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HomeMy WebLinkAboutTHE VILLA INC SECURITY AGREEMENT .- -.. ~.~~" -"J:tl _,,--. i . SECURITY AGREEMENT This Security Agreement is made and entered into this 1 sf day of OCTOBER, 2008, by and between The Villa. Inc. (hereinafter referred to as "Borrower"), Augusta, Georgia (hereinafter referred to as "Augusta") as follows: FOR VALUE RECEIVED, and in order to secure payment of any and all indebtedness of the Borrower to Augusta, now existing or hereafter incurred, matured or unmatured, direct or contingent, including any extensions, renewals and substitutions thereof, the Borrower hereby grants to Augusta a security interest in, all of Borrower's rights, title and i'nterest, tangible or intangible, in and to: certain assets used in the operation of the Busine.ss known as The Villa EurooaRestaurant located at 3044 Deans Bridee Road, Aueusta, Georeia 30906, said assets to include only the equipment, furniture and inventory listed on Exhibit A (hereinafter referred to as "Collateral"). This Security Agreement secures the indebtedness of the Borrower as evidenced by that certain promissory note ("Promissory Note") given by Borrower to Augusta of even date herewith in the original principal amount of Twenty-Five Thousand Dollars and no cents ($25.000.00). This Security Agreement secures to Augusta: (a) the repayment of the Promissory Note and all renewals, extensions and modifications of the Promissory Note; (b) the payment of all other sums, with interest, advanced to protect the security of this Security Agreement including all expenditures for taxes, insurance and repairs and maintenance of the Collateral; (c) the performance of Borrower's covenants and agreements under this Security Agreement and the Promissory Note; and (d) any other indebtedness of the Borrower to Augusta, whether now existing or hereafter incurred, matured or unmatured, direct or contingent. 1. UCC FINANCING STATEMENT. A Uniform Commercial Code (UCe) Financing Statement covering the Collateral herein secured shall be filed for record with the Clerk of Richmond County, Georgia. 2. PROMISSORY NOTE PAYMENTS. Borrower shall promptly pay when due the principal and interest on the debt evidenced by the Promissory Note and any late charges due under the Promissory Note. Unless applicable law provides otherwise, all payments received by Augusta shall be applied first to interest due on the indebtedness, second to the principal due on the indebtedness, and third to any late charges outstanding under the Promissory Note. 3. LIENS. Borrower shall pay all taxes, assessments, charges, fines and impositions attributable to the Collateral, which may attain priority over this Security Agreement, and all leasehold payment or ground rents, if any. Borrower shall pay these obligations on time directly to the person owed the payment. Borrower shall promptly furnish to Augusta receipts evidencing the payments, if requested by Augusta. Borrower shall promptly discharge any lien which may have priority over this Security Agreement. If Augusta determines that any part of the Collateral is subject to alien which may attain priority over this Security Agreement, Augusta may give Borrower a notice identifying the lien. Borrower shall satisfy the lien within ten (10) days of the giving of notice. The Borrower will defend the Collateral against all other claims or demands of all persons at any time claiming any interest in the Collateral, when such claim is adverse to the rights of Augusta conveyed in this Agreement. 4. COMPLIANCE WITH LAws. Borrower shall, at all times, fully _-0 .~.., . '" .. . 5. TRANSFER OF COLLATERAL. The Borrower shall not, without written consent of Augusta, sell, contract to sell, lease, assign or dispose of any interest of any kind in the Collateral, except for the sale of the Collateral in the normal course of business, until this Security Agreement and all debts secured hereby have been fully paid and satisfied. If all or any part of the Collateral, or any interest in the Collateral, is sold or transferred, or if a beneficial interest in Borrower is sold or transferred, Augusta may, at its option, require immediate payment in full of all sums secured by this Security Agreement. It shall not be considered a change in ownership if Borrower transfers all or part of the Collateral to a corporation in which Borrower owns and controls at least fifty percent (50%) of such corporate stock, provided that such corporation assumes all liabilities and Borrower's obligations contained herein, and provided that Borrower shall remain liable hereunder. Notwithstanding the foregoing, Borrower shall provide written notice by certified mail to Augusta of any sale, assignment or transfer of any interest in the Collateral for so long as there are any debts outstanding from Borrower to Augusta. 