SECURITY AGREEMENT
THIS SECURITY AGREEMENT is made and entered into as of the 5th day of
November, 1998, by THREE-FIVE SYSTEMS, INC., a Delaware corporation (hereinafter
called "Debtor"), whose chief executive office is located at 0000 Xxxxx Xxxxxx
Xxxxx, Xxxxx, Xxxxxxx 00000-0000, in favor of IMPERIAL BANK ARIZONA, an Arizona
banking corporation, as Agent for the Banks listed in the hereinafter defined
Credit Agreement and for the Issuing Bank (as defined in the Credit Agreement)
and its successors and assigns (hereinafter called "Secured Party"), whose
address is 000 Xxxx Xxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000.
1. SECURITY INTEREST
Debtor hereby grants to Secured Party a security interest (hereinafter
called the "Security Interest") in all of Debtor's right, title and interest in
and to the personal property described on Schedule A attached hereto (the
"Collateral").
2. OBLIGATION SECURED
The Security Interest shall secure, in such order of priority as
Secured Party may elect:
(a) Payment of the sum of $15,000,000.00 according to the
terms of that Revolving Promissory Note (RLC) dated November 5, 1998,
made by Debtor and all present and future Subsidiaries (collectively,
the "Borrower"), payable to the order of Secured Party, evidencing a
revolving line of credit, all or any part of which may be advanced to
Borrower, repaid by Borrower and readvanced to Borrower, from time to
time, subject to the terms and conditions thereof, with interest
thereon, extension and other fees, late charges and attorneys' fees,
according to the terms thereof, and all extensions, modifications,
renewals, restatements or replacements thereof (hereinafter called the
"RLC Note");
(b) Payment of the sum of $10,000,000.00 according to the
terms of that Revolving Promissory Note (RLCT) dated November 5, 1998,
made by Borrower, payable to the order of Secured Party, evidencing a
revolving line of credit, all or any part of which may be advanced to
Borrower, repaid by Borrower and readvanced to Borrower, from time to
time, subject to the terms and conditions thereof, with interest
thereon, extension and other fees, late charges and attorneys' fees,
according to the terms thereof, and all extensions, modifications,
renewals, restatements or replacements thereof (together with the RLC
Note, hereinafter called the "Note");
(c) Payment, performance and observance by Debtor of each
covenant, condition, provision and agreement contained herein and of
all monies expended or advanced by Secured Party pursuant to the terms
hereof, or to preserve any right
of Secured Party hereunder, or to protect or preserve the Collateral or
any part thereof; and
(d) Payment, performance and observance by Debtor of each
covenant, condition, provision and agreement contained in that Credit
Agreement dated November 5, 1998, by and between Borrower, the Banks
and Secured Party as agent for the Banks and the Issuing Bank (as
extended, modified, renewed, restated or replaced hereinafter called
the "Credit Agreement") and in any other document or instrument related
to the indebtedness described in subparagraph (a) above and of all
monies expended or advanced by Secured Party pursuant to the terms
thereof or to preserve any right of Secured Party thereunder.
All of the indebtedness and obligations secured by this Agreement are
hereinafter collectively called the "Obligation."
3. USE; LOCATION; CONSTRUCTION
3.1 The Collateral is or will be used or produced primarily for
business purposes.
3.2 The Collateral will be kept at Debtor's address set forth at the
beginning of this Agreement and/or at the location(s) listed on Schedule B, if
any, attached hereto.
3.3 Debtor's records concerning the Collateral will be kept at Debtor's
address set forth at the beginning of this Agreement and/or at the location(s)
listed on Schedule B, if any, attached hereto.
4. REPRESENTATIONS AND WARRANTIES OF DEBTOR
Debtor hereby represents and warrants that:
4.1 Debtor is the owner of the Collateral free of all security
interests or other encumbrances except the Security Interest and Permitted Liens
(as defined in the Credit Agreement) and no financing statement covering the
Collateral is filed or recorded in any public office except with respect to any
Permitted Liens.
