Security Agreement for Borrowing Money

Security Agreement for Borrowing Money 1. Names. This Security Agreement is between _________________, Borrower, and _________________, Lender. 2. Grant of Security Interest. Borrower grants to Lender a continuing security interest in the following property (the Secured Property), which consists of: [ ] The tangible personal property owned by Borrower's business known as ______________, as listed in attached Attachment 1. [ ] Any additional tangible personal property that Borrower now owns or later acquires in connection with Borrower's business, including replacement inventory. [ ] Other: ____________________. 3. Security for Promissory Note. Borrower is granting this security interest to secure performance of a promissory note dated ______________ that Borrower executed in favor of Lender. The promissory note obligates Borrower to pay Lender $_____________ with interest at the rate of ___% a year, on the terms stated in the promissory note. 4. Financing Statement. Borrower agrees that until the principal and interest owed under the promissory note are paid in full, the note will be further secured by a Uniform Commercial Code Financing Statement. Borrower will sign any other documents that Lender reasonably requests to protect Lender's security interest in the Secured Property. 5. Use and Care of the Secured Property. Until the promissory note is fully paid, Borrower agrees to: A. Keep at Borrower's premises the Secured Property owned by the Borrower's business and use it only in the operation of the business. B. Maintain the Secured Property in good repair. C. Not sell, transfer, or release the Secured Property unless Lender consents. Borrower may sell inventory in the ordinary course of Borrower's business, but will Security Agreement for Borrowing Money Page 1 reasonably renew and replenish inventory to keep it at its current level. D. Pay all taxes on the Secured Property as taxes become due. E. Insure the Secured Property against normal risks, with an insurance policy that names Borrower and Lender as beneficiaries as their interests appear. F. Deliver to Lender a copy of the insurance policy insuring the Secured Property and provide annual proof to the Lender that Borrower has paid the premiums on the policy. G. Allow Lender to inspect the Secured Property at any reasonable time. 6. Borrower's Default. If Borrower is more than ___ days late in making any payment required by the promissory note or if Borrower fails to correct any violations of paragraph 5 of this Security Agreement within ___ days of receiving written notice from Lender, Borrower will be in default. 7. Lender's Rights. If Borrower is in default, Lender may exercise the remedies contained in the Uniform Commercial Code for the state of ____________ and any other remedies legally available to Lender. Lender may, for example: A. Remove the Secured Property from the place where it is then located. B. Require Borrower to make the Secured Property available to Lender at a place designated by Lender that is reasonably convenient to Borrower and Lender. C. Sell, lease, or otherwise dispose of the Secured Property. 8. Notice to Borrower. Lender will give Borrower at least ten days notice of when and where the Secured Property will be sold, leased, or otherwise disposed of. Any notice required by this paragraph or by statute will be deemed given to Borrower if sent by firstclass mail to Borrower at the following address: ______________________________ 9. Entire Agreement. This is the entire agreement between the parties. It replaces and supersedes any and all oral agreements between the parties, as well as any prior writings. 10. Successors and Assignees. This agreement binds and benefits the heirs, successors, Security Agreement for Borrowing Money Page 2 and assignees of the parties. 11. Governing Law. This agreement will be governed by and construed in accordance with the laws of the state of ______________. 12. Counterparts. This agreement may be signed by the parties in different counterparts and the signature pages combined will create a document binding on all parties. 13. Modification. This agreement may be modified only by a written agreement signed by all the parties. 14. Waiver. If one party waives any term or provision of this agreement at any time, that waiver will only be effective for the specific instance and specific purpose for which the waiver was given. If either party fails to exercise or delays exercising any of its rights or remedies under this agreement, that party retains the right to enforce that term or provision at a later time. 15. Severability. If any court determines that any provision of this agreement is invalid or unenforceable, any invalidity or unenforceability will affect only that provision and will not make any other provision of this agreement invalid or unenforceable and such provision shall be modified, amended, or limited only to the extent necessary to render it valid and enforceable. LENDER Name of Business: _____________________, a ___________________________ By: __________________________ Dated: _____________________ Printed Name: __________________ Title: _____________________ Address: _____________________ _____________________ Security Agreement for Borrowing Money Page 3 BORROWER Name of Business: _____________________, a ___________________________ By: __________________________ Dated: _____________________ Printed Name: __________________ Title: _____________________ Address: _____________________ _____________________ Security Agreement for Borrowing Money Page 4 Attachment 1 to Security Agreement 1. Names. This attachment is made by ________________, Borrower, and _________________, Lender. 2. Terms of Attachment. We agree that the tangible personal property covered by paragraph 2 of our Security Agreement dated ________________ includes the following: __________________________________________. LENDER Name of Business: _____________________, a ___________________________ By: __________________________ Dated: _____________________ Printed Name: __________________ Title: _____________________ Address: _____________________ _____________________ BORROWER Name of Business: _____________________, a ___________________________ By: __________________________ Dated: _____________________ Printed Name: __________________ Security Agreement for Borrowing Money Page 5 Title: _____________________ Address: _____________________ _____________________ Security Agreement for Borrowing Money Page 6