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F ederal

reserve

Ban k

DA LLA S, TE X A S

of

Da lla s

75222

Circular No. 68-4
January 10, 1968

To All Member Banks of the
Eleventh Federal Reserve District:
Several changes are being made in the Form C-9 Security Agreement, which we have been furnishing
to member banks for use under the Uniform Commercial Code. The purpose of the changes is to improve
and update the form. A sample copy is enclosed.
The layout of the form has been modified to give more space for describing th e collateral and listing
the notes. The blanks have been conformed to typewriter spacing to permit more convenient use.
Certain of the changes are intended to take account of amendments to the Texas Uniform Com­
mercial Code enacted in 1967. These amendments require, among other things, that when the collateral
is fixtures (goods to be affixed to real estate) or crops, the financing statem ent m ust include the name
of the record owner of the real estate concerned. Accordingly, the instructions for describing fixture and
crop collateral have been amended to add this requirement.
Another new requirement of the Texas Uniform Commercial Code is that a financing statem ent
filed with respect to fixtures m ust contain the following statem ent: “Collateral is or includes fixtures.”
A financing statem ent containing this language can perfect a security interest only in fixtures.
To take account of this change, the instructions on the C-9 relative to th e use of the form as a
financing statem ent have been changed to include a warning that the Texas statutory statem ent concern­
ing fixtures m ust be quoted when applicable.
The Texas Consumer Credit Code, effective January 1, 1968, imposes new requirements on a bank’s
acquisition of retail installm ent paper. A warranty which the retail seller makes to the bank in
connection with the bank’s acquisition of retail installm ent paper (found on the reverse of the C-9) has
been amended to take account of the new requirements imposed by the Consumer Credit Code.
The C-9 Security Agreem ent is intended to be useful in a large number of transactions, including
all manner of farm loans, inventory and accounts receivable financing, and loans on business equipment,
consumer goods, and automobiles. The terms of this Security Agreement will be acceptable to the Federal
Reserve Bank of Dallas when tendered with paper submitted for rediscount or as collateral for advances.
A decision on the legal form s to be used by your bank should, of course, be made in consultation
with your legal counsel.
Copies of the revised security agreem ent form are available to member banks without cost and will
be supplied upon request made to this Bank or the appropriate branch.
Yours very truly,
Watrous H. Irons
President

Enclosure

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

SECURITY AGREEMENT
A. PARTIES

Date

FR B -D A L L A S
C-9 Rev. 11-67

1. Debtor_______________________
2. Address:
(Residence — Show County)

3. Bank:__
4. Address:.
(Information concerning this security interest may be obtained at the office of the bank shown above.)

B. AGREEM ENT
Subject to the applicable terms of this security agreement, debtor grants to bank a security interest in
the collateral to secure the payment of the obligation.
C. OBLIGATION
1. The following is the obligation secured by this agreement:
a. All past, present, and future advances, of whatever type, by bank to debtor, and extensions and
renewals thereof.
b. All existing and future liabilities, of whatever type, of debtor to bank, and including (but not
limited to) liability for overdrafts and as indorser and surety.
c. All costs incurred by bank to obtain, preserve, and enforce this security interest, collect the obliga­
tion, and maintain and preserve the collateral, and including (but not limited to) taxes, assess­
ments, insurance premiums, repairs, reasonable attorneys’ fees and legal expenses, feed, rent,
storage costs, and expenses of sale.
d. Interest on the above amounts, as agreed between bank and debtor, or if no such agreement, at the
maximum rate permitted by law.
2. List notes included in the obligation as of the date of this agreement (show date and am ou n t):

D. COLLATERAL
1. The security interest is granted in the following collateral:
a. Describe collateral. Include the following inform ation:
(1)

For crops; oil, gas or other minerals to be extracted; timber to be cut; and fixtures (goods to be affixed to real
estate): describe real estate concerned and for crops and fixtures show record owner.
(2) If debtor’s residence is outside the state: give location of consumer goods, farm products,and farm equip­
ment, and if collateral includes accounts arising from the sale of farm products, give location of products sold.
(3) If this is a purchase money security interest in farm equipment: give purchase price of each item.

