"Security Agreement Template"

What Is a Security Agreement?

A Security Agreement is a formal document signed by the lender and the borrower - the latter provides their property or interest in an asset as collateral for the loan. Many financial institutions need more than the promise of the borrower and constant payments, and this financial tool allows them to secure their funds by taking the borrower's property in case they fail to repay their debt. You can download a printable Security Agreement template via the link below.

Alternate Name:

  • Security Contract.

A debtor has a better chance to secure the loan and prove their creditworthiness to a creditor if they offer their assets as collateral - the lender can be more willing to provide them with funds for personal and commercial loans if they know they can cease the property of the debtor after delinquency. Then, the lender can sell the assets to recover the funds borrowed by the debtor and compensate for their financial loss.

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How to Write a Security Agreement?

Follow these steps to draft a Security Contract:

  1. Identify the parties - the debtor and the lender. Write their names and addresses. You may add other contact information for the convenience of counterparts who may need to remain in contact.
  2. Confirm that the debtor grants a security interest in the property to a lender. Describe the property - for instance, if it is a house, you have to write down its location the way it appears in legal documentation; record the main characteristics of the motor vehicle if you choose to pledge it as collateral. Note that you may choose between all kinds of property to determine proper collateral - this list includes but is not limited to equipment, financial instruments, investments, trademarks, intellectual property, etc.
  3. Explain that this arrangement secures a particular loan - identify it by the date and amount. Since most loans are documented in writing, refer to the existing documentation to avoid confusion.
  4. Indicate the debtor's commitment to the agreement - they must promise not to sell, license, lease, or otherwise transfer the collateral in question. This provision also includes the debtor's promise not to grant any third parties security interests or liens in the property which is to be kept in good condition. It is recommended that the lender inspects the property before the document is signed to attest to its current state. If the price of the collateral is high, it may be a good idea to obtain an insurance policy - offer this possibility to the lender if they have any doubts regarding the arrangement.
  5. Determine the default for the purposes of your agreement. You need to list all situations that qualify as a default - for example, the debtor fails to make a payment and does not contact the lender to provide them with a reasonable cause, so the lender has a right to take possession of the collateral.
  6. Confirm both parties understand the contract in its entirety, sign and date the Security Agreement form.

Still looking for a particular form? Take a look at the related templates below:

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Download "Security Agreement Template"

