A federal notice regarding preservation of the consumer's claims and defenses is required on all consumer credit contracts by Federal Trade Commission regulation 16 C.F.R. � 433.2. The notice must appear in 10-point bold type or print and must be worded as set forth at the end of the above form. A security interest is an interest in personal property or fixtures that secures payment or performance of an obligation. Personal property is basically anything that is not real property. A fixture is personal property that has become so attached or adapted to real estate that it has lost its character as personal property and is deemed to be part of the real estate. An example would be a central air conditioning unit within a commercial building. The property that is subject to the security interest is called the collateral. The party holding the security interest is called the secured party. A security interest is said to attach at the time it becomes enforceable. There are three prerequisites to the attachment of a security interest: • There must a security agreement; • Value must be given; and • The debtor must have rights in the collateral (for example, he must own it or be leasing the collateral). A security interest is an interest in personal property or fixtures that secures payment or performance of an obligation. Personal property is basically anything that is not real property. A fixture is personal property that has become so attached or adapted to real estate that it has lost its character as personal property and is deemed to be part of the real estate. An example would be a central air conditioning unit within a commercial building.
General Form of Security Agreement Covering Consumer Goods Security Agreement made on the (date), between (Name of Debtor) of (street address, city, state, zip code), referred to herein as Debtor, and (Name of Secured Party), a corporation organized and existing under the laws of the state of (name of state), with its principal office located at (street address, city, state, zip code), hereinafter called Secured Party. 1. Grant of Security Interest For valuable consideration, receipt of which is acknowledged, Debtor grants to Secured Party a purchase-money security interest under (cite appropriate section of Article 9 of State’s Uniform Commercial Code), in the following property described in Exhibit A attached hereto and made a part hereof, together with any and all additions and accessions to the property (hereinafter collectively called Collateral), to secure payment of the total Obligation advanced by Secured Party to enable Debtor to acquire said Collateral, as evidenced by this Agreement and by Debtor's Promissory Note of even date, hereinafter called the Obligation. 2. Terms of Obligation The Obligation is payable on the following terms: (state terms of sale or loan). (Set forth any consumer credit disclosures required by federal or state law). 3. Location of Collateral The Collateral shall be kept at street address, city, state, zip code), until such time as written consent to a change of location is obtained from Secured Party. 4. Attachment to Real Property If the Collateral is to be attached to real estate, a description of the real estate is attached hereto as Exhibit B, and made a part hereof, prior to the perfection of the security interest granted by this Agreement, Debtor shall on Secured Party's demand furnish Secured Party with a disclaimer or disclaimers, signed by all persons having any interest in such real estate, of any interest in the Collateral that is prior to Secured Party's interest. 5. Debtor’s Rights in Collateral Debtor warrants and covenants that, except for the security interest granted by this Agreement, Debtor is the owner of the Collateral free from any prior lien, security interest or encumbrance. Debtor shall defend the Collateral against all claims and demands of all persons at any time claiming Collateral or any interest in the Collateral. 6. Protection of Collateral Debtor shall keep the Collateral free from any adverse lien, security interest or encumbrance, and in good order and repair, shall not waste or destroy the Collateral or any part of the same, and shall not use the Collateral in violation of any applicable statute, ordinance or policy of insurance on the Collateral. Secured Party may examine and inspect the Collateral, wherever located, at any reasonable time or times. 7. Filing No financing statement covering the Collateral or any proceeds of the same is on file in any public office. Debtor shall immediately notify Secured Party in writing of any change in address from that shown in this Agreement. Debtor shall also on demand furnish to Secured Party such further information, shall execute or join in executing and deliver to Secured Party such financing statements and other papers, and shall do all such acts and things as Secured Party may at any time reasonably request that may be necessary or appropriate to perfect and maintain a valid security interest in the Collateral as security for the Obligation, subject to no prior liens or encumbrances. 8. Transfer of Collateral Debtor shall not sell, offer to sell or otherwise transfer or encumber the Collateral or any interest in the Collateral without Secured Party's prior written consent. 9. Insurance Debtor shall keep the Collateral at all times insured against risks of loss or damage by fire (including so-called extended coverage), theft and such other casualties as Secured Party may reasonably require, including collision in the case of any motor vehicle, all in such amounts, under such forms of policies on such terms, for such periods, and written by such companies or underwriters as Secured Party may approve. Losses in all cases shall be payable to Secured Party and Debtor as their interests may appear. All policies of insurance shall provide for at least (number) days' prior written notice of cancellation to Secured Party. Debtor shall furnish Secured Party with certificates of such insurance or other evidence satisfactory to Secured Party as to compliance with the provisions of this section. Secured Party may act as attorney for Debtor in making, adjusting and settling claims under and canceling such insurance and endorsing Debtor's name on any drafts drawn by insurers of the Collateral. 10. Taxes and Assessments Debtor shall pay promptly when due all taxes and assessments on the Collateral or for its use or operation, on this Agreement or on any note or notes evidencing any part of Obligation. 11. Reimbursement of Secured Party Secured Party may, but is not required to, discharge tax or other liens, security interests or other encumbrances at any time levied or placed on the Collateral, may place and pay for insurance on the Collateral, may order and pay for the repair, maintenance and preservation of the Collateral, and may pay any necessary filing or recording fees. Debtor shall reimburse Secured Party on demand for any payment made or any expense incurred by Secured Party pursuant to the foregoing authorization. 12. Possession of Collateral Until default, Debtor may have possession of the Collateral and use the Collateral in any lawful manner not inconsistent with this Agreement. 13. Default The happening of any of the following events or conditions shall constitute default under this Agreement: A. Failure or delay in the payment or performance of any Obligation, covenant or liability contained or referred to in this Agreement or in any note evidencing any part of
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