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SECURITY AGREEMENT

[// GUIDANCE: This template is intended for secured transactions governed by Article 9 of the Uniform Commercial Code as adopted in the selected state. Customize all bracketed items, confirm consistency with the underlying credit documents, and coordinate any required UCC or real-property filings.]


TABLE OF CONTENTS

I. Document Header
II. Definitions
III. Operative Provisions
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block


I. DOCUMENT HEADER

SECURITY AGREEMENT
This Security Agreement (this “Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

  1. [SECURED PARTY NAME], a [STATE OF ORGANIZATION] [ENTITY TYPE] having its principal place of business at [ADDRESS] (“Secured Party”); and
  2. [DEBTOR NAME], a [STATE OF ORGANIZATION] [ENTITY TYPE] having its chief executive office at [ADDRESS] (“Debtor”).

Recitals

A. Debtor is indebted to Secured Party under that certain [NAME OF CREDIT DOCUMENT] dated as of [DATE] (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”).

B. As a condition precedent to the extension of credit under the Credit Agreement and in order to secure the Obligations (as defined below), Debtor has agreed to grant Secured Party a continuing security interest in the Collateral (as defined below) in accordance with Article 9 of the Uniform Commercial Code, U.C.C. § 9-101 et seq. (“UCC”), as adopted in the State of [GOVERNING LAW STATE] (the “Governing Law State”).

NOW, THEREFORE, in consideration of the mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:


II. DEFINITIONS

For purposes of this Agreement, the following terms have the meanings set forth below. Capitalized terms used but not defined herein have the meanings ascribed to them in the Credit Agreement.

“Collateral” means all of Debtor’s right, title, and interest, whether now owned or hereafter acquired, in and to the following property and interests in property, wherever located, and all Proceeds thereof:
(a) Accounts;
(b) Chattel Paper (tangible and electronic);
(c) Deposit Accounts;
(d) Documents;
(e) Equipment;
(f) Fixtures;
(g) General Intangibles (including Payment Intangibles and Software);
(h) Goods;
(i) Instruments;
(j) Inventory;
(k) Investment Property;
(l) Letter-of-Credit Rights;
(m) Supporting Obligations; and
(n) all additions, accessions, substitutions, replacements, and Proceeds of any of the foregoing.
[// GUIDANCE: Exclude assets that cannot be pledged (e.g., consumer accounts, trust assets, certain licenses) by adding carve-outs here.]

“Event of Default” has the meaning set forth in Section VI.1.

“Obligations” means all present and future indebtedness, liabilities, and obligations of Debtor to Secured Party arising under the Credit Agreement, this Agreement, and any other Loan Document, whether direct or indirect, absolute or contingent, joint or several, secured or unsecured, matured or unmatured, including interest, fees, expenses, and indemnity obligations.

“Permitted Lien” means any lien expressly permitted under Section V.2(b).

“Proceeds” has the meaning assigned in U.C.C. § 9-102(a)(64).

Additional defined terms appear in the body of this Agreement and are incorporated herein alphabetically.


III. OPERATIVE PROVISIONS

  1. Grant of Security Interest. Debtor hereby grants, pledges, assigns, hypothecates, and transfers to Secured Party a continuing first-priority security interest in the Collateral to secure the prompt payment and performance of the Obligations.

  2. Perfection. Debtor authorizes Secured Party to file one or more UCC financing statements, amendments, or continuations covering the Collateral (including any filings describing the Collateral as “all assets” of Debtor) without Debtor’s signature to perfect or continue perfection of the security interest created hereby.

  3. Continuing Nature; No Novation. This Agreement is a continuing security agreement and will (a) remain in full force until the Obligations have been indefeasibly paid in full in cash, and (b) not be deemed to create a novation of any prior obligations.

  4. Future Advances. This Agreement secures future advances and extensions of credit, whether or not the financing statement so states.

  5. Conditions Precedent. The effectiveness of this Agreement is subject to satisfaction (or waiver by Secured Party) of all conditions precedent set forth in Section [REFERENCE] of the Credit Agreement, including delivery of any landlord, bailee, or warehouseman waivers.


IV. REPRESENTATIONS & WARRANTIES

Debtor represents and warrants to Secured Party that, as of the Effective Date and continuing thereafter:

  1. Organization; Power. Debtor is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization and has the power and authority to execute, deliver, and perform this Agreement.

  2. Authorization; Enforceability. The execution, delivery, and performance of this Agreement have been duly authorized by all requisite corporate or other organizational action; this Agreement constitutes the legal, valid, and binding obligation of Debtor, enforceable against Debtor in accordance with its terms, subject to applicable bankruptcy, insolvency, or equitable principles.

