EXHIBIT 10.4
SECURITY AGREEMENT
THE UNDERSIGNED, EXPRESSO FRANCHISE CORP. (hereinafter called
"Debtor"), hereby grants to the following individuals:
Xxxxx Xxxxxx
Xxx Xxxxxxxxxx
Xxxxx X. Xxxx
Xxxxx X. Xxxxxxxx
Xxxxx Xxxx
Xxxx XxXxxxxx
Solomon Xxxxxxx
Xxxxx Milgard
Xxxxxx X. Xxxxxxxx
(hereinafter cumulatively called "Secured Party"), a security interest in the
following described property; together with all increases therein and
improvements therefor, together with all proceeds of all such property, to-wit:
All furniture, fixtures, equipment, supplies, inventory of other
merchandise, accounts receivable, goodwill, (including all rights to
the name "Tuscany Premium Coffee'), and all other tangible or
intangible property owned by Debtor and used in connection with its
business conducted at each of the premises described in Exhibit A
attached hereto, including all of Debtor's rights or interest under any
lease or other rental agreement for occupancy of said premises.
All of said property is hereinafter referred to as the "Property."
This Security Agreement is given to secure the payment and performance
of all indebtedness and obligations of Debtor to Secured Party presently
existing and hereinafter arising, direct or indirect, and interest thereon. In
particular, this Security Agreement is given in consideration for the Secured
Party's execution of a Commercial Guaranty ("the Guaranty"), guaranteeing the
Debtor's compliance with the terms of its Loan, Line of Credit, Note or other
indebtedness with Seattle-First National Bank ("the Indebtedness"). Regardless
of the adequacy of any security which the Secured Party may at any time hold
hereunder, and regardless of the adequacy of any other security which Secured
Party may obtain with any other transactions, any deposits or any other moneys
owing from Secured Party to Debtor shall (as collateral in the possession of
Secured Party) constitute additional security for, and may be set off against,
obligations secured hereby even though said obligations may not then be due.
DEBTOR HEREBY REPRESENTS, COVENANTS AND AGREES, WITH SECURED
PARTY AS FOLLOWS:
1. Use of Property. Debtor agrees to comply with any governmental regulation
affecting the use of the Property and will not waste, injure nor destroy the
Property, nor use nor permit the use of
the Property in any unlawful manner. Debtor represents and agrees that the
primary use of the Property is and will be for business use.
2. Debtor and Collateral Location. The address appearing next to the Debtor's
signature below is the address of Debtor's chief executive office.
Collateral is located at the Debtor's address appearing below, and at the
addresses listed on Exhibit A attached hereto.
Debtor will give Secured Party prior written notice of any change in either the
Debtor's chief executive office or the location of its collateral.
3. Notice. Debtor will give Secured Party written notice of any default with
respect to the Indebtedness, receipt of any notice of default from Seattle-First
National Bank with respect to the Indebtedness, or any other document indicating
that Debtor is not in compliance with respect to any matter that may result in
the Secured Party's liability to Seattle-First National Bank under the terms of
the Guaranty, within twenty-four (24) hours of the occurrence of the default or
receipt of the aforementioned notice of said default.
4. Ownership and Liens. Debtor owns the property and the same is free and clear
of all security interests and encumbrances of every nature. Any certificate of
title now or hereafter existing on any of the Property will be delivered to the
Secured Party and will recite the interest of Secured Party.
5. Taxes. Debtor will pay before delinquency all taxes or other governmental
charges that are or may become a lien or charge on the Property and will pay any
tax which may be levied on any obligation secured hereby.
6. Repairs and Inspection. Debtor will keep the Property in good repair. Secured
Party may inspect the Property at reasonable times and intervals and may for
this purpose enter the premises upon which the Property is located.
7. Insurance. Debtor will keep the Property continuously insured by an insurer
approved by Secured Party against fire, theft and other hazards designated at
any time by Secured Party, in an amount equal to the full insurable value
thereof or to all sums secured hereby, with such form of loss-payable clause as
designated by and in favor of Secured Party, and will deliver the certificates
of insurance showing maintenance of said insurance policies to the Secured
Party. In the event of loss, Secured Party shall have full power to collect any
and all insurance upon the Property and to apply the same at its option to any
obligation secured hereby, whether or not matured, or to the restoration or
repair of the Property. Secured Party shall have no liability whatsoever for any
loss that may occur by reason of the omission or lack of coverage of any such
insurance.
