This post uses hypothetical scenarios for illustrative purposes only. It does not describe any actual client, transaction, or representation, and is not legal advice.
All-Assets Security Agreement
A lender-oriented all-assets security agreement for a startup borrower, with collateral taxonomy, 2022 UCC digital-asset gates, perfection and control deliverables, covenants, remedies, release mechanics, and a filing/continuation checklist.
Drafting standard applied
Module control. Use only with an identified secured obligation and state-specific Article 9 analysis. Select debtor entity type and location, collateral classes, excluded property, commercial-tort claims, deposit and securities accounts, controllable electronic records, federal IP filings, landlord/bailee controls, insurance, and remedies. Do not file a financing statement until the debtor name and authorization are independently verified.
Operative form with optional analysis
Opening: This All-Assets Security Agreement (this “Agreement”) is entered into as of [DATE] by and between [DEBTOR LEGAL NAME], a [STATE AND ENTITY TYPE] (“Debtor”), and [SECURED PARTY LEGAL NAME], a [STATE AND ENTITY TYPE] (“Secured Party”).
1Grant of Security Interest
Debtor grants Secured Party a continuing security interest in the Collateral to secure the defined Obligations. The grant covers present and after-acquired property and identifiable proceeds only to the extent permitted by law and the selected collateral schedule. It does not itself transfer title, authorize ordinary-course interference before default, or override nonwaivable restrictions and statutory exclusions.
Drafting analysis
- Instruction
- Tie the grant to a precise obligation definition and collateral taxonomy.
- Risk controlled
- An overbroad obligation or collateral definition can capture unintended exposures.
- Three-pass review
- Necessity: confirm distinct work. Counterparty: test trigger, scope, cap, cure, and carve-outs. Proofreader: reconcile defined terms, cross-references, exhibits, and related documents.
2Obligations
“Obligations” means principal, interest, fees, indemnities, protective advances, and enforcement costs owing under [IDENTIFIED CREDIT DOCUMENTS], including only the amendments, replacements, hedging, treasury, future advances, and contingent obligations expressly identified in Schedule 1. Obligations exclude unlawful interest, obligations released in writing, and unrelated affiliate debt. “Payment in Full” occurs only under the discharge conditions stated in Schedule 1.
Drafting analysis
- Instruction
- Avoid all-obligations language without transaction approval.
- Risk controlled
- Hidden cross-collateralization surprises borrowers and investors.
- Three-pass review
- Necessity: confirm distinct work. Counterparty: test trigger, scope, cap, cure, and carve-outs. Proofreader: reconcile defined terms, cross-references, exhibits, and related documents.
3Collateral Description
“Collateral” means Debtor’s right, title, and interest in the Article 9 categories and other property specifically described in Schedule 1, together with after-acquired property of those categories and identifiable proceeds, but excluding Excluded Property. A commercial tort claim is Collateral only if specifically described as required by applicable law. Assets governed by federal or other special perfection regimes are included only to the extent stated in Schedule 1 and supported by the required supplemental filing or control step.
Drafting analysis
- Instruction
- Reconcile agreement, financing statement, and collateral schedules.
- Risk controlled
- A generic label may not attach to specially described collateral.
- Three-pass review
- Necessity: confirm distinct work. Counterparty: test trigger, scope, cap, cure, and carve-outs. Proofreader: reconcile defined terms, cross-references, exhibits, and related documents.
4Excluded Property
“Excluded Property” means property identified in Schedule 1 for which attachment or enforcement is prohibited by nonwaivable law, would cause termination under an enforceable restriction not displaced by law, requires an unreceived consent, would create the specifically documented tax or regulatory consequence, or is intentionally outside the transaction. Any exclusion is limited to the period and extent of the restriction and does not exclude proceeds to the extent a lien on proceeds is lawful. When the restriction ends or required consent is obtained, the property automatically becomes Collateral, subject to any required perfection step and the materiality threshold in Schedule 1.
Drafting analysis
- Instruction
- Create an itemized excluded-property and consent schedule.
- Risk controlled
- A broad exclusion can unintentionally release valuable proceeds or later-acquired rights.
- Three-pass review
- Necessity: confirm distinct work. Counterparty: test trigger, scope, cap, cure, and carve-outs. Proofreader: reconcile defined terms, cross-references, exhibits, and related documents.
5Attachment and Value
Debtor acknowledges receipt of value and represents that it has rights in the Collateral, or power to transfer rights in the Collateral, sufficient for attachment, subject to disclosed schedule exceptions. Attachment to after-acquired Collateral and future advances occurs when the requirements of applicable law and the identified credit documents are satisfied. No representation implies ownership of licensed assets or customer data beyond Debtor’s actual transferable rights.
