Collateral security note.
Account Number: _________
Lender-Secured Party: _________ bank _________(mailing address: No. and street, city, county, state)
Borrower-Debtor(s): _________(type full names) _________(no., street or RFD, city, county, state)
Borrower(s) represent that the loan evidenced by this means is being obtained for the following primary purpose: [ ] Personal, family or household [ ] Farming operations [ ] Business
For value received, namely, money loaned, the undersigned borrower-debtor(s) named above (hereafter collectively termed "debtor"), jointly and severally (if more than one debtor), promise(s) to pay to the order of _________ bank, as lender-secured party (hereafter termed "secured party"), at its office in the above city, the sum of $_____, which total sum includes interest for the term of this loan at the agreed contract rate of _________ percent per year, and with interest at the contract rate after maturity, until paid. [ ] If checked here, repayment terms are stated on attached schedule "B", incorporated here by reference.
Payment terms. Total of payments is payable: _________ after date, or payable in monthly installments, commencing on [date], in _________ equal payments of $_____, plus an irregular or balloon payment of $_____, due on [date] (the balloon payment may not be refinanced, if not paid when due), together with a delinquency charge of _________ percent of each installment in default for _________ or more days. Further, in case action is instituted, upon debtor's default, to collect outstanding balance or otherwise to enforce loan contract, borrowers are liable for secured party's legal expenses and _________ percent of the outstanding balance unpaid at time of action, as attorney's fees of secured party. If this loan contract is prepaid in full by cash, a new loan, refinancing, or otherwise before the final installment date, borrowers shall receive a rebate of precomputed interest, computed under _________ percent of rule of 78's.
To secure payment of the negotiable note stated above, all obligations of the undersigned debtor under this agreement, and all other obligations of debtor to secured party, its successors and assigns, holder of this note, however created, arising or evidenced, whether direct or indirect, absolute or contingent, or now or hereafter existing, or due to become due (the loan and debt evidenced by this note and secured by this security agreement and all other present and future obligations of debtor owed to secured party are hereafter collectively termed the "obligations"): the undersigned debtor mortgages, conveys and grants to secured party, a security interest in, the following described and identified personal property, hereafter termed "specific collateral" and any and all additions, accessions, and substitutions to it or for it, and also any personal property or funds belonging to any of the undersigned which now or hereafter are in the control or possession of or on deposit in or with secured party for any reason or purpose, including the pledge of same as security for payment of any debt whatsoever due the secured party or in which secured party now or hereafter has any security interest. (All such personal property, funds and the like, including specific collateral, are hereafter collectively termed the "collateral"):
[ ] If checked here, specific collateral is listed and described on attached schedule "A", incorporated here by reference.
This instrument and security agreement is subject to the additional provisions, warranties, undertakings and rights set forth on the reverse side of this agreement, the same being incorporated here by reference.
Additional Disclosures Required by Federal Law
Cost of Insurance, if to be procured by secured party, with premiums financed here:
Property Insurance for _________ mos. to include: (describe below)
Insurance against liability for bodily injury or property damage to others is not included in this transaction.
Property insurance, if written in connection with this secured transaction, may be obtained by customers through any licensed insurance agent or broker of his or her choice, subject only to creditors' right to refuse to accept any insurer offered by customers, for reasonable cause. If such insurance is procured by creditor(s) with insurance premiums consequently financed as part of this loan, the cost will be total property insurance premium stated above. Credit life and/or disability insurance are not required for credit, purchase of such through creditor(s) being voluntary on customers' part. No such credit insurance is provided unless the customer to be insured under such credit insurance policies signs the appropriate statement below: The premium (cost) for credit life and/or disability insurance, for the term of the credit, is stated above.
I desire credit life and disability insurance.
I desire credit life insurance only.
Basic Terms of Loan Contract:
Notice: Security agreement will secure future and other indebtedness and will cover after-acquired property of debtor.
In witness, the parties have executed this agreement [date]. Each debtor acknowledges that the agreement was complete, with all blanks filled in, prior to their executing same, each debtor having received a copy of this agreement.