8. Removal or Sale. Without the prior written consent of Secured Party, Debtor
will not remove the Property is located and Debtor will not sell nor lease the
Property or any interest therein.
9. Expenses Incurred by Secured Party. Secured Party is not required to, but may
at its option,
pay any tax or other charge or expense payable by Debtor and any filing or
recording fees and any amounts so paid shall be repayable by Debtor upon Demand.
Debtor will also repay upon demand all of Secured Party's expenses incurred in
collecting, insuring, conserving or protecting the collateral or in any
inventories, audits, inspections or other examination by Secured Party in
respect of the collateral. All such sums shall bear interest at the lesser of
one and one-half percent (1.5%) per month or the maximum rate permitted by law
from the date of payment by the Secured Party until repaid by Debtor and such
sums and interest thereon shall be secured hereby. The rights granted by this
paragraph are not a waiver of any other rights of Secured Party arising from
breach of any of Debtor's covenants.
10. Waivers. This Security Agreement shall not be qualified or supplemented by
course of dealing. No waiver or modification by Secured Party of any of the
terms or conditions hereof shall be effective unless in writing signed by
Secured Party. No waiver nor indulgence by Secured Party as to any required
performance by Debtor shall constitute a waiver as to any subsequent required
performance or other obligation of Debtor hereunder. Debtor hereby waives any
counter claims or defense hereunder against any assignee for value.
11. Default. Time is of the essence in this Security Agreement, and in any of
the following events, hereinafter called "Events of Default," to-wit:
a. Any failure by Debtor to comply with any of the terms of the
Indebtedness;
b. Issuance by Seattle-First National Bank of any notice of
default with respect to the Indebtedness;
c. Issuance by Seattle-First National Bank of any notice
indicating its intent to recover from the Secured Party
pursuant to the Guaranty;
d. Any failure to perform as required by any covenant or
agreement herein (subject to the right to cure any
non-monetary default described herein other than as described
in sub-sections (a), (b), and (C) of Section 11 within ten
(10) days after receipt of written notice of said default from
Secured Party); or
e. If the property should be seized or levied upon under any
legal or governmental process against Debtor or against the
property; or
f. If Debtor becomes insolvent or is the subject of a petition in
bankruptcy, either voluntary or involuntary, or in any other
proceeding under the federal bankruptcy laws; or makes an
assignment for the benefit of creditors; or if Debtor is named
in or the property is subjected to a suite for the appointment
of a receiver; or
g. Dissolution or liquidation of Debtor.
Then and in any of such events of a default, the Secured Party shall
have an immediate right to pursue the remedies set forth in this Security
Agreement.
12. Remedies. In the event of a default hereunder, Secured Party shall have
remedies provided by law; and without limiting the generality of the foregoing,
shall be entitled as follows:
a. Debtor agrees to put Secured Party in possession of the
Property on demand; and
b. Secured Party is authorized to enter any premises where the
Property is situated and take possession of said Property
without notice or demand and without legal proceedings; and
c. At the request of Secured Party, Debtor will assemble the
Property and make available to Secured Party at a place
designed by Secured Party which is reasonably convenient to
both parties; and
d. Debtor agrees that a period of ten (10) days from the time
notice is sent, by first-class mail or otherwise, shall be a
reasonable period of notification of a sale or other
disposition of the Property; and
e. Debtor agrees that any notice or other communication by
Secured Party to Debtor shall be sent to the address of the
Debtor stated herein; and
f. Debtor agrees to pay on demand the amount of all expenses
reasonably incurred by Secured Party in protecting or
realizing on the Property. In the event that this Security
Agreement or any obligation secured by it is referred to an
attorney for protecting or defending the priority of Secured
Party's interest or for collection or realization procedures,
Debtor agrees to pay a reasonable attorney's fee, including
fees incurred in both trail and appellate courts, or fees
incurred without suit, and expenses of title search and all
court costs and costs of public officials. The sums agrees to
be paid in this subparagraph shall be secured hereby; and
g. If Secured Party disposes of the Property, Debtor agrees to
pay any deficiency remaining after application of the net
proceeds to the Indebtedness secured hereby.
