SECURITY AGREEMENT
This SECURITY AGREEMENT (the "Agreement") is made and entered into
as of January 17, 2000, by and among BH Capital Investments, L.P. for itself
and in trust, as agent for Excalibur Limited Partnership, Gundyco in trust
for RSP 000-00000-00 and MB Capital Partners (together, "Secured Party") and
Eco Soil Systems, Inc. and its direct and indirect subsidiaries, and
Agricultural Supply, Inc., Turf Partners, Inc., Sistemas Y Equipos Agricolas,
S.A. de C.V. and Agricultural Supply de Mexico, S.A. de C.V. (individually
and collectively, the "Debtor").
WITNESSETH:
WHEREAS, pursuant to the provisions of a certain Convertible
Debentures and Warrants Purchase Agreement of even date herewith between the
Debtor and the Secured Party (the "Purchase Agreement") the Secured Party has
agreed to lend to the Debtor jointly and severally for the mutual benefit of
each Debtor, and Debtor have agreed to borrow from the Secured Party
$4,500,000 under certain terms and conditions set forth in the Purchase
Agreement; and
WHEREAS, pursuant to the provisions of the Purchase Agreement, and
as a condition to Secured Party's obligation to lend thereunder, the Debtor
has also agreed to provide certain collateral to secure Debtor's obligations
to the Secured Party pursuant to the Purchase Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the
covenants set forth herein, the Secured Party and the Debtor hereby agree as
follows:
ARTICLE I
COLLATERAL
Section 1.1 GRANT AND DESCRIPTION. As security for the Debtor's
obligations under the Purchase Agreement and the Convertible Debentures, the
Debtor, and each of them, jointly and severally, hereby grants to the Secured
Party a continuing security interest in the property of the Debtor, and each
of them, listed and described in Schedule A attached hereto (the
"Collateral"). Notwithstanding the foregoing such grant of a security
interest shall not extend to, and the term "Collateral" shall not include:
(a) any rights in any general intangibles representing rights under
agreements between the Debtor and any other party (other than agreements
between a Debtor and a subsidiary or parent entity of such Debtor), which are
now or hereafter held by the Debtor as lessee, licensee or otherwise, only to
the extent that (i) such general intangibles are not assignable or capable of
being encumbered as a matter of law or under the terms of the agreement
applicable thereto (but solely to the extent that any such restriction shall
be enforceable under applicable law), without the consent of the other party
thereto and (ii) such consent has not been obtained and (b) any capital stock
or other ownership interests held by Debtor of any foreign subsidiary to the
extent (and only to the extent) that the pledge of such
capital stock or other ownership interests would trigger the "deemed
dividend" rules of Section 900 et. seq. of the Internal Revenue Code of 1986,
as amended. Debtor shall execute UCC-1 Financing Statements suitable for
filing and/or recording with the appropriate filing offices as demanded by
Secured Party within three business days of presentment and demand therefor.
ARTICLE II
OBLIGATIONS SECURED
Section 2.1 OBLIGATIONS SECURED. The Collateral and the power of
collection pertaining thereto shall secure the prompt and complete
performance and repayment of any and all loans and advances made by Secured
Party to Debtor pursuant to the Purchase Agreement prior to, on or after the
date hereof, and specifically the unpaid principal amount outstanding at any
time under the Convertible Debentures, plus all accrued and unpaid interest
thereunder, together with all fees, expenses, commissions, charges,
penalties, and other amounts owing or chargeable by Debtor under the Purchase
Agreement or the Convertible Debentures whether any of the foregoing are
direct or indirect, joint or several, absolute or contingent, due or to
become due, now existing or hereafter arising, no matter how or when arising
and whether under any present or future agreement or instrument or otherwise,
whether or not evidenced by a writing (collectively the "Obligations").
