Legal Security Contract

LEGAL SECURITY CONTRACT

This Security Agreement (the Agreement) is made as of the day of , , by and between Secured Party: , entity type Individual Corporation LLC, with principal place of business at , and Grantor: , entity type Individual Corporation LLC, with principal place of business at .

Recitals

WHEREAS, Grantor is indebted to Secured Party under that certain obligation described as: in the maximum principal amount of (the Obligations);

WHEREAS, as security for the prompt and complete payment and performance of the Obligations, Grantor desires to grant and does hereby grant to Secured Party a security interest in the Collateral (as defined below);

WHEREAS, Secured Party is willing to accept such security interest and to take such actions as are reasonably necessary to create, perfect and maintain such security interest under applicable law.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the Parties agree as follows:

1. Definitions

1.1. "Collateral" means all assets, property and rights of Grantor described in Schedule A attached hereto and all proceeds, products, accessions and replacements thereof, including without limitation accounts, chattel paper, inventory, equipment, instruments, general intangibles and receivables.

1.2. "Obligations" means all debts, liabilities and obligations of Grantor to Secured Party now existing or hereafter arising, whether direct or indirect, absolute or contingent, including principal, interest, fees, expenses and indemnities.

2. Grant of Security Interest

2.1. Grant. Grantor hereby grants to Secured Party a continuing security interest in, lien upon and right of setoff against all of Grantor's right, title and interest in and to the Collateral to secure the prompt and complete payment and performance of the Obligations.

2.2. After-Acquired Property. The security interest granted hereunder extends to after-acquired property of Grantor to the fullest extent permitted by applicable law. Include after-acquired property: Inventory Accounts Equipment General Intangibles

3. Collateral Description; Schedule A

3.1. Collateral Description. The Collateral consists of the property described in Schedule A. Grantor authorizes Secured Party to file financing statements or similar instruments listing the Collateral or Grantor's trade name.

4. Obligations Secured

4.1. Scope. This Agreement secures the payment and performance of the Obligations described in Section 1 and any extensions, renewals, replacements or amendments thereof. Secured Party may at any time and without notice apply any collateral or proceeds against any Obligation in such order as Secured Party determines.

5. Representations and Warranties

5.1. Title and Power. Grantor represents and warrants that Grantor has good and marketable title to the Collateral free of any lien, security interest or encumbrance except as disclosed in writing to Secured Party, and has full power and authority to grant the security interest herein.

5.2. No Violations. The execution, delivery and performance by Grantor of this Agreement will not violate any law, order or agreement binding on Grantor, and no authorization or consent of any third party is required other than as disclosed in writing to Secured Party.

6. Covenants

6.1. Maintenance of Collateral. Grantor shall at all times keep the Collateral in good condition and repair, shall not sell or transfer Collateral except in the ordinary course of business, and shall not create or permit to exist any lien on the Collateral other than the security interest granted herein.

6.2. Further Assurances. Grantor will execute and deliver such further documents and take such further actions as may be reasonably requested by Secured Party to perfect and maintain the security interest granted hereby.

7. Perfection; Filings; Priority

7.1. Filing. Grantor authorizes Secured Party to file financing statements, continuation statements and other documents as Secured Party deems necessary to perfect and maintain the security interest. Filing jurisdiction for perfection shall be: .

7.2. Priority. Secured Party shall have priority over all subsequent lienholders to the extent permitted by applicable law. Grantor agrees not to grant any lien or security interest in the Collateral that would have priority over the interest of Secured Party.

8. Default and Remedies

8.1. Events of Default. An Event of Default shall occur if (a) Grantor fails to pay any amount when due under the Obligations, (b) Grantor breaches any representation, warranty or covenant in this Agreement, or (c) Grantor becomes insolvent, makes an assignment for the benefit of creditors, or a bankruptcy or similar proceeding is commenced by or against Grantor.

8.2. Remedies. Upon occurrence of an Event of Default, Secured Party may, at its option, declare the Obligations immediately due and payable and exercise all rights and remedies of a secured party under applicable law, including but not limited to taking possession of the Collateral, selling or otherwise disposing of the Collateral at public or private sale, and applying proceeds to the Obligations. Secured Party's rights are cumulative and not exclusive.

9. Costs; Attorneys' Fees

If Secured Party incurs expenses to collect, preserve, realize upon, defend or enforce its rights with respect to the Collateral or the Obligations, Grantor shall pay all reasonable costs and expenses, including attorneys' fees and costs, whether before or after judgment, and whether or not suit is filed.

10. Notices

All notices, requests, demands and other communications required or permitted hereunder shall be in writing and shall be deemed given when delivered personally, or three business days after deposit in the U.S. mail, postage prepaid, or one business day after deposit with an overnight courier, addressed as follows (or to such other address as a party shall designate by written notice):

11. Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to conflict of law principles.

12. Entire Agreement

This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior oral and written agreements and understandings relating thereto. All schedules and attachments are incorporated herein by this reference.

13. Severability

If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

14. Amendments; Waiver

No amendment, modification or waiver of any provision of this Agreement shall be effective unless in writing and signed by both Parties. No failure or delay by Secured Party in exercising any right shall operate as a waiver of such right.

15. Counterparts

This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Signatures transmitted by facsimile or electronic image shall be effective as original signatures.

IN WITNESS WHEREOF, the Parties have executed this Security Agreement as of the date first above written.

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