4.2 The Collateral is, and is intended to be, used, produced or
acquired by Debtor for use primarily for business purposes. The address of
Debtor set forth at the beginning of this Agreement is the chief executive
office of Debtor.
4.3 Each material account, chattel paper or general intangible included
in the Collateral is genuine and enforceable in accordance with its terms
against the party named therein who is obligated to pay the same (hereinafter
called "Obligor"), and the security interests that are part of each item of
chattel paper included in the Collateral are valid, first and prior perfected
security interests. To the knowledge of Debtor, each material Obligor is
solvent, and the amount that
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Debtor has represented to Secured Party as owing by each such Obligor is the
amount actually and unconditionally owing by that Obligor, without deduction
except for normal cash discounts where applicable; to the knowledge of Debtor no
material Obligor has any defense, setoff, claim or counterclaim against Debtor
that can be asserted against Secured Party whether in any proceeding to enforce
the Security Interest or otherwise. Each document, instrument and chattel paper
included in the Collateral is materially complete and regular on its face and
free from evidence of forgery or alteration. No material default has occurred in
connection with any instrument, document or chattel paper included in the
Collateral, no payment in connection therewith is materially overdue and no
presentment, dishonor or protest has occurred in connection therewith.
5. COVENANTS OF DEBTOR
5.1 Except as otherwise permitted in the Credit Agreement, and except
as to its inventory which may be sold in the ordinary course of business, Debtor
shall not sell, transfer, assign or otherwise dispose of any Collateral or any
interest therein (except as permitted herein) without obtaining the prior
written consent of Secured Party and shall keep the Collateral free of all
security interests or other encumbrances except the Security Interest and any
Permitted Liens; provided however that Debtor may sell, transfer, assign or
otherwise dispose of any Collateral ("Disposed Collateral") or any interest
thereon without obtaining the prior written consent of Secured Party so long as
(i) Debtor is doing so in the ordinary course of business, (ii) the book value
of any such Disposed Collateral does not exceed $5,000.00, and (iii) the
aggregate book value of all such Disposed Collateral does not exceed $100,000.00
in any fiscal year. Although proceeds of Collateral are covered by this
Agreement, this shall not be construed to mean that Secured Party consents to
any sale of the Collateral.
5.2 Debtor shall keep and maintain the Collateral in good condition and
repair and shall not use the Collateral in violation of any provision of this
Agreement or any applicable statute, ordinance or regulation or any policy of
insurance insuring the Collateral.
5.3 Debtor shall provide and maintain insurance insuring the Collateral
against risks, with coverage and in form and amount satisfactory to Secured
Party. At Secured Party's request, Debtor shall deliver to Secured Party the
original policies of insurance containing endorsements naming Secured Party as a
loss payee.
5.4 Debtor shall pay when due all taxes, assessments and other charges
which may be levied or assessed against the Collateral.
5.5 Debtor shall prevent any portion of the Collateral that is not a
fixture from being or becoming a fixture and shall prevent any portion of the
Collateral from being or becoming an accession to other goods that are not part
of the Collateral.
5.6 Debtor shall keep all titled vehicles properly registered with and
licensed, shall provide Secured Party with the license numbers of all titled
vehicles, and if requested by Secured Party shall cause the Security Interest to
be shown as a valid first lien on the Certificate of Title.
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5.7 Debtor, upon demand, shall promptly deliver to Secured Party all
instruments, documents and chattel paper included in the Collateral and all
invoices, shipping or delivery records, purchase orders, contracts or other
items related to the Collateral. Debtor shall notify Secured Party immediately
of any material default by any Obligor in the payment or performance of its
obligations with respect to any Collateral.
