SECURITY AGREEMENT

(Uniform Commercial Code Article 9)

PARTIES

This Security Agreement ("Agreement") is made and entered into as of [EFFECTIVE DATE] by and between:

SECURED PARTY (Lender/Creditor):

DEBTOR (Borrower/Grantor):

RECITALS

A. Secured Party has agreed to extend credit or financial accommodations to Debtor pursuant to [IDENTIFY LOAN DOCUMENTS - e.g., "that certain Loan Agreement dated [DATE]," "Promissory Note dated [DATE]," etc.] (collectively, the "Loan Documents").

B. As a condition to extending such credit, Secured Party requires that Debtor grant a security interest in certain collateral to secure Debtor's obligations.

ARTICLE 1: DEFINITIONS

"Collateral" means all property described in Article 2, whether now owned or hereafter acquired, together with all Proceeds thereof.

"Event of Default" has the meaning set forth in Article 6.

"Obligations" means all present and future debts, liabilities, and obligations of Debtor to Secured Party, including:
- All amounts owed under the Loan Documents
- All interest, fees, costs, and expenses
- All future advances and re-advances
- All costs of collection and enforcement, including attorneys' fees
- All obligations arising from this Agreement

"Proceeds" means all proceeds of Collateral as defined in UCC § 9-102(a)(64), including:
- Whatever is acquired upon sale, lease, license, exchange, or other disposition of Collateral
- Claims arising out of loss, damage, or destruction of Collateral
- Insurance payable by reason of loss or damage to Collateral
- General intangibles arising from Collateral

"UCC" means the Uniform Commercial Code as adopted in [STATE].

ARTICLE 2: GRANT OF SECURITY INTEREST

2.1 Grant

To secure the payment and performance of all Obligations, Debtor hereby grants to Secured Party a continuing security interest in all of Debtor's right, title, and interest in and to the following property, whether now owned or hereafter acquired, wherever located (collectively, the "Collateral"):

2.2 Collateral Description

Select all categories that apply:

☐ All Assets — All assets of Debtor, including without limitation all of the following:

☐ Accounts — All accounts, accounts receivable, and rights to payment for goods sold, leased, or licensed, or for services rendered, whether or not earned by performance.

☐ Chattel Paper — All chattel paper, including electronic chattel paper and tangible chattel paper.

☐ Commercial Tort Claims — All commercial tort claims, including: [DESCRIBE SPECIFIC CLAIMS IF KNOWN]

☐ Deposit Accounts — All deposit accounts maintained with any bank or financial institution, including: [LIST ACCOUNT NUMBERS AND INSTITUTIONS]

☐ Documents — All documents, including bills of lading, dock warrants, dock receipts, and warehouse receipts.

☐ Equipment — All equipment, machinery, furniture, fixtures, vehicles, tools, and other tangible personal property used in Debtor's business.

☐ Farm Products — All farm products, including crops, livestock, and supplies used in farming operations.

☐ General Intangibles — All general intangibles, including:
- Payment intangibles
- Software
- Customer lists
- Goodwill
- Licenses and permits
- Intellectual property (patents, trademarks, copyrights, trade secrets)
- Contract rights
- Tax refunds

☐ Goods — All goods, including consumer goods, equipment, farm products, and inventory.

☐ Instruments — All instruments, including promissory notes, drafts, and checks.

☐ Inventory — All inventory, including raw materials, work in process, finished goods, goods held for sale or lease, and packaging materials.

☐ Investment Property — All investment property, including:
- Certificated and uncertificated securities
- Security entitlements
- Securities accounts
- Commodity contracts and commodity accounts

☐ Letter-of-Credit Rights — All letter-of-credit rights.

☐ Money — All money.

☐ Supporting Obligations — All supporting obligations, including guaranties, letters of credit, and other secondary obligations.

☐ Specific Property — The following specifically described property:
[DESCRIBE SPECIFIC COLLATERAL - serial numbers, VINs, account numbers, etc.]

2.3 After-Acquired Property

The security interest granted herein attaches to all Collateral now owned or existing and to all Collateral hereafter acquired or arising, immediately upon Debtor's acquisition of rights therein or upon such Collateral coming into existence.