(Secured party not required to sign, unless this agreement is to be filed or recorded.)
Debtor warrants, covenants and agrees that:
(1). Specific collateral is used or being purchased for use primarily for: [ ] Personal, family or household, [ ] Farming operations, [ ] Business. [ ] If checked here, specific collateral is being acquired with the proceeds of and advance evidenced by this agreement, which secured party may disburse directly to the seller of the personal property. Further, [ ] if checked here, specific collateral is to be affixed to real property.
(2). The collateral (other than any of which, prior to execution of this agreement, undersigned debtor shall have advised secured party in writing, consists of equipment or inventory normally used in more than one state) will be kept at address shown above for debtor; otherwise, [ ] if checked here, at: _________, until such time as written, advance consent to a change of location is obtained from secured party.
(3). If specific collateral is bought or used primarily for business use, debtor's principal place of business in the state, if any, is that shown in his or her address at beginning of this agreement. All other places of business in the state outside of the town or city mentioned in the previous clause are located as follows: _________.
(4). If any of specific collateral is bought or used primarily for business use and is of a type normally used in more than one state (such as automotive equipment, rolling stock, airplanes, road building equipment, commercial harvesting equipment, construction machinery and the like), whether or not actually used, and debtor has a place(s) of business in more than one state, the chief place of business is that shown at the beginning of this agreement—otherwise, [ ] if checked here, it is at _________(no. and street, city, county, state). Further, debtor will immediately notify secured party in writing of any change in debtor's chief place of business and of any use of any such specific collateral in any jurisdiction other than a state in which debtor shall have previously advised secured party such collateral will be used. If certificates are issued or outstanding as to any of the collateral, debtor will cause the security interests of secured party to be properly protected and perfected by notation on that certificate. Absent advance written consent of secured party, the specific collateral described here will be used outside the territorial limits of the United States of America.
(5). If specific collateral is to be affixed to real property, a description of the real estate is as follows: _________ and the full name(s) of the record owner(s) is: _________ and, if the collateral is attached to real estate prior to the perfection of the security interests granted here and by this means, debtor will, on demand of secured party furnish the latter with a disclaimer(s), executed by all persons having any interest in the real estate, of any interest in or claim against the collateral which is prior to secured party's interests.
(6). Debtor (or one or more of undersigned) has, or will immediately acquire, full title to specific collateral, and will at all times keep same free of all liens, security interests, attachments and/or claims whatsoever, other than the security interests under this agreement. The specific collateral is free and clear of all liens, security interests, claims, and/or encumbrances except the following: _________(if "none," so state). Debtor has good, indefeasible marketable title and will warrant and defend same against all claims. Debtor is not to, and will not attempt to transfer, sell or encumber the collateral or use it for hire or in violation of any statute or ordinance. Debtor, further, agrees to pay promptly all taxes and assessments upon the collateral and/or for its use or operation, and/or on this agreement, to keep, use and maintain the collateral in a reasonably careful manner, so as not to unreasonably or unnecessarily expose it to waste, damage, wear or depreciation, and to keep it in good order and repair. Secured party may examine and inspect collateral or any part of it, wherever located, at any reasonable time(s). Secured party, holder of this agreement, may correct patent errors in this agreement. Time is of the essence, and any notices to debtor shall be sufficiently given, if mailed to the first address stated above of debtor. All equipment, accessories and parts shall become part of the collateral by accession.
(7). If specific collateral is bought or used primarily for personal, family or household purposes, or for farming operations, or if debtor has no place of business in the state, the debtor's residence in the state is that shown at the beginning of this agreement.
(8). This instrument and security agreement, including provisions on the reverse side of this agreement, constitute the entire agreement as between debtor and secured party, and no waivers or modifications shall be valid unless written upon or attached to this agreement. Further, this agreement shall be governed by and construed under the _________ laws. All terms and expressions contained here which are defined in articles _________ of the Uniform Commercial Code of _________ shall have the same meaning here as in the articles of the Code. No waiver by secured party of any default(s) shall operate as a waiver of any other default or of the same default on a future occasion. All rights of secured party under this agreement shall inure to the benefit of its successors and assigns, and all obligations of debtor shall bind his or her heirs, executors, administrators, successors and/or assigns. If more than one person has signed this agreement, such parties are jointly and severally obligated under this agreement. If any provision of this agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective but only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this agreement. "Agreement" refers to this entire instrument and security agreement here. All signers of this agreement waive all exemptions and Homestead Laws.
