SECURITY
AGREEMENT
AGREEMENT
made this ______________ (month & day), ___ (year) between
____________________________ ("Debtor"), and ________________________
("Secured Party").
1. SECURITY INTEREST. Debtor grants to Secured Party a security interest in all
inventory, equipment, appliances, furnishings, and fixtures now or hereafter
placed upon the premises known as _________________________________, located at
_________________________ (the "Premises") or used in connection
therewith and in which Debtor now has or hereafter acquires any right and the
proceeds therefrom. As additional
collateral, Debtor assigns to Secured Party, a security interest in all of its
right, title, and interest to any trademarks, trade names, contract rights, and
leasehold interests in which Debtor now has or hereafter acquires. The Security Interest shall secure the
payment and performance of Debtor's promissory note of even date herewith in
the principal amount of ________________________ ($___________) and the payment
and performance of all other liabilities and obligations of Debtor to Secured
Party of every kind and description, direct or indirect, absolute or
contingent, due or to become due now existing or hereafter arising.
2. COVENANTS.
Debtor hereby warrants and covenants:
(a) The collateral will be kept at
______________________________________, and that the collateral will not be
removed from the Premises other than in the ordinary course of business.
(b) The Debtor's place of business is
______________________________________. _____________________, and Debtor will
immediately notify Secured Party in writing of any change in or discontinuance
of Debtor's place of business.
(c) The parties intend that the collateral is
and will at all times remain personal property despite the fact and
irrespective of the manner in which it is attached to realty.
(d) The Debtor will not sell, dispose, or
otherwise transfer the collateral or any interest therein without the prior
written consent of Secured Party, and the Debtor shall keep the collateral free
from unpaid charges (including rent), taxes, and liens.
(e) The Debtor shall execute alone or with
Secured Party any Financing Statement or other document or procure any
document, and pay the cost of filing the same in all public offices wherever
filing is deemed by Secured Party to be necessary.
(f) Debtor shall maintain insurance at all times
with respect to all collateral against risks of fire, theft, and other such
risks and in such amounts as Secured Party may require. The policies shall be payable to both the
Secured Party and the Debtor as their interests appear and shall provide for
ten (10) days written notice of cancellation to Secured Party.
(g) The Debtor shall make all repairs,
replacements, additions, and improvements necessary to maintain any equipment
in good working order and condition.
At
its option, Secured Party may discharge taxes, liens, or other encumbrances at
any time levied or placed on the collateral, may pay rent or insurance due on
the collateral and may pay for the maintenance and preservation of the
collateral. Debtor agrees to reimburse
Secured Party on demand for any payment made, or any expense incurred by Secured
Party pursuant to the foregoing authorization.
3. DEFAULT.
The Debtor shall be in default under this Agreement upon the happening
of any of the following:
(a) Any misrepresentation in connection with
this Agreement on the part of the Debtor.
(b) Any noncompliance with or nonperformance of
the Debtor's obligations under the Note or this Agreement.
(c) If Debtor is involved in any financial
difficulty as evidenced by (i) an assignment for the benefit of creditors, or
(ii) an attachment or receivership of assets not dissolved within thirty (30)
days, or (iii) the institution of Bankruptcy proceedings, whether voluntary or
involuntary, which is not dismissed within thirty (30) days from the date on
which it is filed.
Upon
default and at any time thereafter, Secured Party may declare all obligations
secured hereby immediately due and payable and shall have the remedies of a
Secured Party under the Uniform Commercial Code. Secured Party may require the Debtor to make it available to
Secured Party at a place which is mutually convenient.
No
waiver by Secured Party of any default shall operate as a waiver of any other
default or of the same default on a future occasion. This Agreement shall inure to the benefit of and bind the heirs,
executors, administrators, successors, and assigns of the parties. This Agreement shall have the effect of an
instrument under seal.
Date: ______________________ By: __________________________
___________________________
Signature
NOTE:
FILE
FINANCING STATEMENTS IN OR WITHIN FIVE (5) DAYS FROM DATE.