Drafting analysis
- Instruction
- Verify chain of title and license restrictions.
- Risk controlled
- Security cannot attach to rights the debtor does not have.
- Three-pass review
- Necessity: confirm distinct work. Counterparty: test trigger, scope, cap, cure, and carve-outs. Proofreader: reconcile defined terms, cross-references, exhibits, and related documents.
6Debtor Name, Location, and Organization
Debtor states its exact public-organic-record name, type, jurisdiction, organizational number if any, chief executive office, and prior names, jurisdictions, mergers, and conversions. Debtor shall provide advance notice of changes and complete continuation or amendment steps before effectiveness. Individual-name rules require a separate jurisdiction-specific module.
Drafting analysis
- Instruction
- Use certified formation records, not invoices or websites.
- Risk controlled
- A small naming error can render a financing statement seriously misleading.
- Three-pass review
- Necessity: confirm distinct work. Counterparty: test trigger, scope, cap, cure, and carve-outs. Proofreader: reconcile defined terms, cross-references, exhibits, and related documents.
7Authorization to File
Debtor authorizes initial financing statements, amendments, continuations, assignments, and terminations consistent with this Agreement. Secured Party may describe collateral as all assets only if the deal intentionally grants that scope. Filing authority does not permit inaccurate debtor information, premature termination, or filings after release, and Secured Party must provide copies and maintain a filing calendar.
Drafting analysis
- Instruction
- Approve actual UCC forms and jurisdictions before submission.
- Risk controlled
- Boilerplate authorization does not cure a defective filing.
- Three-pass review
- Necessity: confirm distinct work. Counterparty: test trigger, scope, cap, cure, and carve-outs. Proofreader: reconcile defined terms, cross-references, exhibits, and related documents.
8Perfection by Possession, Control, or Notation
Debtor shall deliver instruments, certificated securities, and negotiable documents where agreed; obtain deposit-account, securities-account, and other control agreements; mark chattel paper or title records where applicable; and implement control for electronic money or controllable electronic records under enacted law. Each method requires a custodian, priority review, and release procedure.
Drafting analysis
- Instruction
- Map perfection method by asset and state enactment.
- Risk controlled
- Filing alone is insufficient or subordinate for some collateral.
- Three-pass review
- Necessity: confirm distinct work. Counterparty: test trigger, scope, cap, cure, and carve-outs. Proofreader: reconcile defined terms, cross-references, exhibits, and related documents.
9Intellectual Property and Special Filings
Debtor shall list material patents, trademarks, copyrights, applications, and domain names; execute short-form federal recordation documents where prudent; maintain prosecution and registrations subject to business-judgment thresholds; and notify Secured Party of material additions, abandonment, infringement, or licenses. Federal recordation supplements, and does not replace without analysis, UCC perfection.
Drafting analysis
- Instruction
- Coordinate EF-080 and federal filing practice.
- Risk controlled
- Assuming one filing system perfects every IP right creates priority gaps.
- Three-pass review
- Necessity: confirm distinct work. Counterparty: test trigger, scope, cap, cure, and carve-outs. Proofreader: reconcile defined terms, cross-references, exhibits, and related documents.
10Representations
Debtor represents on the date of this Agreement and each date specified in the loan documents, subject to the materiality, knowledge, and schedule qualifications stated there, that it has authority to enter this Agreement; has rights in the Collateral sufficient to grant the security interest; has disclosed existing liens, organization data, locations, transfers, and exceptions; and has completed the schedules accurately in all material respects. No representation as to perfection, priority, valuation, litigation, or intellectual property is made beyond the expressly stated and diligence-supported representation in the loan documents.
Drafting analysis
- Instruction
- Use a disclosure schedule and bring-down standard.
- Risk controlled
- Absolute priority representations may be impossible without searches and control.
- Three-pass review
- Necessity: confirm distinct work. Counterparty: test trigger, scope, cap, cure, and carve-outs. Proofreader: reconcile defined terms, cross-references, exhibits, and related documents.
11Affirmative Covenants
Debtor shall preserve Collateral, maintain records and insurance, pay material taxes and charges before liens arise subject to good-faith contests, comply with law, protect IP, collect accounts in the ordinary course before default, provide inspections and reporting on reasonable notice, and execute further assurances. Covenants must not prevent ordinary startup operations or consume management through unlimited audits.
Drafting analysis
- Instruction
- Add thresholds, frequency, and confidentiality for inspections.
- Risk controlled
- Unbounded covenants create default from routine business changes.