(9). The collateral shall, at all times, be at debtor's risk. The loss, injury to or destruction of collateral shall not release debtor from payment or other performance of this agreement. Debtor agrees to obtain and keep in force physical damage and/or property damage insurance on the collateral and any other insurance requested by secured party. Such insurance is to be in form and amounts satisfactory to secured party, payable to secured party and debtor as their interests may appear. All such policies shall provide for _________ days' written minimum cancellation notice to secured party. Debtor shall furnish to secured party the original policies or certificates or other evidence satisfactory to secured party of compliance with the insurance provisions stated above. Secured party is authorized, but not obligated, to purchase any or all of the insurance or "single interest insurance" protecting only its security interests, all at debtor's expense. In such event, debtor agrees to reimburse secured party for the cost of such insurance, to the extent that it is not included in the principal amount of the note and debt stated above.
(10). Debtor assigns to secured party the proceeds of all such insurance to the extent of the unpaid balance under this agreement, and directs any insurer to make payments directly to secured party, holder of this note. Debtor, further, grants to secured party his or her power of attorney, which shall be irrevocable for so long as any amount is unpaid under this agreement. The power of attorney gives secured party the sole right to file proof of loss and/or any other forms required to collect from any insurer any amount due from any loss, damage or destruction of the collateral, to agree to and bind debtor as to the amount of the recovery, to designate payee(s) of such recovery, to grant releases to payor-insurers for their liability, to grant subrogation rights to any such payor-insurer, and/or to endorse any settlement check or draft. Debtor, further, agrees not to exercise any of the powers granted to secured party, without the latter's written consent. In event of any default under this agreement, secured party is authorized to cancel any insurance and credit any premium refund against the unpaid balance due on debtor's obligations.
(11). Each of the undersigned, whether maker-debtors, sureties, indorsers, or guarantors and all others who may become liable for all or any part of the obligations evidenced and secured by this agreement, jointly and severally waive presentment, demand, protest, notice of protest and/or of dishonor and also notice of acceleration of maturity on default or otherwise. Further, they agree that secured party may, from time to time, extend or renew the note and security agreement for any period (whether or not longer than the original period of the note) and grant any releases, compromises or indulgences with respect to the note or any extension or renewal of it or any security for it, or to any party liable under it, all without notice to or consent of any of the undersigned and without affecting the liability of the undersigned under this agreement. The undersigned, further, waive notice of acceptance of their guaranty and expressly agree to pay all amounts under this agreement, upon demand, without requiring any action or proceeding against the principal debtor-maker(s).
(12). No financing statement (other than any filed by this secured party) covering any of the collateral here or proceeds is on file in any public or filing office. On request of secured party, debtor will join with same in executing one or more financing statements pursuant to the Uniform Commercial Code, in form satisfactory to secured party and will pay all costs and expenses of filing them or of filing this agreement in any and all public or filing offices wherever filing or recording is deemed by secured party to be necessary or desirable. Further, secured party is authorized to file financing statements relating to collateral without debtor's signature where authorized by law.
(13). Where proceeds of the loan evidenced by this means are being used by debtor to purchase personal property or fixtures from a seller or to finance improvements to real estate pursuant to a contract between debtor and a contractor where the latter has agreed to perform services and to sell to debtor items of personal property to be affixed to or placed in or on real estate, debtor acknowledges that by execution of this agreement, he or she has agreed to and does waive all rights to defend against secured party on any grounds whatsoever. Debtor agrees not to set up any claims he or she might have against the seller or contractor as a defense, setoff, recoupment, or otherwise, to any action brought by secured party for any balance due under this agreement or for possession of collateral, all pursuant to _________[applicable statute].
