Document:

Document

                                                        

Exhibit 10.28

Mitek Systems, Inc.
Directors Deferral Plan
Plan Document

Effective September 30, 2020

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MITEK SYSTEMS, INC.
DIRECTORS DEFERRAL PLAN
PLAN DOCUMENT

 

TABLE OF CONTENTS

						
		Page
	Article 1 Definitions
	4

	Article 2 Eligibility and Enrollment
	4

	2.1    Eligibility
	6

	2.2    Enrollment Requirements
	7

	2.3    Eligibility; Commencement of Participation
	7

	Article 3 Deferral Elections/Crediting
	7

	3.1    Deferral Election
	7

	3.2    Timing of Deferral Elections
	7

	3.3    Withholding of Deferral Amounts
	8

	3.4    Vesting
	8

	3.5    Crediting/Debiting of Account Balances
	8

	3.6    Distributions
	8

	Article 4 Payment Elections
	8

	4.1    Time of Payment
	8

	4.2    Form of Payment
	9

	4.3    Unforeseeable Financial Emergencies
	9

	4.4    Subsequent Election
	9

	Article 5 Distributions
	9

	5.1    Plan Benefit
	10

	5.2    Payment On Change in Control
	10

	5.3    Payment On Separation from Service
	10

	5.4    Payment On Other Payment Triggers
	10

	5.5    Death Prior to Completion of Payment
	10

	Article 6 Beneficiary Designation
	10

	6.1    Beneficiary
	10

	6.2    Beneficiary Designation; Change; Spousal Consent
	11

	6.3    Acknowledgment
	11

	6.4    No Beneficiary Designation
	11

	6.5    Doubt as to Beneficiary
	11
	6.6    Discharge of Obligations
	11

	Article 7 Termination, Amendment or Modification
	11

	7.1    Termination
	11

	7.2    Amendment
	11

	7.3    Plan Agreement
	12

	7.4    Effect of Payment
	12

	Article 8 Administration
	12

	8.1    Committee Duties
	12
	8.2    Administration Upon Change in Control
	12

	8.3    Agents
	13

	8.4    Binding Effect of Decisions
	13

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	8.5    Indemnity of Administrator
	13
	8.6    Missing Payees
	13

	8.7    Payment Delay or Acceleration
	13

	Article 9 Other Benefits and Agreements
	13

	9.1    Coordination with Other Benefits
	13

	Article 10 Claims Procedures
	13

	10.1    Presentation of Claim
	13

	10.2    Notification of Decision
	14

	10.3    Review of a Denied Claim
	14

	10.4    Decision on Review
	14

	10.5    Legal Action
	14
	10.6    Payment Following Resolution of Claim
	14

	Article 11 Miscellaneous
	14

	11.1    Status of Plan
	14

	11.2    Unsecured General Creditor
	15

	11.3    Company Liability
	15

	11.4    Nonassignability
	15

	11.5    Not a Contract of Employment or Retention
	15

	11.6    Furnishing Information
	15

	11.7    Terms
	15

	11.8    Captions
	15

	11.9    Governing Law
	15

	11.10    Notice
	16

	11.11    Successors
	16

	11.12    Spouse’s Interest
	16

	11.13    Validity
	16

	11.14    Incompetent
	16

	11.15    Payments to Spouses
	16

	11.16    Distribution in the Event of Taxation
	16

	11.17    Payment Delays due to Company Insolvency
	17

	11.18    Code Section 409A
	17

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MITEK SYSTEMS, INC.
DIRECTORS DEFERRAL PLAN
PLAN DOCUMENT

 

Introduction
The purpose of this Plan is to provide specified benefits to the non-employee outside directors of Mitek Systems, Inc.  This Plan is unfunded for tax purposes.  This Plan is a new plan, effective with respect to amounts deferred beginning September 30, 2020.
The Company, the Administrator, and the Committee reserve full discretionary authority to operate the Plan to prohibit distributions, elections, or other actions that would trigger taxation under Section 409A of the Code.  This authority includes, but is not limited to, the authority to stop, delay, or review elections or distribution requests.
Article 1
Definitions
For purposes of this Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings:
1.1    “Account Balance” shall mean, at any given time, the balance in a Participant’s Deferral Account.  The Account Balance shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan.
1.2    “Administrator” shall mean the administrator described in Sections 8.1 and 8.2.
1.3    “Beneficiary” shall mean one or more persons, trusts, estates, or other entities, designated in accordance with Article 6, that are entitled to receive benefits under this Plan upon the death of a Participant.
1.4    “Beneficiary Designation Form” shall mean the form (written or electronic) established from time to time by the Administrator that a Participant completes, executes, and submits to the Administrator to designate one or more Beneficiaries.
1.5    “Board” shall mean the board of directors of the Company.
1.6    “Change in Control” shall mean the occurrence of “change in the ownership,” a “change in the effective control” or a “change in the ownership of a substantial portion of the assets” of Mitek Systems, Inc., as determined in accordance with this Section.
In order for an event described below to constitute a Change in Control with respect to a Participant, except as otherwise provided in part (b)(ii) of this Section, the applicable event must relate to the corporation for which the Participant is providing services, the corporation that is liable for payment of the Participant’s Account Balance (or all corporations liable for payment if more than one), as identified by the Committee in accordance with Treas. Reg. §1.409A-3(i)(5)(ii)(A)(2).
In determining whether an event shall be considered a “change in the ownership,” a “change in the effective control” or a “change in the ownership of a substantial portion of the assets” of a corporation, the following provisions shall apply:
(a)    A “change in the ownership” of the applicable corporation shall occur on the date on which any one person, or more than one person acting as a group, acquires ownership of stock of such corporation that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of such corporation, as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(v).  If a 
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person or group is considered either to own more than 50% of the total fair market value or total voting power of the stock of such corporation, or to have effective control of such corporation within the meaning of part (b) of this Section, and such person or group acquires additional stock of such corporation, the acquisition of additional stock by such person or group shall not be considered to cause a “change in the ownership” of such corporation.
(b)    A “change in the effective control” of the applicable corporation shall occur on either of the following dates:
(i)    The date on which any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of such corporation possessing 50% or more of the total voting power of the stock of such corporation, as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(vi).  If a person or group is considered to possess 50% or more of the total voting power of the stock of a corporation, and such person or group acquires additional stock of such corporation, the acquisition of additional stock by such person or group shall not be considered to cause a “change in the effective control” of such corporation; or
(ii)    The date on which a majority of the members of the applicable corporation’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of such corporation’s board of directors before the date of the appointment or election, as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(vi).  In determining whether the event described in the preceding sentence has occurred, the applicable corporation to which the event must relate shall only include a corporation identified in accordance with Treas. Reg. §1.409A-3(i)(5)(ii) for which no other corporation is a majority shareholder. 
(c)    A “change in the ownership of a substantial portion of the assets” of the applicable corporation shall occur on the date on which any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the corporation that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the corporation immediately before such acquisition or acquisitions, as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(vii).  A transfer of assets shall not be treated as a “change in the ownership of a substantial portion of the assets” when such transfer is made to an entity that is controlled by the shareholders of the transferor corporation, as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(vii)(B).
1.1    “Claimant” shall have the meaning set forth in Section 10.1.
1.2    “Code” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time.
1.3    “Committee” shall mean the committee described in Article 8.
1.4    “Company” shall mean Mitek Systems, Inc. and any successor to all or substantially all of the Company’s assets or business.
1.5    “Deferral Account” shall mean (i) the sum of all of a Participant’s Deferral Amounts, plus or less, as the case may be, (ii) amounts credited or debited in accordance with all the applicable crediting provisions of this Plan that relate to the Participant’s Deferral Account, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to his or her Deferral Account.
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1.6    “Deferral Amount” shall mean that portion of a Participant’s Director Equity Pay that a Participant elects to have, and is, deferred in accordance with Article 3.  For the avoidance of doubt, a Deferral Amount may consist of equity that is granted in lieu of cash at the election of the Director. 
1.7    “Director” shall mean any non-employee member of the Board.
1.8    “Director Equity Pay” shall mean the payments (whether payable in cash or stock) made pursuant to an equity award that is granted to a Director under the Mitek Systems, Inc. 2020 Incentive Plan, the Mitek Systems, Inc. 2012 Incentive Plan or the Mitek Systems, Inc. Director Restricted Stock Unit Plan (or any successor plans) and is designated by the Committee as eligible for deferral under this Plan, and shall include any Directors Fees or other cash payments made or payable to a Director that such Director has elected to receive as equity in lieu of cash. Except as designated otherwise by the Committee, Director Equity Pay shall include dividend equivalent rights that are payable under the equity award, if any.
1.9    “Directors Fees” shall mean the annual fees paid by the Company, including retainer fees and meetings fees, chair fees, and lead director fees, as compensation for serving on the Board.
1.10    “Disability” shall mean a medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months and resulting in the Director being unable to engage in any substantial gainful activity.
1.11    “Election Form” shall mean the form (or forms) established from time to time by the Administrator that a Participant completes, executes, and submits to the Administrator to make an election under the Plan.
1.12    “Effective Date” means September 30, 2020.
1.13    “Participant” shall mean any Director (i) who elects to participate in the Plan, (ii) who executes an Election Form and a Beneficiary Designation Form, (iii) whose executed Election Form and Beneficiary Designation Form are accepted by the Administrator, (iv) who commences participation in the Plan, and (v) whose Plan participation has not terminated.  A spouse or former spouse of a Participant shall not be treated as a Participant in the Plan or have an account balance under the Plan, even if he or she has an interest in the Participant’s benefits under the Plan as a result of applicable law or property settlements resulting from legal separation or divorce.
1.14    “Plan” shall mean this Directors Deferral Plan, as it may be amended from time to time.
1.15    “Plan Year” shall mean a period beginning on January 1 of a particular calendar year and continuing through December 31 of such calendar year.  The first Plan Year shall be from September 30, 2020 through and including December 31, 2020.
1.16    “Separation from Service” shall mean a “separation from service,” as such term is defined in Code Section 409A and guidance thereunder, as a Director of the Company for any reason.
1.17    “Unforeseeable Financial Emergency” shall mean severe financial hardship to a Participant resulting from an illness or accident of the Participant or the Participant’s spouse or dependent (as defined in Section 152 of the Code, without regard to Sections 152(b)(1), (b)(2), and (d)(1)(B)) of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, as determined in the sole discretion of the Administrator.

