This Agreement, made this [date], by and between [name], a [specify] corporation (Borrower) and [name], a [specify] corporation, with principal place of business and post office address at [address] (Secured Party).
WITNESSETH:
To secure payment of the principal sum of [$ amount] by said Borrower to Secured Party, together with interest, in accordance with the provisions of that certain promissory note of even date herewith executed by Borrower concurrently herewith;
AND ALSO to secure the payment by the Borrower to the Secured Party of all sums expended or advanced by the Secured Party pursuant to any term or provision of this agreement;
AND ALSO to secure the payment by the Borrower to the Secured Party of all other sums now or hereafter loaned or advanced by the Secured Party for the account of the Borrower or otherwise owing by the Borrower to the Secured Party on any and every account whatsoever.
The Borrower does hereby grant to the Secured Party, its successors and assigns, absolutely, a security interest, as that term is defined in the Uniform Commercial Code of the State of [state] in and to the following collateral:
All furniture, furnishings, decorations, appliances, machinery, apparatus, equipment, fittings, fixtures, and personal property, other than consumable goods, now owned or hereafter acquired, together with all substitutions therefor and additions and accessions thereto, which will be placed and installed in the building to be erected on that certain parcel of land situated at [location];
TOGETHER WITH all additions and accessions thereto, and renewals and replacements thereof, and all articles in substitution therefor;
TO HAVE AND TO HOLD the same (collateral) unto the Secured Party, its successors, and assigns, absolutely;
PROVIDED, HOWEVER, that if the Borrower shall discharge any and all obligations that are now or may hereafter be or becoming owing by the Borrower to the Secured Party on account of any breach of this Agreement or default under the promissory note aforesaid, and all
other obligations that are now or may hereafter be or become owing by the Borrower to the Secured Party, of which obligations the books of the Secured Party shall be prima facie evidence, and which obligations it is agreed by these presents are and shall be secured as a charge
against the collateral hereby encumbered, and shall observe and perform all of the covenants and agreements herein contained, THEN THESE PRESENTS SHALL BE VOID;
BUT UPON FAILURE to pay said sums or interest thereon when due, or upon the breach of any covenant or agreement hereof or any obligation hereby secured, then and in either of such events the whole amount of any indebtedness owing by or chargeable to the Borrower under the provisions of this Security Agreement, or intended to be secured thereby, shall at the option of the Secured Party, and without notice, at once become due and payable.
1. Maintenance of Good Title. The Borrower warrants that the Borrower is the owner of and is lawfully possessed of the collateral, and that no financing statement or any other lien or encumbrance covering any of the collateral, or any of the proceeds thereof, is on file in [location] or otherwise outstanding. The Borrower hereby covenants and agrees that he will, from time to time, on request by the Secured Party, execute such financing statement and other documents deemed necessary by the Secured Party, and pay the cost of filing or recording the same. The Borrower further covenants and agrees that the Borrower will maintain the valid security interest of the Secured Party in the collateral free of all liens, claims, and encumbrances that may be, or are threatened to be, made prior to said security interest.
2. Indemnification of Secured Party. The Borrower covenants and agrees to defend all or any part of the collateral against all claims and demands of all persons at any time claiming the same or any interest therein adverse to the Secured Party, and the Borrower shall fully
indemnify the Secured Party for all loss and expense suffered or incurred by the Secured Party as a result of any such claim or demand.
3. Taxes, Assessments, Etc.; No Removal or Transfer of Collateral. The Borrower will pay and discharge all taxes, rates, assessments, duties, and charges that are now or may hereafter be levied or assessed, or become or threaten to become a charge on or against, or relate to
the collateral, or the debts or interest, the payment of which is hereby secured; the Borrower will not use the collateral illegally or improperly, and shall not, without the written consent of the Secured Party, remove the collateral from the county wherein the same is now located, and shall not sell, assign, transfer, lease, mortgage, or hypothecate the collateral, or any interest therein, without the written consent of the Secured Party, except that the Borrower may, without such consent, grant to the Borrower's suppliers a security interest in the collateral subject and inferior to the security interest of the Secured Party granted herein; the Borrower agrees that all additions to, accessions to, renewals and replacements of, or substitutions for the collateral, as well as proceeds from the sale of the collateral may be covered in this agreement or in any financing statement or other document executed in connection herewith and such inclusion shall not be construed as giving authority to Borrower to sell or otherwise dispose of the collateral except as provided herein.
4. Insurance. The Borrower agrees to keep the collateral insured against physical damage and/or theft and to procure and maintain such other insurance as the Secured Party may require, and in the event of the Borrower's failure so to do, the Secured Party may effect said insurance. The proceeds of any insurance, whether paid by reason of loss, injury, return premium, or otherwise, shall be applied toward the repair or replacement of the collateral or shall, at the option of the Secured Party, be paid to the Secured Party to be held as security for the performance of the undertakings for which this security interest is given. Should the collateral suffer any loss, damage, or injury from any cause whatsoever, regardless of whether the same is covered by insurance, such loss, damage, or injury shall be borne by the Borrower, and shall not relieve him from any obligation hereunder. The Borrower agrees to save the Secured Party harmless from any and all liabilities, including all costs and reasonable attorney fees for damage to person or property caused in any manner by the ownership, possession, or use of the collateral.
5. Restoration of Collateral. The Borrower agrees to keep the collateral and all additions and accessions thereto, renewals and replacements thereof, and substitutions therefor in good condition, order, and repair, and at the Borrower's own expense to replace with new any parts thereof that may be broken or become obsolete or worn out or unfit for use, and to comply with all laws, rules, and regulations made by governmental authority and applicable thereto, and not commit or suffer any strip or waste of the collateral.