(14). If the specific collateral here has been or is to be affixed to real estate belonging to debtor, as specified in item 6, debtor agrees that upon the happening of any of the events of default, as hereafter defined, on demand of secured party, he or she will execute and deliver to the secured party, or holder, a good and sufficient real estate deed of trust, conveying the premises (real estate) described in item 6, as additional security for the payment of all obligations evidenced and/or secured in and by this agreement. Debtor reserves the option to pay secured party the entire unpaid balance due under this agreement rather than furnishing the deed of trust stated above, on his or her default.
Additional Rights Granted Secured Party
At its option secured party may discharge taxes, liens, security interests or other encumbrances at any time levied or placed on the collateral, may pay for insurance and for the maintenance and preservation of same. Debtor agrees to reimburse secured party, on demand, for any such payment made, or any such expense incurred by secured party pursuant to the authorization stated above. Until default, as hereafter defined, debtor shall have the right to retain possession of the specific collateral and to use it in any lawful manner not inconsistent with this agreement and with any policy of insurance on it.
With prior written assent of secured party, other collateral may be substituted for the original collateral here, in which event all rights, duties, obligations, remedies and security interests provided for, created or granted shall apply fully to such substitute collateral.
If any installment due and payable under this agreement is in default for _________ or more days, or if the payment and maturity of the entire unpaid outstanding balance under this agreement shall be accelerated and matured by reason of the occurrence of any of the "events of default," as hereafter defined, secured party is expressly authorized to exercise its right of setoff or bank lien as to any monies deposited in demand, checking, time, savings or other accounts of any nature maintained in and with it by any of the undersigned, without advance notice. The right of setoff shall also be exercised and applicable where secured party is indebted to any signer of this agreement by reason of any certificate of deposit, bond, note, or otherwise. Secured party, as further security for the payment of this agreement, is granted by this means a lien and security interest in and to any funds now or at any future time loaned to or deposited with it by any of the signers here.
Events of Default
Debtor shall be in default under this agreement, upon the happening of any of the following events, circumstances or conditions, namely:
(1) Default in the payment or performance of any of the obligations or of any covenant, warranty or liability contained or referred to here; or
(2) Any warranty, representation or statement made or furnished to secured party by or on behalf of debtor, in connection with this agreement or to induce the secured party to make a loan to debtor proving to have been false in any material respect when made or furnished; or
(3) Loss, theft, substantial damage, destruction, sale or encumbrance to or of any collateral, or the assertion or making of any levy, seizure, mechanic's lien or attachment of it or on it; or
(4) Death, dissolution, termination of existence, insolvency, business failure, appointment of a receiver of any part of the property of, assignment for the benefit of creditors by, or the commencement of any proceeding under the bankruptcy or insolvency laws by or against debtor or any indorser, guarantor or surety for the debtor; or
(5) Failure of a corporate debtor or indorser, guarantor or surety for the debtor to maintain its corporate existence in good standing; or
(6) Debtor's being found to have either a "record or reputation for violating laws of the United States or of any state relating to liquor (as referred to in 18 USCA §§ 3668, et seq.) or narcotics" and/or any commercial crimes; or
(7) Upon the entry of any monetary judgment or the assessment and/or filing of any tax lien against debtor, or upon the issuance of any writ of garnishment or attachment against any property of, debts due or rights of debtor, to specifically include commencement of any action or proceeding to seize monies of debtor on deposit in any bank account with secured party; and/or
(8) If secured party should otherwise deem itself, its security interests, its collateral or the debt unsafe or insecure, or should the secured party, in good faith, believe that the prospect of payment or other performance is impaired.
Remedies on Default (Including Powers of Sale)
Upon the occurrence of any of the events, circumstances or conditions of default stated above, all of the obligations evidenced here and secured by this means shall immediately be due and payable, without notice. Further, secured party shall then have all the rights and remedies of a secured party under the Uniform Commercial Code, as enacted in _________.
