Security Agreement Template

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Form 4.1 Security Agreement
SECURITY AGREEMENT
THIS SECURITY AGREEMENT is made as of this [Date] by and between
[Borrower], whose address is [Borrower=s Address], (“Debtor”) and [Lender],
whose address is [Lender=s Address], (“Secured Party”).
For and in consideration of the promises, covenants and agreements herein
set forth, the parties hereto agree as follows:
1. Debt. The Debtor has incurred an indebtedness to the Secured Party
and, to evidence the indebtedness, has executed and delivered to Secured Party
a Promissory Note (the “Note”) of even date herewith, payable to the order of the
Secured Party, providing for payments of principal and interest and maturity as
provided for therein, and containing provisions for payment of attorneys’ fees and
acceleration of maturity in the event of default, as therein set forth.
2. Collateral. Debtor hereby grants the Secured Party a security interest in
the property described on Exhibit A and incorporated herein by reference togeth-
er with all similar property now owned or hereafter acquired, additions, substitu-
tions, replacements, proceeds and products thereof, wherever located. All items
in which a security interest is granted hereby are referred to as the “Collateral.”
3. Indebtedness Secured. The security interest granted hereby is to secure
payment of the following (the “Indebtedness”):
(a) The amounts due under the Note, together with interest, fees and other
charged provided for therein;(b)
All future advances which Secured
Party may, at its option and for any purpose, make to Debtor, together
with interest thereon;
(c) All sums which Secured Party may, at its option, expend or advance for
the maintenance, preservation and protection of the Collateral, including
without limitation, payment of taxes, levies, assessments, insurance pre-
miums and discharge of liens, together with interest thereon, or in any
other property given as security for payment of the Indebtedness;
(d) All expenses, including reasonable attorneys’ fees, which Secured Party
incurs in connection with collection of any or all Indebtedness secured
hereby or in enforcement or protection of its rights hereunder, or any
other instrument given as security for the Note, or in changes in form of
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Form 4.1 Security Agreement
SECURITY AGREEMENT
THIS SECURITY AGREEMENT is made as of this [Date] by and between
[Borrower], whose address is [Borrower=s Address], (“Debtor”) and [Lender],
whose address is [Lender=s Address], (“Secured Party”).
For and in consideration of the promises, covenants and agreements herein
set forth, the parties hereto agree as follows:
1. Debt. The Debtor has incurred an indebtedness to the Secured Party
and, to evidence the indebtedness, has executed and delivered to Secured Party
a Promissory Note (the “Note”) of even date herewith, payable to the order of the
Secured Party, providing for payments of principal and interest and maturity as
provided for therein, and containing provisions for payment of attorneys’ fees and
acceleration of maturity in the event of default, as therein set forth.
2. Collateral. Debtor hereby grants the Secured Party a security interest in
the property described on Exhibit A and incorporated herein by reference togeth-
er with all similar property now owned or hereafter acquired, additions, substitu-
tions, replacements, proceeds and products thereof, wherever located. All items
in which a security interest is granted hereby are referred to as the “Collateral.”
3. Indebtedness Secured. The security interest granted hereby is to secure
payment of the following (the “Indebtedness”):
(a) The amounts due under the Note, together with interest, fees and other
charged provided for therein;(b)
All future advances which Secured
Party may, at its option and for any purpose, make to Debtor, together
with interest thereon;
(c) All sums which Secured Party may, at its option, expend or advance for
the maintenance, preservation and protection of the Collateral, including
without limitation, payment of taxes, levies, assessments, insurance pre-
miums and discharge of liens, together with interest thereon, or in any
other property given as security for payment of the Indebtedness;
(d) All expenses, including reasonable attorneys’ fees, which Secured Party
incurs in connection with collection of any or all Indebtedness secured
hereby or in enforcement or protection of its rights hereunder, or any
other instrument given as security for the Note, or in changes in form of
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(Rev. 1, 9/99)
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such Indebtedness which may be made from time to time by agreement
between Debtor and Secured Party, together with interest thereon;
(e) All other present or future, direct or indirect, absolute or contingent, lia-
bilities, obligations and indebtedness of Debtor to Secured Party, howev-
er created, and specifically including all or part of any renewal or exten-
sion of the Note whether or not the Debtor executes any extension
agreement or renewal instruments.