5.8 Debtor shall give Secured Party immediate written notice of any
change in the location of: (i) Debtor's chief executive office; (ii) except as
its transfer is permitted under the Credit Agreement, the Collateral or any part
thereof; or (iii) Debtor's records concerning the Collateral.
5.9 After reasonable notice by Secured Party, Secured Party or its
agents may inspect the Collateral at reasonable times and may enter into any
premises where the Collateral is or may be located. Debtor shall keep records
concerning the Collateral in accordance with generally accepted accounting
principles. Secured Party shall have free and complete access to Debtor's
records and shall have the right to make extracts therefrom or copies thereof.
Upon request of Secured Party from time to time, Debtor shall submit up-to-date
schedules of the items comprising the Collateral in such detail as Secured Party
may require.
5.10 Debtor, at its reasonable cost and expense, shall protect and
defend this Agreement, all of the rights of Secured Party hereunder, and the
Collateral against all claims and demands of other parties, including without
limitation defenses, setoffs, claims and counterclaims asserted by any Obligor
against Debtor and/or Secured Party. Debtor shall pay all claims and charges
that in the reasonable opinion of Secured Party might prejudice, imperil or
otherwise affect the Collateral or the Security Interest. Debtor shall promptly
notify Secured Party of any levy, distraint or other seizure by legal process or
otherwise of any part of the Collateral and of any threatened or filed claims or
proceedings that might in any way affect or impair the terms of this Agreement.
5.11 The Security Interest, at all times, shall be perfected and except
for Permitted Liens shall be prior to any other interests in the Collateral.
Debtor shall act and perform as necessary and shall execute and file all
security agreements, financing statements, continuation statements and other
documents requested by Secured Party to establish, maintain and continue the
perfected Security Interest. Debtor, on demand, shall promptly pay all
reasonable costs and expenses of filing and recording, including the costs of
any searches, deemed reasonably necessary by Secured Party from time to time to
establish and determine the validity and the continuing priority of the Security
Interest.
5.12 If Debtor shall fail to pay any taxes, assessments, expenses or
charges, to keep all of the Collateral free from other security interests,
encumbrances or claims, to keep the Collateral in good condition and repair, to
procure and maintain insurance thereon, or to perform otherwise as required
herein, Secured Party may advance the monies necessary to pay the same, to
accomplish such repairs, to procure and maintain such insurance or to so
perform; after reasonable notice by Secured Party to Debtor, Secured Party is
hereby authorized to enter upon any property in the possession or control of
Debtor for such purposes.
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5.13 All rights, powers and remedies granted Secured Party herein, or
otherwise available to Secured Party, are for the sole benefit and protection of
Secured Party, and Secured Party may exercise any such right, power or remedy at
its option and in its sole and absolute discretion without any obligation to do
so. In addition, if under the terms hereof, Secured Party is given two or more
alternative courses of action, Secured Party may elect any alternative or
combination of alternatives at its option and in its sole and absolute
discretion. All monies advanced by Secured Party under the terms hereof and all
amounts paid, suffered or incurred by Secured Party in exercising any authority
granted herein, including reasonable attorneys' fees, shall be added to the
Obligation, shall be secured by the Security Interest, shall bear interest at
the Default Rate (as defined in the Credit Agreement) until paid, and shall be
due and payable by Debtor to Secured Party immediately without demand.
6. NOTIFICATION AND PAYMENTS; COLLECTION OF COLLATERAL; USE OF
COLLATERAL BY DEBTOR
6.1 Secured Party, after the occurrence of any Event of Default,
defined below, and with prior written notice to Debtor, may notify any or all
Obligors of the existence of the Security Interest and may direct the Obligors
to make all payments on the Collateral to Secured Party. Until Secured Party has
notified the Obligors to remit payments directly to it, Debtor, at Debtor's own
cost and expense, shall collect or cause to be collected the accounts and monies
due under the accounts, documents, instruments and general intangibles or
pursuant to the terms of the chattel paper. Secured Party shall not be liable or
responsible for any embezzlement, conversion, negligence or default by Debtor or
Debtor's agents with respect to such collections; all agents used in such
collections shall be agents of Debtor and not agents of Secured Party. Unless
Secured Party notifies Debtor in writing that it waives one or more of the
requirements set forth in this sentence, any payments or other proceeds of
Collateral received by Debtor, before or after notification to Obligors, shall
be held by Debtor in trust for Secured Party in the same form in which received,
shall not be commingled with any assets of Debtor and shall be turned over to
Secured Party not later than the next business day following the day of receipt.
