1. Grant of Security Interest. [Name], residing at [address] (Borrower), grants to [name], with offices at [address] (Lender), its successors and assigns, a security interest in the following property together with any additions, attachments, and accessions that may be placed on it (Collateral): [list].
2. Purpose of Security Interest. The security interest is to secure payment of an indebtedness to Lender evidenced by a promissory note in the principal sum of ........ dollars ($........), with interest at the rate of ...... percent (......%) per annum, signed by Borrower and delivered by Borrower to Lender simultaneously with Borrower's execution, of this Agreement.
3. Borrower's Warranties and Covenants. Borrower warrants and covenants:
a. Title. Borrower is the owner of the Collateral free from any adverse lien, security interest, or encumbrance. Borrower will defend the Collateral against any claims and demands of other persons at any time claiming the Collateral or any interest in it.
b. Use. The Collateral is bought or used primarily for:
[ ] Personal, family, or household purposes
[ ] Farming operations
[ ] Business use
and if checked here [ ], is being acquired with the proceeds of a loan by Lender to Borrower, which Lender may disburse directly to the seller of the Collateral.
c. Location of Collateral. The Collateral will be kept at [address]. Borrower will not remove the Collateral from [state] without Lender's written consent. Borrower will promptly notify Lender of any change in the place where the Collateral is kept.
d. Location of Business. If the Collateral is bought or used primarily for business use, Borrower's place of business is [address]. Borrower will promptly notify Lender of any change in Borrower's place of business.
e. Fixtures. If the Collateral is or has been attached to real estate, a description of the real estate follows: [description], and the name of the record owner is [name]. Upon Lender's demand, Borrower will deliver to Lender disclaimers signed by parties having an interest in the real estate or any interest in the Collateral that is prior to Lender's interest.
f. Perfection of Security Interest. Borrower agrees to execute and file financing statements and do whatever may be necessary under applicable law to perfect and continue Lender's interest in the Collateral, all at Borrower's expense.
g. Sale of Collateral Prohibited. Borrower will not sell, offer to sell, or transfer the Collateral or any interest in it without Lender's prior written consent.
h. Insurance. Borrower will have and maintain insurance at all times with respect to the Collateral against such risks as Lender may require, in such form, for such periods, and written by such companies as may be satisfactory to Lender. All policies of insurance shall have indorsed on them Lender's standard payable clause or such other endorsement as Lender may from time to time request. Borrower will promptly provide Lender with evidence of such insurance. Lender is made attorney-in-fact for Borrower to obtain, adjust, settle, and cancel, in its sole discretion, such insurance and indorse and negotiate any drafts issued by the insurer to Borrower's order. If Borrower fails to provide insurance, Lender may, at Lender's option, provide such insurance.
i. No Adverse Liens; Collateral to Be Kept in Good Repair. Borrower will keep the Collateral free from any adverse lien, security interest, or encumbrance and in good order and repair, and will not waste or destroy the Collateral or any part of it. Borrower will not use or permit anyone to use the Collateral in violation of any statute, ordinance, or state or federal regulation. Lender may examine and inspect the Collateral at any time, wherever located.
j. Taxes and Assessments. Borrower will promptly pay when due all taxes and assessments upon the Collateral or for its use or operation or upon this Agreement or upon any notes evidencing Borrower's indebtedness to Lender.
4. Lender's Right to Pay Taxes. At its option, Lender may discharge taxes, liens or security interests, or other encumbrances at any time levied or placed on the Collateral, may pay for insurance on the Collateral, and may pay for the maintenance and...
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