4. Warranties and Covenants of Debtor. Debtor expressly warrants and
covenants and agrees that:
(a) Debtor is and will continue to be the owner of the Collateral free from
any lien, security interest or encumbrance, other than that created by
this Security Agreement; Debtor will defend the Collateral against all
claims and demands of all other persons at anytime claiming the same
or any interest therein; and Debtor will not sell the Collateral (except in
the ordinary course of business) without the prior written consent of the
Secured Party;(b) No effective financing statement covering any of the
Collateral or any proceeds thereof is on file in any public office, nor will
Debtor (except as provided herein) execute any financing statement
affecting the Collateral during the term of this Security Agreement with-
out the prior consent of the Secured Party;
(c) Debtor will pay the Indebtedness to Secured Party as the same
becomes due and payable;
(d) Debtor will from time to time as required by Secured Party join with
Secured Party in executing one or more financing statements pursuant to
the Uniform Commercial Code of [State] (and any assignments, exten-
sions or modifications thereof) in form satisfactory to Secured Party;
(e) Debtor will pay all costs of filing any financing, continuation, assignment
or termination statements with respect to the security interest created by
this Security Agreement and hereby appoints Secured Party its
attorney-in-fact to do, at Secured Party’s option and at Debtor’s
expense, all acts and things which Secured Party may deem necessary
to perfect and continue perfected the security interest created by this
Security Agreement;
(f)
Without the prior written consent of Secured Party, Debtor will not volun-
tarily or involuntarily encumber, or agree to encumber any portion of the
Collateral (including the replacement of such Collateral in the ordinary
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course of business), and in the event Secured Party grants written con-
sent for the establishment of another security interest in the Collateral,
and with respect to the Security Agreements of record, Debtor will per-
form its obligations under those security agreements;(g)
Debtor will
pay as they become due all taxes or other liens or claims which may
become a charge against the Collateral;
(h) Debtor will insure the Collateral with companies and in amounts accept-
able to Secured Party, such amount being the full replacement value of
the Collateral or the maximum amount the insurer will permit, against
risks of theft, vandalism, fire and such other risks as are normally
insured against, including standard extended coverage. All insurance
policies shall be written for the benefit of Debtor and Secured Party as
their interests may appear, and the Secured Party shall be named as a
loss payee on an indorsement to all insurance policies. All policies,
indorsements and certificates evidencing the same shall be furnished to
Secured Party. All insurance policies shall provide for at least 10 days’
prior written notice of cancellation to Secured Party;
(i)
Debtor will maintain the Collateral in good condition and repair, and
Secured Party may examine and inspect the Collateral at any reason-
able time and wherever located;
(j)
The location of the Collateral will be at the address specified for the
Debtor in this Agreement. Debtor will not permit any part or all of the
Collateral to be removed from said location, except for temporary peri-
ods in its normal and customary use, without the prior written consent of
Secured Party, and Debtor will give immediate notice to Secured Party
of any change in location of any part or all of the Collateral (and in no
event will Debtor remove, or allow to be removed, any part of all of the
Collateral from the State of [State]);
(k) Debtor will indemnify and hold the Secured Party harmless from any
and all loss, damage, injury or other casualty to persons or property
caused or occasioned by the maintenance, operation and use of the
Collateral by Debtor, its agents, invitees or employees;(l)
Debtor will
from time to time supply Secured Party with a current list specifying the
Collateral at the request of Secured Party;
(m) With respect to any Collateral to be purchased with monies advanced by
Secured Party to Debtor, this Security Agreement creates a purchase
money security interest;
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(n) Debtor will execute and deliver such other and further instruments and
will do such other and further act as in the opinion of the Secured Party
may be necessary or desirable to carry out more effectually the purpos-
es of this instrument, including, without limiting the generality of the fore-
going:
i) prompt correction of any defect which may hereafter be discov-
ered in the title to the Collateral or in the execution and acknowl-
edgment of this instrument, the Note, or any other document used
in connection herewith; and
ii) prompt execution and delivery of all other documents or instru-
ments which in the opinion of the Secured Party are needed to
transfer effectually the Collateral or the proceeds or the Collateral to
the Secured Party.
(o) If the Debtor is a corporation, it is duly organized and validly existing
under the laws of the State of [State] and the execution of this
Agreement has been duly authorized and approved by the Board of
Directors of Debtor and, if required, by the shareholders of Debtor. If the
Debtor is a partnership, it is duly organized and validly existing under
the laws of the State of [State] and the execution of this Agreement has
been authorized and approved by all partners necessary to authorize
the same. Debtor has full power and authority to carry on its business as
now being conducted with full power and authority to enter into this
Agreement and effect the transactions contemplated to be effected by
and under the terms of this Agreement;(p)
There is no pending or
threatened litigation, claim for infringement, proceeding or investigation
by any governmental authority or any other person known to Debtor
against or otherwise affecting Debtor or any of its assets or its officers,
partners, directors or agents in their capacities as such, nor does the
Debtor know of any ground for any such litigation, infringement claims,
proceedings or investigations;
(q) No contract or organizational document prohibits any term or condition
of the security agreement;
(r) The execution and delivery of the security agreement will not violate any
law or agreement governing the Debtor or to which the Debtor is a party;
(s) All information and statements furnished in connection with the Note,
this Security Agreement and any other documents related to this
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secured obligation are true and correct, and contain no false or mislead-
ing statements.
5. Secured Party’s Right to Discharge. At its option, Secured Party may
discharge taxes, liens, assessments, security interest or other encumbrances at
any time levied or placed on the Collateral, may pay for premiums for insurance
on the Collateral, costs of maintenance or preservation of the Collateral, and any
other charges or expenses or perform any obligation imposed upon Debtor here-
under. Debtor agrees to reimburse Secured Party on demand for any payment
made, or any expense incurred by Secured Party, pursuant to the foregoing
authorization. Until reimbursed, the amounts so advanced or expenses incurred
shall be part of the Indebtedness to the Note, with interest thereon at the default
rate specified in the Note.
6. Possession of Collateral. Until default, Debtor may have possession of the
Collateral and use it in any lawful manner not inconsistent with this Agreement and
not inconsistent with any policy of insurance thereon, but upon default Secured Party
shall have the immediate right to possession and use of the Collateral.
7. Events of Default. Any one of the following shall constitute a default for
purposes of this Security Agreement:
(a) If the Debtor uses the Collateral in violation of any statute or ordinance;
or
(b) If Debtor fails to promptly pay when due all taxes and assessments
upon the Collateral or fails to keep the Collateral in good condition and
repair and fully insured; or
(c) If Debtor fails to pay promptly in full any Indebtedness secured hereby
when any part of such Indebtedness becomes due and payable; or
(d) If Debtor breaches any term, condition, representation or covenant to be
performed or observed by Debtor provided in this Security Agreement,
the Note or in any other instrument given in connection with or securing
part or all of the Indebtedness of Debtor to Secured Party; or
(e) If any warranty, representation or statement made or furnished to
Secured Party by or on behalf of Debtor in connection with the Security
Agreement proves to have been false in any respect; or
(f)
If the Collateral, or any part thereof, is levied upon or seized under any
levy or attachment or any other legal process; or
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(Rev. 1, 9/99)

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