knowledge thereof, report to Lender in writing any default on any item of Financial Obligations Collateral, any material claim or dispute asserted by any obligor on any item of that Collateral, and any other material matters that may affect the value, enforceability or collectability of any of that Collateral. n. Borrower shall not, without Lender’s written consent, make any material settlement, compromise or adjustment of any item of Financial Obligations Collateral or grant any material discounts, extensions, allowances or credits thereon, except in the ordinary course of Borrower’s business.