- Three-pass review
- Necessity: confirm distinct work. Counterparty: test trigger, scope, cap, cure, and carve-outs. Proofreader: reconcile defined terms, cross-references, exhibits, and related documents.
12Negative Covenants
Without the consent required by the loan documents, Debtor shall not create a lien on Collateral; dispose of Collateral other than a permitted disposition; change its jurisdiction or legal name without completing advance perfection steps; move titled, possessed, or controlled assets outside permitted arrangements; compromise a material account after default; abandon material IP outside approved thresholds; or amend a control agreement adversely to Secured Party. Permitted liens, sales, licenses, investments, ordinary-course use, and other baskets are solely those stated in the loan documents.
Drafting analysis
- Instruction
- Reconcile every basket with the loan agreement.
- Risk controlled
- Security covenants that conflict with permitted transactions create accidental default.
- Three-pass review
- Necessity: confirm distinct work. Counterparty: test trigger, scope, cap, cure, and carve-outs. Proofreader: reconcile defined terms, cross-references, exhibits, and related documents.
13Insurance and Casualty
Debtor maintains property and liability coverage appropriate to Collateral, identifies Secured Party as lender loss payee or additional insured where negotiated, provides evidence, and applies proceeds under the loan documents. Secured Party may make protective advances after notice and failure to cure where practicable. Insurance proceeds remain subject to applicable law and repair/reinvestment rights.
Drafting analysis
- Instruction
- Review endorsements rather than relying on certificates.
- Risk controlled
- Loss-payee status and additional-insured status serve different risks.
- Three-pass review
- Necessity: confirm distinct work. Counterparty: test trigger, scope, cap, cure, and carve-outs. Proofreader: reconcile defined terms, cross-references, exhibits, and related documents.
14Events of Default
An “Event of Default” exists only upon an event defined as such in [IDENTIFIED LOAN DOCUMENT] or the following additional event: [SPECIFIC EVENT], in each case after all applicable materiality thresholds, notice, cure, cross-default, and grace periods. A technical schedule omission does not trigger remedies unless it materially impairs attachment, perfection, priority, value, or enforcement and remains uncured for [NUMBER] days after notice.
Drafting analysis
- Instruction
- Avoid duplicative, inconsistent default definitions.
- Risk controlled
- A security agreement should not silently expand the credit bargain.
- Three-pass review
- Necessity: confirm distinct work. Counterparty: test trigger, scope, cap, cure, and carve-outs. Proofreader: reconcile defined terms, cross-references, exhibits, and related documents.
15Remedies
After an uncured Event of Default, Secured Party may exercise Article 9 and agreed rights, including possession, collection, control, disposition, and application of proceeds, subject to commercial reasonableness, mandatory notice, debtor protections, special-asset law, and limitations on self-help. Debtor authorizes access only where lawful and without breach of peace or unauthorized system intrusion.
Drafting analysis
- Instruction
- Build an enforcement plan by collateral class.
- Risk controlled
- Overbroad self-help language does not override mandatory law.
- Three-pass review
- Necessity: confirm distinct work. Counterparty: test trigger, scope, cap, cure, and carve-outs. Proofreader: reconcile defined terms, cross-references, exhibits, and related documents.
16Power of Attorney and Protective Acts
Any power of attorney is coupled with an interest, becomes exercisable only after specified default or failure to perform, and is limited to lawful actions reasonably necessary to protect, perfect, collect, or enforce Collateral. Secured Party must document use and cannot make business decisions unrelated to collateral protection. Protective advances become Obligations only as agreed.
Drafting analysis
- Instruction
- Avoid an immediately exercisable general power.
- Risk controlled
- A broad power invites operational and fiduciary disputes.
- Three-pass review
- Necessity: confirm distinct work. Counterparty: test trigger, scope, cap, cure, and carve-outs. Proofreader: reconcile defined terms, cross-references, exhibits, and related documents.
17Proceeds and Application
Apply collections and disposition proceeds in the order required by law and the loan documents: enforcement expenses, secured obligations by agreed order, subordinate claims if required, and surplus to the entitled person. Debtor remains liable for deficiency only to the extent lawful. Account for noncash proceeds, reserves, disputed claims, and later-recovered amounts.
Drafting analysis
- Instruction
- Align waterfall with intercreditor and guaranty documents.
- Risk controlled
- A conflicting waterfall can breach priority arrangements.
- Three-pass review
- Necessity: confirm distinct work. Counterparty: test trigger, scope, cap, cure, and carve-outs. Proofreader: reconcile defined terms, cross-references, exhibits, and related documents.