  3. Title to Collateral. Debtor has good and marketable title to the Collateral, free of any lien except Permitted Liens.

  4. Location of Collateral; Jurisdiction of Organization. The chief executive office of Debtor, the books and records relating to the Collateral, and each location where Collateral is kept are set forth on Schedule 1. Debtor’s jurisdiction of organization is [STATE]. Debtor has not within the preceding five (5) years changed its name, jurisdiction of organization, or organizational structure except as disclosed on Schedule 1.

  5. No Violation. The execution, delivery, and performance of this Agreement do not (a) contravene any organizational documents, (b) violate any law, or (c) result in the creation or imposition of any lien on the Collateral except in favor of Secured Party.

  6. Solvency. After giving effect to this Agreement and the transactions contemplated hereby, Debtor is Solvent. “Solvent” means that Debtor is able to pay its debts as they become due in the ordinary course of business and has assets having a fair salable value greater than its liabilities.

  7. Survival. All representations and warranties survive the execution and delivery of this Agreement until termination of this Agreement pursuant to Section IX.3.


V. COVENANTS & RESTRICTIONS

  1. Affirmative Covenants. Until termination of this Agreement:
    (a) Maintenance of Collateral. Debtor shall (i) keep the Collateral in good repair, (ii) pay all taxes and assessments relating to the Collateral before delinquency, and (iii) maintain insurance on the Collateral in accordance with Section V.1(c).
    (b) Records. Debtor shall keep accurate and complete records concerning the Collateral and, upon request, promptly provide Secured Party with copies.
    (c) Insurance. Debtor shall maintain insurance covering loss or damage to the Collateral in such amounts, with such deductibles, and with such insurers as are reasonably satisfactory to Secured Party, naming Secured Party as lender’s loss-payee or additional insured, as applicable.
    (d) Further Assurances. Debtor shall execute and deliver such further instruments and documents, and take all actions, that Secured Party reasonably requests to perfect, protect, or enforce its security interest.

  2. Negative Covenants. Without the prior written consent of Secured Party, Debtor shall not:
    (a) Transfers. Sell, lease, license, or otherwise transfer any Collateral, except sales of inventory in the ordinary course of business.
    (b) Liens. Create or permit to exist any lien on the Collateral other than (i) liens securing the Obligations and (ii) liens set forth on Schedule 2 (collectively, “Permitted Liens”).
    (c) Name, Jurisdiction Changes. Change its legal name, jurisdiction of organization, or place where its chief executive office is located without providing at least thirty (30) days’ prior written notice to Secured Party.
    (d) Terminate Control. Terminate any control agreement or other method of perfection with respect to Collateral without Secured Party’s prior written consent.

  3. Notice of Certain Events. Debtor shall promptly (and in any event within three (3) business days) notify Secured Party in writing of (a) any Event of Default, (b) any change in Debtor’s corporate structure, or (c) any material loss or damage to the Collateral.

  4. Inspection. Upon reasonable notice, Secured Party or its representatives may during normal business hours inspect the Collateral and Debtor’s books and records related thereto.


VI. DEFAULT & REMEDIES

  1. Events of Default. Each of the following constitutes an Event of Default:
    (a) Payment Default. Failure to pay any Obligations when due.
    (b) Breach of Covenants. Failure to perform any covenant or agreement in this Agreement and continuation of such failure for ten (10) days after notice.
    (c) Breach of Representation. Any representation or warranty made by Debtor is materially incorrect.
    (d) Insolvency Proceedings. Debtor becomes subject to any bankruptcy or insolvency proceeding.
    (e) Cross-Default. An event of default occurs under the Credit Agreement or any other Loan Document.

  2. Notice and Cure. Except as provided above, Secured Party shall give written notice of default specifying the nature of the Event of Default; if the Event of Default is curable, Debtor shall have a cure period of ten (10) days (or such shorter period set forth in the Credit Agreement).

  3. Remedies. Upon the occurrence and during the continuation of an Event of Default, Secured Party may, without notice except as required by law, exercise any or all rights and remedies of a secured party under the UCC, and:
    (a) Accelerate the Obligations and declare them immediately due and payable.
    (b) Enter any premises where Collateral may be located to repossess, remove, and/or replevy such Collateral.
    (c) Require Debtor to assemble the Collateral and make it available to Secured Party at a place designated by Secured Party.
    (d) Sell, lease, license, or otherwise dispose of the Collateral at public or private sale for cash or credit.
    (e) Exercise all rights with respect to Supporting Obligations, Investment Property, and Deposit Accounts (including “set-off”).
    (f) Apply Proceeds of Collateral to the Obligations in such order as Secured Party elects.

  4. Attorneys’ Fees & Expenses. Debtor shall pay all reasonable fees and expenses (including attorneys’ fees) incurred by Secured Party in the enforcement of its rights under this Agreement.

