HomeMy WebLinkAboutTHE VILLA INC SECURITY AGREEMENT
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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
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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
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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.
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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
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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
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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
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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. .