b. All substitutes and replacements for, accessions, attachments, and other additions to, and tools,
parts, and equipment used in connection with, the above property; and the increase and unborn
young of animals and poultry.
c. All property similar to the above hereafter acquired by debtor.
2. Classify goods under one or more of the following Uniform Commercial Code categories:
□ Consumer goods
□ Equipment (farm use)
n Inventory
□ Equipment (business use)
□ Farm products
3. □ If this block is checked, this is a purchase money security interest, and debtor will use funds advanced
to purchase the collateral, or bank may disburse funds direct to the seller of the collateral, and to pur­
chase insurance on the collateral.
4. If any of the collateral is accounts or contract rights, give the location of the office where the records
concerning them are kept (if other than debtor’s address in Item A 2).
5. If this security agreement is to be filed as a financing statement, check the appropriate block if
□ proceeds
□ products
are covered for financing statem ent purposes. Coverage of proceeds or products for financing state­
ment purposes is not to be construed as giving debtor any additional rights with respect to the col­
lateral, and debtor is not authorized to sell, lease, otherwise transfer, furnish under contracts of ser­
vice, manufacture, process, or assemble the collateral except in accordance with the provisions on the
back of this security agreement.
Additional terms on back.
BANK, By:

DEBTOR, B y :

Signature

Signature______

Typed
Name and Title

Typed
Name and Title

If this Security Agreement is to be filed as a financing statement:
(1) Bank must sign.
(2) For New Mexico, it should be acknowledged.
(3) For Texas, the statutory statement concerning fixtures must be quoted hereon when applicable.

E. AGREEM ENTS OF DEBTOR
1. Debtor will: take adequate care of the collateral; insure the collateral for such hazards and in such amounts as bank
directs, policies to be satisfactory to bank; pay all costs necessary to obtain, preserve, and enforce this security interest,
collect the obligation, and preserve the collateral, and including (but not limited to) taxes, assessments, insurance pre­
miums, repairs, reasonable attorneys’ fees and legal expenses, feed, rent, storage costs, and expenses of sale; furnish
bank with any information on the collateral requested by bank; allow bank to inspect the collateral, and inspect and
copy all records relating to the collateral and the obligation; sign any papers furnished by bank which are necessary
to obtain and maintain this security interest; assist bank in complying with the Federal Assignment of Claims Act,
where necessary to enable bank to become an assignee under such Act; take necessary steps to preserve the liability of
account debtors, obligors, and secondary parties whose obligations are part of the collateral; transfer possession of all
instruments, documents, and chattel paper which are part of the collateral to bank immediately, or as to those here­
after acquired, immediately following acquisition; perfect a security interest (using a method satisfactory to bank) in
goods covered by chattel paper which is part of the collateral; notify bank of any change occurring in or to the collateral,
or in any fact or circumstance warranted or represented by debtor in this agreement or furnished to bank, or if any
event of default occurs.
2. Debtor will not (without bank’s consent): remove the collateral from the locations specified herein; allow the collateral
to become an accession to other goods; sell, lease,otherwise transfer, manufacture, process, assemble, or furnish under
contracts of service, the collateral, except goods identified herein as inventory; allow the collateral to be affixed to real
estate, except goods identified herein as fixtures.
3. Debtor warrants: no financing statement has been filed with respect to the collateral, other than relating to this
security interest; debtor is absolute owner of the collateral, and it is not encumbered other than by this security interest
(and the same will be true of collateral acquired hereafter when acquired); none of the collateral is affixed to real estate
or an accession to other goods, nor will collateral acquired hereafter be affixed to real estate or an accession to other
goods when acquired, unless debtor has furnished bank the consents or disclaimers necessary to make this security
interest valid against persons holding interests in the real estate or other goods; all account debtors and obligors, whose
obligations are part of the collateral, are to the extent permitted by law prevented from asserting against bank any
claims or differences they have against sellers, or can be so prevented by bank taking action provided by law for such
purposes.

