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<br />time of death of the insured, the excess proceeds over (a) and (b) above shall <br />be paid to the alternate beneficiary designated by agreement ofPEDC and the <br />Company in the Policy. <br /> <br />5. Security Agreements: The Company shall execute and deliver to PEDC one <br />or more Security Agreements covering all of the Company's inventory, <br />accounts receivable, other personal property, furniture, fixtures and <br />equipment owned by the Company in Paris, Texas. In addition, to secure the <br />Guaranty, Michael Meshbesher shall execute and deliver to the Company (i) <br />a Security Agreement covering all of the stock of the Company owned by <br />him, together with a stock power, endorsed in blank, to which is attached the <br />stock certificate or certificates evidencing his stock ownership in the <br />Company, to be held by PEDC until the Note is paid by the Company for the <br />purpose of perfecting PEDC's security interest in the stock, and (ii) another <br />Security Agreement to PEDC, as secured party, covering as collateral all of <br />Michael Meshbesher's non-exempt personal and real property, wherever <br />located (including a mortgage or deed of trust to cover all real estate). All <br />Security Agreements shall create in PEDC valid and enforceable security <br />interests under the Uniform Commercial Code as adopted in the State of <br />Texas or in any state whose law governs with respect to the collateral <br />included therein. Financing statements will be filed in the appropriate <br />governmental offices, as applicable, to further perfect PEDC' s security <br />interest granted under the Security Agreements. All liens and security <br />interests granted to PEDC by the Company and by Michael Meshbesher shall <br />be first and superior to other creditors, if possible; but if not they will be <br />second or subordinate to any existing, preferential or prior liens or security <br />interests only to the extent that those existing, preferential or prior liens or <br />security interests are properly created and perfected under applicable laws. <br /> <br />6. Deed of Trust (with Security Agreement and Assignment of Rents and <br />Leases): The Company will execute and deliver to PEDC a Deed of Trust <br />(with Security Agreement and Assignment of Rents and Leases) describing <br />the real property in the Industrial Park conveyed by PEDC to the Company, <br />together with all improvements and fixtures situated thereon. The Deed of <br />Trust shall provide that it shall be a default under the terms of the loan <br />documents described in this Section C if the Company shall fail to pay the <br />Note or to perform any of its covenants or obligations under this Agreement, <br />the Loan Agreement or under the other loan documents. In addition, it shall <br />be a default under the Note, the Deed of Trust and the Security Agreements <br />described above if any of the representations or warranties made by the <br />Company to PEDC in this Agreement shall prove to have been or become <br />untrue. <br /> <br />10 <br />