All payments and other proceeds of Collateral received by Secured Party directly
or from Debtor shall be applied to the Obligation in such order and manner and
at such time as Secured Party, in its sole discretion, shall determine. In
addition, Debtor shall promptly notify Secured Party of the return to or
possession by Debtor of goods underlying any Collateral; Debtor shall hold the
same in trust for Secured Party and shall dispose of the same as Secured Party
directs.
6.2 Secured Party, after the occurrence of an Event of Default and
without notice to Debtor, may demand, collect and xxx on the Collateral (either
in Debtor's or Secured Party's name), enforce, compromise, settle or discharge
the Collateral and endorse Debtor's name on any instruments, documents, or
chattel paper included in or pertaining to the Collateral; Debtor hereby
irrevocably appoints Secured Party its attorney in fact for all such purposes.
6.3 Until the occurrence of an Event of Default, Debtor may: (i) use,
consume and sell any inventory included in the Collateral in any lawful manner
in the ordinary course of Debtor's business provided that all sales shall be at
commercially reasonable prices; and (ii) subject to
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Paragraphs 6.1 and 6.2 above, retain possession of any other Collateral and use
it in any lawful manner consistent with this Agreement.
7. COLLATERAL IN THE POSSESSION OF SECURED PARTY
7.1 Secured Party shall use such reasonable care in handling,
preserving and protecting the Collateral in its possession as it uses in
handling similar property for its own account. Secured Party, however, shall
have no liability for the loss, destruction or disappearance of any Collateral
unless there is affirmative proof of a lack of due care; the lack of due care
shall not be implied solely by virtue of any loss, destruction or disappearance.
7.2 Debtor shall be solely responsible for taking any and all actions
to preserve rights against all Obligors; Secured Party shall not be obligated to
take any such actions whether or not the Collateral is in Secured Party's
possession. Debtor waives presentment and protest with respect to any instrument
included in the Collateral on which Debtor is in any way liable and waives
notice of any action taken by Secured Party with respect to any instrument,
document or chattel paper included in any Collateral that is in the possession
of Secured Party.
8. EVENTS OF DEFAULT; REMEDIES
8.1 The occurrence of any of the following events or conditions shall
constitute and is hereby defined to be an "Event of Default":
(a) Any failure or neglect to perform or observe any of the
terms, provisions, or covenants of this Agreement, and such failure or
neglect either (i) cannot be remedied, (ii) can be remedied within
fifteen (15) days by prompt and diligent action, but it continues
unremedied for a period of fifteen (15) days after notice thereof to
Debtor, or (iii) can be remedied, although not within fifteen (15) days
even by prompt and diligent action, but such remedy is not commenced
within fifteen (15) days after notice thereof to Debtor or is not
diligently prosecuted to completion within a total of forty-five (45)
days from the date of such notice.
(b) Any warranty, representation or statement contained in
this Agreement that shall be or shall prove to have been false when
made or furnished.
(c) Any levy or execution upon, or judicial seizure of, any
portion of the Collateral or any other collateral or security for the
Obligation.
(d) Any attachment or garnishment of, or the existence or
filing of any lien or encumbrance against, any portion of the
Collateral or any other collateral or security for the Obligation that
is not removed and released within fifteen (15) days after its
creation.