Article 2
Eligibility and Enrollment
2.1    Eligibility
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Participation in the Plan shall be limited to Directors.
2.2    Enrollment Requirements
As a condition to participation, each Director shall complete, execute, and submit to the Committee an Election Form and a Beneficiary Designation Form (unless the Committee permits enrollment without a Beneficiary Designation Form), within the time set by the Committee, in its sole discretion, for the purpose of returning documents and forms.  In addition, the Committee shall establish from time to time such other enrollment requirements as it determines in its sole discretion are necessary.
2.3    Eligibility; Commencement of Participation
A Director shall commence participation in the Plan on the first day of the Plan Year following the date on which he or she has (i) satisfied all Enrollment Requirements and (ii) has had his or her Election Form and Beneficiary Designation Form, if any, accepted by the Committee.  Notwithstanding the previous sentence, the Committee may, in its sole and absolute discretion and only to the extent consistent with the terms of this Plan, permit a Director to commence participation in the Plan mid-Plan Year in accordance with Section 3.2(b) in order to defer Director Equity Pay but only with respect to services to be performed subsequent to the election and only if the election is made within 30 days after the date the Director becomes eligible to participate.

Article 3
Deferral Elections/Crediting
3.1    Deferral Election
A Director may make an irrevocable election to defer a portion of his or her Director Equity Pay for a Plan Year, subject to such rules and any minimum and/or maximum deferrals set by the Committee or in the applicable Election Form.  Deferrals shall be a fixed percentage of the applicable Director Equity Pay.  Except as otherwise provided on the Election Form, for Director Equity Pay that is settled in shares of stock, the number of shares deferred if not a whole number shall be rounded down to the next highest whole number of shares.
3.2    Timing of Deferral Elections
A Director’s Election Form must be received by the Committee no later than the deadline it specifies.  In no event will such date be later than the last day of the Plan Year preceding the Plan Year in which the services begin to be performed for which the Director Equity Pay is awarded (which typically is the year in which the Director Equity Pay is granted); provided, however:
(a)    Newly eligible Participants may make their initial deferral elections as provided in Section 2.3; and
(b)    To the extent permitted by the Committee, Directors may elect to defer Director Equity Pay no later than the following deadline:
(i)    the last day of the Company’s taxable year that ends immediately before the start of the period for which the deferred compensation is considered “fiscal year compensation” (within the meaning of Treas. Reg. § 1.409A-2(a)(6)); or
(ii)    the thirtieth (30th) day after the grant date, to the extent the deferred compensation is subject to a condition requiring the Participant to continue to provide services for a period of at least 12 months from the grant date and provided that such election also is at least 12 months in advance of the earliest date at which the forfeiture condition on such deferred compensation would otherwise lapse (consistent with Treas. Reg. § 1.409A-2(a)(5));
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3.3    Withholding of Deferral Amounts
For each Plan Year, with respect to Equity Pay, the Deferral Amount shall be withheld at the time the shares underlying the Equity Pay are or would have been issued.
3.4    Vesting
A Participant shall always be 100% vested in his or her Deferral Account.
3.5    Crediting/Debiting of Account Balances
In accordance with, and subject to, the rules and procedures that are established from time to time by the Administrator, in its sole discretion, deferral amounts shall be credited or debited to a Participant’s Account Balance in accordance with the following rules:
(a)    Equity Pay.  Notwithstanding any other provision in this Plan and except as otherwise determined by the Administrator, to the extent a Participant elects to defer Director Equity Pay, such portion of the Deferral Amount shall be tracked in common stock of the Company.  Except as otherwise determined by the Administrator, adjustments or substitutions to such shares of common stock shall be made consistent with adjustments or substitutions that are applied under the equity plan pursuant to which the Director Equity Pay award was originally granted.  The Administrator may limit (or prohibit) any change in allocation to or from such Company stock and may establish rules applicable to accounting for, crediting, or allocating any dividends payable on such Company stock.
(b)    No Actual Investment.  Notwithstanding any other provision in this Plan, the crediting of Company stock as to the Deferral Accounts is to be used for measurement purposes only, and the allocation to a Participant’s Account Balance, the calculation of additional amounts and the crediting or debiting of such amounts to a Participant’s Account Balance shall not be considered or construed in any manner as an actual investment of his or her Account Balance in any such Company stock.  Without limiting the foregoing, a Participant’s Account Balance shall at all times be a bookkeeping entry only and shall not represent any investment made on his or her behalf by the Company; the Participant shall at all times remain an unsecured creditor of the Company.
3.6    Distributions
The Company shall withhold from any payments made to a Participant under this Plan all federal, state and local income, employment and other taxes (domestic or foreign) required to be withheld by the Company in connection with such payments, in amounts and in a manner to be determined in the sole discretion of the Company.

