SECURITY AGREEMENT
AGREEMENT made this ______ day of ______, 19__ 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 _________________ ($___________) Dollars
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 up and bind the
heirs, executors, administrators, successors, and assigns of the
parties.
This Agreement shall have the effect of an instrument
under seal.
By:
Date: ___________________________
___________________________
NOTE: FILE FINANCING STATEMENTS IN OR WITHIN FIVE (5) DAYS FROM
DATE.
Form 135
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