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(e) The institution of any legal action or proceedings to
enforce any lien or encumbrance upon any portion of the Collateral or
any other collateral or security for the Obligation, that is not
dismissed within sixty (60) days after its institution.
(f) The abandonment by Debtor of all or any part of the
Collateral.
(g) The loss, theft or destruction of, or any substantial
damage to, any portion of the Collateral or any other collateral or
security for the Obligation, that is not adequately covered by
insurance.
(h) The occurrence of any event of default under the Credit
Agreement.
8.2 Upon the occurrence of any Event of Default and at any time while
such Event of Default is continuing, Secured Party shall have the following
rights and remedies and may do one or more of the following:
(a) Declare all or any part of the Obligation to be
immediately due and payable, and the same, with all costs and charges,
shall be collectible thereupon by action at law.
(b) Without further notice or demand and without legal
process, take possession of the Collateral wherever found and, for this
purpose, enter upon any property occupied by or in the control of
Debtor. Debtor, upon demand by Secured Party, shall assemble the
Collateral and deliver it to Secured Party or to a place designated by
Secured Party that is reasonably convenient to both parties.
(c) Operate the business of Debtor as a going concern,
including, without limitation, extend sales or services to new
customers and advance funds for such operation. Secured Party shall not
be liable for any depreciation, loss, damage or injury to the
Collateral or other property of Debtor as a result of such action.
Debtor hereby waives any claim of trespass or replevin arising as a
result of such action.
(d) Pursue any legal or equitable remedy available to collect
the Obligation, to enforce its title in and right to possession of the
Collateral and to enforce any and all other rights or remedies
available to it.
(e) Upon obtaining possession of the Collateral or any part
thereof, after notice to Debtor as provided in Paragraph 8.4 herein,
sell such Collateral at public or private sale either with or without
having such Collateral at the place of sale. The proceeds of such sale,
after deducting therefrom all reasonable expenses of Secured Party in
taking, storing, repairing and selling the Collateral (including
reasonable attorneys' fees) shall be applied to the payment of the
Obligation, and
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any surplus thereafter remaining shall be paid to Debtor or any other
person that may be legally entitled thereto. In the event of a
deficiency between such net proceeds from the sale of the Collateral
and the total amount of the Obligation, Debtor, upon demand, shall
promptly pay the amount of such deficiency to Secured Party.
8.3 Secured Party, so far as may be lawful, may purchase all or any
part of the Collateral offered at any public or private sale made in the
enforcement of Secured Party's rights and remedies hereunder.
8.4 Any demand or notice of sale, disposition or other intended action
hereunder or in connection herewith, whether required by the Uniform Commercial
Code or otherwise, shall be deemed to be commercially reasonable and effective
if such demand or notice is given to Debtor at least ten (10) days prior to such
sale, disposition or other intended action, in the manner provided herein for
the giving of notices.
8.5 Debtor shall pay all costs and expenses, including without
limitation costs of Uniform Commercial Code searches, court costs and reasonable
attorneys' fees, incurred by Secured Party in enforcing payment and performance
of the Obligation or in exercising the rights and remedies of Secured Party
hereunder. All such costs and expenses shall be secured by this Agreement and by
all deeds of trust and other lien and security documents securing the
Obligation. In the event of any court proceedings, court costs and attorneys'
fees shall be set by the court and not by jury and shall be included in any
judgment obtained by Secured Party.
8.6 In addition to any remedies provided herein for an Event of
Default, Secured Party shall have all the rights and remedies afforded a secured
party under the Uniform Commercial Code and all other legal and equitable
remedies allowed under applicable law. No failure on the part of Secured Party
to exercise any of its rights hereunder arising upon any Event of Default shall
be construed to prejudice its rights upon the occurrence of any other or
subsequent Event of Default. No delay on the part of Secured Party in exercising
any such rights shall be construed to preclude it from the exercise thereof at
any time while that Event of Default is continuing. Secured Party may enforce
any one or more rights or remedies hereunder successively or concurrently. By
accepting payment or performance of any of the Obligation after its due date,
Secured Party shall not thereby waive the agreement contained herein that time
is of the essence, nor shall Secured Party waive either its right to require
prompt payment or performance when due of the remainder of the Obligation or its
right to consider the failure to so pay or perform an Event of Default.