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Security Agreement
This Security Agreement (hereinafter referred to as the “Agreement”) is entered into as
of ___________________, by and between ________________________, with a mailing
address of _______________________________________________________________
_______________________________________ (hereinafter referred to as the “Debtor”)
and ________________________, with a mailing address of ______________________
_________________________________ (hereinafter referred to as the “Secured Party”),
collectively referred to as the “Parties,” both of whom agree to be bound by this
Agreement.
Under the terms hereof, the Secured Party desires to obtain and the Debtor desires to
grant the Secured Party security for all of the Obligations (as hereinafter defined).
NOW, THEREFORE, the Debtor and the Secured Party, intending to be legally
bound, hereby agree as follows:
1. Definitions. ​ “ Collateral” shall include the Debtor's tangible personal property, fixtures,
leasehold improvements, trade fixtures, equipment, and other personal property described
on Exhibit “A” attached hereto and made a part hereof (hereinafter referred to as the
“Personal Property”); all general intangibles relating to or arising from the Personal
Property, all cash and non-cash proceeds (including insurance proceeds) of the Personal
Property, all products thereof and all additions and accessions thereto, substitutions
therefor and replacements thereof.
“Collateral Assignment” means that certain Collateral Assignment of Lessee’s Leasehold
Interest in Lease, dated as of the date hereof, made by the Debtor, as assignor, for the
benefit of the Secured Party, as assignee.
“Loan Documents” means the Note (as hereafter defined), the Collateral Assignment, this
Agreement, and all other documents and instruments evidencing, securing, or executed in
connection therewith.
“Note” means that certain Promissory Note, dated as of the date hereof, made by the
Debtor, for the benefit of the Secured Party, in the original principal amount of
$________________.
“Obligations” shall include all debts, liabilities, obligations, covenants, and duties owing
from the Debtor to the Secured Party of any kind or nature, present or future (including
any interest accruing thereon after maturity, or after the filing of any petition in
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Security Agreement
This Security Agreement (hereinafter referred to as the “Agreement”) is entered into as
of ___________________, by and between ________________________, with a mailing
address of _______________________________________________________________
_______________________________________ (hereinafter referred to as the “Debtor”)
and ________________________, with a mailing address of ______________________
_________________________________ (hereinafter referred to as the “Secured Party”),
collectively referred to as the “Parties,” both of whom agree to be bound by this
Agreement.
Under the terms hereof, the Secured Party desires to obtain and the Debtor desires to
grant the Secured Party security for all of the Obligations (as hereinafter defined).
NOW, THEREFORE, the Debtor and the Secured Party, intending to be legally
bound, hereby agree as follows:
1. Definitions. ​ “ Collateral” shall include the Debtor's tangible personal property, fixtures,
leasehold improvements, trade fixtures, equipment, and other personal property described
on Exhibit “A” attached hereto and made a part hereof (hereinafter referred to as the
“Personal Property”); all general intangibles relating to or arising from the Personal
Property, all cash and non-cash proceeds (including insurance proceeds) of the Personal
Property, all products thereof and all additions and accessions thereto, substitutions
therefor and replacements thereof.
“Collateral Assignment” means that certain Collateral Assignment of Lessee’s Leasehold
Interest in Lease, dated as of the date hereof, made by the Debtor, as assignor, for the
benefit of the Secured Party, as assignee.
“Loan Documents” means the Note (as hereafter defined), the Collateral Assignment, this
Agreement, and all other documents and instruments evidencing, securing, or executed in
connection therewith.
“Note” means that certain Promissory Note, dated as of the date hereof, made by the
Debtor, for the benefit of the Secured Party, in the original principal amount of
$________________.
“Obligations” shall include all debts, liabilities, obligations, covenants, and duties owing
from the Debtor to the Secured Party of any kind or nature, present or future (including
any interest accruing thereon after maturity, or after the filing of any petition in
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bankruptcy, or the commencement of any insolvency, reorganization or like proceeding
relating to the Debtor, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding), whether evidenced by or arising under the Note or this
Agreement or, whether absolute or contingent, joint or several, due or to become due,
now existing or hereafter arising, and all costs and expenses of the Secured Party incurred
in the enforcement, collection or otherwise in connection with any of the foregoing,
including reasonable attorneys' fees and expenses.
2. Grant of Security Interest. ​ T o secure the Obligations, the Debtor, as debtor, hereby
assigns and grants to the Secured Party, as secured party, a continuing lien on and
security interest in the Collateral.
3. Change in Name or Locations. ​ T he Debtor hereby agrees that if the location of the
Collateral changes from the locations listed on Exhibit “A” hereto and made part hereof,
or if the Debtor changes its name or form or jurisdiction of organization, or establishes a
name in which it may do business, the Debtor will immediately notify the Secured Party
in writing of the additions or changes. The Debtor's chief executive office is listed in the
Notice section below.
4. Representations and Warranties. ​ T he Debtor represents, warrants and covenants to
the Secured Party that:
● The Debtor has good, marketable, and indefeasible title to the Collateral, has not
made any prior sale, pledge, encumbrance, assignment, or other disposition of any
of the Collateral, and the Collateral is free from all encumbrances and rights of
setoff of any kind except the lien in favor of the Secured Party created by this
Agreement;
● Except as herein provided, the Debtor will not hereafter without the Secured
Party’s prior written consent sell, pledge, encumber, assign or otherwise dispose of
any of the Collateral or permit any right of setoff, lien or security interest to exist
thereon except to the Secured Party;
● The Debtor will defend the Collateral against all claims and demands of all
persons at any time claiming the same or any interest therein.
5. Debtor's Covenants. ​ T he Debtor covenants that it shall:
● From time to time and at all reasonable times allow the Secured Party, by or
through any of its officers, agents, attorneys, or accountants, to examine or inspect
the Collateral, and obtain valuations and audits of the Collateral, at the Debtor's
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expense, wherever located. The Debtor shall do, obtain, make, execute and deliver