Article 4
Payment Elections
4.1    Time of Payment
As part of each Deferral Election made pursuant to Article 3, the Director must specify on the Election Form the applicable time that payment will be made (or will commence), in accordance with rules set forth by the Committee.  For example, the Committee may allow Directors to elect to receive the Deferral Amount (a) as of a specified date, (b) on his or her Separation from Service, or (c) on the earlier of (a) or (b); or any other payment triggers (or combinations of payment triggers) permissible under Code Section 409A.  To the extent permitted by the Committee and on the Election Form, a Participant may elect different times of payment with respect to different percentages or dollar amounts (if applicable) of the Deferral Amount.  Except as otherwise provided on the Election Form, with respect to 
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an election to receive a portion of Director Equity Pay, the number of shares payable on each payment date if not a whole number shall be rounded down to the next highest whole number of shares.  If a Participant fails to make any election as to the time of payment for a Deferral Amount (or a portion thereof), then such amount shall be paid (or begin to be paid) in the month of January next following such Participant’s Separation from Service as a Director.  
4.2    Form of Payment
As part of each Deferral Election made pursuant to Article 3, the Director must specify the applicable form in which payment will be made upon each alternative payment trigger, to the extent permitted by the Committee.  For example, the Committee may allow Directors to elect to receive the Deferral Amount in a single lump sum payment or in annual installments payable over a specified period.  To the extent permitted by the Committee and on the Election Form, the Director may elect different forms of payment with respect to different alternative payment triggers.  If a Participant fails to make any election as to the form of payment for a Deferral Amount (or a portion thereof or an applicable payment trigger permitted pursuant to Section 4.1), then such amount shall be payable in a single lump sum.
Except as otherwise specified by the Committee and on the Election Form, if a Director elects to receive payments in annual installments over a number of years, the installments shall be calculated as follows:  For the Plan Year in which payments begin, the number of shares payable over the installment period shall be calculated as of the close of business on the last business day of the month immediately preceding the month in which payments are scheduled to begin.  For subsequent Plan Years, the number of shares of the Participant shall be calculated as of the close of business on the last business day of the preceding Plan Year.  The annual installment for each Plan Year shall be calculated by multiplying this number of shares by a fraction, the numerator of which is the number of monthly payments to be made during the Plan Year, and the denominator of which is the remaining number of monthly payments due the Participant or Beneficiary.  For purposes of determining the number of shares payable, the number of shares if not a whole number shall be rounded down to the next highest whole number of shares.  Dividend equivalents and accumulated dividends shall be payable using this same method.
4.3    Unforeseeable Financial Emergencies
If the Participant experiences an Unforeseeable Financial Emergency the Participant may petition the Administrator to (i) cancel any deferrals required to be made by a Participant and, if such cancellation is insufficient to satisfy the Unforeseeable Financial Emergency, (ii) receive a partial or full payout from the Plan.  The payout shall not exceed the lesser of the Participant’s Account Balance or the amount reasonably necessary to satisfy the Unforeseeable Financial Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship).  If the Administrator determines that an Unforeseeable Financial Emergency exists, cancellation shall take effect upon the date of such determination, and any payout shall be made thirty (30) days after such date.  Any partial payout shall be deducted from a Participant’s existing Account Balances on a pro rata basis.
4.4    Subsequent Election
After the Deferral Election is irrevocable, a Participant may make an election to change an existing payment election to an allowable alternative payout period by submitting a new Election Form to the Administrator, provided that any such Election Form is submitted at least one (1) year prior to the otherwise applicable payment date and delays the Participant’s initial payment by a period of at least five (5) years.  For purposes of such election changes, the right to a series of installment payments shall be treated as the right to a single payment.
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Article 5
Distributions
5.1    Plan Benefit
Payment of a Participant’s Account Balance shall be made in a single lump sum or shall commence in installments (or in such other form or forms) as elected by the Participant in his or her Deferral Election, subject to any limitations on the form of payment as may be determined by the Committee.  In addition, all amounts distributed from the Plan are intended to be deductible by the Company.  If the Committee determines in good faith that all or a portion of any distribution will not be deductible by the Company solely by reason of the limitation under Section 162(m) of the Code, then such distribution to the Participant will be delayed until the first year in which it is deductible.
5.2    Payment On Change in Control
Notwithstanding anything to the contrary in this Plan or any Deferral Election, in the event of a Change in Control, all Participants shall be paid their Account Balance in full within 5 days of such Change in Control.
5.3    Payment On Separation from Service
Any payment on Separation from Service shall be made (or begin to be made) during the January following such Separation from Service or, if earlier, as soon as practicable following the Participant’s death.  Notwithstanding anything the foregoing, if a Participant is deemed on the date of the Separation from Service to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment that is considered deferred compensation under Code Section 409A payable on account of a “separation from service,” such payment shall not be made until the date which is the earlier of (a) the expiration of the six (6) month period measured from the date of the Participant’s Separation from Service, and (y) the date of the Participant’s death, to the extent required under Code Section 409A.  Upon the expiration of the foregoing delay period, all payments delayed pursuant to the preceding sentence be paid to the Participant in a lump sum, and any remaining payments due shall be paid in accordance with the normal payment dates.
5.4    Payment On Other Payment Triggers
Except as otherwise elected by the Participant or established by the Committee on the Election Form, a payment upon a payment trigger other than Separation from Service will be made (or begin to be made) during the January following such payment trigger.  For example, this rule will apply for payments upon death or Disability.
5.5    Death Prior to Completion of Payment
Unless otherwise elected by the Participant, if a Participant dies after payments begin but before the Account Balance is paid in full, the Participant’s payments shall be paid to the Participant’s Beneficiary in a single lump sum as soon as practicable after the Participant’s death.

Article 6
Beneficiary Designation
6.1    Beneficiary
Each Participant shall have the right, at any time, to designate his or her Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable under the Plan to a beneficiary upon the death of a Participant.  The 
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Beneficiary designated under this Plan may be the same as or different from the Beneficiary designation under any other plan of the Company in which the Participant participates.
6.2    Beneficiary Designation; Change; Spousal Consent
A Participant shall designate his or her Beneficiary or Beneficiaries by completing and executing the Beneficiary Designation Form, and submitting it to the Administrator or its designated agent.  A Participant shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Administrator’s rules and procedures, as in effect from time to time.  If the Participant names someone other than his or her spouse as a Beneficiary, a spousal consent, in the form designated by the Administrator, must be executed by that Participant’s spouse and submitted to the Administrator.  Upon the acceptance by the Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be canceled.  The Committee shall be entitled to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the Administrator prior to such Participant’s death.
6.3    Acknowledgment
No designation or change in designation of a Beneficiary shall be effective until received and acknowledged in writing by the Administrator or its designated agent.
6.4    No Beneficiary Designation
If a Participant fails to designate a Beneficiary as provided in Sections 6.1, 6.2 and 6.3 above or if all designated Beneficiaries predecease the Participant or die prior to complete distribution of the Participant’s benefits, then the Participant’s designated Beneficiary shall be deemed to be his or her surviving spouse.  If the Participant has no surviving spouse, the benefits remaining under the Plan to be paid to a Beneficiary shall be payable to the executor or personal representative of the Participant’s estate in their capacity as such.
6.5    Doubt as to Beneficiary
If the Administrator has any doubt as to the proper Beneficiary to receive payments pursuant to this Plan, the Administrator shall have the right, exercisable in its discretion, to cause the Company to withhold such payments until this matter is resolved to the Administrator’s satisfaction.
6.6    Discharge of Obligations
The payment of benefits under the Plan to a Beneficiary shall fully and completely discharge the Company and the Administrator from all further obligations under this Plan with respect to the Participant, and that Participant’s participation shall terminate upon such full payment of benefits.

Article 7
Termination, Amendment or Modification
7.1    Termination
Although it is anticipated that the Plan will continue for an indefinite period of time, there is no guarantee that the Company will continue the Plan.  Accordingly, the Company reserves the right to discontinue its sponsorship of the Plan and/or to terminate the Plan at any time by action of the Board.  Upon termination of the Plan, the Company will pay each Participant a single lump-sum distribution of his or her entire Account Balance, to the extent consistent with Section 11.18.  The termination of the Plan shall not adversely affect any Participant or Beneficiary who has become entitled to the payment of any benefits under the Plan as of the date of termination.
7.2    Amendment
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The Company may, at any time, through the Board amend or modify the Plan, in whole or in part; provided, however, that: (i) no amendment or modification shall be effective to decrease or restrict the value of a Participant’s Account Balance in existence at the time the amendment or modification is made, calculated as if the Participant had experienced a Separation from Service as of the effective date of the amendment or modification, and (ii) no amendment or modification to clause (i) of this Section 7.2 or Section 8.2 of the Plan shall be effective, absent written consent of the affected Participants.
7.3    Plan Agreement
The terms of any Plan agreement may be different for any Participant, and a Plan agreement may provide additional benefits not set forth in the Plan or limit the benefits otherwise provided under the Plan; provided, however, that any such additional benefits or benefit limitations must be agreed to by both the Company and the Participant.  Despite the provisions of Section 7.2 above, if a Participant’s Plan agreement contains benefits or limitations that are not in this Plan document, the Company may only amend or terminate such provisions with the consent of the Participant.
7.4    Effect of Payment
The full payment of the applicable benefit under Article 5 of the Plan shall completely discharge all obligations to a Participant and his or her designated Beneficiaries under this Plan and the Participant’s Plan participation shall terminate.

