Fill and Sign the Security Agreement Contract Form

Security Agreement in Accounts and Contract Rights Security Agreement made on the __________________________ (date) , between ____________________________________________ (Name of Borrower) of ______________ ______________________________________________________________________________ (street address, city, county, state, zip code) , hereinafter called Borrower , and _______________________________________ (Name of Lender) , a corporation organized and existing under the laws of the state of _______________________________ (name of state) , with its principal office located at __________________________________________________ _________________________________________ (street address, city, county, state, zip code) , referred to herein as Lender . Whereas, it is contemplated that Borrower may from time to time request loans or advances from Lender and that Lender may, at its option, comply with any such request; Now, therefore, for and in consideration of the mutual covenants contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Definitions A. The word Note means any promissory Note of Borrower evidencing any loan or advances made by Lender to Borrower. B. The word liabilities means the liabilities and obligations of Borrower to Lender under this Agreement and also any and all other obligations of Borrower to Lender of every kind or description, direct or indirect, absolute or contingent, due or to become due, now existing or subsequently arising. C . The word account means the obligation of an account debtor to pay Borrower for the sale or lease or rendition by Borrower of goods and/or services. D. The word account debtor means a person obligated to Borrower on or under any account or contract right. E. The word eligible account means any account which meets the following requirements: 1. It is a valid and legally enforceable indebtedness of the account debtor arising from the sale or lease or rendition by Borrower of goods and/or services and such goods and/or services will have been delivered to and/or performed for, and accepted by, such account debtor ; 2. It will be subject to no set-offs, claims, or defenses and will be free and clear of all liens, security interests, and encumbrances other than Lender's security interest; 3. It is evidenced by an invoice (dated not later than the date of shipment or performance and having payment terms acceptable to Lender) rendered to such account debtor, and it is not evidenced by any instrument or chattel papers; 4. It is not owing by an account debtor who shall have failed to pay in full any invoice evidencing any account within ________ (number) days after the due date of such invoice; and 5. Is not been listed as unacceptable by Lender in any written notice to Borrower. An eligible account shall immediately cease to be such if it fails to meet any of the foregoing requirements. F. The word " collateral " shall mean all property or rights in which a security interest is granted under this Agreement. G. The term " collateral account " is defined in Section Five of this instrument. H. The word " obligor " includes Borrower and any maker, drawer, acceptor, endorser, guarantor, surety, accommodation party and any other person liable on or for any of the liabilities . 2. Security Interest As security for the payment of all liabilities , Borrower grants to Lender a security interest in: A. All account s, now existing or subsequently arising. B. All interests of Borrower, now existing or subsequently arising, in goods, the sale or lease of which give rise to any account s. C. All contract rights of Borrower, now existing or subsequently arising. D. All chattel paper, documents, and instruments relating to account s. E. The proceeds, products, and accessions of and to any and all of the foregoing. Borrower will promptly deliver to Lender, endorsed when necessary, all such chattel paper, documents and instruments, and related guaranties, now on hand or subsequently received by Borrower. 3. Representations, Covenants and Warranties Borrower represents, covenants, and warrants that: A. Absolute title to each account , free and clear of all liens, security interests, and encumbrances, other than Lender's security interest, will be vested in Borrower at the time such security interest attaches, and all instruments, documents, and chattel paper pertaining to the account s will be valid and genuine. B. Borrower will perform, or cause to be performed, all obligations of Borrower and/or every manufacturer with respect to the goods, the sale or lease of which gave rise to each account . C. On request of Lender, Borrower will mark or stamp each of its individual ledger sheets or cards pertaining to the relative account s and will stamp or otherwise mark and keep its books and records relating to the account s in such manner as Lender may require, including computer records. D. Borrower will, at its cost and expense, execute, deliver, file, or record (in such manner and form as Lender may require) any specific assignment, financing statement or other paper that may be necessary or desirable, or that Lender may request, in order to create, preserve, perfect, validate, or satisfy any security interest granted by this Agreement or to enable Lender to exercise and enforce its rights under this Agreement or under any Note or any account . The right is granted to Lender, at its discretion, to file one or more financing statements under the Uniform Commercial Code as enacted in __________________________ (name of state) naming Borrower as debtor and Lender as secured party and indicating in these statements the types or describing the items of collateral specified in this Agreement. E. Borrower will: 1. Keep such books and records, including computer records, pertaining to account s and contract rights, and at such office or offices of Borrower as shall be satisfactory to Lender; 2. Permit representatives of Lender at any time to inspect and make abstract of Borrower's books and records, including computer records, pertaining to account s and contract rights; and .3. Furnish to Lender such information