Security Agreement - Alabama

SECURITY AGREEMENT (ALABAMA)

This Security Agreement is made as of [__/__/____] by:

• Secured Party: [________________________________]
• Address: [________________________________]
• Debtor: [________________________________]
• Debtor type and jurisdiction of organization: [________________________________]
• Debtor address / chief executive office: [________________________________]
• Related credit document: [________________________________], dated [__/__/____] (the Credit Document)

1. Use and Transaction Limits

This form is intended for a negotiated commercial secured transaction. It must not be used without a transaction-specific review of the debtor, collateral, governing perfection law, filing office, debtor-name rules, priority, existing liens, and default remedies.

Before execution, counsel should confirm:

• ☐ The transaction is not a consumer transaction.
• ☐ The debtor's exact legal name and organizational status have been verified from current public records.
• ☐ Schedule A reasonably identifies the collateral; the grant does not rely only on “all assets” or similar supergeneric wording.
• ☐ Each collateral type has a documented perfection method in Schedule B.
• ☐ Certificate-of-title property, fixtures, deposit accounts, letter-of-credit rights, money, investment property, controllable electronic records, and other special collateral have been separately analyzed.
• ☐ Existing liens, purchase-money issues, proceeds, accessions, commingling, and priority have been reviewed.
• ☐ The Credit Document and this Agreement use the same debt, default, notice, and cure terms.

2. Definitions

Collateral means only the property reasonably identified in Schedule A, including any expressly selected after-acquired property and identifiable proceeds described there.

Default means an event listed in Section 8.

Obligations means:

• the unpaid principal, interest, and charges that are enforceable under the Credit Document;
• Debtor's performance obligations under this Agreement; and
• only the following future advances or additional obligations, if selected and specifically described: [________________________________].

No obligation of an affiliate or unrelated transaction is included unless Schedule C identifies it with enough specificity for counsel to approve the scope.

3. Grant and Attachment

For value received and to secure the Obligations, Debtor grants Secured Party a security interest in the Collateral.

The parties intend attachment only when the requirements of applicable law are satisfied, including value, Debtor's rights in the Collateral or power to transfer rights, and an applicable signed agreement, possession, delivery, or control condition. This Agreement does not postpone attachment unless the following condition is completed: [________________________________].

After-Acquired Property and Future Advances

• ☐ After-acquired property included. The grant covers property acquired after execution only for the categories expressly marked in Schedule A and only to the extent permitted by law.
• ☐ After-acquired property excluded. The grant covers only property in which Debtor has rights when this Agreement is signed.
• ☐ Future advances included. The Collateral secures future advances described in the definition of Obligations.
• ☐ Future advances excluded. The Collateral secures no future advance unless the parties later sign an amendment.

4. Collateral Description

Schedule A controls the grant. If Schedule A uses an Article 9 collateral category, it should also provide transaction-specific identifiers where reasonably available.

The security interest includes identifiable proceeds of the Collateral. No commercial tort claim is included unless it is described in a signed amendment by a description that satisfies applicable law.

Excluded property: [________________________________].

5. Perfection and Filing Authorization

Debtor authorizes Secured Party to file an initial financing statement and amendments covering the Collateral described in this Agreement and property that becomes Collateral as identifiable proceeds. Each financing statement must use the debtor and secured-party names and collateral indication required by applicable law.

This Agreement does not represent that filing alone perfects every security interest. The parties will complete Schedule B for filing, possession, control, delivery, certificate-of-title notation, fixture filing, or another required method. Secured Party may request reasonable further signed records or delivery necessary to implement Schedule B.

No clause in this Agreement guarantees perfection or first priority. Perfection and priority depend on the applicable choice-of-law rules, the debtor's location, collateral type and location, competing interests, timing, and continuation of each perfection step.

6. Debtor Representations

Debtor represents on the date of execution that:

1. its exact legal name, type, jurisdiction of organization, organizational number, and addresses are stated correctly in Schedule D;
2. it has rights in the Collateral or power to transfer rights to Secured Party;
3. Schedule E lists every lien known to Debtor affecting the Collateral;
4. execution of this Agreement has been duly authorized; and
5. the Collateral and proceeds are not used primarily for personal, family, or household purposes.

7. Debtor Covenants

Until the Obligations are paid and the security interest is released, Debtor shall:

1. preserve the Collateral in commercially reasonable condition, ordinary wear excepted;
2. maintain the records reasonably necessary to identify the Collateral and proceeds;
3. provide prompt written notice before changing its legal name, jurisdiction or form of organization, chief executive office, or the location of material Collateral;
4. provide prompt written notice of loss, material damage, seizure, or a competing claim affecting material Collateral;
5. not transfer Collateral outside the ordinary course of the business described here without Secured Party's written consent: [________________________________]; and
6. permit reasonable inspection of Collateral and related records on reasonable notice during ordinary business hours, subject to confidentiality and third-party rights.

Insurance requirements, if any: [________________________________].

Permitted dispositions: [________________________________].