Article 8
Administration
8.1    Committee Duties
Except as otherwise provided in this Article 8, this Plan shall be administered by a Committee appointed by the Board, which Committee may consist, in part or in full, of persons who are not on the Board.  Members of the Committee may be Participants under this Plan.  The Committee shall also have the discretion and authority to (i) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Plan and (ii) decide or resolve any and all questions including interpretations of this Plan, as may arise in connection with the Plan.  Any individual serving on the Committee who is a Participant shall not vote or act on any matter relating solely to himself or herself.  When making a determination or calculation, the Committee shall be entitled to rely on information furnished by a Participant or the Company.
8.2    Administration Upon Change in Control
For purposes of this Plan, the Company (via the Committee described in Section 8.1) shall be the “Administrator” at all times prior to the occurrence of a Change in Control.  Upon and after the occurrence of a Change in Control, the “Administrator” shall be an independent third party selected by the Committee and approved by the individual who, immediately prior to such event, was the Company’s Chief Executive Officer or, if not so identified, the Company’s highest ranking officer (the “Ex-CEO”).  The Administrator shall have the discretionary power to determine all questions arising in connection with the administration of the Plan and the interpretation of the Plan, including, but not limited to benefit entitlement determinations.  On and after the occurrence of a Change in Control, the Company must: (1) pay all reasonable administrative expenses and fees of the Administrator; (2) indemnify the Administrator against any costs, expenses and liabilities including, without limitation, attorney’s fees and expenses arising in connection with the performance of the Administrator hereunder, except with respect to matters resulting from the gross negligence or willful misconduct of the Administrator or its employees or agents; and (3) supply full and timely 
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information to the Administrator or all matters relating to the Plan, the Participants and their Beneficiaries, the Account Balances of the Participants, the date of circumstances of the Participants’ Separation from Service or death, and such other pertinent information as the Administrator may reasonably require.  On and after a Change in Control, the Administrator may be terminated (and a replacement appointed) by the only with the approval of the Ex-CEO.
8.3    Agents
In the administration of this Plan, the Administrator may, from time to time, employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel who may be counsel to the Company.
8.4    Binding Effect of Decisions
The decision or action of the Administrator with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.
8.5    Indemnity of Administrator
The Company shall indemnify and hold harmless the members of the Committee, any employee to whom the duties of the Committee may be delegated, and the Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Plan, except in the case of willful misconduct by the Committee, any of its members, any such employee or the Administrator.
8.6    Missing Payees
If the Administrator cannot locate any person or estate entitled to payment of a Plan benefit after a reasonable search, the Administrator may at any time thereafter treat such benefit as forfeited. If the person or estate should later make a valid claim for the benefit or otherwise be located, any amounts so forfeited shall be reinstated (without any interest or earnings adjustment) and paid to the person or estate, as otherwise provided by this Plan, unless the benefit has been escheated to a state government.
8.7    Payment Delay or Acceleration
Notwithstanding any other provision in this Plan, the Administrator may, in its sole and absolute discretion, delay or accelerate payments under the Plan to the extent consistent with Section 11.18.

Article 9
Other Benefits and Agreements
9.1    Coordination with Other Benefits
The benefits provided for a Participant and a Participant’s Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program for Directors.  The Plan shall supplement and shall not supersede, modify or amend any other such plan or program except as may otherwise be expressly provided.

Article 10
Claims Procedures
10.1    Presentation of Claim
Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the Administrator a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan.  If such a claim relates to the contents of a notice received by the 
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Claimant, the claim must be made within 60 days after such notice was received by the Claimant.  All other claims must be made within 180 days of the date on which the event that caused the claim to arise occurred.  The claim must state with particularity the determination desired by the Claimant.
10.2    Notification of Decision
The Administrator shall consider a Claimant’s claim within a reasonable time, and shall notify the Claimant in writing:
(a)    that the Claimant’s requested determination has been made, and that the claim has been allowed in full; or
(b)    that the Administrator has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a manner calculated to be understood by the Claimant:
(i)    the specific reason(s) for the denial of the claim, or any part of it;
(ii)    specific reference(s) to pertinent provisions of the Plan upon which such denial was based;
(iii)    a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and
(iv)    an explanation of the claim review procedure set forth in Section 10.3 below.
10.3    Review of a Denied Claim
Within 60 days after receiving a notice from the Administrator that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s duly authorized representative) may file with the Administrator a written request for a review of the denial of the claim.  In conjunction with filing an appeal (but no later than the date the appeal is filed), the Claimant (or the Claimant’s duly authorized representative):
(a)    may review pertinent documents;
(b)    may submit written comments or other documents; and/or
(c)    may request a hearing, which the Administrator, in its sole discretion, may grant.
10.4    Decision on Review
The Administrator shall render its decision on review promptly, and not later than 60 days after the filing of a written request for review of the denial, unless a hearing is held or other special circumstances require additional time, in which case the Administrator’s decision must be rendered within 120 days after such date.  Such decision must be written in a manner calculated to be understood by the Claimant, and it must contain:
(a)    specific reasons for the decision;
(b)    specific reference(s) to the pertinent Plan provisions upon which the decision was based; and
(c)    such other matters as the Administrator deems relevant.
10.5    Legal Action
A Claimant’s compliance with the foregoing provisions of this Article 10 is a mandatory prerequisite to a Claimant’s right to commence any legal action with respect to any claim for benefits under this Plan.
10.6    Payment Following Resolution of Claim
If a Participant is entitled to a payment following the resolution of a claim pursuant to this Article 10, such payment will be made during the calendar year in which the claim is finally and conclusively resolved, or, if later, at the time set forth in accordance with Article 4 and 5.

Article 11
Miscellaneous
11.1    Status of Plan
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The Plan is not intended to qualify under Code Section 401(a) or be subject to the Employee Retirement Income Security Act of 1974, as amended.
11.2    Unsecured General Creditor
Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of the Company with respect to the Plan.  For purposes of the payment of benefits under this Plan, the Company’s assets shall be, and remain, the general, unpledged unrestricted assets of the Company.  The Company’s obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future.
11.3    Company Liability
The Company’s liability for the payment of benefits shall be defined only by the Plan and any Plan agreement as entered into between the Company and a Participant.  The Company shall have no obligation to a Participant under the Plan except as expressly provided in the Plan.
11.4    Nonassignability
Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable.  No part of the amounts payable shall, prior to actual payment, be subject to seizure, attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person or be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency.
11.5    Not a Contract of Employment or Retention
The terms and conditions of this Plan shall not be deemed to constitute a contract of employment or retention between the Company (or any of its affiliates) and the Participant.  Nothing in this Plan shall be deemed to give a Participant the right to be retained in the service of the Company (or any of its affiliates), either as an employee or a director, or to interfere with the right to discipline or discharge the Participant at any time.
11.6    Furnishing Information
A Participant or his or her Beneficiary will cooperate with the Administrator by furnishing any and all information requested by the Administrator and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Administrator may deem necessary.
11.7    Terms
Whenever any words are used herein in the masculine, they shall be construed as though they were in the feminine in all cases where they would so apply; and whenever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply.
11.8    Captions
The captions of the articles, sections and paragraphs of this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.
11.9    Governing Law
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To the extent United States federal law does not apply, the provisions of this Plan shall be construed and interpreted according to the internal laws of the State of California without regard to its conflicts of laws principles.
11.10    Notice
Any notice or filing required or permitted to be given to the Committee under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below: 
			
	Mitek Systems, Inc.
600 B Street, Suite 100
San Diego, CA 92101
Attn:  General Counsel

Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.
Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Participant.
11.11    Successors
The provisions of this Plan shall bind and inure to the benefit of the Company and its successors and assigns and the Participant and the Participant’s designated Beneficiaries.
11.12    Spouse’s Interest
The interest in the benefits hereunder of a spouse of a Participant who has predeceased the Participant shall automatically pass to the Participant and shall not be transferable by such spouse in any manner, including but not limited to such spouse’s will, nor shall such interest pass under the laws of intestate succession.
11.13    Validity
In case any provision of this Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.
11.14    Incompetent
If the Administrator determines in its discretion that a benefit under this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Administrator may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person.  The Administrator may require proof of minority, incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit.  Any payment of a benefit shall be a payment for the account of the Participant and the Participant’s Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Plan for such payment amount.
11.15    Payments to Spouses
If a court determines that a spouse or former spouse of a Participant has an interest in the Participant’s benefits under the Plan in connection with a property settlement or otherwise, the Administrator, in its sole discretion, shall have the right, notwithstanding any election made by a Participant, to immediately distribute the spouse’s or former spouse’s interest in the Participant’s benefits under the Plan to that spouse or former spouse.  The Plan will honor only those domestic relations orders that satisfy the requirements set forth by the Administrator, which may be modified from time to time without notice to Participants.
11.16    Distribution in the Event of Taxation
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If, for any reason, all or any portion of a Participant’s benefits under this Plan becomes taxable to the Participant under Code Section 409A prior to receipt, an amount equal to the taxable portion of his or her benefit will be distributed immediately to the Participant in the form of a lump sum (which amount shall not exceed the Participant’s unpaid Account Balance under the Plan).  Such a distribution shall affect and reduce the benefits to be paid under this Plan.
11.17    Payment Delays due to Company Insolvency
Notwithstanding any other provision in this Plan, payment of a Participant’s benefits will be delayed in the event that making the payment will jeopardize the ability of the Company to continue as a going concern.  A payment delayed pursuant to this Section 11.17 will be made during the first calendar year in which making the payment would not have such effect.
11.18    Code Section 409A
The Plan is intended to avoid any “plan failures” within the meaning of Code Section 409A(a)(1).  The Plan shall be interpreted and administered, to the extent possible, in accordance with this intention.

