Security Agreement
(All Assets)
Summary
This Security Agreement (All Assets) template is the principal security document for use with a credit agreement in a transaction involving one or more tranches of loans made to a U.S. borrower. The loans are secured by a lien on substantially all of the property and assets of the borrower and its subsidiaries. This template includes practical guidance, drafting notes, and alternate and optional clauses. This security agreement is commonly used in syndicated leveraged loans and assumes the following: • All grantors are U.S. entities and will pledge substantially all of their respective assets to secure loans to the borrower. • A separate pledge agreement will be entered into by the relevant grantors and the collateral agent in which the grantors will pledge all equity interests owned by such grantors as collateral. • Separate real property mortgages and short-form intellectual property security agreements may be entered into by the relevant grantors and the collateral agent. • Separate tri-party control agreements may be required with respect to some or all of the grantors' deposit accounts and securities accounts. • The amendments to the UCC recommended by the Uniform Law Commission in 2022 concerning digital assets (for example, blockchain-based currencies) and other emerging technologies have not been uniformly adopted by the states and the parties are negotiating this agreement in reliance on the UCC as in effect prior to the adoption of any of these changes. See Digital Assets: Security Interests for a comprehensive analysis of the asset types defined in the UCC that are the closest fit for cryptocurrency at this time (i.e., prior to the widespread adoption of the 2022 Amendments). See UCC Amendments Relating to Digital Assets and Other Emerging Technologies for more information on the 2022 amendments to the UCC. The parties, type of financing, and other factors relevant to each transaction will require modifications to this template. Bracketed references to "reasonable" or "reasonably" are grantor-friendly modifications. Whenever the option of [commercially reasonable efforts / best efforts / reasonable efforts] is given herein, commercially reasonable efforts is grantor-friendly, best efforts is lender-friendly, and reasonable efforts is the middle-of-the road option. See Security Interests Resource Kit for a summary of practical guidance and templates related to perfection and priority. For a full listing of key content covering finance fundamentals, see Finance Fundamentals Resource Kit. For a full listing of key content covering asset-based lending, including agreements, security, guaranties, perfection, and priorities, see Asset-Based Lending Resource Kit. For general commentary on security agreements see Warren's Forms of Agreements § 31.1, Commercial Law And Practice Guide P 29.07, Current Legal Forms with Tax Analysis FORM 6.124.