Sleazeball Joe derives a limited amount of income from scheming settlements out of big companies. His latest con involves a slip at the local Hy-Vee, resulting in back injury and a personal injury suit against Hy-Vee for $10 million. Sleazeball Joe's attorney gurantees him a victory, or at least a large settlement of around $50,000. Sleazeball Joe goes to Greedy Bank, who has extended him credit before, and obtains a $25,000 loan. He signs a security agreement that describes the collateral as "any and all damages resulting from the matter of Sleazeball Joe v. Hy-Vee." Unfortunately for Sleazeball Joe, Hy-Vee refuses to settle, takes the matter to trial, and when the jury decides that Sleazeball Joe is in fact a sleaze ball, he is awarded no damages. He then promptly files a malpractice suit against his attorney for the victory guarantee, and receives $10,000 in a settlement.

In the meantime, Sleazeball Joe has been living large, and has burned through the $25,000 loan. He is left with only high stakes poker IOU's in the amount of $3,500 and a premium margarita machine valued at $350, in addition to his $10,000 malpractice settlement.

Which statement is correct?

1. Greedy Bank does not have a valid Article 9 security interest in the settlement, the IOUs, or the maragarita machine.

2. Greedy Bank has a valid security interest in the IOUs and the maragarita machine, which are proceeds of the loan.

3. Greedy Bank has a valid security interest in the settlement, which is proceeds of the Sleazeball Joe v. Hy-Vee lawsuit.

4. Greedy Bank has a valid security interest in the settlement, the IOUs, and the margarita machine.