IN WITNESS WHEREOF, the Company has executed this Plan document as of:

									
	September 30, 2020		/s/ Jason Gray
			Jason Gray
			Chief Legal Officer
			

17commercialsecurityagr200

  COMMERCIAL SECURITY AGREEMENT  THIS COMMERCIAL SECURITY AGREEMENT  dated November 24, 2020 is made and executed among CONTRAIL  AVIATION SUPPORT, LLC ("Grantor"); CONTRAIL AVIATION SUPPORT, LLC, and CONTRAIL AVIATION LEASING,  LLC ("Borrower"); and OLD NATIONAL BANK ("Lender").  GRANT OF SECURITY INTEREST.  For valuable consideration, Grantor grants to Lender a security interest in  the Collateral to secure the Indebtedness and agrees that Lender shall have the rights stated in this Agreement  with respect to the Collateral, in addition to all other rights which Lender may have by law.  COLLATERAL DESCRIPTION.  The word "Collateral" as used in this Agreement means the following described  property, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever located, in  which Grantor is giving to Lender a security interest for the payment of the Indebtedness and performance of all other  obligations under the Note and this Agreement:  All personal property of every kind and nature, wherever located, whether now owned or hereafter acquired  or arising, whether jointly or severally owned, including all goods (including inventory, equipment, farm  products, consumer goods and any accessions thereto), fixtures, documents, instruments (including  promissory notes), accounts (including health care insurance receivables), securities and all other  investment property, supporting obligations, chattel paper (whether tangible or electronic), commercial tort  claims, deposit accounts, letter of credit rights (whether or not the letter of credit is evidenced by a writing),  and all general intangibles (including, without limitation, all payment intangibles, patents, patent  applications, trademarks, trademark applications, tradenames, trade secrets, copyrights, copyright  applications, software, service marks, goodwill, licenses, permits and agreements of every kind utilized in  the business), all records of any kind relating to the foregoing, together with all cash proceeds, non-cash  proceeds and products thereof, additions and accessions thereto, replacements and substitutions thereof.  This Agreement covers, and is intended to cover, all assets.  In addition, the word "Collateral" also includes all the following, whether now owned or hereafter acquired, whether now  existing or hereafter arising, and wherever located:  (A)  All accessions, attachments, accessories, replacements of and additions to any of the collateral described  herein, whether added now or later.  (B)  All products and produce of any of the property described in this Collateral section.  (C)  All accounts, general intangibles, instruments, rents, monies, payments, and all other rights, arising out of a  sale, lease, consignment or other disposition of any of the property described in this Collateral section.  (D)  All proceeds (including insurance proceeds) from the sale, destruction, loss, or other disposition of any of the  property described in this Collateral section, and sums due from a third party who has damaged or destroyed the  Collateral or from that party's insurer, whether due to judgment, settlement or other process.  (E)  All records and data relating to any of the property described in this Collateral section, whether in the form of a  writing, photograph, microfilm, microfiche, or electronic media, together with all of Grantor's right, title, and interest  in and to all computer software required to utilize, create, maintain, and process any such records or data on  electronic media.  CROSS-COLLATERALIZATION.  In addition to the Note, this Agreement secures all obligations, debts and liabilities,  plus interest thereon, of either Grantor or Borrower to Lender, or any one or more of them, as well as all claims by Lender  against Borrower and Grantor or any one or more of them, whether now existing or hereafter arising, whether related or  unrelated to the purpose of the Note, whether voluntary or otherwise, whether due or not due, direct or indirect,  determined or undetermined, absolute or contingent, liquidated or unliquidated, whether Borrower or Grantor may be  liable individually or jointly with others, whether obligated as guarantor, surety, accommodation party or otherwise, and  whether recovery upon such amounts may be or hereafter may become barred by any statute of limitations, and whether  the obligation to repay such amounts may be or hereafter may become otherwise unenforceable. All loans, including,  but not limited to, Term Loan G as evidenced by the Note, are secured by all of the Collateral on a pari-passu basis.   BORROWER'S WAIVERS AND RESPONSIBILITIES.  Except as otherwise required under this Agreement or by  applicable law,  (A)  Borrower agrees that Lender need not tell Borrower about any action or inaction Lender takes in  connection with this Agreement;  (B)  Borrower assumes the responsibility for being and keeping informed about the  Collateral; and  (C)  Borrower waives any defenses that may arise because of any action or inaction of Lender, including  without limitation any failure of Lender to realize upon the Collateral or any delay by Lender in realizing upon the  Collateral; and Borrower agrees to remain liable under the Note no matter what action Lender takes or fails to take under  this Agreement.  GRANTOR'S REPRESENTATIONS AND WARRANTIES.  Grantor warrants that:  (A)  this Agreement is executed at  Borrower's request and not at the request of Lender;  (B)  Grantor has the full right, power and authority to enter into this  Agreement and to pledge the Collateral to Lender;  (C)  Grantor has established adequate means of obtaining from  Borrower on a continuing basis information about Borrower's financial condition; and  (D)  Lender has made no  representation to Grantor about Borrower or Borrower's creditworthiness.  GRANTOR'S WAIVERS.  Grantor waives all requirements of presentment, protest, demand, and notice of dishonor or  non-payment to Borrower or Grantor, or any other party to the Indebtedness or the Collateral.  Lender may do any of the  following with respect to any obligation of any Borrower, without first obtaining the consent of Grantor:  (A)  grant any  extension of time for any payment,  (B)  grant any renewal,  (C)  permit any modification of payment terms or other terms,  

 

  or  (D)  exchange or release any Collateral or other security.  No such act or failure to act shall affect Lender's rights  against Grantor or the Collateral.  RIGHT OF SETOFF.  To the extent permitted by applicable law, Lender reserves a right of setoff in all Grantor's accounts  with Lender (whether checking, savings, or some other account).  This includes all accounts Grantor holds jointly with  someone else and all accounts Grantor may open in the future.  However, this does not include any IRA or Keogh  accounts, or any trust accounts for which setoff would be prohibited by law.  Grantor authorizes Lender, to the extent  permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts,  and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff  rights provided in this paragraph.  GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL.  With respect to  the Collateral, Grantor represents and promises to Lender that:  Perfection of Security Interest.  Grantor agrees to take whatever actions are requested by Lender to perfect and  continue Lender's security interest in the Collateral.  Upon request of Lender, Grantor will deliver to Lender any and  all of the documents evidencing or constituting the Collateral, and Grantor will note Lender's interest upon any and  all chattel paper and instruments if not delivered to Lender for possession by Lender.  This is a continuing Security  Agreement and will continue in effect even though all or any part of the Indebtedness is paid in full and even  though for a period of time Borrower may not be indebted to Lender.  Notices to Lender.  Grantor will promptly notify Lender in writing at Lender's address shown below (or such other  addresses as Lender may designate from time to time) prior to any  (1)  change in Grantor's name;  (2)  change in  Grantor's assumed business name(s);  (3)  change in the management or in the members or managers of the limited  liability company Grantor;  (4)  change in the authorized signer(s);  (5)  change in Grantor's principal office address;   (6)  change in Grantor's state of organization;  (7)  conversion of Grantor to a new or different type of business entity;  or  (8)  change in any other aspect of Grantor that directly or indirectly relates to any agreements between Grantor  and Lender.  No change in Grantor's name or state of organization will take effect until after Lender has received  notice.    OLD NATIONAL BANK    25 W. Main Street Suite 200     Madison, WI 53703  No Violation.  The execution and delivery of this Agreement will not violate any law or agreement governing Grantor  or to which Grantor is a party, and its membership agreement does not prohibit any term or condition of this  Agreement.  Enforceability of Collateral.  To the extent the Collateral consists of accounts, chattel paper, or general intangibles,  as defined by the Uniform Commercial Code, the Collateral is enforceable in accordance with its terms, is genuine,  and fully complies with all applicable laws and regulations concerning form, content and manner of preparation and  execution, and all persons appearing to be obligated on the Collateral have authority and capacity to contract and  are in fact obligated as they appear to be on the Collateral.  There shall be no setoffs or counterclaims against any  of the Collateral, and no agreement shall have been made under which any deductions or discounts may be claimed  concerning the Collateral except those disclosed to Lender in writing.  Location of the Collateral.  Except in the ordinary course of Grantor's business, Grantor agrees to keep the  Collateral at Grantor's address shown above or at such other locations as are acceptable to Lender.  Upon Lender's  request, Grantor will deliver to Lender in form satisfactory to Lender a schedule of real properties and Collateral  locations relating to Grantor's operations, including without limitation the following:  (1)  all real property Grantor owns  or is purchasing;  (2)   all real property Grantor is renting or leasing;  (3)  all storage facilities Grantor owns, rents,  leases, or uses; and  (4)  all other properties where Collateral is or may be located.  Removal of the Collateral.  Except in the ordinary course of Grantor's business,  Grantor shall not remove the  Collateral from its existing location without Lender's prior written consent.  Grantor shall, whenever requested, advise  Lender of the exact location of the Collateral.    Transactions Involving Collateral.  Except for inventory sold or accounts collected in the ordinary course of  Grantor's business, or as otherwise provided for in this Agreement, Grantor shall not sell, offer to sell, or otherwise  transfer or dispose of the Collateral. Grantor shall not pledge, mortgage, encumber or otherwise permit the Collateral  to be subject to any lien, security interest, encumbrance, or charge, other than the security interest provided for in  this Agreement, without the prior written consent of Lender.  This includes security interests even if junior in right to  the security interests granted under this Agreement.  Unless waived by Lender, all proceeds from any disposition of  the Collateral (for whatever reason) shall be held in trust for Lender and shall not be commingled with any other  funds; provided however, this requirement shall not constitute consent by Lender to any sale or other disposition.   Upon receipt, Grantor shall immediately deliver any such proceeds to Lender.   Title.  Grantor represents and warrants to Lender that Grantor holds good and marketable title to the Collateral, free  and clear of all liens and encumbrances except for the lien of this Agreement.  No financing statement covering any  of the Collateral is on file in any public office other than those which reflect the security interest created by this  Agreement or to which Lender has specifically consented.  Grantor shall defend Lender's rights in the Collateral  against the claims and demands of all other persons.  Repairs and Maintenance.  Grantor agrees to keep and maintain, and to cause others to keep and maintain, the  Collateral in good order, repair and condition at all times while this Agreement remains in effect.  Grantor further  agrees to pay when due all claims for work done on, or services rendered or material furnished in connection with  the Collateral so that no lien or encumbrance may ever attach to or be filed against the Collateral.  Inspection of Collateral.  Lender and Lender's designated representatives and agents shall have the right at all  reasonable times to examine and inspect the Collateral wherever located.  