all such additional and further acts, things, deeds, assurances and instruments as
the Secured Party may require to vest in and assure to the Secured Party its rights
hereunder and in or to the Collateral, and the proceeds thereof, including waivers
from landlords, warehousemen, and mortgagees;
● Keep the Collateral in good order and repair at all times and immediately notify
the Secured Party of any event causing a material loss or decline in value of the
Collateral, whether or not covered by insurance, and the amount of such loss or
depreciation;
● Only use or permit the Collateral to be used in accordance with all applicable
federal, state, county, and municipal laws and regulations;
● Have and maintain insurance at all times with respect to all Collateral against risks
of fire (including so-called extended coverage), theft, sprinkler leakage, and other
risks (including the risk of a flood if any Collateral is maintained at a location in a
flood hazard zone) as the Secured Party may reasonably require, in such form, in
the minimum amount of the outstanding principal of the Note and written by such
companies as may be reasonably satisfactory to the Secured Party. Each such
casualty insurance policy shall contain a standard Lender's Loss Payable Clause
issued in favor of the Secured Party under which all losses thereunder shall be paid
to the Secured Party as the Secured Party's interest may appear. Such policies shall
expressly provide that the requisite insurance cannot be altered or canceled
without at least ______ days prior written notice to the Secured Party and shall
insure the Secured Party notwithstanding the act or neglect of the Debtor. Upon
the Secured Party’s demand, the Debtor shall furnish the Secured Party with
evidence of insurance as the Secured Party may require. In the event of failure to
provide insurance as herein provided, the Secured Party may, at its option, obtain
such insurance and the Debtor shall pay to the Secured Party, on-demand, the cost
thereof. Proceeds of insurance may be applied by the Secured Party to reduce the
Obligations or to repair or replace Collateral, all in the Secured Party's sole
discretion;
● If any of the Collateral is, at any time, in the possession of a bailee, the Debtor
shall promptly notify the Secured Party thereof and, if requested by the Secured
Party, shall promptly obtain an acknowledgment from the bailee, in form and
substance satisfactory to the Secured Party, that the bailee holds such Collateral
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for the benefit of the Secured Party and shall act upon the instructions of the
Secured Party, without the further consent of the Debtor.
6. Negative Pledge, No Transfer. The Debtor will not sell or offer to sell or otherwise
transfer or grant or allow the imposition of a lien or security interest upon the Collateral
or use any portion thereof in any manner inconsistent with this Agreement or with the
terms and conditions of any policy of insurance thereon.
7. Further Assurances. The Debtor hereby irrevocably authorizes the Secured Party at
any time and from time to time to file in any Uniform Commercial Code jurisdiction any
initial financing statements and amendments thereto that:
● Indicate the Collateral (i) as all assets of the Debtor or words of similar effect,
regardless of whether any particular asset comprised in the Collateral falls within
the scope of Article 9 of the Florida Uniform Commercial Code or such
jurisdiction, or (ii) as being of an equal or lesser scope or with greater detail; and
● Contain any other information required by part 5 of Article 9 of the Florida
Uniform Commercial Code for the sufficiency or filing office acceptance of any
financing statement or amendment, including, but not limited to (i) whether the
Debtor is an organization, the type of organization and (ii) any organization
identification number issued to the Debtor. The Debtor agrees to furnish any such
information to the Secured Party promptly upon request. The Debtor also ratifies
its authorization for the Secured Party to have filed in any Uniform Commercial
Code jurisdiction any like initial financing statements or amendments thereto if
filed prior to the date hereof.
8. Events of Default. ​ T he Debtor shall, at the Secured Party’s option, be in default under
this Agreement upon the happening of any of the following events or conditions (each, an
“Event of Default”):
● A failure to pay any amount due under the Note or this Agreement within ______
days of the date the same is due;
● The failure by the Debtor to perform any of its other obligations under this
Agreement within ______ days of notice from the Secured Party of the same;
● Falsity, inaccuracy, or material breach by the Debtor of any written warranty,
representation, or statement made or furnished to the Secured Party by or on
behalf of the Debtor;
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● An uninsured material loss, theft, damage, or destruction to any of the Collateral,
or the entry of any judgment against the Debtor or any lien against or the making
of any levy, seizure or attachment of or on the Collateral;
● The failure of the Secured Party to have a perfected first priority security interest
in the Collateral;
● Any indication or evidence received by the Secured Party that the Debtor may
have directly or indirectly been engaged in any type of activity which, in the
Secured Party's discretion, might result in the forfeiture of any property of the
Debtor to any governmental entity, federal, state or local.
9. Remedies. ​ U pon the occurrence of any such Event of Default and at any time
thereafter, the Secured Party may declare all Obligations secured hereby immediately due
and payable and shall have, in addition to any remedies provided herein or by any
applicable law or in equity, all the remedies of a secured party under the UCC. The
Secured Party’s remedies include, but are not limited to, to the extent permitted by law,
the right to:
● Peaceably by its own means or with judicial assistance enter the Debtor's premises
and take possession of the Collateral without prior notice to the Debtor or the
opportunity for a hearing;
● Render the Collateral unusable;
● Dispose of the Collateral on the Debtor's premises; and
● Require the Debtor to assemble the Collateral and make it available to the Secured
Party at a place designated by the Secured Party.
Unless the Collateral is perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market, the Secured Party will give the Debtor
reasonable notice of the time and place of any public sale thereof or of the time after
which any private sale or any other intended disposition thereof is to be made. The
requirements of commercially reasonable notice shall be met if such notice is sent to the
Debtor at least ______ days before the time of the intended sale or disposition. Expenses
of retaking, holding, preparing for sale, selling, or the like shall include the Secured
Party's reasonable attorney's fees and legal expenses, incurred or expended by the
Secured Party to enforce any payment due it under this Agreement either as against the
Debtor, or in the prosecution or defense of any action, or concerning any matter growing
out of or connection with the subject matter of this Agreement and the Collateral pledged
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