2.4 Proceeds

The security interest granted herein extends to all Proceeds of the Collateral. If Debtor receives any Proceeds consisting of cash, negotiable instruments, or other items of payment, Debtor shall hold such Proceeds in trust for Secured Party and shall immediately deliver such Proceeds to Secured Party.

2.5 Future Advances

This Agreement secures all future advances and re-advances made by Secured Party to Debtor, whether or not such advances are obligatory or are made pursuant to a commitment.

ARTICLE 3: PERFECTION

3.1 Financing Statements

Debtor authorizes Secured Party to file UCC-1 Financing Statements, continuation statements, amendments, and all other filings necessary or desirable to perfect and maintain Secured Party's security interest in the Collateral in all applicable jurisdictions.

3.2 Filing Locations

Financing statements shall be filed in:

3.3 Other Perfection Methods

Debtor agrees to take all actions necessary to perfect Secured Party's security interest, including:

☐ Possession: Delivering possession of instruments, negotiable documents, or tangible chattel paper to Secured Party.

☐ Control Agreements: Executing control agreements with depository banks, securities intermediaries, or commodity intermediaries for:
- Deposit accounts
- Investment property
- Letter-of-credit rights
- Electronic chattel paper

☐ Certificate of Title: Noting Secured Party's lien on certificates of title for titled goods.

☐ Fixture Filings: Filing fixture filings in the real property records where fixtures are located.

☐ Intellectual Property Filings: Filing with the USPTO (patents, trademarks) and Copyright Office as applicable.

ARTICLE 4: REPRESENTATIONS AND WARRANTIES

Debtor represents and warrants:

4.1 Title and Authority

☐ Debtor has good and marketable title to the Collateral, free of all liens and encumbrances except Permitted Liens (as defined below).
☐ Debtor has the authority to grant the security interest herein.
☐ This Agreement creates a valid, enforceable security interest in the Collateral.

4.2 Debtor Information

☐ The name, organizational structure, jurisdiction, and addresses provided herein are true and correct.
☐ Debtor's exact legal name (as it appears in organizational documents or driver's license) is: [EXACT LEGAL NAME]
☐ Debtor's organizational identification number (if any) is: [ID NUMBER]
☐ Debtor has not changed its name, identity, or structure in the past [5] years, except: [DISCLOSE ANY CHANGES]

4.3 Location of Collateral

☐ The Collateral is located at: [LIST ALL LOCATIONS]
☐ Debtor will not move the Collateral without prior written consent.

4.4 No Conflicting Interests

☐ Except for Permitted Liens, no other person has any security interest in, lien on, or claim to the Collateral.
☐ Debtor has not agreed to grant any other security interest in the Collateral.

4.5 Permitted Liens

"Permitted Liens" means only the following:
- Liens securing Obligations hereunder
- Statutory liens for taxes not yet due
- [LIST ANY OTHER PERMITTED LIENS]

ARTICLE 5: COVENANTS

Debtor covenants and agrees:

5.1 Maintenance of Collateral

☐ Maintain the Collateral in good condition and repair.
☐ Pay all taxes, assessments, and charges on the Collateral when due.
☐ Defend the Collateral against claims of third parties.
☐ Keep the Collateral free of liens except Permitted Liens.

5.2 Insurance

☐ Maintain insurance on the Collateral against loss, damage, and destruction in amounts and with insurers acceptable to Secured Party.
☐ Name Secured Party as loss payee on property insurance and additional insured on liability insurance.
☐ Provide certificates of insurance to Secured Party upon request.
☐ Proceeds of insurance shall be applied to the Obligations or used to repair/replace Collateral, at Secured Party's option.

5.3 Records and Inspection

☐ Maintain accurate books and records regarding the Collateral.
☐ Permit Secured Party to inspect the Collateral and records upon reasonable notice.
☐ Provide Secured Party with financial statements [ANNUALLY/QUARTERLY] and upon request.
☐ For accounts/inventory: provide aging reports, inventory reports, and other information as requested.

5.4 Protection of Security Interest

☐ Take all actions necessary to maintain the perfected status of Secured Party's security interest.
☐ Notify Secured Party immediately of any event that could impair the Collateral or Secured Party's security interest.
☐ Not change Debtor's name, organizational structure, or jurisdiction without 30 days' prior written notice.
☐ Not change the location of Collateral without prior written notice.