and reports regarding account s and contract rights, and Borrower's financial status, as Lender may from time to time require. F. Borrower will give such notice in writing as Lender may require at any time to any or all account debtor s indebted on all or any of the account s and, if Lender shall so request, deliver to Lender copies of any and all such notices. In addition, Lender or its agents, may: (a) transmit to any or all account debtor s at any time or times such notice, and any failure to give such notice by Lender shall in no way affect Lender's rights and interests under this Agreement or under any account ; or (b) request from account debtor s at any time or times information concerning the amount owing under any or all account s. G. Borrower will transmit to Lender promptly all information that it may have or receive with respect to account s or with respect to any account debtor that might in any way affect the value of account s or Lender's rights or remedies with respect to them. H. Borrower will carry such insurance as may be satisfactory to Lender, and furnish Lender with duplicate policies if Lender so requests, on any goods the sale of which gave rise to any account , during such time as such goods are at Borrower's risk or held by it for Lender in trust, with the loss to be payable to Lender, and/or Borrower as their respective interests may appear. In the event of any loss or damage to such goods, Borrower will promptly give Lender written notice of the same and promptly file proof of loss with the appropriate insurer, and all amounts of such insurance received by Borrower shall be promptly deposited in the collateral account . I. Borrower will not sell, assign, or create a security interest in or otherwise encumber any of its account s or contract rights or chattel paper, documents, or instruments relating to account s, or proceeds or products of any of the same, to or in favor of anyone other than Lender. 4. Collections and Credits Until notice in writing from Lender of the revocation of Borrower's authority, Borrower will, as agent of Lender, at Borrower's own cost and expense and subject at any time or times to Lender's right to direct and control (it being understood that in the absence of specific instructions Borrower is to use its best judgment as Lender's agent to protect Lender's interest): A. Endeavor to collect or cause to be collected from account debtor s, as and when due, any and all amounts including interest, owing under or on account of each account . B. Take or cause to be taken such appropriate action to repossess goods, the sale of which gave rise to any account and/or to enforce any rights or liens under account s, as Borrower or Lender may deem proper, and in Lender's name or Borrower's name as Lender may deem proper. C. Receive or cause to be received in trust for account of Lender such goods as may be returned or rejected by or repossessed from purchasers who purchased such goods under account s, and hold such goods and any proceeds from them separate and identified by suitable markings as Lender's property, without intermingling the same with Borrower's goods, and remit promptly any proceeds of sale of such goods for deposit in the collateral account . D. Allow such credits to account debtor s, whether or not accompanied by the return, rejection, or repossession of all or any part of the goods sold, as Lender or Borrower may determine to be right and proper, provided, always, that Borrower shall make full account ing and payment to Lender for such credits pursuant to Section 5. Borrower may not, without prior written consent of Lender, extend the time within which any account is due and payable . 5. Collateral Account All proceeds of collections on account shall, immediately on receipt of them by Borrower, be deposited in the form received, except for Borrower's endorsement when necessary, in a separate bank account maintained by the Lender (all such account s collectively called the collateral account) and shall be subject to withdrawal only as provided for in this Agreement. Until so deposited all such proceeds shall be held in trust by Borrower for and as the property of Lender and shall not be commingled with any other funds or property of Borrower. All instruments so received shall be deposited in the collateral account subject to final payment. In the event that any check or other instrument for the payment of money shall be returned uncollected for any reason, Borrower will immediately pay to Lender for deposit in the collateral account the amount of such check or other instrument, or Lender in its discretion may, in the event of Borrower's failure to make such payment, charge Borrower's regular account with Lender with the amount of such check or other instrument. A. Deposits in the collateral account shall be security for the liability and shall not constitute payment until applied as provided below. Borrower shall have the liability of a general endorser with respect to all instruments deposited in the account , whether or not Borrower shall have so endorsed the same. B. Lender, in its discretion, may charge the collateral account at any time or times and at least once every _________ (number) days with the amount of collected funds to the credit of the collateral account , apply on account of all or any of the liabilities then unpaid any or all of the amount so charged, and then remit any balance of the amount so charged to Borrower for Borrower's account . All such applications on loans under this Agreement shall be made in the order of inception of the loans. 6. Expenses Borrower will, on demand, promptly pay to Lender the amount of all expenses, including reasonable attorney's fees and legal expenses, incurred by Lender in seeking to collect or enforce any rights under the collateral and, on a default on Borrower's part under this Agreement, in seeking to collect each Note and all other liabilities and to enforce rights under this Agreement. 