 

  Taxes, Assessments and Liens.  Grantor will pay when due all taxes, assessments and liens upon the Collateral,  its use or operation, upon this Agreement, upon any promissory note or notes evidencing the Indebtedness, or upon  any of the other Related Documents.  Grantor may withhold any such payment or may elect to contest any lien if  Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender's  interest in the Collateral is not jeopardized in Lender's sole opinion.  If the Collateral is subjected to a lien which is  not discharged within fifteen (15) days, Grantor shall deposit with Lender cash, a sufficient corporate surety bond or  other security satisfactory to Lender in an amount adequate to provide for the discharge of the lien plus any interest,  costs, attorneys' fees or other charges that could accrue as a result of foreclosure or sale of the Collateral.  In any  contest Grantor shall defend itself and Lender and shall satisfy any final adverse judgment before enforcement  against the Collateral.  Grantor shall name Lender as an additional obligee under any surety bond furnished in the  contest proceedings.  Grantor further agrees to furnish Lender with evidence that such taxes, assessments, and  governmental and other charges have been paid in full and in a timely manner.  Grantor may withhold any such  payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest  the obligation to pay and so long as Lender's interest in the Collateral is not jeopardized.  Compliance with Governmental Requirements.  Grantor shall comply promptly with all laws, ordinances, rules  and regulations of all governmental authorities, now or hereafter in effect, applicable to the ownership, production,  disposition, or use of the Collateral, including all laws or regulations relating to the undue erosion of highly-erodible  land or relating to the conversion of wetlands for the production of an agricultural product or commodity.  Grantor  may contest in good faith any such law, ordinance or regulation and withhold compliance during any proceeding,  including appropriate appeals, so long as Lender's interest in the Collateral, in Lender's opinion, is not jeopardized.  Hazardous Substances.  Grantor represents and warrants that the Collateral never has been, and never will be so  long as this Agreement remains a lien on the Collateral, used in violation of any Environmental Laws or for the  generation, manufacture, storage, transportation, treatment, disposal, release or threatened release of any  Hazardous Substance.  The representations and warranties contained herein are based on Grantor's due diligence  in investigating the Collateral for Hazardous Substances.  Grantor hereby  (1)  releases and waives any future claims  against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under  any Environmental Laws, and  (2)  agrees to indemnify, defend, and hold harmless Lender against any and all claims  and losses resulting from a breach of this provision of this Agreement.  This obligation to indemnify and defend shall  survive the payment of the Indebtedness and the satisfaction of this Agreement.  Maintenance of Casualty Insurance.  Grantor shall procure and maintain all risks insurance, including without  limitation fire, theft and liability coverage together with such other insurance as Lender may require with respect to  the Collateral, in form, amounts, coverages and basis reasonably acceptable to Lender and issued by a company or  companies reasonably acceptable to Lender.  Grantor, upon request of Lender, will deliver to Lender from time to  time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will  not be cancelled or diminished without at least ten (10) days' prior written notice to Lender and not including any  disclaimer of the insurer's liability for failure to give such a notice.  Each insurance policy also shall include an  endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or  default of Grantor or any other person.  In connection with all policies covering assets in which Lender holds or is  offered a security interest, Grantor will provide Lender with such loss payable or other endorsements as Lender may  require.  If Grantor at any time fails to obtain or maintain any insurance as required under this Agreement, Lender  may (but shall not be obligated to) obtain such insurance as Lender deems appropriate, including if Lender so  chooses "single interest insurance," which will cover only Lender's interest in the Collateral.  Application of Insurance Proceeds.  Grantor shall promptly notify Lender of any loss or damage to the Collateral,  whether or not such casualty or loss is covered by insurance.  Lender may make proof of loss if Grantor fails to do  so within fifteen (15) days of the casualty.  All proceeds of any insurance on the Collateral, including accrued  proceeds thereon, shall be held by Lender as part of the Collateral.  If Lender consents to repair or replacement of  the damaged or destroyed Collateral, Lender shall, upon satisfactory proof of expenditure,  pay or reimburse Grantor  from the proceeds for the reasonable cost of repair or restoration.  If Lender does not consent to repair or replacement  of the Collateral, Lender shall retain a sufficient amount of the proceeds to pay all of the Indebtedness, and shall pay  the balance to Grantor.  Any proceeds which have not been disbursed within six (6) months after their receipt and  which Grantor has not committed to the repair or restoration of the Collateral shall be used to prepay the  Indebtedness.  Insurance Reserves.  Lender may require Grantor to maintain with Lender reserves for payment of insurance  premiums, which reserves shall be created by monthly payments from Grantor of a sum estimated by Lender to be  sufficient to produce, at least fifteen (15) days before the premium due date, amounts at least equal to the insurance  premiums to be paid.  If fifteen (15) days before payment is due, the reserve funds are insufficient, Grantor shall  upon demand pay any deficiency to Lender.  The reserve funds shall be held by Lender as a general deposit and  shall constitute a non-interest-bearing account which Lender may satisfy by payment of the insurance premiums  required to be paid by Grantor as they become due.  Lender does not hold the reserve funds in trust for Grantor, and  Lender is not the agent of Grantor for payment of the insurance premiums required to be paid by Grantor.  The  responsibility for the payment of premiums shall remain Grantor's sole responsibility.  Insurance Reports.  Grantor, upon request of Lender, shall furnish to Lender reports on each existing policy of  insurance showing such information as Lender may reasonably request including the following:  (1)  the name of the  insurer;  (2)  the risks insured;  (3)  the amount of the policy;  (4)  the property insured;  (5)  the then current value  on the basis of which insurance has been obtained and the manner of determining that value; and  (6)  the expiration  date of the policy.  In addition, Grantor shall upon request by Lender (however not more often than annually) have  an independent appraiser satisfactory to Lender determine, as applicable, the cash value or replacement cost of the  Collateral.  