6. CHANGES IN COLLATERAL. The Borrower will . keep the Collateral separate and identifiable at the Borrower's business premises and will not remove the Collateral from said location without Augusta's written consent. The Borrower shall promptly notify Augusta in writing of any proposed change in the location or ownership of its business. The Borrower shall be allowed to improve or replace any portion of the Collateral with collateral of greater or equal value without prior consent of Augusta. In the event Borrower does replace any Collateral with collateral of greater or equal value, Borrower shall not be obligated to give Augusta any of the proceeds from the prior held collateral. 7. INSURANCE. Borrower shall maintain at all times fire, liability and other casualty insurance and any other insurance required, including theft, to protect the Collateral and fully secure Borrower's obligation to Augusta. Augusta shall be named as an additional insured and loss payee and shall be provided with a Certificate of Coverage. Such insurance coverage may be reduced by Borrower subsequent to the date of closing provided that said coverage is always at least equal to the amount of Borrower's debt to Augusta at that time. Such insurance shall be obtained from companies registered to transact business in the State of Georgia and said policy shall be issued in the names of Augusta and Borrower, as its respective interests may appear, and proof of coverage and copies of all related documents shall be delivered to Augusta, upon Augusta's request, but at least annually, until such time as all Borrower's obligations to Augusta are satisfied. In the event Borrower fails to maintain the coverage described above, Augusta may, at Augusta's option, obtain coverage to protect Augusta's rights in the Collateral, and Borrower shall be required to pay to Augusta the costs and expenses incurred by Augusta in obtaining such coverage. In the event of loss, Borrower shall give prompt notice to the insurance carrier and Augusta. Augusta may make proof of loss if not made promptly by Borrower. Unless Augusta and Borrower otherwise agree in writing, insurance proceeds shall be applied to restoration or repair of the Collateral damaged, if the restoration or repair is economically feasible and Augusta's security is not lessened. If the restoration or repair is not economically feasible or Augusta's security would be lessened, the insurance proceeds shall be applied to the sums secured by this Security Agreement, whether or not then due, with any excess paid to Borrower. If Borrower abandons the Collateral, or does not answer within ten (10) days after notice from Augusta that the insurance carrier has offered to settle the claim, then Augusta may collect the insurance proceeds. Augusta t'-;''' _, '...-:; 8. BUSINESS RECORDS. The Borrower will at all times keep accurate and complete records of the Collateral and upon default or threat of default, Augusta, or any of Augusta's agents, shall have the right to call at the Borrower's place of business during normal hours of business to inspect the books, records, journals, orders, receipts, correspondence and other data relating to the Collateral or to any other transaction between the parties hereto. 9. PROTECTION OF COLLATERAL. The Borrower shall keep the Collateral in good working order and repair and shall not waste or destroy the Collateral or any part thereof. The Borrower shall not use the Collateral in violation of any statute or ordinance and Augusta or its agent shall have the right to examine and inspect the Collateral during normal business hours upon prior notice to Borrower specifying the reasonable cause for the inspection. 10. PROTECTION OF AUGUSTA'S RIGHTS IN THE COLLATERAL. If Borrower fails to perform the covenants and agreements contained in this Security Agreement, or there is a legal proceeding that may significantly affect Augusta's rights in the Collateral (such as a proceeding in bankruptcy, probate, for condemnation or forfeiture or to enforce laws or regulations), then Augusta may do, and pay for, whatever is necessary to protect the value of the Collateral and Augusta's rights in the Collateral. Augusta's. actions may include paying any sums secured by a lien which has priority over this Security Agreement, appearing in court, paying reasonable attorneys' fees and entering the location where the Collateral is to make repairs. Although Augusta may take action under this paragraph, Augusta does not have to do so. Any amounts disbursed by Augusta under this paragraph shall become additional debt of Borrower secured by this Security Agreement. Unless Borrower and Augusta agree to other terms of payment, these amounts shall bear interest from the date of disbursement at the Promissory Note rate and shall be payable, with interest, upon notice from Augusta to Borrower requesting . payment. 11. DEFAULT. Notwithstanding anything to the contrary herein, the Borrower shall be in default under this Security Agreement upon the occurrence of any of the following events or conditions: (a) Default in the payment or performance of any term under the Promissory Note or any other obligations, covenants, liabilities or any other indebtedness of the Borrower, referred to herein or secured hereby, specifically failure to pay when due any amount, principal or interest, payable on the loan made hereunder. (b) Any warranty, representation or statement made or furnished to Augusta by or on behalf of the Borrower proves to have been false in any material respect when made or furnished. (c) Any levy, seizure or attachment of the Collateral. (d) A change in the location of the Collateral without the prior written consent of Augusta, which consent shall not be unreasonably withheld. (e) Dissolution, termination of existence, insolvency, business failure, appointment of a receiver for any part of the Collateral, assignment for the benefit of creditors or the commencement of any proceeding under any bankruptcy or insolvency law by or against the Borrower or any guarantor or surety for the Borrower. ...