  5. Cumulative Rights. The rights and remedies herein are cumulative and not exclusive of any rights or remedies provided by law.


VII. RISK ALLOCATION

  1. Indemnification by Debtor. Debtor shall indemnify, defend, and hold harmless Secured Party and its Related Parties against any and all losses, claims, damages, liabilities, and expenses (including reasonable attorneys’ fees) arising out of or resulting from (a) the Collateral, (b) this Agreement, or (c) any claim that the Collateral or Secured Party’s exercise of rights hereunder infringes the rights of any third party, except to the extent such losses are caused by Secured Party’s gross negligence or willful misconduct.

  2. Limitation of Liability. The aggregate liability of Secured Party and its Related Parties, whether in contract, tort (including negligence), strict liability, or otherwise, arising out of or relating to this Agreement shall not exceed, in the aggregate, the fair market value of the Collateral at the time of the act or omission giving rise to such liability.

  3. Force Majeure. Secured Party shall not be liable for any delay or failure to perform its obligations hereunder arising from events beyond its reasonable control, including acts of God, war, terrorism, civil unrest, labor disruptions, or governmental orders.


VIII. DISPUTE RESOLUTION

  1. Governing Law. This Agreement and any dispute arising hereunder shall be governed by and construed in accordance with the laws of the Governing Law State, without regard to conflict-of-laws principles (other than UCC § 1-301).

  2. Forum Selection. Each party irrevocably submits to the exclusive jurisdiction of the state courts located in [COUNTY], Governing Law State, and agrees that any action or proceeding arising out of or relating to this Agreement shall be heard and determined exclusively in such courts.

  3. Arbitration. [OPTIONAL—SELECT ONE AND DELETE THE OTHER BEFORE EXECUTION]
    [ ] (a) Not Applicable. The parties do not agree to arbitration.
    [ ] (b) Applicable. Any dispute, claim, or controversy arising out of or relating to this Agreement shall be resolved by binding arbitration administered by [ARBITRATION BODY] under its [RULES] in [CITY, STATE]. Judgment on the arbitral award may be entered in any court of competent jurisdiction.

  4. Jury Trial Waiver. [OPTIONAL] EACH PARTY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT.

  5. Injunctive Relief & Replevin. Nothing in this Section shall limit Secured Party’s right to seek (a) injunctive relief, (b) replevin, or (c) any provisional remedy or equitable relief available under the UCC or other applicable law.


IX. GENERAL PROVISIONS

  1. Amendments; Waivers. No amendment or waiver of any provision of this Agreement shall be effective unless in a writing signed by Secured Party and Debtor. A waiver of any Event of Default shall not constitute a waiver of any other or subsequent default.

  2. Assignment. Secured Party may assign or otherwise transfer its rights and obligations hereunder in whole or in part; Debtor may not assign this Agreement or any rights hereunder without Secured Party’s prior written consent.

  3. Termination. Upon (a) full and indefeasible payment of the Obligations and (b) written request of Debtor, Secured Party shall deliver termination statements and releases necessary to evidence the release of the security interest created hereby.

  4. Successors & Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns.

  5. Severability. If any provision of this Agreement is held unenforceable, the remaining provisions shall remain in full force, and the invalid provision shall be reformed to the maximum extent permitted to affect the parties’ intent.

  6. Entire Agreement. This Agreement, together with the Credit Agreement and other Loan Documents, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings, or representations.

  7. Counterparts; Electronic Signatures. This Agreement may be executed in any number of counterparts, each of which is an original and all of which constitute one instrument. Signatures transmitted by electronic means (e.g., PDF, DocuSign) are deemed original for all purposes.

  8. Notices. All notices required or permitted hereunder shall be given in accordance with Section [REFERENCE] of the Credit Agreement.


X. EXECUTION BLOCK

IN WITNESS WHEREOF, the parties hereto have executed this Security Agreement as of the Effective Date.

SECURED PARTY DEBTOR
[SECURED PARTY NAME] [DEBTOR NAME]
By: ____ By: ____
Name: ________ Name: ________
Title: _______ Title: _______

[Seal, if applicable]

STATE OF __ )
COUNTY OF
__ )

On this ___ day of _, 20_, before me, the undersigned Notary Public, personally appeared _______, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the foregoing instrument and acknowledged that he/she/they executed the same on behalf of the entity therein named and for the purposes therein contained.

Witness my hand and official seal.


Notary Public
My Commission Expires: ______

[// GUIDANCE: Notarization and witness requirements vary by state. Confirm whether notarization is required for personal property security agreements in the selected jurisdiction; it is generally not required for perfection but may be prudent for evidentiary purposes.]


Schedule 1 – Locations of Collateral and Debtor Information
Schedule 2 – Permitted Liens

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