The security agreement
is a special agreement whereby the Grantor and Borrower assigns, grants
and pledges to the Grantee and Lender a security interest in a hard asset known
as the collateral
Examples of typical
collateral are shares of stock, real estate, and vehicles
The Borrower agrees
that the Lender shall have the rights stated in the Security Agreement with
respect to the Collateral, in addition to all other general rights which the Lender may
have by law
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In essence, the security agreement
provides for an arrangement of securing the debt of a debtor by granting
the lending party certain assets of the debtor as collateral. The
debtor guarantees that he/she holds title to the assets and thus grants
the lender a lien on the assets. The lien can be exercised by the
lender to obtain ownership in the event that the debtor defaults in the
payment.