5.5 Prohibited Actions

Debtor shall NOT, without Secured Party's prior written consent:

☐ Sell, lease, transfer, or dispose of any Collateral (except inventory in the ordinary course of business).
☐ Grant any security interest in or lien on the Collateral.
☐ Permit the Collateral to become fixtures or accessions without proper filing.
☐ Use the Collateral in violation of law.
☐ File any financing statement or other filing affecting the Collateral without Secured Party's consent.

5.6 Accounts Receivable (If Applicable)

☐ All accounts are genuine and enforceable.
☐ Debtor will not modify, compromise, or settle accounts without consent (if over $[AMOUNT]).
☐ Debtor will notify account debtors to make payment directly to Secured Party upon request.
☐ Debtor will turn over any payments received on Collateral to Secured Party (if so directed).

5.7 Inventory (If Applicable)

☐ All inventory is of good and merchantable quality.
☐ Debtor will maintain inventory levels as required by Secured Party.
☐ Proceeds of inventory sales shall be deposited in [SPECIFIED ACCOUNT].

ARTICLE 6: EVENTS OF DEFAULT

The following constitute Events of Default:

☐ Payment Default: Failure to pay any Obligation when due.

☐ Covenant Default: Breach of any covenant in this Agreement or the Loan Documents.

☐ Representation Default: Any representation or warranty proves materially false.

☐ Cross-Default: Default under any other agreement with Secured Party or any other material indebtedness.

☐ Insolvency: Debtor becomes insolvent, makes an assignment for benefit of creditors, or files or has filed against it any bankruptcy or insolvency proceeding.

☐ Judgment: Entry of any judgment against Debtor exceeding $[AMOUNT] not discharged within [60] days.

☐ Impairment of Collateral: Loss, theft, damage, destruction, or substantial decline in value of Collateral not covered by insurance.

☐ Impairment of Security Interest: Secured Party's security interest becomes unperfected, subordinated, or otherwise impaired.

☐ Material Adverse Change: Any material adverse change in Debtor's financial condition or ability to perform.

☐ Government Action: Any governmental action materially affecting Debtor or the Collateral.

ARTICLE 7: REMEDIES

7.1 Acceleration

Upon an Event of Default, Secured Party may declare all Obligations immediately due and payable.

7.2 UCC Remedies

Secured Party shall have all rights and remedies of a secured party under the UCC, including:

☐ Take possession of Collateral without judicial process (if without breach of peace).
☐ Require Debtor to assemble Collateral and make it available to Secured Party.
☐ Sell, lease, or otherwise dispose of Collateral at public or private sale.
☐ Purchase Collateral at any public sale.
☐ Apply Proceeds to Obligations in any order.
☐ Notify account debtors to make payment directly to Secured Party.
☐ Collect Collateral directly from account debtors.

7.3 Notice of Sale

Secured Party shall give Debtor at least [10] days' prior written notice of any public or private sale of Collateral. Debtor agrees that such notice constitutes reasonable notice.

7.4 Application of Proceeds

Proceeds of any sale or collection shall be applied:
1. First, to costs of collection, enforcement, and sale (including attorneys' fees)
2. Second, to accrued interest
3. Third, to outstanding principal
4. Fourth, to other Obligations
5. Fifth, any surplus to Debtor (or as required by law)

7.5 Deficiency

Debtor shall remain liable for any deficiency remaining after application of Proceeds.

7.6 Cumulative Remedies

All remedies are cumulative and not exclusive. Secured Party may exercise any remedy without waiving others.

ARTICLE 8: GENERAL PROVISIONS

8.1 Governing Law

This Agreement shall be governed by the laws of the State of [STATE] and applicable provisions of the UCC.

8.2 Jurisdiction and Venue

The parties submit to jurisdiction in [COUNTY, STATE] for any legal proceedings.

8.3 Jury Waiver

☐ JURY WAIVER: EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY.
☐ No jury waiver.

8.4 Notices

Notices shall be in writing and delivered to the addresses above, or such other address as designated in writing.

