Security Agreement for Buying Business Assets

Security Agreement for Buying Business Assets 1. Names. _________________, Buyer, grants to _________________, Seller, a continuing security interest in the following property (the Secured Property), which consists of: [ ] The property listed in Attachment 1. [ ] Any additional tangible personal property that Buyer now owns or later acquires in connection with Buyer's business, including replacement inventory. 2. Security for Promissory Note. Buyer is granting this security interest to secure performance of a promissory note that Buyer executed on _________________ as partial payment for certain business assets. The promissory note obligates Buyer to pay Seller $_________ with interest at the rate of ___% a year, on the terms stated in the promissory note. 3. Financing Statement. Buyer agrees that the promissory note will be further secured by a Uniform Commercial Code Financing Statement. Buyer will sign any other documents that Seller reasonably requests to protect Seller's security interest in the Secured Property. 4. Use and Care of the Secured Property. Until the promissory note is fully paid, Buyer agrees to: [ ] A. Keep the Secured Property at Buyer's premises and use it only in the operation of Buyer's business. [ ] B. [ ] C. Maintain the Secured Property in good repair. Not sell, transfer, or release the Secured Property unless Seller consents. Buyer may sell inventory in the ordinary course of Buyer's business, but will reasonably renew and replenish inventory to keep it at its current level. [ ] D. [ ] E. Pay all taxes on the Secured Property as taxes become due. Insure the Secured Property against normal risks, with an insurance policy Security Agreement for Buying Business Assets Page 1 that names Buyer and Seller as beneficiaries. [ ] F. Deliver to Seller a copy of the insurance policy insuring the Secured Property and provide to Seller annual proof that Buyer has paid the premiums on the policy. [ ] G. Allow Seller to inspect the Secured Property at any reasonable time. 5. Buyer's Default. If Buyer is more than ten days late in making any payment required by the promissory note or if Buyer fails to correct any violations of paragraph 4 within ten days of receiving written notice from Seller, Buyer will be in default. 6. Seller's Rights. If Buyer is in default, Seller may exercise the remedies contained in the Uniform Commercial Code for the State of _____________ and any other remedies legally available to Seller. Seller may, for example: A. Remove the Secured Property from the place where it is then located. B. Require Buyer to assemble the Secured Property and make it available to Seller at a place designated by Seller that is reasonably convenient to Buyer and Seller. C. Sell or lease the Secured Property, or otherwise dispose of it. 7. Notice to Buyer. Seller will give Buyer at least ten days notice of when and where the Secured Property will be sold, leased, or otherwise disposed of. Any notice required here or by statute will be deemed given to Buyer if sent by first-class mail to Buyer at the following address: ______________________________, or to a new address that Buyer designates in writing. 8. Entire Agreement. This is the entire agreement between the parties. It replaces and supersedes any and all oral agreements between the parties, as well as any prior writings. 9. Successors and Assignees. This agreement binds and benefits the heirs, successors, and assignees of the parties. 10. Governing Law. This agreement will be governed by and construed in accordance with the laws of the state of ________________. 11. Counterparts. This agreement may be signed by the parties in different counterparts and the signature pages combined will create a document binding on all parties. Security Agreement for Buying Business Assets Page 2 12. Modification. This agreement may be modified only by a written agreement signed by all the parties. 13. Waiver. If one party waives any term or provision of this agreement at any time, that waiver will only be effective for the specific instance and specific purpose for which the waiver was given. If either party fails to exercise or delays exercising any of its rights or remedies under this agreement, that party retains the right to enforce that term or provision at a later time. 14. Severability. If any court determines that any provision of this agreement is invalid or unenforceable, any invalidity or unenforceability will affect only that provision and will not make any other provision of this agreement invalid or unenforceable and such provision shall be modified, amended, or limited only to the extent necessary to render it valid and enforceable. SELLER Name of Business: _____________ a _____________________ By: __________________________ Dated: __________________ Printed Name: ________________ Title: __________________ Address: __________________ __________________ BUYER Name of Business: _____________ a _____________________ Security Agreement for Buying Business Assets Page 3 By: __________________________ Dated: __________________ Printed Name: ________________ Title: __________________ Address: __________________ __________________ Security Agreement for Buying Business Assets Page 4 Attachment 1 to Security Agreement This is an attachment to the Security Agreement given by ____________, Buyer, to ____________, Seller. The Secured Property consists of the following: ____________. SELLER Name of Business: ____________ a ____________ By: ______________________ Dated: ____________ Printed Name: ____________ Title: _____________ BUYER Name of Business: _____________ a _____________ By: __________________________ Dated: ____________ Printed Name: _____________ Security Agreement for Buying Business Assets Page 5 Title: _____________ Security Agreement for Buying Business Assets Page 6