of all tangible Collateral,
together with (i) all accessories, attachments, parts, equipment, accessions and
repairs now or hereafter attached or affixed to or used in connection with any
such goods, and (ii) all warehouse receipts, bills of lading and other documents
now or hereafter covering such goods.
This Agreement shall create a continuing security interest in the Collateral and
shall, except as otherwise set forth in Section 6, remain in full force in
effect until the satisfaction in full of the Secured Obligations.
All terms not
otherwise described herein shall have the meaning assigned to them in the Loan
Agreement.
2.
REPRESENTATIONS, WARRANTIES AND
AGREEMENTS.
THE GRANTOR HEREBY REPRESENTS AND WARRANTS TO, AND COVENANTS AND
AGREES WITH, THE SECURED PARTY AS FOLLOWS:
(A)
THE COLLATERAL WILL BE USED PRIMARILY FOR
BUSINESS PURPOSES.
(B)
THE GRANTOR IS A DULY ORGANIZED NEVADA
LIMITED LIABILITY COMPANY IN GOOD STANDING.
THE GRANTOR SHALL NOT CHANGE ITS
STATE OF ORGANIZATION, LEGAL STRUCTURE, TYPE OF ORGANIZATION, AS THE CASE MAY
BE, WITHOUT THE SECURED PARTY'S PRIOR WRITTEN CONSENT, WHICH CONSENT SHALL NOT
BE UNREASONABLY WITHHELD.
THE GRANTOR SHALL PROMPTLY NOTIFY THE SECURED PARTY
OF ANY CONSOLIDATION, MERGER OR OTHER ANALOGOUS REORGANIZATION OR TRANSACTION
INVOLVING THE GRANTOR.
(C)
IF ANY PART OR ALL OF THE COLLATERAL WILL
BECOME SO RELATED TO PARTICULAR REAL ESTATE AS TO BECOME A FIXTURE, THE GRANTOR
WILL PROMPTLY ADVISE THE SECURED PARTY AS TO REAL ESTATE CONCERNED AND THE
RECORD OWNER THEREOF AND EXECUTE AND DELIVER ANY AND ALL INSTRUMENTS NECESSARY
TO PERFECT THE SECURITY INTEREST THEREIN AND TO ASSURE THAT SUCH SECURITY
INTEREST WILL BE PRIOR TO THE INTEREST THEREIN OF THE OWNER OF THE REAL ESTATE.
(D)
THE GRANTOR'S EXACT LEGAL NAME IS THAT
INDICATED ON THE FIRST PAGE OF THIS AGREEMENT.
DURING THE PRECEDING ONE
(1) YEAR, THE GRANTOR HAS NOT CHANGED ITS NAME OR OPERATED OR CONDUCTED BUSINESS
UNDER ANY TRADE NAME OR "D/B/A" WHICH IS DIFFERENT FROM ITS CORPORATE NAME.
THE
GRANTOR SHALL PROMPTLY NOTIFY THE SECURED PARTY OF ANY CHANGE IN SUCH NAME OR IF
IT OPERATES OR CONDUCTS BUSINESS UNDER ANY TRADE NAME OR "D/B/A" WHICH IS
DIFFERENT FROM SUCH NAME BY PROVIDING AT LEAST THIRTY (30) DAYS' ADVANCE WRITTEN
NOTICE.
(E)
THE GRANTOR HAS (OR WILL HAVE AT THE TIME
THE GRANTOR ACQUIRES RIGHTS IN COLLATERAL HEREAFTER ACQUIRED OR ARISING) AND
WILL MAINTAIN ABSOLUTE TITLE TO EACH ITEM OF COLLATERAL FREE AND CLEAR OF ALL
SECURITY INTERESTS, LIENS AND ENCUMBRANCES, EXCEPT THE SECURITY INTEREST,
PURCHASE-MONEY SECURITY INTERESTS AND SUCH OTHER SECURITY INTERESTS AS ARE
PERMITTED UNDER THE LOAN AGREEMENT, THE INITIAL NOTE OR THE REPLACEMENT NOTE
(THE SECURITY INTEREST AND THE SECURITY INTERESTS PERMITTED UNDER THE INITIAL
NOTE, REPLACEMENT NOTE AND THE LOAN AGREEMENT ARE HEREINAFTER COLLECTIVELY
REFERRED TO AS THE "PERMITTED INTERESTS"), AND WILL DEFEND THE COLLATERAL
AGAINST ALL CLAIMS OR DEMANDS OF ALL PERSONS OTHER THAN THE SECURED PARTY AND
THOSE HOLDING PURCHASE-MONEY SECURITY INTERESTS AND PERMITTED INTERESTS.
THE
GRANTOR WILL NOT SELL, LEASE OR OTHERWISE DISPOSE OF THE COLLATERAL OR