Permitted liens: [________________________________].

8. Defaults and Cure

Each of the following is a Default only to the extent selected and completed:

• ☐ failure to pay an amount when due under the Credit Document, subject to this cure period: [____] days;
• ☐ material breach of this Agreement, subject to written notice and this cure period: [____] days;
• ☐ a materially false representation that Secured Party reasonably relied upon;
• ☐ an unauthorized disposition or lien that materially impairs the Collateral;
• ☐ a cross-default under this specifically identified agreement: [________________________________]; or
• ☐ another negotiated default: [________________________________].

No insolvency or bankruptcy event creates a contractual remedy to the extent a stay, avoidance rule, or other applicable law limits enforcement.

9. Remedies After Default

After Default and expiration of any required cure period, Secured Party may exercise rights available under this Agreement and applicable law. Those rights are subject to applicable duties and limits, including the following:

1. Collection. Secured Party may notify an account debtor or other person obligated on Collateral to make payment as permitted by law and may enforce Collateral obligations.
2. Possession. Secured Party may use judicial process. Nonjudicial possession is authorized only if it can be completed without breach of the peace.
3. Assembly. Debtor shall assemble tangible Collateral only after Default and make it available at a place reasonably convenient to both parties.
4. Disposition. Every aspect of a sale, lease, license, or other disposition must be commercially reasonable.
5. Notice. Secured Party shall send every signed disposition notice required by law to each person entitled to receive it.
6. Proceeds. Secured Party shall apply cash proceeds in the order required by law. This Agreement does not authorize Secured Party to select a different order.
7. Acceptance in satisfaction. Secured Party may accept Collateral in full or partial satisfaction only through the consent, notice, objection, and other conditions required by law.
8. Redemption. Nothing in this Agreement eliminates a redemption right that applicable law preserves.

Secured Party may recover reasonable enforcement and disposition expenses, including reasonable attorney's fees, only to the extent the Credit Document or this Agreement provides for them and applicable law permits them.

10. Governing Law

Alabama law governs this Agreement's contractual construction, without displacing mandatory Article 9 rules that select another jurisdiction's law for perfection, the effect of perfection or nonperfection, or priority.

Venue, jurisdiction, arbitration, and any jury-trial waiver must be addressed in the Credit Document after separate counsel review. This Agreement adds none by implication.

11. Release and Termination

After final payment and performance of the Obligations, Secured Party shall promptly provide or authorize the releases and termination records reasonably necessary to evidence termination of the security interest, subject to applicable law and any surviving expressly identified obligation.

Surviving obligation, if any: [________________________________].

12. General Terms

1. Amendments. An amendment must be in a signed record identifying this Agreement and the provision changed.
2. No implied waiver. A delay or single waiver does not waive another or later breach.
3. Assignment. Neither party may assign this Agreement except with the other party's written consent or together with a valid transfer of the related Obligations and security interest as approved by counsel.
4. Notices. Notices must follow the notice section of the Credit Document. If it has none, use Schedule F.
5. Entire agreement. This Agreement, the Credit Document, and completed schedules are the parties' agreement concerning the security interest.
6. Execution method. If the parties plan to use counterparts or electronic signatures, counsel should add transaction-appropriate execution language after reviewing the intended method.
7. Severability. An unenforceable provision will be severed only to the extent permitted by law; a court is not directed to rewrite it.

13. Signatures

Schedule A — Collateral

Mark and describe only the intended collateral:

• ☐ Accounts: [________________________________]
• ☐ Chattel paper: [________________________________]
• ☐ Deposit accounts: [________________________________]
• ☐ Documents: [________________________________]
• ☐ Equipment: [________________________________]
• ☐ Fixtures: [________________________________]
• ☐ General intangibles: [________________________________]
• ☐ Goods: [________________________________]
• ☐ Instruments: [________________________________]
• ☐ Inventory: [________________________________]
• ☐ Investment property: [________________________________]
• ☐ Letter-of-credit rights: [________________________________]
• ☐ Supporting obligations: [________________________________]
• ☐ Controllable accounts, electronic records, or payment intangibles: [________________________________]
• ☐ Other specifically described personal property: [________________________________]

Identifiers, locations, serial numbers, account details, and exclusions: [________________________________]

Schedule B — Perfection Plan

Schedule C — Additional Obligations or Future Advances

[________________________________]

Schedule D — Debtor Information

• Exact legal name: [________________________________]
• Former names: [________________________________]
• Entity type: [________________________________]
• Jurisdiction of organization: [________________________________]
• Organizational number: [________________________________]
• Chief executive office: [________________________________]
• Principal residence, if an individual: [________________________________]
• Collateral locations: [________________________________]

Schedule E — Existing and Permitted Liens

[________________________________]

Schedule F — Notices

Sources and References

• Alabama Legislature — Code of Alabama
• Alabama's current Article 9 text reflects Act 2023-492 amendments to the listed affected sections. Amendment screening was completed through the state-bills index and the Legislature's official 2026 bill record before the verification date.