Without limitation to, secured party shall have the following specific rights and remedies:
(1). To take immediate possession of the collateral without notice or resort to legal process, and for such purpose, to enter upon any premises on which the collateral or any part of it may be situated and remove it from there, or, at its option, to render the collateral unusable. Further, also at its option, to dispose of the collateral on debtor's premises.
(2). To require debtor to assemble the collateral and make it available to secured party at a place to then be designated by the secured party, which is reasonably convenient to both parties.
(3). To exercise its rights of setoff by applying any monies of debtor on deposit with secured party toward payment of the obligations evidenced or referred to here or secured by this means, without notice. If any process is issued or ordered to be served on secured party, seeking to seize debtor's rights and/or interests in any such bank account maintained with secured party, the balance in any account shall immediately be deemed to have been and shall be set off against any and all obligations of debtor to the secured party, as of the time of issuance of any such writ or process, whether or not debtor and/or secured party shall then have been served with that process.
(4). To dispose of the collateral, in any county or place to be selected by secured party at time of default, at either private or public sale (at which public sale secured party may be the purchaser), with or without having the collateral physically present at the sale.
If the collateral is sold at public sale, under this contractual power of sale, it is agreed that, pursuant to _________ or _________[cite statutes], whichever is applicable to (or any similar statutes subsequently enacted in replacement, notice of such public sale shall be posted on a suitable bulletin board maintained for such purpose in the courthouse in the county or place in which the sale is to be held, at least _________ days immediately preceding the sale. Such posting shall constitute sufficient advertising. If the collateral is sold at public sale, secured party shall mail a copy of its notice of public sale to debtor at the address shown at the beginning of this agreement, at least _________ days before the date of such public sale. Further, if the collateral is sold at private sale, secured party shall give at least _________ days' written notice of the time after which private sale is to be made, such notice being stipulated by all parties here as reasonable. At any sale or other disposition of the collateral, secured party may accept a trade of property for all or a portion of the sale price.
(5). To make or have made any repairs deemed necessary or desirable at time of repossession, possession or sale, the cost of which is to be charged against debtor.
(6). To apply the proceeds realized from disposition of the collateral to satisfy the following items, in the order listed here:
(a) The cost of reimbursing any person whose interest in the premises is physically damaged by the entry and removal of the collateral, upon debtor's failure to do so; next, to
(b) The expense of taking, removing, holding for sale, repairing or otherwise preparing for sale and selling of the collateral, specifically including the secured party's reasonable attorneys' fees and both legal and collection expenses, if claim and delivery and/or action are instituted for possession of the collateral and/or collection of the unpaid balance(s) here. Debtor agrees that _________ percent of the sum of the unpaid principal and all interest due on it at the time action is instituted by secured party shall be deemed reasonable attorneys' fees of the secured party; next, to
(c) The expense of liquidating any liens, security interests, attachments or encumbrances superior to the security interests created here; and, finally, to
(d) The unpaid principal balance and all accumulated interest under this agreement and to any other debt owed to secured party by any signer of this agreement.
Any surplus, after the satisfaction of the items (a) through (d) stated above shall be paid to debtor or to any other secured party lawfully entitled to it and known to this secured party. Further, if the proceeds realized from disposition of the collateral shall fail to satisfy any of the items (a) through (d) stated above, debtor shall immediately pay any deficiency balance to secured party.
(See other side for signatures and seals.)
Guaranty of Third Persons
Undersigned, jointly and severally, guarantee the payment, when due, to any holder of this note, of all amounts from time to time owing under it, and the payment, upon demand, of the entire amount owing on the agreement stated above, in the event of default in payment by debtor(s) named in it. Undersigned waive(s) notice of acceptance of this guaranty, acknowledge themselves as fully bound by all provisions of the agreement, and expressly agree to pay all amounts owing under this agreement upon demand, without requiring any action or proceeding against debtor(s) or any foreclosure against any collateral secured in the agreement.
_________, Guarantor (Seal)
_________, Guarantor (Seal)
Signature of Owner of Specific Collateral
Undersigned acknowledge themselves as fully bound by all provisions of the security agreement portion of the agreement, which they execute here:
_________(Owner(s) of specific collateral)
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