Security Agreement for Asset Sale
1.
Names and Secured Property
____________, Buyer, grants to _____________, Seller, a continuing security interest in
the following property (the "Secured Property"), which consists of:
A.
The property listed in Attachment __, and
B.
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 and Other Documents
Concurrently with the execution of this Security Agreement, Seller will have the right to
file a UCC 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 ________________ and use it only in the operation
of the ___________ business.
B.
Maintain the Secured Property in good repair.
C.
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.
Pay all taxes on the Secured Property as taxes become due.
E.
Insure the Secured Property against normal risks, with an insurance policy that
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Security Agreement for Asset Sale
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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 ___ days late in making any payment required by the promissory
note or if the Buyer fails to correct any violations of Clause __ within __ 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 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 ____ 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:
______.
8.
Entire Agreement
This is the entire agreement between the parties concerning Seller's security interest in
the Secured Property. It replaces and supersedes any and all oral agreements between the
parties, as well as any prior writings on that subject.
9.
Successors and Assignees
This agreement binds and benefits the heirs, successors, and assignees of the parties.
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Security Agreement for Asset Sale
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10.
Governing Law
This agreement will be governed by and construed in accordance with the laws of the
State of __________________.
11.
Modification
This agreement may be modified only by a written amendment signed by both parties.
12.
Waiver
If either party waives any provision of this agreement at any time, that waiver will only
be effective for the specific instance and purpose for which that 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.
13.
Severability
If a court determines that a provision in this agreement is invalid or not enforceable, that
determination will affect only that provision. The provision will be modified only to the
extent necessary to make it valid and enforceable. The rest of the agreement will be
unaffected.
SELLER
________________________, a __________________
By: ____________________________________
Printed name: __________________
Title: ________________________
Address:
__________________
______________________________
Dated: _____________
BUYER
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Security Agreement for Asset Sale
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________________________, a __________________
By: ____________________________________
Printed name: __________________
Title: ________________________
Address:
__________________
______________________________
Dated: _____________
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Security Agreement for Asset Sale
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