ARTICLE III
DUTIES OF THE DEBTOR REGARDING COLLATERAL
Section 3.1 DUTIES OF THE DEBTOR REGARDING COLLATERAL. At all
times hereafter the Debtor agrees that it shall:
(a) Preserve the Collateral in good condition and order
and not permit it to be abused or misused;
(b) Not allow any of the Collateral to be affixed to real
estate, except for any property deemed to be fixtures, provided such property
is included in the Secured Party's security interest given hereunder;
(c) Maintain good and complete title to the Collateral
subject to Permitted Liens;
(d) Keep the Collateral free and clear at all times of all
other security interests, liens, or encumbrances of any kind, including,
without limitation any lien arising as a result of the Debtors' failure to
pay any and all taxes or governmental assessments or charges of any kind
whatsoever, except existing liens in favor of Coast Business Credit or First
National Bank of San Diego ("Senior Debt"), the existence and priority of
which are acknowledged by Secured Party, and other Permitted Liens;
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(e) Except as otherwise expressly provided herein, refrain
from selling, assigning or otherwise disposing of any of the Collateral or
moving or removing any of the Collateral except in the ordinary course of
Debtor's business, without the prior written consent of the Secured Party, or
until all of the Debtor's obligations have been paid in full;
(f) Promptly provide to the Secured Party such financial
statements, reports, lists and schedules related to the Collateral and any
other information relating to the Collateral as the Secured Party from time
to time may reasonably request;
(g) Permit the Secured Party to inspect all books and
records of the Debtor relating to the Collateral at such times, upon such
notice and as often as the Secured Party may reasonably request; and
(h) Notify the Secured Party of any material change in any
fact or circumstance warranted or represented by the Debtor herein or
furnished in connection herewith to the Secured Party or if any Event of
Default occurs.
Section 3.2 "PERMITTED LIENS" means the following:
(a) purchase money security interests in specific items of
equipment;
(b) leases of specific items of equipment, technology and
intellectual property including capital leases;
(c) liens for taxes not yet payable;
(d) security interests existing as of the date hereof
(including security interests evidencing the Senior Debt) and set forth on
Schedule C and additional security interests and liens consented to in
writing by Secured Party in its absolute discretion;
(e) security interests being terminated substantially
concurrently with this Agreement and liens created hereunder;
(f) liens of materialmen, mechanics, warehousemen,
carriers, or other similar liens arising in the ordinary course of business
and securing obligations which are not delinquent;
(g) liens incurred in connection with the extension,
renewal or refinancing of the indebtedness secured by liens of the type
described above in clauses (a) or (b) above, provided that any extension,
renewal or replacement lien is limited to the property encumbered by the
existing lien and the principal amount of the indebtedness being extended,
renewed or refinanced does not increase; or
(h) liens in favor of customs and revenue authorities
which secure payment of customs duties in connection with the importation of
goods
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Nothing herein shall restrict Debtor's: (i) leases of BioJects (whether
Debtor is the lessor or lessee), related equipment and related technology
(including all use and possessory rights created/permitted pursuant to the
leases of BioJects), and (ii) licenses of intellectual property rights
related to the production of microbials, in the ordinary course of its
business. Secured Party will have the right to require, as a condition to any
consent under clause (d) above, that the holder of the additional security
interest or lien sign an intercreditor agreement on Secured Party's then
standard form, acknowledge that the security interest is subordinate to the
security interest in favor of Secured Party, and agree not to take any action
to enforce its subordinate security interest so long as any Obligations
remain outstanding, and that Debtor agree that any uncured default in any
obligation secured by the subordinate security interest shall also constitute
an Event of Default under this Agreement.
ARTICLE IV
EVENTS OF DEFAULT
Section 4.1 DEFINED. The occurrence of any of the following events
shall constitute an event of default under this Agreement (an "Event of
Default"):
(i) The failure of the Debtor to perform or comply with
any act, duty or obligation required to be performed under this Agreement if
such failure is not remedied within ten (10) days following receipt by Debtor
of notice of such failure from Secured Party.
(ii) If any of the representations or warranties of the
Debtor set forth in this Agreement shall prove to have been incorrect in any
material respect when made, or if they become incorrect, if not cured within
thirty (30) days of notice from Secured Party of such event.
(iii) If any material portion of the Collateral shall be
damaged, destroyed or otherwise lost and such damage, destruction or loss is
not covered by insurance.
(iv) If an Event of Default as defined in the Convertible
Debentures shall have occurred.
Section 4.2 RIGHTS AND REMEDIES UPON DEFAULT. If an Event of
Default shall have occurred hereunder or under the Convertible Debentures,
the Secured Party may, at its sole option, without notice or demand, declare
the Obligations to be immediately due and payable. As to any Collateral, the
Secured Party shall have the rights and remedies of any secured creditor
under the Uniform Commercial Code as in effect, from time to time, in
California ("UCC"), such rights to be exercised in such order or manner as
Secured Party may determine in its sole discretion against any one or more of
the entities constituting Debtor. If for any reason the Secured Party should
be required by law or otherwise to give notice to the Debtor of the sale of
any Collateral, the Debtor agrees that that any written notice sent by
overnight delivery service not less than five (5) calendar days before the
sale or mailed postage prepaid to the Debtor's address listed below not less
than ten (10) calendar days before the sale shall be deemed reasonable and
adequate.