 

  Financing Statements.  Grantor authorizes Lender to file a UCC financing statement, or alternatively, a copy of this  Agreement to perfect Lender's security interest.  At Lender's request, Grantor additionally agrees to sign all other  documents that are necessary to perfect, protect, and continue Lender's security interest in the Property.  Grantor  will pay all filing fees, title transfer fees, and other fees and costs involved unless prohibited by law or unless Lender  is required by law to pay such fees and costs.  Grantor irrevocably appoints Lender to execute documents necessary  to transfer title if there is a default.  Lender may file a copy of this Agreement as a financing statement.  GRANTOR'S RIGHT TO POSSESSION.  Until default, Grantor may have possession of the tangible personal property  and beneficial use of all the Collateral and may use it in any lawful manner not inconsistent with this Agreement or the  Related Documents, provided that Grantor's right to possession and beneficial use shall not apply to any Collateral where  possession of the Collateral by Lender is required by law to perfect Lender's security interest in such Collateral.  If Lender  at any time has possession of any Collateral, whether before or after an Event of Default, Lender shall be deemed to  have exercised reasonable care in the custody and preservation of the Collateral if Lender takes such action for that  purpose as Grantor shall request or as Lender, in Lender's sole discretion, shall deem appropriate under the  circumstances, but failure to honor any request by Grantor shall not of itself be deemed to be a failure to exercise  reasonable care.  Lender shall not be required to take any steps necessary to preserve any rights in the Collateral against  prior parties, nor to protect, preserve or maintain any security interest given to secure the Indebtedness.  LENDER'S EXPENDITURES.  If any action or proceeding is commenced that would materially affect Lender's interest  in the Collateral or if Grantor fails to comply with any provision of this Agreement or any Related Documents, including  but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay  under this Agreement or any Related Documents, Lender on Grantor's behalf may (but shall not be obligated to) take  any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security  interests, encumbrances and other claims, at any time levied or placed on the Collateral and paying all costs for insuring,  maintaining and preserving the Collateral.  All such expenditures incurred or paid by Lender for such purposes will then  bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by  Grantor.  All such expenses will become a part of the Indebtedness and, at Lender's option, will  (A)  be payable on  demand;  (B)  be added to the balance of the Note and be apportioned among and be payable with any installment  payments to become due during either  (1)  the term of any applicable insurance policy; or  (2)  the remaining term of  the Note; or  (C)  be treated as a balloon payment which will be due and payable at the Note's maturity.  The Agreement  also will secure payment of these amounts.  Such right shall be in addition to all other rights and remedies to which  Lender may be entitled upon the occurrence of any Event of Default.  DEFAULT.  Each of the following shall constitute an Event of Default under this Agreement:  Payment Default.  Borrower fails to make any payment when due under the Indebtedness.  Other Defaults.  Borrower or Grantor fails to comply with or to perform any other term, obligation, covenant or  condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term,  obligation, covenant or condition contained in any other agreement between Lender and Borrower or Grantor.  Default in Favor of Third Parties.  Borrower, any guarantor or Grantor defaults under any loan, extension of credit,  security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person  that may materially affect any of Borrower's, any guarantor's or Grantor's property or ability to perform their respective  obligations under this Agreement or any of the Related Documents.  False Statements.  Any warranty, representation or statement made or furnished to Lender by Borrower or Grantor  or on Borrower's or Grantor's behalf under this Agreement or the Related Documents is false or misleading in any  material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.  Defective Collateralization.  This Agreement or any of the Related Documents ceases to be in full force and effect  (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and  for any reason.  Insolvency.  The dissolution of Grantor (regardless of whether election to continue is made), any member withdraws  from the limited liability company, or any other termination of Borrower's or Grantor's existence as a going business  or the death of any member, the insolvency of Borrower or Grantor, the appointment of a receiver for any part of  Borrower's or Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the  commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower or Grantor.  Creditor or Forfeiture Proceedings.  Commencement of foreclosure or forfeiture proceedings, whether by judicial  proceeding, self-help, repossession or any other method, by any creditor of Borrower or Grantor or by any  governmental agency against any collateral securing the Indebtedness.  This includes a garnishment of any of  Borrower's or Grantor's accounts, including deposit accounts, with Lender.  However, this Event of Default shall not  apply if there is a good faith dispute by Borrower or Grantor as to the validity or reasonableness of the claim which  is the basis of the creditor or forfeiture proceeding and if Borrower or Grantor gives Lender written notice of the  creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture  proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the  dispute.   Events Affecting Guarantor.  Any of the preceding events occurs with respect to any Guarantor of any of the  Indebtedness or Guarantor dies or becomes incompetent or revokes or disputes the validity of, or liability under, any  Guaranty of the Indebtedness.  Adverse Change.  A material adverse change occurs in Borrower's or Grantor's financial condition, or Lender  believes the prospect of payment or performance of the Indebtedness is impaired.  Cure Provisions.  If any default, other than a default in payment, is curable and if Grantor has not been given a  notice of a breach of the same provision of this Agreement within the preceding twelve (12) months, it may be cured  

 

  if Grantor, after Lender sends written notice to Borrower demanding cure of such default:  (1)  cures the default within  fifteen (15) days; or  (2)  if the cure requires more than fifteen (15) days, immediately initiates steps which Lender  deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all  reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.  RIGHTS AND REMEDIES ON DEFAULT.  If an Event of Default occurs under this Agreement, at any time thereafter,  Lender shall have all the rights of a secured party under the Wisconsin Uniform Commercial Code.  In addition and  without limitation, Lender may exercise any one or more of the following rights and remedies:  Accelerate Indebtedness.  Lender may declare the entire Indebtedness, including any prepayment penalty which  Borrower would be required to pay, immediately due and payable, without notice of any kind to Borrower or Grantor.  Assemble Collateral.  Lender may require Grantor to deliver to Lender all or any portion of the Collateral and any  and all certificates of title and other documents relating to the Collateral.  Lender may require Grantor to assemble  the Collateral and make it available to Lender at a place to be designated by Lender.  Lender also shall have full  power to enter upon the property of Grantor to take possession of and remove the Collateral.  If the Collateral  contains other goods not covered by this Agreement at the time of repossession, Grantor agrees Lender may take  such other goods, provided that Lender makes reasonable efforts to return them to Grantor after repossession.  Sell the Collateral.  Lender shall have full power to sell, lease, transfer, or otherwise deal with the Collateral or  proceeds thereof in Lender's own name or that of Grantor.  Lender may sell the Collateral at public auction or private  sale.  Unless the Collateral threatens to decline speedily in value or is of a type customarily sold on a recognized  market, Lender will give Grantor, and other persons as required by law, reasonable notice of the time and place of  any public sale, or the time after which any private sale or any other disposition of the Collateral is to be made.   However, no notice need be provided to any person who, after Event of Default occurs, enters into and authenticates  an agreement waiving that person's right to notification of sale.  The requirements of reasonable notice shall be met  if such notice is given at least ten (10) days before the time of the sale or disposition.  All expenses relating to the  disposition of the Collateral, including without limitation the expenses of retaking, holding, insuring, preparing for sale  and selling the Collateral, shall become a part of the Indebtedness secured by this Agreement and shall be payable  on demand, with interest at the Note rate from date of expenditure until repaid.  Appoint Receiver.  Lender shall have the right to have a receiver appointed to take possession of all or any part of  the Collateral, with the power to protect and preserve the Collateral, to operate the Collateral preceding foreclosure  or sale, and to collect the rents from the Collateral and apply the proceeds, over and above the cost of the  receivership, against the Indebtedness or as the court may direct.  The receiver may serve without bond if permitted  by law.  Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Collateral  exceeds the Indebtedness by a substantial amount.  Employment by Lender shall not disqualify a person from serving  as a receiver.  Collect Revenues, Apply Accounts.  Lender, either itself or through a receiver, may collect the payments, rents,  income, and revenues from the Collateral.  Lender may at any time in Lender's discretion transfer any Collateral into  Lender's own name or that of Lender's nominee and receive the payments, rents, income, and revenues therefrom  and hold the same as security for the Indebtedness or apply it to payment of the Indebtedness in such order of  preference as Lender may determine.  Insofar as the Collateral consists of accounts, general intangibles, insurance  policies, instruments, chattel paper, choses in action, or similar property, Lender may demand, collect, receipt for,  settle, compromise, adjust, sue for, foreclose, or realize on the Collateral as Lender may determine, whether or not  Indebtedness or Collateral is then due.  For these purposes, Lender may, on behalf of and in the name of Grantor,  receive, open and dispose of mail addressed to Grantor; change any address to which mail and payments are to be  sent; and endorse notes, checks, drafts, money orders, documents of title, instruments and items pertaining to  payment, shipment, or storage of any Collateral.  To facilitate collection, Lender may notify account debtors and  obligors on any Collateral to make payments directly to Lender.  Obtain Deficiency.  If Lender chooses to sell any or all of the Collateral, Lender may obtain a judgment against  Borrower for any deficiency remaining on the Indebtedness due to Lender after application of all amounts received  from the exercise of the rights provided in this Agreement.  Borrower shall be liable for a deficiency even if the  transaction described in this subsection is a sale of accounts or chattel paper.    Other Rights and Remedies.  Lender shall have all the rights and remedies of a secured creditor under the  provisions of the Uniform Commercial Code, as may be amended from time to time.  In addition, Lender shall have  and may exercise any or all other rights and remedies it may have available at law, in equity, or otherwise.  Election of Remedies.  Except as may be prohibited by applicable law, all of Lender's rights and remedies, whether  evidenced by this Agreement, the Related Documents, or by any other writing, shall be cumulative and may be  exercised singularly or concurrently.  Election by Lender to pursue any remedy shall not exclude pursuit of any other  remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this  Agreement, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its  remedies.  COLLATERAL INSPECTION/APPRAISAL COST REIMBURSEMENT. Upon such frequency as Lender may determine  and whether or not Borrower or Grantor is in default, Lender shall be entitled to perform and Grantor shall cooperate  with examinations, inspections, audits and appraisals as provided herein.  Grantor shall maintain complete and accurate  books and records with respect to Collateral.   Upon advance notice by Lender to Grantor, Grantor shall permit access  thereto by Lender and by Lender's designated representatives and agents for purposes of inspection, copying and/or  auditing.  Lender and Lender's designated representatives and agents shall also have the right upon advance notice to  examine, inspect and/or appraise any Collateral wherever located.  Subject to any limitations under applicable law,  Grantor shall reimburse Lender for any professional fees or other expenses incurred by Lender in connection with any  examinations, inspections or audits of the books and records of Grantor and/or any examinations, inspections and/or  

