Legal Debtor Forms

LEGAL DEBTOR STATEMENT AND SECURITY AGREEMENT

This Debtor Statement and Security Agreement (the Agreement) is made on by and between Debtor Name: , whose principal address is and Secured Party (Creditor) Name: , whose principal address is .

RECITALS

WHEREAS, Debtor represents that Debtor is lawfully obligated to the Secured Party and has requested credit, accommodation or other financial accommodations from the Secured Party; and

WHEREAS, in connection with such credit or accommodation, Debtor has provided material information about Debtor's assets, liabilities and financial condition and the Secured Party requires a security interest in certain property of Debtor as collateral for payment and performance; and

WHEREAS, Debtor desires to disclose to Secured Party, and to grant and create with respect to certain property a continuing security interest, on the terms and conditions set forth in this Agreement.

NOW, THEREFORE

In consideration of the premises and other good and valuable consideration, the parties agree as follows:

1. DEFINITIONS

1.1 "Collateral" means all property and assets of Debtor described in Schedule A attached hereto and all proceeds, products, substitutions and replacements thereof. Debtor shall describe primary collateral below and provide additional detail in Schedule A.

2. DEBTOR REPRESENTATIONS AND WARRANTIES

2.1 Debtor represents and warrants that Debtor is the owner of the Collateral, free and clear of any lien, security interest, encumbrance, or adverse claim except those disclosed in writing to Secured Party and identified in Schedule B. Debtor will not grant any subsequent security interest in the Collateral without Secured Party's prior written consent.

2.2 All information provided by Debtor to Secured Party concerning Debtor's financial condition, assets and liabilities, whether in writing or verbally, is true, complete and correct as of the date provided, and there has been no material adverse change since such date unless disclosed in writing to Secured Party.

3. FINANCIAL DISCLOSURE

3.1 Debtor certifies that the financial statement provided to Secured Party accurately reflects Debtor's assets, liabilities, income and expenses as of the date indicated below and that all accounts and obligations of Debtor are included unless otherwise noted.

4. GRANT OF SECURITY INTEREST

4.1 Debtor hereby grants to Secured Party a continuing security interest in the Collateral to secure all present and future obligations of Debtor to Secured Party, whether absolute or contingent, and including both principal and interest, costs of collection, and other sums due (the Secured Obligations).

4.2 Debtor authorizes Secured Party to file any financing statements, continuation statements or other instruments necessary to perfect and continue perfection of the security interest granted hereunder in each jurisdiction in which Debtor may have rights in Collateral.

5. COVENANTS OF DEBTOR

5.1 Debtor shall keep the Collateral in good condition, shall not remove, transfer, or dispose of Collateral except in the ordinary course of business or with the prior written consent of Secured Party, and shall not permit additional liens to be created on the Collateral without Secured Party's written consent.

5.2 Debtor shall maintain insurance covering the Collateral in commercially reasonable amounts with loss payable to Secured Party as loss payee where applicable, and shall provide evidence of such insurance upon Secured Party's request.

6. EVENTS OF DEFAULT

6.1 The following shall constitute an Event of Default: (a) Debtor's failure to pay or perform any Secured Obligation when due; (b) any representation or warranty made by Debtor proves to be false or misleading in any material respect; (c) Debtor becomes insolvent or makes an assignment for the benefit of creditors; or (d) a court enters an order appointing a receiver for a substantial portion of Debtor's assets.

7. REMEDIES

7.1 Upon the occurrence of an Event of Default, Secured Party may, to the fullest extent permitted by law, declare all Secured Obligations immediately due and payable, foreclose the security interest, take possession of the Collateral without judicial process where permitted, sell or otherwise dispose of the Collateral at public or private sale and apply proceeds to the Secured Obligations after deducting reasonable expenses.

7.2 Secured Party shall have all rights, remedies and notices provided by applicable law, and exercise of one remedy shall not preclude the exercise of others.

8. NOTICES

8.1 All notices, requests and demands required or permitted under this Agreement shall be in writing and shall be deemed given when delivered personally, sent by certified mail, return receipt requested, or by overnight courier to the addresses set forth below or to such other address as either party designates by notice to the other.

9. GOVERNING LAW

9.1 This Agreement shall be governed by and construed in accordance with the laws of the state of without regard to its conflicts of law provisions.

10. ENTIRE AGREEMENT; SEVERABILITY

10.1 This Agreement, together with any Schedules and other documents executed in connection herewith, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, agreements, representations and understandings, whether written or oral.

10.2 If any provision of this Agreement is held to be invalid, illegal or unenforceable under applicable law, such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability without affecting the remaining provisions hereof, which shall remain in full force and effect.

11. AMENDMENTS; WAIVER; COUNTERPARTS

11.1 No amendment or modification of this Agreement shall be effective unless in writing and executed by both parties. No waiver of any provision shall be effective unless signed by the party waiving compliance, and no single waiver shall operate as a waiver of any other or subsequent default.

11.2 This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.

12. ADDITIONAL CERTIFICATIONS

12.1 Debtor certifies under penalty of perjury that the information set forth in this Agreement and any schedules or financial statements delivered in connection herewith is true, correct and complete to the best of Debtor's knowledge, and that Debtor will promptly notify Secured Party of any material change to such information.

SCHEDULE A — COLLATERAL DETAIL

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