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                                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.