9. MISCELLANEOUS PROVISIONS
9.1 The acceptance of this Agreement by Secured Party shall not be
considered a waiver of or in any way to affect or impair any other security that
Secured Party may have, acquire simultaneously herewith, or hereafter acquire
for the payment or performance of the Obligation, nor shall the taking by
Secured Party at any time of any such additional security be construed as
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a waiver of or in any way to affect or impair the Security Interest; Secured
Party may resort, for the payment or performance of the Obligation, to its
several securities therefor in such order and manner as it may determine.
9.2 Without notice or demand, without affecting the obligations of
Debtor hereunder or the personal liability of any person for payment or
performance of the Obligation, and without affecting the Security Interest or
the priority thereof, Secured Party, from time to time, may: (i) extend the time
for payment of all or any part of the Obligation, accept a renewal note
therefor, reduce the payments thereon, release any person liable for all or any
part thereof, or otherwise change the terms of all or any part of the
Obligation; (ii) take and hold other security for the payment or performance of
the Obligation and enforce, exchange, substitute, subordinate, waive or release
any such security; (iii) join in any extension or subordination agreement; or
(iv) release any part of the Collateral from the Security Interest.
9.3 Debtor waives and agrees not to assert: (i) any right to require
Secured Party to proceed against any guarantor, to proceed against or exhaust
any other security for the Obligation, to pursue any other remedy available to
Secured Party, or to pursue any remedy in any particular order or manner; (ii)
the benefits of any legal or equitable doctrine or principle of marshalling;
(iii) demand, diligence, presentment for payment, protest and demand, and notice
of extension, dishonor, protest, demand and nonpayment, relating to the
Obligation; and (iv) any benefit of, and any right to participate in, any other
security now or hereafter held by Secured Party.
9.4 The terms herein shall have the meanings in and be construed under
the Uniform Commercial Code. This Agreement shall be governed by and construed
according to the laws of the State of Arizona. Each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be void or
invalid, the same shall not affect the remainder hereof which shall be effective
as though the void or invalid provision had not been contained herein.
9.5 No modification, rescission, waiver, release or amendment of any
provision of this Agreement shall be made except by a written agreement executed
by Debtor and a duly authorized officer of Secured Party.
9.6 This is a continuing Agreement which shall remain in full force and
effect until actual receipt by Secured Party of written notice of its revocation
as to future transactions and shall remain in full force and effect thereafter
until all of the Obligation incurred before the receipt of such notice, and all
of the Obligation incurred thereafter under commitments extended by Secured
Party before the receipt of such notice, shall have been paid and performed in
full.
9.7 No setoff or claim that Debtor now has or may in the future have
against Secured Party shall relieve Debtor from paying or performing the
Obligation.
9.8 Time is of the essence hereof. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their heirs,
personal representatives, successors and
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assigns. The term "Secured Party" shall include not only the original Secured
Party hereunder but also any future owner and holder, including pledgees, of
note or notes evidencing the Obligation. The provisions hereof shall apply to
the parties according to the context thereof and without regard to the number or
gender of words or expressions used.
9.9 All notices required or permitted to be given hereunder shall be in
writing and may be given, and shall become effective, as provided in the Credit
Agreement.
9.10 A carbon, photographic or other reproduced copy of this Agreement
and/or any financing statement relating hereto shall be sufficient for filing
and/or recording as a financing statement.
