What event would cause an Aerus debtor to lose the right to retain possession of collateral?

Except as otherwise provided herein, Debtor may retain possession of the Collateral, and at Debtor's sole expense keep and use the same unless and until an Event of Default shall occur hereunder.

• (a) Default in Payment of Note.

Debtor shall fail to pay when due (whether on the date scheduled for payment, upon acceleration, at maturity or otherwise) any payment of principal or interest upon the Debt.

• (b) Default Under Other Obligations.

Debtor shall fail to pay any indebtedness for borrowed money upon maturity or when such indebtedness becomes or is declared to be due and payable prior to its express maturity by reason of any default in the performance of or observance of any obligation or condition in connection with such indebtedness, and such failure shall continue beyond any applicable grace period.

• (c) Default in Material Agreement.

Debtor shall be declared to be in default under any material contract, agreement or instrument to which Debtor is a party or by which Debtor or its property is bound including, without limitation, the Note, the Asset Purchase Agreement, the Franchise Agreement, and any other documents or instruments evidencing or securing any obligation of Debtor to Secured Party, Aerus LLC, or their affiliates under or in connection with this Security Agreement or any of the foregoing documents and instruments and such default shall continue for thirty (30) days after receipt of notice of such failure from the other party to the said contract, agreement or instrument.

• (d) Insolvency.

Debtor shall become insolvent or admit an inability to pay Debts as they become due, or apply for, consent to, or acquiesce in the appointment of a trustee, custodian or receiver for any property; or in the absence of such application or acquiescence, a trustee, custodian or receiver is appointed for Debtor, under any bankruptcy, reorganization, debt arrangement, insolvency law (whether now or hereafter in effect) and such appointment shall not have been terminated within thirty (30) days thereafter, or any dissolution or liquidation proceeding is instituted against Debtor or is consented to or acquiesced in by Debtor; or Debtor shall make an assignment for the benefit of creditors and such inability or assignment shall continue for a period of thirty (30) days.

• (e) Levy, Repossession or Seizure of Collateral.

Any creditor of Debtor shall obtain possession of any Collateral by any means including, without limitation, levy, distraint, replevin or self-help.

• (f) Representations Incorrect.

Any representation or warranty made by Debtor herein or in the Note or otherwise, as an inducement to Secured Party to enter into this Security Agreement is untrue in any material respect, or any schedule, statement, report, notice or writing furnished by Debtor to Secured Party is untrue in any material respect as of the date on which the facts set forth therein are stated.

• (g) Material Adverse Change.

Secured Party shall have determined in good faith and reasonably that a material adverse change has occurred in the business operations or financial

condition of Debtor or that the prospect of payment of the Note or performance under this Security Agreement has become impaired.

• (h) Judgments.

The issuance, filing or levy against Debtor of an attachment, injunction, execution, tax lien or judgment in excess of one thousand dollars ($1,000.00) which is not discharged in full or stayed within thirty (30) days after issuance or filing.

Source: Item 23 — Receipts (FDD pages 74–305)