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EXHIBIT C
<br />SECURITY AGREEMENT
<br />THIS SECURITY AGREEMENT, dated February 20, 1996, is entered into by and between the
<br />CITY OF SAN LEANDRO, hereafter designated "the Secured Party," and Carol lohnson, hereafter
<br />designated "the Debtor," as follows:
<br />FOR VALUE RECEIVED, the Debtor grants to the Secured Party a security interest in the
<br />following described property, referred to in this SECURITY AGREEMENT as the collateral: All
<br />fixtures, equipment, and improvements owned or to be owned by the Debtor and located or to be
<br />located in Debtor's chief place of business located at 186 Pelton Center Way, San Leandro,
<br />California, to secure (1) the Debtor's PROMISSORY NOTE OF $30,000 to the Secured Party dated
<br />concurrently herewith, payable as to principal and interest as provided in the note; (2) all
<br />expenditures by the Secured Party for taxes, insurance, and repairs to and maintenance of the
<br />Collateral incurred by the Secured Party in the collection and enforcement of the note and other
<br />indebtedness of the Debtor; and (3) all liabilities of the Debtor to the Secured Party now existing or
<br />incurred in the future, matured or unmatured, direct or contingent, and any renewals, extensions,
<br />and substitutions of those liabilities.
<br />The Debtor warrants and covenants (1) that the Collateral currently owned by the Debtor is
<br />used and shall continue to be used in the Debtor's business, (2) that the Collateral to be owned by
<br />the Debtor is being acquired with the proceeds of the Loan from the Secured Party evidenced by
<br />the LOAN AGREEMENT and PROMISSORY NOTE dated concurrently herewith between the Debtor
<br />and the Secured Party, and (3) that the Collateral will be kept at Debtors chief place of business.
<br />The Debtor warrants, covenants, and agrees as follows:
<br />Title
<br />1. Except for the security interest granted by this Agreement, the Debtor has, or on acquisition
<br />will have, full title to the Collateral free from any liens, security interests, encumbrances, or claims,
<br />and the Debtor will, at the Debtor's cost and expense, defend any action that may affect the Secured
<br />Party's security interest in, or the Debtor's title to, the Collateral.
<br />Financing Statement
<br />2. The Debtor shall execute the Financing Statement attached hereto as Exhibit 1 and further
<br />shall execute any additional Financing Statement(s) deemed by the Secured Party to be necessary
<br />or useful to perfect the Secured Party's security interest in the Collateral. No financing statement
<br />covering the Collateral or any part of it or any proceeds of it is on file in any public office, except
<br />the financing statement to be prepared pursuant to this SECURITY AGREEMENT.
<br />Sale, Lease, or Disposition of Collateral
<br />3. The Debtor will not, without the written consent of the Secured Party, sell, contract to sell,
<br />lease, encumber, or dispose of the Collateral or any interest in it.
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