Barry Bonds asks for a loan of $100,000 from his friend Greg Anderson to purchase some human growth hormone from BALCO sports nutrition center. Anderson loans Bonds the money in exchange for a security interest in the human growth hormone as well as a security interest in Bonds’ sports memorabilia collection. Bonds signs a security agreement which adequately described both the HGH and the memorabilia collection. Anderson gives Bonds one season to pay off the loan. Bonds plays extremely well throughout the season and breaks the record for home runs in a season. The Giants give Bonds a large bonus for breaking the record. In celebration, Bonds gives away his entire sports memorabilia collection to a local charity.
At the beginning of the next season, Bonds still had not paid Anderson back. Assume that the agreement between Bonds and Anderson is legally enforceable (despite the subject matter of the agreement). Which statement is correct?
1. Anderson has a security interest in Bonds' bonus because it was proceeds of the HGH, which caused Bonds to break the home run record
2. Anderson does not have a security interest in Bonds' bonus, which is not proceeds of the HGH.
3. Anderson has a security interest in Bonds' bonus; it was proceeds of the memorabilia collection because it replaced the value of the memorabilia collection that Bonds gave away.
4. Anderson has a security interest in Bonds' bonus because both Bonds and Anderson knew Bonds would be consuming the human growth hormone, and thus it only makes sense that the parties would have intended the security interest to attach to any bonus Bonds earned.