9.11 Debtor authorizes Secured Party, without notice or demand, without
affecting the obligations of Debtor hereunder or the personal liability of any
person for payment or performance of the Obligation and without affecting the
lien or the priority of the Security Interest, from time to time, at the request
of any person primarily obligated therefor, to renew, compromise, extend,
accelerate or otherwise change the time for payment or performance of, or
otherwise change the terms of, all or any part of the Obligation, including
increase or decrease any rate of interest thereon. Debtor waives and agrees not
to assert: (i) any right to require Secured Party to proceed against Borrower;
(ii) the benefits of any statutory provision limiting the liability of a surety,
including without limitation the benefit of Section 12-1641, ET SEQ., of the
Arizona Revised Statutes; and (iii) any defense arising by reason of any
disability or other defense of Borrower or by reason of the cessation from any
cause whatsoever of the liability of Borrower. Debtor shall have no right of
subrogation and hereby waives any right to enforce any remedy which Secured
Party now has, or may hereafter have, against Borrower.
IN WITNESS WHEREOF, these presents are executed as of the date
indicated above.
THREE-FIVE SYSTEMS, INC., a Delaware
corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
-------------------------------
Title: Executive Vice President
------------------------------
DEBTOR
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SCHEDULE "A"
COLLATERAL DESCRIPTION
All of the property described below in, to or under which Debtor now
has or hereafter acquires any right, title or interest, whether present, future
or contingent, and in Debtor's expectancy to acquire such property (all of the
property described on this schedule is herein called the "Collateral"):
1. All accounts, general intangibles, instruments, documents
and chattel paper (including all accounts receivable, notes, drafts,
lease agreements and security agreements), and all goods, if any,
represented thereby, whether now existing or hereafter acquired or
created from time to time in the course of Debtor's business;
2. All inventory now owned or hereafter acquired, including
all goods held for sale or lease in Debtor's business, as now or
hereafter conducted, and all materials, work in process and finished
goods used or to be consumed in Debtor's business (whether or not the
inventory is represented by warehouse receipts or bills of lading or
has been or may be placed in transit or delivered to a public
warehouse);
3. All equipment now owned or hereafter acquired, including
all furniture, fixtures, furnishings, vehicles (whether titled or
non-titled), machinery, materials and supplies, wherever located,
including but not limited to such items described on the collateral
schedule (if any) attached hereto and by this reference made a part
hereof, together with all parts, accessories, attachments, additions
thereto or replacements therefor;
4. All instruments, documents and chattel paper now held by or
hereafter delivered to Secured Party, together with all property rights
and security interests evidenced thereby, all increases thereof
(including, without limitation, stock dividends), all profits therefrom
and all transformations thereof, including but not limited to such
items described on the collateral schedule (if any) attached hereto and
by this reference made a part hereof (all hereinafter called the
"Specific Collateral-in-Possession");
5. All tax refund claims, all policies or certificates of
insurance covering any of the Collateral, all contracts, agreements or
rights of indemnification, guaranty or surety relating to any of the
Collateral, and all claims, awards, loss payments, proceeds and premium
refunds that may become payable with respect to any such policies,
certificates, contracts, agreements or rights;
6. All ledger cards, invoices, delivery receipts, worksheets,
books of accounts, statements, correspondence, customer lists, files,
journals, ledgers and records in any form, written or otherwise,
related to any of the Collateral;
7. Tradenames, trademarks and service marks (subject to any
franchise or license agreements relating thereto);
8. All claims for loss or damage to or in connection with any
of the Collateral, all other claims in any form for the payment of
money, including tort claims, and all rights with respect to such
claims and all proceeds thereof;
9. All accessions to any of the Collateral; and
10. All products and proceeds of the Collateral, in any form,
including all proceeds received, due or to become due from any sale,
exchange or other disposition of any of the Collateral, whether such
proceeds are cash or noncash in nature or are represented by checks,
drafts, notes or other instruments for the payment of money.
All "Collateral Schedules," if any, attached hereto are hereby incorporated into
this collateral description as if set forth here and at each reference thereto.