6. Secured Party's Right to Inspect and Make Repairs. The Secured Party may examine and inspect the collateral or any portion thereof wherever located, at any reasonable time or times. The Secured Party may from time to time, at its option, perform any agreement of the Borrower hereunder which the Borrower shall fail to perform and take any other action which the Secured Party deems necessary for the maintenance or preservation of any of the collateral or its security interest therein, and the Borrower agrees to forthwith reimburse the Secured Party for all expenses of the Secured Party in connection with the foregoing, together with interest thereon at the same rate as the Borrower is obligated to pay under the terms of the promissory note, aforesaid, from the date incurred until reimbursed by the Borrower.
7. Events of Default; Remedies. Time is of the essence in this agreement, and if the Borrower defaults in complying with the terms hereof or of the promissory note aforesaid, or if the Borrower fails to pay any amount due thereon, or any other obligations that are now or may hereafter be or become owing by the Borrower to the Secured Party, or should the financial condition of the Borrower, in the sole judgment of the Secured Party, be such as to endanger the rights or security of the Secured Party, or should the Secured Party ascertain that the Borrower misrepresented the Borrower's credit standing, or if the collateral should substantially decrease in value and after demand being made therefor the Borrower shall fail to furnish additional security which shall be satisfactory in character and value to the Secured Party, or if a proceeding in bankruptcy, receivership, or insolvency be instituted or filed by or against the Borrower or the Borrower's property, or if the Borrower shall enter into any arrangement or composition with the Borrower's creditors, or if the collateral be seized or levied on under any legal process or under claim of legal right, then, in any event, the whole amount of any indebtedness owing by or chargeable to the Borrower under any provision of this agreement or the promissory not aforesaid, regardless of whether the same are mature, shall, without notice, at the option of the Secured Party, at once become due and payable, together with interest at the maximum rate permitted by law, from the date of such default until fully paid, and the Secured Party, and it successors and assigns, shall have the right to foreclose this agreement in any of the methods now or hereafter provided by law, including all of the rights and remedies of a secured party under said Uniform Commercial Code and shall have the immediate right to receivership on ex parte order and without bond pending foreclosure, and may, without previous notice to the Borrower, seize, take possession of, or carry away the collateral from any place or places that the same may be and may, for that purpose, enter into and on any premises where the collateral may be, or in the alternative if the Secured Party so instructs the Borrower, the Borrower hereby agrees to assemble to the Secured Party, and the Secured Party may sell and dispose of the same at public or private sale, as an entirety or in separate parts and the Secured Party may in its own name or as the attorney-in-fact for the Borrower, for such purpose hereby irrevocably appointed, effectually transfer the collateral so sold to the purchaser or purchasers absolutely and forever; and any foreclosure or sales shall forever bar the Borrower and all persons claiming under the Borrower from all right and interest in the collateral at law and in equity; and out of the proceeds of any sale the Secured Party may deduct the costs and expenses of foreclosure and/or suit and/or taking possession of the collateral, including the attorney fees, and retain or be awarded all sums then payable by or chargeable to the Borrower on every account, rendering to the Borrower the surplus, if any. If such proceeds shall be insufficient to discharge the same in full, the Secured Party may have any other legal recourse against the Borrower for the deficiency. The Secured Party of any person on its behalf may purchase at any foreclosure sale, and no purchaser shall be answerable for the application of the purchase money.
8. Remedies are Cumulative; No Waiver. The Secured Party shall have the right to enforce one or more remedies hereunder or any other remedy it may have, successively or concurrently, and such action shall not operate to estop or prevent the Secured Party from pursuing any further remedy that it may have hereunder; no waiver by the Secured Party of any breach or default of or by the Borrower shall be deemed to alter or affect the Secured Party's rights hereunder with respect to any prior or subsequent default.
9. Right to Cure Default. Upon failure to observe or perform any covenant or condition of this Security Agreement or any agreement hereby secured, the Secured Party may make any advances that to it may seem proper or necessary to protect the collateral and/or this Security Agreement and the rights of the Secured Party hereunder and recover any such advances made and all expenses, including attorney fees paid or incurred by it, even though any such charge be invalid, upon demand, together with interest thereon to the date of payment at the maximum rate permitted by law, and the same shall be secured by this Security Agreement.
10. Borrower to Pay Lender's Litigation Costs. In the event action be taken by the Secured Party for the assertion, protection, or defense of any of its rights hereunder, or in the event the Secured Party becomes involved in any dispute or litigation arising out of or because of this Security Agreement, the Borrower agrees to pay, on demand, to the Secured Party all of its costs, expenses, and damages, including its attorney fees and court costs in connection with the action taken, and such costs and expenses, including attorney fees, shall be secured hereby.
11. "Borrower" Defined. The word "Borrower," as used herein, shall include the Borrower previously named and its successors and assigns.
12. Other Interpretive Provisions. This Security Agreement, as well as the promissory note aforesaid, shall be construed in accordance with the laws of the State of [state]. Wherever possible, each provision of this Agreement and said Note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement or said Note shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision of the remaining provisions of this Agreement and said Note. The rights and privileges of the Secured Party hereunder shall inure to the benefit of its successors and assigns.
IN WITNESS WHEREOF, the Borrower has caused these presents to be executed the day and year first above written.
[Signatures,
dates]
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