F. RIGHTS OF BANK
Bank may, in its discretion, before or after default: terminate, on notice to debtor, debtor’s authority to sell, lease, other­
w ise transfer, manufacture, process or assemble, or furnish under contracts of service, inventory collateral, or any other
collateral as to which such permission has been given; require debtor to give possession or control of the collateral to
bank; indorse as debtor’s agent any instruments or chattel paper in the collateral; notify account debtors and obligors
on instruments to make payment direct to bank; contact account debtors directly to verify information furnished by debtor;
take control of proceeds and use cash proceeds to reduce any part of the obligation; take any action debtor is required to
take or otherwise necessary to obtain, preserve, and enforce this security interest, and maintain and preserve the collateral,
without notice to debtor, and add costs of same to the obligation (but bank is under no duty to take any such action ); release
collateral in its possession to debtor, temporarily or otherwise; require additional collateral; reject as unsatisfactory any
property hereafter offered by debtor as collateral; set standards, from time to time, to govern what may be used as after­
acquired collateral; designate, from time to time, a certain percent of the collateral as the loan value and require
debtor to maintain the obligation at or below such figure; take control of funds generated by the collateral, such as divi­
dends, interest, and proceeds or refunds from insurance, and use same to reduce any part of the obligation; vote any stock
which is part of the collateral, and exercise all other rights which an owner of such stock may exercise; waive any of its
rights hereunder without such waiver prohibiting the later exercise of the same or similar rights; revoke any permission
or waiver previously granted to debtor.

G. MISCELLANEOUS
The rights and privileges of bank shall inure to its successors and assigns. All representations, warranties, and agree
ments of debtor are joint and several if debtor is more than one and shall bind debtor’s personal representatives, heirs,
successors, and assigns. Definitions in the Uniform Commercial Code apply to words and phrases in this agreement; if
Code definitions conflict, Article 9 definitions apply. Debtor waives presentment, demand, notice of dishonor, protest, and
extension of time without notice as to any instruments and chattel paper in the collateral. Notice mailed to debtor’s
address in Item A2, or to debtor's most recent changed address on file with bank, at least five (5) days prior to the
related action (or, if the Uniform Commercial Code specifies a longer period, such longer period prior to the related
action), shall be deemed reasonable.

H. DEFAU LT
1. Any of the following is an event of default: failure of debtor to pay any note in the obligation in accordance with its
terms, or any other liability in the obligation on demand, or to perform any act or duty required by this agreement;
falsity of any warranty or representation in this agreement when made; substantial change in any fact warranted or
represented in this agreement; involvement of debtor in bankruptcy or insolvency proceedings; death, dissolution, or
other termination of debtor’s existence; merger or consolidation of debtor with another; substantial loss, theft, de­
struction, sale, reduction in value, encumbrance of, damage to, or change in the collateral; modification of any contract,
the rights to which are part of the collateral; levy on, seizure, or attachment of the collateral; judgment against debtor;
filing any financing statement with regard to the collateral, other than relating to this security interest; bank’s belief
that the prospect of payment of any part of the obligation, or the performance of any part of this agreement, is impaired.
2. When an event of default occurs, the entire obligation becomes immediately due and payable at bank’s option without
notice to debtor, and bank may proceed to enforce payment of same and exercise any and all of the rights and remedies
available to a secured party under the Uniform Commercial Code as well as all other rights and remedies. When debtor
is in default, debtor, upon demand by bank, shall assemble the collateral and make it available to bank at a place reason­
ably convenient to both parties. Debtor is entitled to any surplus and shall be liable to bank for any deficiency, arising
from accounts, contract rights, or chattel paper included in the collateral through sale thereof to bank.

I. FIRST AND PRIOR LIEN
This security interest grants to bank a first and prior lien to secure the payment of the notes listed herein, and extensions
and renewals thereof. If bank disposes of the collateral following default, the proceeds of such disposition available to
satisfy the indebtedness shall be applied first to the notes herein, and renewals and extensions thereof, in the order of
execution, and thereafter to all remaining indebtedness secured hereby, in the order in which such remaining indebtedness
w as executed or contracted. For the purpose of this paragraph, an extended or renewed note will be considered executed
on the date of the original note.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102