13. Applicable Law. This Security Agreement shall be governed by the laws of the
State of Washington.
14. Execution of Counterparts of Agreement. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original and
all of which shall constitute one and the same Agreement. A true and correct
photocopy of this Agreement, as executed by all parties hereto, may be used in
lieu of the original for all purposes.
DATED this 13th day of September, 1995.
"DEBTOR" "SECURED PARTY"
Expresso Franchise Corp.
/s/ XXXX XXXXXXXX /s/ XXXXX XXXXXX
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XXXX XXXXXXXX XXXXX XXXXXX
President 00000 XX 0xx Xx., Xxxxx 0000
000 Xxxxx Xxxxxx, Xxxxx 0000 Xxxxxxxx, XX 00000
Xxxxxxx, Xxxxxxxxxx 00000
/s/ XXX XXXXXXXXXX
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XXX XXXXXXXXXX
/s/ XXXXX X. XXXX
------------------------------------
XXXXX X. XXXX
/s/ XXXXX X. XXXXXXXX
------------------------------------
XXXXX X. XXXXXXXX
/s/ XXXXX XXXX
------------------------------------
XXXXX XXXX
/s/ XXXX XXXXXXXX
------------------------------------
XXXX XXXXXXXX
/s/ XXXXXXX XXXXXXX
------------------------------------
XXXXXXX XXXXXXX
/s/ XXXXX MILGARD
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XXXXX MILGARD
/s/ XXXXXX X. XXXXXXXX
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XXXXXX X. XXXXXXXX
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Store Collateral For Seafirst Guarantors
CURRENTLY OPEN ADDRESS
1. Norwest Tower 0000 Xxxxxxx Xxxxxx, Xxxxxx, XX
2. Meadowlake Village 00000 Xxxx 00xx Xxxxxx, Xxxxxx, XX
3. NationsBank 000 Xxxx Xxxxxx, Xxxxxx, XX
4. First City Tower 0000 Xxxxxx Xxxxxx, Xxxxxxx, XX
5. Society Tower 000 Xxxxxx Xxxxxx, Xxxxxxxxx, XX
6. Chagrin Village 00 Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, XX
7. Park Building 000 Xxxxxx Xxxxxx, Xxxxxxxxx, XX
8. One Mellon Tower 000 Xxxxx Xxxxxx, Xxxxxxxxxx, XX
9. Xxxxx Xxxxxx Xxxxx 000 Xxxxx Xxxxxx, Xxxxxxxxxx, XX
10. Southside 000 X. Xxxxxx Xx., Xxxxxxxxxx
11. Shadyside 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx
12. Xxxxxxxx Xxxx 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx
00. University of Pennsylvania 000 X. 00xx Xx., Xxxxxxxxxxxx
14. Sixth & Olive 000 Xxxxx Xxxxxx, Xx. Xxxxx, XX
UNDER CONSTRUCTION
15. Central West End 0000 XxXxxxxxx, Xx. Xxxxx, XX
16. 16th & Walnut 000 X. 00xx Xxxxxx, Xxxxxxxxxxxx, XX
17. King of Xxxxxxx Xxxx 000 Xxxx Xxxx., Xxxx xx Xxxxxxx
00. XxXxxxxx Xxxxxxx XxXxxxxx/Xxxxxxx, Pittsburgh, PA
19. Xxxxxxxx Xxxxx Xxxxxx Xx., Xxxxxxxx, XX
20. Foxridge S. County Line Rd., Denver, CO
LEASES AWAITING DESIGN
21. Xxxxxxx 00 X. Xxxxxxx, Xxxxxxx, XX
22. Xxxxxxx Xxxxxx Xx. 00/Xxxxxxxxx, Xxxxxxx, XX
23. Shaker Square 00000 Xxxxxx Xxx, Xxxxxxxxx, XX
24. Westin Xx Xxxx Grant St., Pittsburgh, PA