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ARTICLE V
ADDITIONAL REMEDIES
Section 5.1 POWER OF COLLECTION. Upon the happening of an Event of
Default hereunder and subject to any prior rights of the holders of the
Senior Debt, the Debtor shall:
(a) Endorse any and all documents evidencing any
Collateral to the Secured Party and notify any payor that said documents have
been so endorsed and that all sums due and owing pursuant to them should be
paid directly to the Secured Party;
(b) Turn over to the Secured Party all documents
evidencing any right to collection of any sums due the Debtor arising from or
in connection with any of the Collateral;
(c) Xxxx or stamp each of its accounting records
pertaining to any of its accounts, relating howsoever to this Agreement or
the Convertible Debentures, with the legend "assigned to BH Capital
Investments, L.P." and keep all of its books, records, documents and
instruments relating to the Collateral in such manner as the Secured Party
may require;
(d) Xxxx or stamp all invoices with a similar legend
satisfactory to the Secured Party so as to indicate that the same must be
know paid directly to the Secured Party;
(e) Take any action reasonably required by the Secured
Party with reference to the Federal Assignment of Claims Act; and
(f) Assign to Secured Party any or all of Debtor's
copyrights and patents as demanded by Secured Party.
The Secured Party shall also have the right, at any time, upon
the happening of any Event of Default hereunder or as defined in the
Convertible Debentures, directly to notify any debtor or debtors of the
Debtor to make payments of any and all amounts directly to the Secured Party,
and the Secured Party shall have the further right to notify the U.S. postal
authorities to change the address for delivery of mail of the Debtor to an
address designated by the Secured Party and to receive, open and dispose of
all mail addressed to the Debtor.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.1 WARRANTIES. The Debtor represents and warrants:
(a) That it is the owner of and, subject to the lien of
the holders of the Senior Debt and other Permitted Liens, has good and
marketable title to the Collateral secured hereby;
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(b) That it has not granted, nor will grant a security
interest in the Collateral to any other individual or entity other than the
holders of the Senior Debt and other Permitted Liens, and that such
Collateral is otherwise free and clear of any mortgage, pledge, lease, trust,
bailment, lien, security interest, encumbrance, charge or other arrangement;
(c) That it has the authority and capacity to perform its
respective obligations hereunder; and
(d) That its true and correct company name, any trade
name(s) under which it conducts its business; each of its chief executive
office; its place(s) of business and the locations of the Collateral or
records relating to the Collateral are set forth in Schedule B hereto
provided, however, Schedule B does not include (i) such information with
respect to Sistemas Y Equipos Agricolas, S.A. de C.V. and Agricultural Supply
de Mexico, S.A. de C.V. or (ii) the location of any bioject equipment located
at the premises of customers of Borrower or any direct or indirect
subsidiaries.
ARTICLE VII
NEGATIVE COVENANTS
Section 7.1 OTHER ENCUMBRANCES. Debtor shall defend its title to a
Secured Party's interest in the Collateral against all claims, take any
action necessary to remove any encumbrances other than those permitted
hereunder and defend the right, title and interest of Secured Party in and to
any of Debtor's rights in the Collateral.
Section 7.2 CHANGE IN MANAGEMENT. Debtor shall not make a material
change in the management of the Debtor except as provided in Section 7.4.
Section 7.3 CHANGE NAME OR LOCATION. Debtor shall not change its
company name or conduct its business under any name other than that set forth
herein or change its chief executive office, place of business or location of
the Collateral or records relating to the collateral from the current
location.
Section 7.4 DISSOLUTION. Debtor shall not dissolve or otherwise
terminate its company status or make any substantial change in the basic type
of business conducted by Debtor as of the date hereof, other than pursuant to
strategic transactions which have been approved by Secured Party.
ARTICLE VIII
WAIVERS
Section 8.1 WAIVERS. The Debtor waives any right to require the
Secured Party to (a) proceed against any person, (b) proceed against any
other collateral under any other agreement, (c) pursue any other remedy in
the Secured Party's power, and (d) make presentment, demand, dishonor, notice
of dishonor, acceleration and/or notice of non-payment.
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Section 8.2 WAIVER OF DEFENSE. The Debtor waives any defense,
which it may have to the exercise by Secured Party of its rights under this
Agreement, other than payment in full of the Obligations.