8.5 Amendments

This Agreement may be amended only in writing signed by both parties.

8.6 Severability

If any provision is invalid, the remainder shall continue in full force.

8.7 Waiver

No delay in exercising any right shall constitute a waiver.

8.8 Successors and Assigns

This Agreement binds Debtor and its successors. Debtor may not assign without consent. Secured Party may assign freely.

8.9 Indemnification

Debtor shall indemnify Secured Party against all claims, losses, and expenses arising from this Agreement or the Collateral, except those caused by Secured Party's gross negligence or willful misconduct.

8.10 Power of Attorney

Debtor irrevocably appoints Secured Party as attorney-in-fact to execute UCC filings and take any action necessary to perfect or protect the security interest, or upon default, to collect Collateral, endorse instruments, and take other actions on Debtor's behalf.

ARTICLE 9: SIGNATURES

IN WITNESS WHEREOF, the parties have executed this Security Agreement as of the date first written above.

SECURED PARTY:

[SECURED PARTY NAME]

DEBTOR:

[DEBTOR NAME]

EXHIBIT A: SPECIFIC COLLATERAL DESCRIPTION

(Use for specific items with serial numbers, VINs, account numbers, etc.)

EXHIBIT B: DEPOSIT ACCOUNT CONTROL AGREEMENT

(Attach if deposit accounts are included in Collateral)

EXHIBIT C: LOCATIONS OF COLLATERAL

IMPORTANT NOTES

Perfection Requirements

This Security Agreement creates the security interest but does NOT perfect it. To perfect:

1. File UCC-1 Financing Statement with appropriate filing office (usually Secretary of State in Debtor's state of organization for entities, or state of residence for individuals)

2. Special Collateral Types:
   - Deposit accounts: Obtain control agreement
   - Investment property: Obtain control or file
   - Vehicles/titled goods: Note lien on title
   - Fixtures: File fixture filing in county real property records

UCC Financing Statement Tips

• Use Debtor's EXACT legal name
• Collateral description in UCC-1 cannot be "super-generic" (e.g., "all assets")
• File continuation statements before 5-year expiration
• Monitor for subsequent filings by other creditors

COMPLIANCE CHECKLIST

☐ Security agreement executed by Debtor (authenticated)
☐ Collateral description reasonably identifies collateral (UCC § 9-108)
☐ Debtor's exact legal name verified (UCC § 9-503)
☐ Value given by Secured Party
☐ Debtor has rights in collateral
☐ UCC-1 Financing Statement filed (UCC § 9-310)
☐ Filing in correct jurisdiction (UCC § 9-301)
☐ Control agreements obtained for deposit accounts (UCC § 9-314)
☐ Control agreements obtained for investment property (if applicable)
☐ Possession of instruments/negotiable documents (UCC § 9-313)
☐ Certificate of title lien noted (for titled goods)
☐ Fixture filing completed (if fixtures included)
☐ Insurance requirements verified
☐ Representations confirmed
☐ Calendar continuation statement date (5 years from filing)
☐ UCC search conducted for prior filings
☐ Legal counsel review completed

LEGAL CITATIONS REFERENCE

UCC Article 9 - Secured Transactions

• § 9-102: Definitions
• § 9-108: Sufficiency of collateral description
• § 9-109: Scope of Article 9
• § 9-201: Security agreement effectiveness
• § 9-203: Attachment and enforceability requirements
• § 9-204: After-acquired property; future advances
• § 9-301 to 9-307: Choice of law (perfection/priority)
• § 9-310: Filing required to perfect (general rule)
• § 9-312 to 9-316: Perfection methods by collateral type
• § 9-317: Priority over unperfected interests
• § 9-322: First-to-file-or-perfect rule
• § 9-324: PMSI priority rules
• § 9-501 to 9-518: Filing office and financing statements
• § 9-601 to 9-628: Default and remedies

Bankruptcy Code (Title 11)

• 11 U.S.C. § 362: Automatic stay
• 11 U.S.C. § 544: Trustee's strong-arm powers (unperfected interests vulnerable)
• 11 U.S.C. § 547: Preferences
• 11 U.S.C. § 552: Post-petition effect of security interest

Prepared for professional use. Verify all terms and perfection requirements before execution.