Security Agreement and Promissory Note

COMPANY LETTERHEAD

{{company_name}}

{{company_address}}

Phone: {{phone}}

Email: {{email}}

Website: {{website}}

SECURITY AGREEMENT AND PROMISSORY NOTE

This Security Agreement and Promissory Note (hereinafter "Agreement") is made and entered into on this {{date_of_agreement}} day of {{month}}, {{year}}, by and between:

**Lender:**

{{lender_company_name}}

{{lender_company_address}}

(hereinafter referred to as the "Lender")

**Borrower:**

{{borrower_company_name}}

{{borrower_company_address}}

(hereinafter referred to as the "Borrower")

1. LOAN AMOUNT AND TERMS

The Lender hereby agrees to lend to the Borrower the principal sum of {{loan_amount_currency}} {{loan_amount_words}} ({{loan_amount_figures}}), (hereinafter "Principal Sum").

The Borrower agrees to repay the Principal Sum, together with interest at a rate of {{interest_rate}}% per annum, calculated on a {{interest_calculation_basis}} basis.

The loan shall be repaid in {{number_of_installments}} installments of {{installment_amount_currency}} {{installment_amount_figures}} each, commencing on {{first_payment_date}} and continuing on the {{payment_day_of_month}} day of each subsequent {{payment_frequency}} thereafter until the Principal Sum and all accrued interest are paid in full.

Any outstanding balance shall be due and payable in full on or before {{maturity_date}}.

2. SECURITY INTEREST

To secure the repayment of the Principal Sum and all accrued interest, the Borrower hereby grants to the Lender a security interest in the following collateral (hereinafter "Collateral"):

**(a) Description of Collateral:** {{description_of_collateral}}

**(b) Location of Collateral:** {{location_of_collateral}}

The Borrower warrants that it is the sole owner of the Collateral, free from any liens, encumbrances, or adverse claims, except as disclosed to the Lender in writing prior to the execution of this Agreement. The Borrower agrees to maintain the Collateral in good condition and to keep it insured against loss or damage to the satisfaction of the Lender.

3. COVENANTS OF THE BORROWER

The Borrower covenants and agrees that it shall:

**(a)** Not sell, transfer, assign, or otherwise dispose of the Collateral without the prior written consent of the Lender.

**(b)** Promptly notify the Lender of any change in the location of the Collateral.

**(c)** Allow the Lender to inspect the Collateral at any reasonable time.

**(d)** Pay all taxes, assessments, and other charges levied against the Collateral when due.

**(e)** Take all necessary actions to perfect and protect the Lender's security interest in the Collateral.

4. EVENTS OF DEFAULT

The occurrence of any of the following shall constitute an "Event of Default" under this Agreement:

**(a)** Failure by the Borrower to pay any installment of principal or interest when due.

**(b)** Breach of any covenant or warranty contained in this Agreement.

**(c)** Insolvency, bankruptcy, or receivership of the Borrower.

**(d)** Any material misrepresentation made by the Borrower in connection with this Agreement.

5. REMEDIES ON DEFAULT

Upon the occurrence of an Event of Default, the Lender, at its option, may declare the entire unpaid Principal Sum and all accrued interest immediately due and payable without notice or demand.

The Lender shall also have all rights and remedies of a secured party under the applicable laws, including, but not limited to, the right to take possession of the Collateral and sell it at public or private sale, with the proceeds applied to the repayment of the loan and any expenses incurred by the Lender.

6. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of {{governing_jurisdiction}}.

7. ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements, understandings, and negotiations, whether written or oral.

8. SIGNATURE BLOCK

IN WITNESS WHEREOF, the parties have executed this Security Agreement and Promissory Note as of the date first written above.

**LENDER:**

_____________________________

{{lender_signatory_name}}

{{lender_signatory_title}}

**BORROWER:**

_____________________________

{{borrower_signatory_name}}

{{borrower_signatory_title}}