OF THE LIABILITIES, THE
BORROWERS HEREBY GRANT TO THE LENDER A
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CONTINUING SECURITY INTEREST IN AND TO, AND ASSIGNS TO THE LENDER, THE
FOLLOWING, AND EACH ITEM THEREOF, WHETHER NOW OWNED OR NOW DUE, OR IN WHICH THE
BORROWERS HAVE AN INTEREST, OR HEREAFTER ACQUIRED, ARISING, OR TO BECOME DUE, OR
IN WHICH THE BORROWERS OBTAIN AN INTEREST (ALL OF WHICH, TOGETHER WITH ANY OTHER
PROPERTY IN WHICH THE LENDER MAY IN THE FUTURE BE GRANTED A SECURITY INTEREST,
IS REFERRED TO HEREIN AS THE "COLLATERAL"):
(A)
ALL INVENTORY.
(B)
ALL ACCOUNTS, ACCOUNTS RECEIVABLE, CONTRACTS, CONTRACT RIGHTS,
NOTES, CHATTEL PAPER (WHETHER TANGIBLE OR ELECTRONIC), DEPOSIT ACCOUNTS, LETTER
OF CREDIT RIGHTS (WHETHER OR NOT THE LETTER OF CREDIT IS EVIDENCED BY A
WRITING), SUPPORTING OBLIGATIONS, COMMERCIAL TORT CLAIMS, BILLS, DRAFTS,
ACCEPTANCES, GENERAL INTANGIBLES, INSTRUMENTS, DOCUMENTS, DOCUMENT OF TITLE,
SECURITIES, SECURITY ENTITLEMENTS, SECURITY ACCOUNTS, INVESTMENT PROPERTY,
CHOSES IN ACTION, AND ALL OTHER DEBTS, OBLIGATIONS AND LIABILITIES IN WHATEVER
FORM, OWING TO BORROWER FROM ANY PERSON, FIRM OR CORPORATION OR ANY OTHER LEGAL
ENTITY, WHETHER NOW EXISTING OR HEREAFTER ARISING, NOW OR HEREAFTER RECEIVED BY
OR BELONGING OR OWING TO BORROWER, FOR GOODS SOLD BY IT OR FOR SERVICES RENDERED
BY IT, OR HOWEVER OTHERWISE SAME MAY HAVE BEEN ESTABLISHED OR CREATED, ALL
GUARANTEES AND SECURITIES THEREFOR, ALL RIGHT, TITLE AND INTEREST OF BORROWER IN
THE MERCHANDISE OR SERVICES WHICH GAVE RISE THERETO, INCLUDING THE RIGHTS OF
RECLAMATION AND STOPPAGE IN TRANSIT, ALL RIGHTS TO REPLEVY GOODS, AND ALL RIGHTS
OR AN UNPAID SELLER OF MERCHANDISE OR SERVICES.
(C)
ALL MACHINERY, EQUIPMENT, FIXTURES AND OTHER GOODS (EXCLUDING
MOTOR VEHICLES) WHETHER NOW OWNED OR HEREAFTER ACQUIRED BY THE BORROWERS AND
WHEREVER LOCATED, ALL REPLACEMENTS AND SUBSTITUTIONS THEREFOR OR ACCESSIONS
THERETO AND ALL PROCEEDS THEREOF.
(D)
LEASEHOLD INTERESTS AND RIGHTS OF OCCUPANCY.
(E)
REAL ESTATE.
(F)
ALL PROCEEDS, PRODUCTS, SUBSTITUTIONS AND ACCESSIONS OF OR TO ANY
OF THE FOREGOING IN ANY FORM, INCLUDING, WITHOUT LIMITATION, ALL PROCEEDS,
REFUNDS AND PREMIUM REBATES OF CREDIT, FIRE OR OTHER INSURANCE, AND ALSO
INCLUDING, WITHOUT LIMITATION, RENTS AND PROFITS RESULTING FROM THE TEMPORARY
USE OF ANY OF THE FOREGOING.
2-2.
EXTENT AND DURATION OF SECURITY INTEREST.
THIS GRANT OF A
SECURITY INTEREST IS IN ADDITION TO, AND SUPPLEMENTAL OF, ANY SECURITY INTEREST
PREVIOUSLY GRANTED BY THE BORROWERS TO THE LENDER AND SHALL CONTINUE IN FULL
FORCE AND EFFECT APPLICABLE TO ALL LIABILITIES UNTIL ALL LIABILITIES HAVE BEEN
PAID AND/OR SATISFIED IN FULL AND THE SECURITY INTEREST GRANTED HEREIN IS
SPECIFICALLY TERMINATED IN WRITING BY A DULY AUTHORIZED OFFICER OF THE LENDER.
ARTICLE 3 - DEFINITIONS
All capitalized terms used in this agreement which are not otherwise defined
herein or in the UCC shall have the meanings assigned to them in EXHIBIT 3,
annexed hereto.
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ARTICLE 4 - CONDITIONS PRECEDENT
The effectiveness of this Agreement, the establishment of the Revolving Credit,
and the making of the first loan under the Revolving Credit, is conditioned upon
the delivery to Lender of the documents described below, each in