ARTICLE IX
MISCELLANEOUS
Section 9.1 ATTORNEY-IN-FACT. The Debtor appoints the Secured
Party its true attorney-in-fact to perform any of the following powers, which
are irrevocable until termination of this Agreement and may be exercised,
from time to time, by the Secured Party's officers and employees or any of
them in the event of a default hereunder or under the Convertible Debentures
or either of them: (i) to perform any obligation of the Debtor hereunder in
the Debtor's name or otherwise; (ii) 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, to accept other property in
exchange for the Collateral, and any money or property received in exchange
for the Collateral may be applied to the Obligations to the Secured Party or
held by the Secured Party under this Agreement; (iii) to make any compromise
or settlement the Secured Party deems desirable or proper in respect of the
Collateral; and (iv) to insure, process and preserve the Collateral. The
foregoing power of attorney shall take effect only upon an Event of Default
or upon failure by Debtor to perform any of its obligations hereunder.
Section 9.2 CROSS DEFAULT. Debtor agrees and acknowledges that
default under the terms of this Agreement shall constitute default under the
Convertible Debentures, and default under the Convertible Debentures shall
constitute default under this Agreement. The security interests, liens and
other rights and interests in and relative to any of the real or personal
property of the Debtor now or hereafter granted to the Secured Party by
Debtor by or in any instrument or agreement, including but not limited to
this Agreement, the Purchase Agreement, or the Convertible Debentures shall
serve as security for any and all liabilities of Debtor to Secured Party,
including but not limited to the liabilities described in this Agreement, the
Purchase Agreement and the Convertible Debentures, and, for the repayment
thereof, Secured Party may resort to any security held by it in such order
and manner as it may elect.
Section 9.3 NOTICES. All notices, requests or demand to or upon a
party to this Agreement shall be given or made by the other party hereto in
writing and by depositing in the mails postage prepaid, return receipt
requested, addressed to the addressee at the address set forth below.
If to the Secured Party: BH Capital Investments, L.P.
000 Xxxxx Xxxxxx Xxxx
Xxxxx Tower, 7th Floor
Toronto, Ontario M4W 3R8
Attention: Xxxxx Xxxxxxxxx
Fax: (000) 000-0000
If to the Debtor:
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c/o Eco Soil Systems, Inc.
00000 Xxxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
Fax: (619)
No other method of giving any notice, request or demand is
hereby precluded provided such shall not be deemed given until such notice is
actually received at the address of the addressee.
Section 9.4 FEES AND EXPENSES. On demand by Secured Party, without
limiting any of the terms of the Purchase Agreement, Debtor shall pay all
reasonable fees, costs, and expenses (including without limitation reasonable
attorneys' fees and legal expenses) incurred by Secured Party in connection
with (a) filing or recording any documents (including all taxes in connection
therewith) in public offices; and (b) paying or discharging any taxes,
counsel fees, maintenance fees, encumbrances, or other amounts in connection
with protecting, maintaining, or preserving the Collateral or defending or
prosecuting any actions or proceedings arising out of or related to the
Collateral.
Section 9.5 NO WAIVER. No course of dealing between Debtor and
Secured Party, nor any failure to exercise nor any delay in exercising, on
the part of Secured Party, any right, power, or privilege under this
Agreement or under the Purchase Agreement or any other agreement, shall
operate as a waiver. No single or partial exercise of any right, power, or
privilege under this Agreement or under the Purchase Agreement or any other
agreement by Secured Party shall preclude any other or further exercise of
such right, power, or privilege or the exercise of any other right, power, or
privilege by Secured Party.
Section 9.6 RIGHTS ARE CUMULATIVE. All of Secured Party's rights
and remedies with respect to the Collateral whether established by this
Agreement, the Purchase Agreement, the Convertible Debentures or any other
documents or agreements, or by law shall be cumulative and may be exercised
concurrently or in any order.
Section 9.7 INDEMNITY. Debtor shall protect, defend, indemnify,
and hold harmless Secured Party and Secured Party's assigns from all
liabilities, losses, and costs (including without limitation reasonable
attorneys' fees) incurred or imposed on Secured Party relating to the matters
in this Agreement, including, without limitation, in connection with Secured
Party's defense of any action brought by a third party against Secured Party
relating to this Agreement or any of the Collateral, but otherwise not
arising from Secured Party's gross negligence or willful misconduct.
Section 9.8 SEVERABILITY. The provisions of this Agreement are
severable. If any provision of this Agreement is held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity
or unenforceability shall affect only such provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such provision or part
thereof in any other jurisdiction, or any other provision of this Agreement
in any jurisdiction.