18Release and Termination
Upon indefeasible Payment in Full and termination of commitments, subject to the expressly identified contingent obligations and cash-collateral arrangements, Secured Party shall promptly release the Collateral, return possession and control, authorize account terminations, and file UCC and other releases within [NUMBER] business days. A partial release requires a signed description of the released assets, conditions, surviving Collateral, and required filing or control steps. Notices must be delivered by [METHODS] to the completed addresses and are effective on [RECEIPT RULE]. Secured Party may assign this Agreement only with the related Obligations; Debtor may not assign it. Article 9 choice-of-law rules govern perfection and priority; [STATE] governs other contractual issues and [FORUM] is exclusive, subject to mandatory law. Waiver, amendment, severability, counterparts, electronic signatures, entire agreement, conflict priority with the loan documents, reinstatement after avoided payments, and survival apply as follows: [COMPLETE TERMS].
Drafting analysis
- Instruction
- Create a payoff checklist before funds flow.
- Risk controlled
- Delayed termination can block financing and asset sales.
- Three-pass review
- Necessity: confirm distinct work. Counterparty: test trigger, scope, cap, cure, and carve-outs. Proofreader: reconcile defined terms, cross-references, exhibits, and related documents.
Necessary exhibits
Exhibit 1 — Schedule 1 — Collateral and Excluded Property
Use Article 9 categories and itemized exceptions.
| Asset class | Included description | Exclusion / consent | Evidence |
|---|---|---|---|
| Accounts/inventory/equipment | [DESCRIPTION] | [EXCLUSION] | [SCHEDULE] |
| IP/general intangibles | [DESCRIPTION] | [LICENSE LIMIT] | [REGISTER] |
| Control collateral | [ACCOUNT/ASSET] | [CONTROL STEP] | [AGREEMENT] |
| Commercial tort claim | [SPECIFIC DESCRIPTION] | [NONE] | [CLAIM RECORD] |
Exhibit 2 — Schedule 2 — UCC Filing Register
Verify public organic record and filing office.
| Filing office | Debtor name | Collateral indication | File/continue/terminate |
|---|---|---|---|
| [STATE/OFFICE] | [EXACT NAME] | [TEXT] | [DATES] |
| Fixture office | [NAME] | [REALTY/GOODS] | [DATES] |
Exhibit 3 — Schedule 3 — Perfection and Control Matrix
Tailor to enacted state law.
| Collateral | Method | Priority risk | Closing evidence |
|---|---|---|---|
| Deposit account | Control | [BANK LIEN] | [DACA] |
| Securities | Control/possession | [INTERMEDIARY] | [SACA] |
| IP | UCC + federal recordation analysis | [CHAIN/PRIORITY] | [EF-080] |
| CER/electronic money | [CONTROL UNDER ENACTED LAW] | [2022 UCC] | [TECH MEMO] |
Scenario tests
| Scenario | Required operation | Review point |
|---|---|---|
| Debtor converts to another state | Pre-close continuation and amendment plan | Do not wait until after conversion |
| Startup receives crypto asset | Analyze enacted 2022 UCC control and custody | No generic filing assumption |
| IP license prohibits lien | Apply anti-assignment and exclusion analysis | Track consent |
| Default involves SaaS servers | Use lawful process; no unauthorized access | Preserve customers and data |
| Refinancing pays loan | Release filings, control, possession, and federal records | Confirm surviving contingencies |
Current-law and specialist gates
| Gate | Starting authority | Owner | Matter-specific question |
|---|---|---|---|
| Attachment/perfection | Enacted state UCC Articles 1, 8, 9, and 12 | Secured-transactions counsel | Debtor, collateral, method |
| 2022 amendments | State enactment of UCC controllable-electronic-record rules | Specialist counsel | Digital assets and control |
| Federal assets | Patent, trademark, copyright, aviation, maritime, or other regimes | Specialist counsel | Supplemental filing |
| Enforcement | Article 9 remedies, bankruptcy stay, and special-asset law | Litigation/bankruptcy counsel | Commercial reasonableness and access |
Release checklist
- Verify obligations, debtor identity, location, authority, and formation record
- Map every collateral class, exclusion, ownership issue, and prior lien
- Complete UCC filing, search, continuation, possession, control, and federal-filing plan
- Reconcile representations, covenants, defaults, and remedies with loan documents
- Test entity conversion, digital asset, restricted license, SaaS enforcement, and payoff
- Build insurance, control, and federal IP evidence
- Prepare payoff and release workflow at closing, not after default
- Obtain secured-transactions, IP, bankruptcy, specialist, and responsible-lawyer approval
- Run final necessity, counterparty, and hostile-proofreader passes.
- Recheck montague.law for duplication immediately before publication.