~. -.. 12. REMEDIES. Upon the occurrence of any such event of default under this Agreement and prior to exercising the appropriate remedies, including, without limitation, the right of acceleration of the indebtedness, Augusta shall give notice of default to the Borrower. The notice shall specify: (1) the default; (2) the action required to cure the default; (3) a date not less than ten (10) days from the date the notice is given to Borrower by which the default must be cured; and (4) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Agreement and sale of the Collateral. If Borrower fails to cure any default prior to the expiration of the ten (10) day period, Augusta may invoke any remedies permitted by this Security Agreement without further notice of demand on Borrower. Augusta may take such action (without notice and without bond, in that Borrower herein expressly waives all rights thereto prior to foreclosure and seizure by Augusta) as it deems advisable to protect and enforce its rights against the Borrower and in and to the Collateral, including, but not limited to, the following actions, each of which may be pursued concurrently or otherwise, at such time and in such order as Augusta may determine, in its sole discretion, without impairing or otherwise, affecting the other rights and remedies of Augusta under this Security Agreement or under any other agreement between Augusta and the Borrower: (a) Declare the Promissory Note to be forthwith due and payable, whereupon the same shall become and be immediately due and payable, both as to principal and interest, without presentment and demand, protest or other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the Promissory Note to the contrary notwithstanding. (b) Receive and retain all the Collateral and proceeds and all other distributions of any kind upon any and all of the Collateral. Borrower agrees to deliver the Collateral to Augusta, and Augusta may without legal process, enter the business premises and take possession of all Collateral and proceeds found therein, without being guilty of trespass, forcible entry or detainer. (c) Exercise any and all rights and remedies afforded Augusta, as a debtor in possession of Collateral or otherwise, under any and all applicable provisions of law, all of which rights and remedies shall be cumulative, and not exclusive, to the extent permitted by law. All rights of Augusta hereunder shall inure to the benefit of Augusta's successors and assigns and all obligations of the Borrower shall bind Borrower's successors and assigns. (d) Take such action as Augusta may elect with respect to the foreclosure, sale, assignment and delivery of the whole, or from time to time any part of, the Collateral, including, without limitation, sell, assign, and deliver the Collateral at any broker's board or at any private sale in a commercially reasonable manner, or at public auction, after advertisement of the time and place of the sale, for cash, for credit or for other property, for immediate or future delivery, and for such price or prices as Augusta shall determine, on commercially reasonable terms, and Augusta may bid for and purchase the whole or any part of the Collateral so sold free from any right or equity of redemption; to adjourn any such sale 01' cause the same to be adjourned from time to time to a subsequent time and place announced at the time and place fixed for the sale; to carry out any agreement to sell any item or items of Collateral in accordance with the terms of such agreement, notwithstanding the fact that after Augusta shall have entered into such ..c_~~\ '''L; . . such sale the fair market value of the property at the time of repossession may be credited upon the amount unpaid by Borrower. In any event, the Borrower agrees to pay the balance forthwith as liquidated damages for the breach of this Agreement. (f) Notice of any sale at public auction pursuant to paragraph (d) shall be sufficient for all purposes if a written notice of any such sale is give to the Borrower by mailing a copy of a notice of such sale (naming the place, date and time thereof and a brief statement of the nature of the Collateral to be sold) to the Borrower not less than five (5) days prior to any such sale and if a similar notice is published at least once, in a newspaper of general circulation published in Richmond County, Georgia not less than three (3) days nor more than ten (10) days prior to such sale. The Borrower agrees that any disposition of Collateral made pursuant to the foregoing shall be deemed to have been made in a commercially reasonable manner, but the foregoing provision shall not be deemed to limit the right of Augusta to dispose of any item of Collateral in any other manner provided in Article 9 of the Uniform Commercial Code. 13. BORROWER'S CLAIMS AGAINST REPOSSESSED COLLATERAL. If Augusta repossesses the Collateral, the Borrower agrees to send notice by registered mail to Augusta within twenty-four (24) hours after repossession if the Borrower claims any articles not included herein or used as security hereby were contained in the Collateral at the time of repossession. The Borrower agrees that failure to do so shall be a waiver and bar to any subsequent claim therefore. The Borrower hereby waives the right to remove any legal action, brought by the holder hereof, from the court originally acquiring jurisdiction. 