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Section 9.9 AMENDMENTS; ENTIRE AGREEMENT. This Agreement is
subject to modification only by a writing signed by the parties. To the
extent that any provision of this Agreement conflicts with any provision of
the Purchase Agreement or the Convertible Debentures, the provision giving
Secured Party greater rights or remedies shall govern, it being understood
that the purpose of this Agreement is to add to, and not detract from, the
rights granted to Secured Party under the Purchase Agreement and the
Convertible Debentures. This Agreement, the Purchase Agreement, the
Convertible Debentures and the documents relating thereto comprise the entire
agreement of the parties with respect to the matters addressed in this
Agreement.
Section 9.10 FURTHER ASSURANCES. At Secured Party's request,
Debtor shall execute and deliver to Secured Party any further instruments or
documentation, and perform any acts, that may be reasonably necessary or
appropriate to implement this Agreement, the Purchase Agreement or any other
agreement, and the documents relating thereto, including without limitation
any instrument or documentation reasonably necessary or appropriate to
create, maintain, perfect, or effectuate Secured Party's security interests
in the Collateral.
Section 9.11 RELEASE. At such time as Debtor shall completely
satisfy all of the Obligations and the Convertible Debentures are no longer
outstanding, Secured Party shall execute and deliver to Debtor all
assignments and other instruments as may be reasonably necessary or proper to
terminate Secured Party's security interest in the Collateral, subject to any
disposition of the Collateral which may have been made by Secured Party
pursuant to this Agreement. For the purpose of this Agreement, the
Obligations shall be deemed to continue if Debtor enters into any bankruptcy
or similar proceeding at a time when any amount paid to Secured Party could
be ordered to be repaid as a preference or pursuant to a similar theory, and
shall continue until it is finally determined that no such repayment can be
ordered.
Section 9.12 SUCCESSORS. The benefits and burdens of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and permitted assigns of the parties; provided that Debtor may not
transfer any of the Collateral or any rights hereunder, without the prior
written consent of Secured Party, except as specifically permitted hereby.
Section 9.13 GOVERNING LAW. THE VALIDITY, INTERPRETATION AND
ENFORCEMENT OF THIS AGREEMENT AND ANY DISPUTE ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE,
SHALL BE GOVERNED BY THE INTERNAL LAWS AND DECISIONS OF THE STATE OF
CALIFORNIA. ALL DISPUTES BETWEEN THE DEBTOR AND SECURED PARTY, WHETHER
SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED ONLY BY
STATE AND FEDERAL COURTS LOCATED IN SAN DIEGO COUNTY, CALIFORNIA AND THE
COURTS TO WHICH AN APPEAL THEREFROM MAY BE TAKEN; PROVIDED, HOWEVER, THAT
SECURED PARTY SHALL HAVE THE RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, TO PROCEED AGAINST THE DEBTOR OR ITS PROPERTY IN ANY LOCATION REASONABLY
SELECTED BY SECURED PARTY IN GOOD FAITH TO ENABLE SECURED PARTY TO REALIZE ON
SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF
SECURED PARTY. THE
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DEBTOR AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS, SETOFFS
OR CROSS-CLAIMS IN ANY PROCEEDING BROUGHT BY SECURED PARTY. THE DEBTOR WAIVES
ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SECURED
PARTY HAS COMMENCED A PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON FORUM NON CONVENIENS.
Section 9.14 WAIVER OF RIGHT TO JURY TRIAL. SECURED PARTY AND
DEBTOR EACH HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO: (I) THIS
AGREEMENT; OR (II) ANY OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT
BETWEEN SECURED PARTY AND DEBTOR; OR (III) ANY CONDUCT, ACTS OR OMISSIONS OF
SECURED PARTY OR DEBTOR OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH SECURED PARTY OR
DEBTOR; IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT
OR OTHERWISE.
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Section 9.15 CAPITALIZED TERMS. All terms capitalized herein and
not otherwise defined shall have the meaning set forth in the Purchase
Agreement, and in the Uniform Commercial Code as in effect in the State of
California.
IN WITNESS WHEREOF, the Debtor and the Secured Party have
duly executed this Agreement as of the day and year first written above.
SECURED PARTY:
BH Capital Investments, L.P., for itself and as
agent for Excalibur Limited Partnership and
Grundyco in trust for RSP 000-00000-00
By: HB & Company, Inc., its general partner
By:
-------------------------------------------
Xxxxx Xxxxxxxxx, President
DEBTOR:
Eco Soil Systems, Inc.