7. General Authority Borrower irrevocably appoints Lender as Borrower's true and lawful attorney, with full power of substitution, in Lender's name or Borrower's name or otherwise, for Lender's sole use and benefit, but at Borrower's cost and expense, to exercise at any time and from time to time all or any of the following powers with respect to all or any of the account s: A. To demand, sue for, collect, receive, and give acquittance for any and all moneys due or to become due on or by virtue of the account ; B. To receive, take, endorse, assigns and deliver any and all checks, Note s, drafts, documents, and other negotiable and nonnegotiable instruments and chattel paper taken or received by Lender in connection with the account ; C. To settle, compromise, compound, prosecute, or defend any action or proceeding with respect to the account ; D. To sell, transfer, assign, or otherwise deal in or with the account or the proceeds of the same or the related goods, as fully and effectually as if Lender were the absolute owner of the same; and E. To extend the time of payment of any or all of the account s and to make any allowance and other adjustments with reference to the same. Provided, however, the exercise by Lender of or failure to so exercise any such authority shall in no manner affect Borrower's liability to Lender under this Agreement or under each Note , and provided, further, that Lender shall be under no obligation or duty to exercise any of the powers conferred on it by this Agreement and it shall be without liability for any act or failure to act in connection with the collection of, or the preservation of any rights under, any one or more of the account s. Lender shall not be bound to take any steps necessary to preserve rights in any instruments or chattel paper against prior parties. 8. Events of Default; Acceleration Any or all of the liabilities shall, at the option of Lender and notwithstanding any time or credit allowed by any instruments evidencing any liability, become immediately due and payable without notice or demand upon the occurrence of any of the following events of default: A. Default in the payment, when due and payable, of any amount due and payable under this Agreement or default in the payment or performance of any of the liabilities ; B. Default in the performance of any obligation or covenant contained or referred to in this Agreement; C . Any warranty, representation or statement made or furnished to Lender by or on behalf of Borrower proves to have been false in any material respect when made or furnished; D. Failure of Borrower, after request by Lender, to furnish financial information or to permit inspection of its books or records; E. Any event which results in the acceleration of the maturity of the indebtedness of Borrower to others under any indenture, Agreement or undertaking; and F. Death, dissolution, termination of existence, insolvency, business failure, appointment of a receiver of any part of the property of, assignment for the benefit of creditors by, or the commencement of any proceedings under any bankruptcy or insolvency laws by or against, any obligor ; and G . Any change in the condition or affairs, financial or otherwise, of any obligor which, in the opinion of Lender, impairs Lender's security or increases its risk. 9. Rights and Remedies on Default On the occurrence of any such event of default, and at any time after default, Lender may exercise from time to time any rights and remedies available to it under applicable law. Lender may require Borrower to assemble the collateral and make it available to Lender at a place to be designated by Lender which is reasonably convenient to both parties. Any notice of intended disposition of any of the collateral required by law shall be deemed reasonable if such notice is given at least ________ (number) days before the time of such disposition. Any proceeds of any disposition by Lender of any of the collateral may be applied by Lender to the payment of expenses in connection with the collateral , including reasonable attorney's fees and legal expenses, and any balance of such proceeds may be applied by Lender toward the payment of such of the liabilities , in such order of application, as Lender may from time to time elect. 10. No Waiver The failure of either party to this Agreement to insist upon the performance of any of the terms and conditions of this Agreement, or the waiver of any breach of any of the terms and conditions of this Agreement, shall not be construed as subsequently waiving any such terms and conditions, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred. 11. Notices Any notice provided for or concerning this Agreement shall be in writing and shall be deemed sufficiently given when sent by certified or registered mail if sent to the respective address of each party as set forth at the beginning of this Agreement. 12. Termination Either Lender or Borrower may terminate this Agreement at any time by written notice to the other, provided, however, that the provisions of this Agreement and Lender's security interest under this Agreement shall remain in full force and effect until all liabilities shall have been paid to Lender in full, together with all interest, if any, on such liabilities , and Lender then shall, upon Borrower's written request, release the security interest under this Agreement and this Agreement shall terminate. Prior to such termination this shall be a continuing Agreement in every respect. 13. Binding Effect The covenants, representations, warranties, and agreements set forth in this Agreement shall be binding on Borrower, its legal representatives, successors, and assigns. 14. Uniform Commercial Code Unless the context otherwise requires, all terms used in this Agreement that are defined in the Uniform Commercial Code as enacted in ________________________ (name of state) shall have the meaning stated in that Code. WITNESS our signatures as of the day and date first above stated. ___________________________________ (Name of Lender) By: ________________________________ __________________________________ (P rinted or typed name) __________________________________ ___________________________________ Name and Signature of Borrower ___________________________________ (Name and Office in Corporation)