14. ATTORNEY'S FEES.In the event Augusta is required to take legal action to enforce any of the provisions of this Security Agreement, then in addition to such relief as shall be granted Augusta, Augusta shall also be entitled to reasonable attorney's fees. 15. NOTICES. Any notice to Borrower provided for in this Security Agreement shall be given by delivering it or mailing it by first class mail, unless applicable law requires use of another method. The notice shall be directed to the Collateral Address or any other address Borrower designates by notice to Augusta. Any notice to Augusta shall be given by first class mail to Augusta's address: HOUSING AND COMMUNITY DEVELOPMENT DEPARTMENT, 925 LANEY WALKER BOULEVARD, 2ND FLOOR, AUGUSTA, GEORGIA 30901, or any other address Augusta designates by notice to Borrower. Any notice provided for in this Security Agreement shall be deemed to have been given to Borrower or Augusta when given as provided in this paragraph. 16. TIME OF PERFORMANCE AND WAIVER. In performing any act under this Security Agreement and the Promissory Note secured hereby, time shall be of the essence. Augusta's extension of the time for payment for any indebtedness or the acceptance of only partial or delinquent payments, or the failure of Augusta to enforce strict performance on the part of the Borrower of any covenant, promise or condition herein contained or contained in any other document evidencing the indebtedness owed Augusta by the Borrower shall not operate as a waiver of the right of Augusta thereafter to require that the terms hereof or the terms of such other documents be strictly performed. 17. RIGHTS OF AUGUSTA. The rights and remedies herein conferred upon Augusta shall be cumulative and not alternative and shall be in addition to and not substitution of the rights and remedies conferred by the Uniform Commercial Code .. ,-'--, 18. GOVERNING LAW: SEVERABILITY. This Security Agreement shall be governed by the laws of the State of Georgia. In the event that any provision or clause of this Security Agreement or the Promissory Note conflicts with applicable law, such conflict shall not affect other provisions of this Security Agreement or the Promissory Note which can be given effect without the conflicting provision. To this end the provisions of this Security Agreement and the Promissory Note are declared to be severable. 19. RELEASE. Upon payment of all sums secured by this Security Agreement, Augusta shall cancel this Security Agreement and file a UCC-3 Termination Statement with the Clerk, Richmond County, Georgia without charge to Borrower. 20. CONSTRUCTION AND SURVIVAL. This Agreement is the complete agreement between the parties and any contracts previously executed between the parties, along with such other written or verbal representations or warranties as may have been made by either party, their broker, agents, or assigns, are merged into this Agreement and are extinguished, except as set forth herein. The provisions and warranties contained in this Agreement shall survive the closing. 21. BINDING EFFECT. This Agreement shall inure to the benefit of and be binding upon Augusta and the Borrower and their respective heirs, executors, administrators, successors and assigns and legal representatives, and shall survive the closing of this sale. 22. NUMBER AND GENDER. Whenever required by the context, the singular number shall include the plural and the masculine gender shall include the feminine and the neuter. 23. HEADINGS. Headings of sections, subsections and paragraphs in this Agreement are for convenience only, and neither limit nor amplify the provisions of this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above written. By: The Villa, Inc. OWNER clPWYNdUO ~J/ e0f?j Anneliese Neises As its President Patricia Schaffer As its Corporate Secretary ..........,""" ...~o~ aNolA.'\.. "'~,~ ..-"........,,~ "t I 'Y tI'."'~'" 1\111 .~.. q.. t. IIh'T I~'b If''ln ~.. ~ J~ '-I:) I~ ""'-~ AI \ ~ ,~, ^~, .., r.n~ III! I"J -- ... ::r J ~ ,~. __ :_ if ,"_:'-"\ '""" .' . Exhibit A All Debtor's machinery, equipment, accounts receivable, fixtures, furniture, inventory, and general intangibles now owned or hereafter acquired, including that which is located upon the premises in Richmond County, Georgia, including all additions and accessions thereto and proceeds thereof. Said premises are further described as 3044 Deans Bridge Road, Augusta, Georgia 30906. .