By:
-------------------------------------------
Xxxx X. Xxxxxxx, Vice President
Agricultural Supply, Inc.
By:
-------------------------------------------
Xxxx X. Xxxxxxx, Vice President
Turf Partners, Inc.
By:
-------------------------------------------
Xxxx X. Xxxxxxx, Vice President
Sistemas Y Equipos Agricolas, S.A. de C.V.
By:
-------------------------------------------
Xxxx X. Xxxxxxx, Vice President
Agricultural Supply de Mexico, S.A. de C.V.
By:
-------------------------------------------
Xxxx X. Xxxxxxx, Vice President
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SCHEDULE A
Collateral
All Accounts, Deposit Accounts, Goods, Fixtures, Securities,
Documents of Title, Inventory, General Intangibles, Equipment and Records now
owned or acquired at any time hereafter by Debtor, wherever located or
situated, and the products and proceeds (including condemnation proceeds) of
the foregoing.
The capitalized terms used herein shall have the meanings set forth
below. All other terms used herein are used as defined in the UCC.
"Accounts" means any and all bank accounts, rights to payment for
goods, including Inventory, sold or leased or to be sold or leased or for
services rendered or to be rendered, whether or not evidenced by an
instrument or chattel paper, and no matter how evidenced, including such
rights in the form of accounts (as that term is defined in the UCC), accounts
receivable, exchange receivables, contract rights, Instruments, Documents,
Chattel Paper, purchase orders, notes, drafts, acceptances and all other
forms of obligations and receivables, including all right, title and interest
of the Debtor in the Inventory which gave rise to any of the foregoing,
including the right of stoppage in transit and all returned, rejected,
rerouted or repossessed Inventory.
"Chattel paper" means "chattel paper" as that term is defined in the
UCC.
"Deposit Accounts" means "deposit accounts" as that term is defined
in the UCC.
"Documents" means "documents" as that term is defined in the UCC.
"Documents of Title" means "documents of title" as defined in the
UCC.
"Equipment" means "equipment" as defined in the UCC, and also all
motor vehicles, rolling stock, machinery, office equipment, plant equipment,
tools, dies, molds, store fixtures, furniture, and other goods, property, and
assets which are used and/or were purchased for use in the operation of
furtherance of the Debtor's business, and any and all accessions, additions
thereto, and substitutions therefore.
"Fixtures" means "fixtures" as that term is defined in the UCC.
"General Intangibles" means "general intangibles" as defined in the
UCC and also all books and records; customer lists; goodwill; causes of
action; judgments; literary rights; rights to performance; licenses, permits,
certificates of convenience and necessity, and similar rights granted by any
governmental authority; copyrights, trademarks, patents, patent applications,
proprietary processes, blueprints, drawings, designs, diagrams, plans,
reports, charts, catalogs, manuals, literature, technical data, proposals,
cost estimates and all other reproductions on paper, or otherwise, of any and
all the design, development, manufacture, sale, marketing, lease or use of
any or all goods produced or sold or leased or credit extended, or service
performed by the Debtor, whether intended for an individual customer or the
general
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business of Debtor.
"Goods" means "goods" as that term is defined in the UCC.
"Instruments" means "instruments" as that term is defined in the UCC.
"Inventory" means any and all raw materials, supplies, work in
process, finished goods, goods returned by customers, and inventory (as that
term is defined in the UCC), including goods in transit, wherever located,
which are-held for sale (but excluding goods subject to leases and goods not
manufactured by the Debtor or an affiliate and which were purchased for
resale directly or indirectly by the Debtor from a non-affiliate pursuant to
a then existing agreement or arrangement with a non-affiliate customer),
including the right of stoppage in transit, or goods which are or might be
used in connection with the manufacturing or packing of such goods, and all
such goods, the sale or disposition of which has given rise to an Account,
which are returned to and/or repossessed and/or stopped in transit by the
Debtor or by the Secured Party, or at any time hereafter in the possession or
under the control of the Debtor or the Secured Party or any agent or bailee
of the Debtor or the Secured Party, and any documents of title representing
any of the above.
"Records" means all books, records, customer lists, ledger cards,
computer programs, computer tapes, disks, printouts and records and other
property and general intangibles at any time evidencing or relating to any of
the types (or items) of property covered by this financing statement, whether
now in existence or hereafter created.
"Securities" means "securities" as that term is defined in the UCC.
"UCC" means the Uniform Commercial Code as in effect in the State of
California.
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