 

  appraisals of the Collateral.  MISCELLANEOUS PROVISIONS.  The following miscellaneous provisions are a part of this Agreement:  Amendments.  This Agreement, together with any Related Documents, constitutes the entire understanding and  agreement of the parties as to the matters set forth in this Agreement.  No alteration of or amendment to this  Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound  by the alteration or amendment.  Attorneys' Fees; Expenses.  Grantor agrees to pay upon demand all of Lender's costs and expenses, including  Lender's attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Agreement.   Lender may hire or pay someone else to help enforce this Agreement, and Grantor shall pay the costs and expenses  of such enforcement.  Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there  is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or  vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services.  Grantor  also shall pay all court costs and such additional fees as may be directed by the court.  Caption Headings.  Caption headings in this Agreement are for convenience purposes only and are not to be used  to interpret or define the provisions of this Agreement.  Governing Law.  This Agreement will be governed by federal law applicable to Lender and, to the extent not  preempted by federal law, the laws of the State of Wisconsin without regard to its conflicts of law provisions.   This Agreement has been accepted by Lender in the State of Wisconsin.  Choice of Venue.  If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the  courts of Dane County, State of Wisconsin.  Joint and Several Liability.  All obligations of Borrower and Grantor under this Agreement shall be joint and several,  and all references to Grantor shall mean each and every Grantor, and all references to Borrower shall mean each  and every Borrower.  This means that each Borrower and Grantor signing below is responsible for all obligations in  this Agreement.  Where any one or more of the parties is a corporation, partnership, limited liability company or  similar entity, it is not necessary for Lender to inquire into the powers of any of the officers, directors, partners,  members, or other agents acting or purporting to act on the entity's behalf, and any obligations made or created in  reliance upon the professed exercise of such powers shall be guaranteed under this Agreement.  No Waiver by Lender.  Lender shall not be deemed to have waived any rights under this Agreement unless such  waiver is given in writing and signed by Lender.  No delay or omission on the part of Lender in exercising any right  shall operate as a waiver of such right or any other right.  A waiver by Lender of a provision of this Agreement shall  not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any  other provision of this Agreement.  No prior waiver by Lender, nor any course of dealing between Lender and Grantor,  shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions.   Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any  instance shall not constitute continuing consent to subsequent instances where such consent is required and in all  cases such consent may be granted or withheld in the sole discretion of Lender.  Notices.  Any notice required to be given under this Agreement shall be given in writing, and shall be effective when  actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with  a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class,  certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Agreement.   Any party may change its address for notices under this Agreement by giving formal written notice to the other  parties, specifying that the purpose of the notice is to change the party's address.  For notice purposes, Grantor  agrees to keep Lender informed at all times of Grantor's current address.  Unless otherwise provided or required by  law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all  Grantors.  Power of Attorney.  Grantor hereby appoints Lender as Grantor's irrevocable attorney-in-fact for the purpose of  executing any documents necessary to perfect, amend, or to continue the security interest granted in this Agreement  or to demand termination of filings of other secured parties.  Lender may at any time, and without further authorization  from Grantor, file a carbon, photographic or other reproduction of any financing statement or of this Agreement for  use as a financing statement.  Grantor will reimburse Lender for all expenses for the perfection and the continuation  of the perfection of Lender's security interest in the Collateral.  Severability.  If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or  unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or  unenforceable as to any other circumstance.  If feasible, the offending provision shall be considered modified so that  it becomes legal, valid and enforceable.  If the offending provision cannot be so modified, it shall be considered  deleted from this Agreement.  Unless otherwise required by law, the illegality, invalidity, or unenforceability of any  provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this  Agreement.  Successors and Assigns.  Subject to any limitations stated in this Agreement on transfer of Grantor's interest, this  Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns.  If ownership  of the Collateral becomes vested in a person other than Grantor, Lender, without notice to Grantor, may deal with  Grantor's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension  without releasing Grantor from the obligations of this Agreement or liability under the Indebtedness.  Survival of Representations and Warranties.  All representations, warranties, and agreements made by Grantor  in this Agreement shall survive the execution and delivery of this Agreement, shall be continuing in nature, and shall  remain in full force and effect until such time as Borrower's Indebtedness shall be paid in full.  

 

  Time is of the Essence.  Time is of the essence in the performance of this Agreement.  DEFINITIONS.  The following capitalized words and terms shall have the following meanings when used in this  Agreement.  Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful  money of the United States of America.  Words and terms used in the singular shall include the plural, and the plural  shall include the singular, as the context may require.  Words and terms not otherwise defined in this Agreement shall  have the meanings attributed to such terms in the Uniform Commercial Code:    Agreement.  The word "Agreement" means this Commercial Security Agreement, as this Commercial Security  Agreement may be amended or modified from time to time, together with all exhibits and schedules attached to this  Commercial Security Agreement from time to time.    Borrower.  The word "Borrower" means CONTRAIL AVIATION SUPPORT, LLC; and CONTRAIL AVIATION  LEASING, LLC and includes all co-signers and co-makers signing the Note and all their successors and assigns.  Collateral.  The word "Collateral" means all of Grantor's right, title and interest in and to all the Collateral as described  in the Collateral Description section of this Agreement.  Environmental Laws.  The words "Environmental Laws" mean any and all state, federal and local statutes,  regulations and ordinances relating to the protection of human health or the environment, including without limitation  the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C.  Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99- 499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource  Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or  regulations adopted pursuant thereto.  Event of Default.  The words "Event of Default" mean any of the events of default set forth in this Agreement in the  default section of this Agreement.  Grantor.  The word "Grantor" means CONTRAIL AVIATION SUPPORT, LLC.   Guarantor.  The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the  Indebtedness.  Guaranty.  The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a  guaranty of all or part of the Note.  Hazardous Substances.  The words "Hazardous Substances" mean materials that, because of their quantity,  concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to  human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured,  transported or otherwise handled.  The words "Hazardous Substances" are used in their very broadest sense and  include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under  the Environmental Laws.  The term "Hazardous Substances" also includes, without limitation, petroleum and  petroleum by-products or any fraction thereof and asbestos.  Indebtedness.  The word "Indebtedness" means the indebtedness evidenced by the Note or Related Documents,  including all principal and interest together with all other indebtedness and costs and expenses for which Borrower  is responsible under this Agreement or under any of the Related Documents.  Specifically, without limitation,  Indebtedness includes all amounts that may be indirectly secured by the Cross-Collateralization provision of this  Agreement.  Lender.  The word "Lender" means OLD NATIONAL BANK, its successors and assigns.    Note.  The word "Note" means the Note dated November 24, 2020 and executed by CONTRAIL AVIATION  SUPPORT, LLC; and CONTRAIL AVIATION LEASING, LLC in the principal amount of $43,598,000.00 together with  all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or  credit agreement.  Property.  The word "Property" means all of Grantor's right, title and interest in and to all the Property as described  in the "Collateral Description" section of this Agreement.  Related Documents.  The words "Related Documents" mean all promissory notes, credit agreements, loan  agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security  deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter  existing, executed in connection with the Indebtedness.    [Signature Page Follows]

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