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Borrowers who agree to sign secured notes may find loans more readily available to them. Lenders know that if a default occurs, they can sell the property used as collateral under the secured note. This protection may, in turn, make a borrower more comfortable with the loan arrangement. Nobody wants to default on a loan or force others to absorb losses on their behalf. When a security interest is granted, you can be sure you’re not leaving lenders – who may be colleagues or other individuals close to you – out in the cold. A security agreement provides further assurance. It explains the specifics of how collateral can be claimed by the lender and what the borrower must do to protect the lender’s interest in that property. This package contains everything you’ll need to customize and complete your security agreement. A written agreement minimizes confusion, misunderstanding, and error, and clearly sets forth the parties’ expectations and fulfillment obligations. In every way, this promotes a successful and profitable business arrangement.
SECURITY AGREEMENT This Security Agreement (the “Security Agreement”) is made and effective _____________ [Date], by and between ___________________, an [individual] [corporation] [limited liability company] [etc.] (the “Borrower”), and _______________________, an [individual] [corporation] [limited liability company] [etc.] (the “Lender,” and together with the Borrower, the “Parties”). RECITALS WHEREAS, the Borrower is indebted to the Lender in the amount of _____________________ ($_________) (the “Loan”). The Loan is evidenced by a promissory note of even date herewith (the “Note”), a copy of which is attached hereto and made a part of hereof as Exhibit A. The Note and this Security Agreement are sometimes collectively referred to as the “Loan Documents,” and each is a “Loan Document”; and WHEREAS, in order to induce the Lender to continue to extend credit to the Borrower in the form of the Loan as evidenced by the Note, the Borrower desires to enter into this Security Agreement; NOW THEREFORE, in consideration of the foregoing, the Parties hereby agree as follows: 1. INDEBTEDNESS. This Security Agreement is made to secure payment when due, whether by stated maturity, demand, acceleration, or otherwise, of all existing and future indebtedness of the Borrower to the Lender under the Note (the “Indebtedness”). The Indebtedness includes without limitation any and all obligations or liabilities of the Borrower to the Lender under the Note, whether absolute or contingent, direct or indirect, voluntary or involuntary, liquidated or unliquidated, joint or several, known or unknown; any and all obligations or liabilities for which the Borrower would othe
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