Security Agreement Page 5
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secured obligation are true and correct, and contain no false or mislead-
ing statements.
5. Secured Party’s Right to Discharge. At its option, Secured Party may
discharge taxes, liens, assessments, security interest or other encumbrances at
any time levied or placed on the Collateral, may pay for premiums for insurance
on the Collateral, costs of maintenance or preservation of the Collateral, and any
other charges or expenses or perform any obligation imposed upon Debtor here-
under. Debtor agrees to reimburse Secured Party on demand for any payment
made, or any expense incurred by Secured Party, pursuant to the foregoing
authorization. Until reimbursed, the amounts so advanced or expenses incurred
shall be part of the Indebtedness to the Note, with interest thereon at the default
rate specified in the Note.
6. Possession of Collateral. Until default, Debtor may have possession of the
Collateral and use it in any lawful manner not inconsistent with this Agreement and
not inconsistent with any policy of insurance thereon, but upon default Secured Party
shall have the immediate right to possession and use of the Collateral.
7. Events of Default. Any one of the following shall constitute a default for
purposes of this Security Agreement:
(a) If the Debtor uses the Collateral in violation of any statute or ordinance;
or
(b) If Debtor fails to promptly pay when due all taxes and assessments
upon the Collateral or fails to keep the Collateral in good condition and
repair and fully insured; or
(c) If Debtor fails to pay promptly in full any Indebtedness secured hereby
when any part of such Indebtedness becomes due and payable; or
(d) If Debtor breaches any term, condition, representation or covenant to be
performed or observed by Debtor provided in this Security Agreement,
the Note or in any other instrument given in connection with or securing
part or all of the Indebtedness of Debtor to Secured Party; or
(e) If any warranty, representation or statement made or furnished to
Secured Party by or on behalf of Debtor in connection with the Security
Agreement proves to have been false in any respect; or
(f)
If the Collateral, or any part thereof, is levied upon or seized under any
levy or attachment or any other legal process; or
5
(Rev. 1, 9/99)
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