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Security Agreement and Assignment of Account

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Security Agreement and Assignment of Account Powered By Docstoc
					This is an agreement that is designed to be used in conjunction with a secured loan
agreement and places the collateral used to secure the loan in a trusted intermediary
bank account. This agreement is entered into between a lender, a borrower, and the
borrower’s intermediary that perfects the security interest. This agreement includes
terms such as the presentation of collateral, assignment of account, performance of the
obligations by the borrower, and the grounds for default. This agreement can be used
by individuals or small businesses that have entered a secured loan agreement and
want to perfect the security interest by executing this document.
SECURITY AGREEMENT AND ASSIGNMENT OF ACCOUNT


THIS ASSIGNMENT dated as of _____________, 20____ is made by and between
______________________________, a_______________ (together with its successors and
assigns, the “Bank”), _____________________ (“the Borrower”) and the undersigned,
______________________________

NOW THEREFORE, in consideration of the mutual agreements and covenants herein contained
and for other good and valuable consideration, the parties hereby agree as follows:

1. ASSIGNMENT OF ACCOUNT. In consideration of the value received and the Bank
giving, in its discretion, credit or banking facilities to the Borrower, the undersigned (jointly and
severally if more than one) hereby pledges, assigns and transfers all of its right, title and interest
in and to, and grants to the Bank a security interest in all mutual funds, cash, instruments,
securities and other investment property now or hereafter as maintained or held in that certain
Loan Collateral Account #_____________ (collectively, "Collateral") in an aggregate amount of
not less than ____________ dollars ($_______) or such greater amount which constitutes all
Obligations to the Bank, together with all interest, dividends and income thereon and all sums
now or at any time hereafter on deposit therein or due thereon and any instruments, investments,
securities or other investment property purchased with the proceeds thereof, and any and all
proceeds and products of any of the foregoing (collectively, the "Account"), as collateral
security for the payment and performance of the Obligations. For the purpose of the Agreement,
Obligations shall collectively mean the following: the obligations of the Borrower and the
undersigned to the Bank or any of its branches and affiliates of every kind and description,
whether direct or indirect, absolute or contingent, primary or secondary, joint or several, due or
to become due, now existing or hereafter arising or acquired arising from a standby letter of
credit number __________________ in an aggregate amount of not less than ____________
dollars ($_______) (together with all agreements and instruments executed in connection with
any of the foregoing, and as the same may from time to time be modified, amended, extended or
replaced, the "Loan Documents"). The Bank hereby agrees that if at any time, any of the
Obligations have matured and are indefeasibly repaid in full, the Bank shall immediately reduce
the amount required to be held in the Account by the amount of such repayment.

2. REPRESENTATIONS, WARRANTIES AND COVENANTS.

   A.    The undersigned represents and warrants that:
                 i. the undersigned has the full right and corporate and legal authority to enter
                    into this Assignment;
                ii. except for any financing statement which may have been filed by the Bank,
                    no financing statement covering the Account has been filed with any filing
                    office;
               iii. there is no other assignment or security agreement that has been executed
                    with respect to the Account;
                      iv. there is no lien, offset or rights of any person attached to the Account other
                          than the Bank;
                       v. this assignment and pledge do not contravene any provision of the
                          Borrower’s constituent documents or any law, regulation, decree, order or
                          agreement binding on the undersigned; and
                      vi. this Assignment represents the legal, valid and binding obligation of the
                          undersigned, enforceable in accordance with its terms.

    B.     Provided any of the Obligations remain outstanding, the undersigned:
                i. will execute and deliver to the Bank all such other documents and
                     instruments, and do all such actions and things, as and when the Bank may
                     from time to time request in order to more fully evidence and perfect the
                     Bank's interest in the Account;
                ii. will not take or cause to take any action of any kind with respect to the
                     Account, including any attempt to transfer, assign or create in favor of any
                     party other than the Bank a security interest in, the Account;
                iii. will not make, or cause to be made, any withdrawals from the Account and
                     will not close the Account; and
                iv. will immediately segregate from all other funds of the undersigned and hold in
                     trust for the Bank any funds received from the Account in violation of this
                     Assignment, and will not exercise dominion or control over such funds except
                     to pay them immediately into the Account.

3. DEFAULT; REMEDIES. In the event there is any default in the payment or performance
of any obligation under this Assignment or any other Obligation (with adequate cure period
thereto) and provided such default shall be continuing, the Bank may declare the Obligations
immediately due and payable and may:

                 i.     withdraw immediately all or any portion of the funds on deposit in or payable
                        on the Account, and apply such funds to the payment of the Obligations in the
                        order and manner as the Bank may direct in its sole discretion;
                ii.     on behalf of the undersigned endorse the name of the undersigned upon any
                        checks, drafts, or other instruments payable to the undersigned evidencing
                        payment on the Account;
               iii.     surrender or present for withdrawal the passbook, certificate or other
                        documents issued to the undersigned in connection with the Account;
               iv.      liquidate any Collateral on such terms as the Bank may determine whether by
                        private or public sale and not
				
DOCUMENT INFO
Description: This is an agreement that is designed to be used in conjunction with a secured loan agreement and places the collateral used to secure the loan in a trusted intermediary bank account. This agreement is entered into between a lender, a borrower, and the borrower’s intermediary that perfects the security interest. This agreement includes terms such as the presentation of collateral, assignment of account, performance of the obligations by the borrower, and the grounds for default. This agreement can be used by individuals or small businesses that have entered a secured loan agreement and want to perfect the security interest by executing this document.