any capitalized lease, title
retention contract or similar agreement and the interest of any bondsman under
any payment or performance bond, in, of or on any assets or properties of a
person, whether now owned or hereafter acquired and whether arising by agreement
or operation of law.
"Obligations" means each and every debt, liability and obligation of every type
and description arising under or in connection with the Subordinated Note.
2
"Permitted Liens" means the Security Interest and any Lien of Golden Oval's
senior lender as identified in the Subordination Agreement.
"Security Interest" has the meaning given in Section 2 hereof.
"UCC" means Uniform Commercial Code as in effect from time to time in the State
of Minnesota.
2.
SECURITY INTEREST. SUBJECT TO THE TERMS OF THE SUBORDINATION
AGREEMENT, THE GRANTORS HEREBY GRANT THE SECURED PARTY A SECURITY INTEREST (THE
"SECURITY INTEREST") IN THE COLLATERAL TO SECURE PAYMENT OF THE OBLIGATIONS.
3.
GRANTORS ACKNOWLEDGMENT/FINANCING STATEMENTS.
THE GRANTORS
HEREBY ACKNOWLEDGE THAT THE GRANT OF THE SECURITY INTEREST IN SECTION 2 HEREOF
CONSTITUTES A GRANT OF A SECURITY INTEREST IN ALL OF THE COLLATERAL AND
AUTHORIZES THE SECURED PARTY TO FILE FINANCING STATEMENTS DESIGNATING THE
COLLATERAL DESCRIBED THEREIN AS "ALL PERSONAL PROPERTY" OF EACH GRANTOR.
4.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS. EACH GRANTOR HEREBY
REPRESENTS, WARRANTS AND AGREES AS FOLLOWS:
(A)
TITLE. SUCH GRANTOR (I) HAS ABSOLUTE TITLE TO EACH ITEM OF
COLLATERAL IN EXISTENCE ON THE DATE HEREOF, FREE AND CLEAR OF ALL LIENS, EXCEPT
PERMITTED LIENS, (II) WILL HAVE, AT THE TIME THE GRANTOR ACQUIRES ANY RIGHTS IN
COLLATERAL HEREAFTER ARISING, ABSOLUTE TITLE TO EACH SUCH ITEM OF COLLATERAL
FREE AND CLEAR OF ALL LIENS, EXCEPT PERMITTED LIENS, (III) WILL KEEP ALL
COLLATERAL FREE AND CLEAR OF ALL LIENS, EXCEPT PERMITTED LIENS, AND (IV) WILL
DEFEND THE COLLATERAL AGAINST ALL CLAIMS OR DEMANDS OF ALL PERSONS OTHER THAN
THE SECURED PARTY, EXCEPT WITH RESPECT TO PERMITTED LIENS. EXCEPT AS PERMITTED
UNDER THE CREDIT AGREEMENT, THE GRANTOR WILL NOT SELL OR OTHERWISE DISPOSE OF
ANY COLLATERAL OR ANY INTEREST THEREIN, WITHOUT THE PRIOR WRITTEN CONSENT OF THE
SECURED PARTY.
(B)
LEGAL NAME; CHIEF EXECUTIVE OFFICE; IDENTIFICATION NUMBERS. EACH
GRANTOR'S CORRECT LEGAL NAME, CHIEF EXECUTIVE OFFICE AND PRINCIPAL PLACE OF
BUSINESS, FEDERAL EMPLOYER IDENTIFICATION NUMBER AND ORGANIZATIONAL
IDENTIFICATION NUMBER ARE PROPERLY SET FORTH BY ITS SIGNATURE BELOW.
(C)
CHANGES IN NAME, LOCATION OR JURISDICTION OF ORGANIZATION. NO
GRANTOR WILL CHANGE ITS NAME, BUSINESS ADDRESS, OR JURISDICTION OF ORGANIZATION
WITHOUT PRIOR WRITTEN NOTICE TO THE SECURED PARTY.
(D)
FIXTURES. NO GRANTOR WILL PERMIT ANY TANGIBLE COLLATERAL TO BECOME
PART OF OR TO BE AFFIXED TO ANY REAL PROPERTY WITHOUT FIRST ASSURING THAT THE
SECURITY INTEREST WILL BE PRIOR AND SENIOR TO ANY LIEN THEN HELD OR THEREAFTER
ACQUIRED BY ANY MORTGAGEE OF SUCH REAL PROPERTY OR THE OWNER OR PURCHASER OF ANY
INTEREST THEREIN.
(E)
MISCELLANEOUS COVENANTS. EACH GRANTOR WILL:
(I)
KEEP ALL TANGIBLE COLLATERAL IN GOOD REPAIR, WORKING ORDER AND
CONDITION, NORMAL DEPRECIATION EXCEPTED, AND WILL, FROM TIME TO TIME, REPLACE
ANY