EXPIRATION DATE 12/31/93
EXHIBIT 10.l0
U.S. SMALL BUSINESS ADMINISTRATION
SECURITY AGREEMENT
1. CAFE LA FRANCE, INC. (hereinafter called "Debtor"),
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(Name)
000 Xxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 00000 , for value received
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(Address)
hereby grants to HOME LOAN AND INVESTMENT BANK, F.S.B. ,
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(Name)
000 Xxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 00000 (hereinafter called
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(Address)
"Secured Party"), a security interest in the property described below
(hereinafter collectively called "Collateral") to secure the payment of the
principal and interest on and all obligations under a note (hereinafter called
the "Note"), dated
February 28, 1996, of the Debtor payable to the order of the Secured Party, in
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the principal amount of Three Hundred Fifty Thousand Dollars ($350,000), all
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renewals and extensions of the Note, and all costs, expenses, advances and
liabilities which may be made or incurred by Secured Party in the disbursement,
administration and collection of the loan evidenced by the Note and in the
protection, maintenance and liquidation of the security interest hereby granted
with interest at the maximum legal rate on such costs, expenses, advances and
liabilities. The note and all other obligations secured hereby are herein
collectively called the "Liabilities."
2. The Collateral in which this security interest is granted is all of the
Debtor's property described below in reference to which an "X" or checkmark has
been placed in the box applicable thereto, together with all the proceeds and
products therefrom. If two such boxes are so marked, the security interest so
designated secures the purchase money from the loan used by the Debtor to
acquire title to the Collateral.
[X][X] a. All equipment and machinery, including power-driven machinery and
equipment, furniture and fixtures now owned or hereafter acquired,
together with all replacements thereof, all attachments, accessories,
parts and tools belonging thereto or for use in connection therewith.
[ ][ ] b. All passenger and commercial motor vehicles registered for use upon
public highways or streets, now owned or hereinafter acquired,
together with all replacements thereof, all attachments, accessories,
parts, equipment and tools belonging, thereto or for use in connection
therewith.
[X][X] c. All inventory, raw materials, work in process and supplies now owned
or hereinafter acquired.
[X][X] d. All accounts receivable now outstanding or hereafter arising.
[X][X] e. All contract rights and general intangibles now in force or hereafter
acquired.
3. Debtor shall not transfer, sell or assign Debtor's interest in the Collateral
nor permit any other security interest to be created thereon without Secured
Party's prior written approval, except that Debtor may sell the inventory listed
in Paragraph 2.c. hereof in the ordinary course of business on customary terms
and at usual prices and may collect as Secured Party's agent sums due on
accounts receivable and contract rights listed in Paragraphs 2.d. and 2.e. until
advised otherwise by Secured Party.
SBA FORM 1059 (10-86) REF SOP 70 50 Use 11-85 Edition Until Exhausted
4. Debtor shall keep, store or regularly garage all Collateral at locations
approved by Secured Party in writing.
5. Debtor shall not conduct business under any other name than that given above
nor change or reorganize the type of business entity under which it does
business except upon prior written approval of Secured Party. If such approval
is given, Debtor guarantees that all documents, instruments and agreements
demanded by Secured Party shall be prepared and filed at Debtor's expense before
such change of name or business entity occurs.
6. Debtor shall pay the filing and recording costs of any documents or
instruments necessary to perfect, extend, modify, or terminate the security
interest created hereunder, as demanded by Secured Party.
7. Debtor shall maintain all Collateral in good condition, pay promptly all
taxes, judgments, or changes of any kind levied or assessed theron, keep current
all rent due on premises where Collateral is located, and maintain insurance on
all collateral against such hazards, in such amounts and with such companies as
Secured Party may demand, all such insurance policies to be in the possession of
Secured Party and to contain a Lender's Loss Payable Clause naming Secured Party
in a manner satisfactory to Secured Party. Debtor hereby assigns to Secured
Party any proceeds of such policies and an unearned premiums thereon, and
authorizes and empowers Secured Party to collect such sums and to execute and
endorse in Debtor's name all proofs of loss, drafts, checks and any other
documents necessary to accomplish such collections, and any persons or entities
making payments to Secured Party under the terms of this Paragraph are hereby
relieved absolutely from any obligation to see to the application of any sums so
paid.
8. Debtor shall be in default hereunder if Debtor fails to perform any of the
liabilities imposed hereby or any other obligation required by the various
instruments or papers evidencing or securing this loan, or if the full balance
of the loan becomes immediately payable under the terms of such instruments,
either automatically or by declaration of the Secured Party. In the event of any
default, Secured Party may, in its own discretion, cure such default and, if it
does so, any expenditures made for such purpose shall be added to the principal
of the Note.
9. In the event of default, Debtor shall assemble and make available all
Collateral at any place designated by Secured Party. Debtor acknowledges being
advised of a constitutional right to a court notice and hearing to determine
whether, upon default, there is probable cause to sustain the validity of the
Secured Party's claim and whether the Secured Party is entitled to possession of
the Collateral and being so advised, Debtor hereby voluntarily gives up, waives
and surrenders any right to a notice and hearing to determine whether there is
probable cause to sustain the validity of Secured Party's claim. Any notices
required pursuant to any state or local law shall be deemed reasonable if mailed
by Secured Party to the persons entitled thereto at their last known addresses
at least ten days prior to disposition of the Collateral, and, in reference to a
private sale, need state only that Secured Party intends to negotiate such a
sale. Disposition of Collateral shall be deemed commercially reasonable if made
pursuant to a public offering advertised at least twice in a newspaper of
general circulation in the community where the Collateral. is located or by a
private sale for a sum equal to or in excess of the liquidation value of the
Collateral as determined by Secured Party.
10. All rights conferred on Secured Party hereby are in addition to those
granted to it by any state or local law or any other law. Failure or repeated
failure to enforce any rights hereunder shall not constitute an estoppel or
waiver of Secured Party's rights to exercise such rights accruing prior or
subsequent thereto. Secured Party shall not be liable for any loss to Collateral
in its possession, nor shall such loss diminish the debt due, even if the loss
is caused or contributed to by Secured Party's negligence.
IN WITNESS WHEREOF, The above-named Debtor has executed this Security Agreement
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as a sealed instrument this 28th day of February, 1996.
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CAFE LA FRANCE, INC.
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(corpoate seal) By: /s/ Xxxxxx X. XxXxxxx
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Xxxxxx X. XxXxxxx, President
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SBA Form 1059 (10-86) US Government Printing Office 0000-000-000/51734 Page 2
