Form 9-4

Security Agreement

[Interest in Noncorporate Entity]

Basic Information

Date:

Debtor:

Debtor’s Mailing Address:

Secured Party:

Secured Party’s Mailing Address:

Classification of Collateral: General intangibles

Collateral:

All of Debtor’s interest in the following personal property and all proceeds of that prop­erty [describe the specific collateral as in the following example]:

a.Debtor’s undivided interest as a [general partner/limited partner/member] in and to that certain [general partnership/limited partnership/limited liability company] named [name of company] (the “Company”), described in the [[limited/general] partnership agreement/limited liability company [agree­ment/regulations]] of the Company dated [date], by and between Debtor and other [partners/members] of the Company, as amended or modified and in effect (the “Company Agreement”), together with all of Debtor’s other rights, title, and interest of every kind and character whatever in and to the Company and under the Company Agreement; and

b.all of Debtor’s share of profits, distributions, income, and surplus from the Company and Debtor’s interest in specific properties of the Company on dis­solution or otherwise.

Obligation

Note

Date:

Original principal amount:

Borrower (Obligor):

Other debt/Future advances: The security interest also secures all other present and future debts and liabilities of Debtor and/or Obligor to Secured Party, including future advances.

Other obligation[s]:

A.Debtor’s Representations Concerning Debtor and Locations

A.1.[Debtor’s place of business/Debtor’s chief executive office] is located at [address, city, state].

A.2.Debtor’s residence is located at [address, city, state].

A.2.Debtor’s state of organization is [Texas/[state]], and Debtor’s name, as shown in its public organic record, as amended, is exactly as set forth above.

A.3.The Company’s state of organization is [Texas/[state]], and the Company’s name, as shown in its organizational documents, as amended, is exactly as set forth above.

A.4.Debtor’s records concerning the Collateral are located at [address, city, state].

B. Granting Clause

Debtor grants to Secured Party a security interest in the Collateral and all its proceeds to secure the Obligation and all renewals, modifications, and extensions of the Obligation. Debtor authorizes Secured Party to file a financing statement describing the Collateral.

C.Debtor Represents the Following:

C.1.No financing statement covering the Collateral is filed in any public office [include if the secured party has prefiled a financing statement or otherwise has a financing statement on file: except any financing statement in favor of Secured Party].

C.2.Debtor owns the Collateral and has the authority to grant this security interest, free from any setoff, claim, restriction, security interest, or encumbrance except liens for taxes not yet due.

C.3.All information about Debtor’s financial condition is or will be accurate when provided to Secured Party.

C.4.An accurate copy of the Company Agreement has been delivered to Secured Party. There are no changes to the Company Agreement not reflected in the copy delivered to Secured Party.

C.5.Debtor has obtained the written consent of all persons required under the Com­pany Agreement or otherwise to authorize the security interest created by this agreement and Secured Party’s exercise of its rights hereunder. On request of Secured Party, Debtor will deliver to Secured Party an executed original of that consent.

D.Debtor Agrees to—

D.1.Defend the Collateral against all claims adverse to Secured Party’s interest; pay all taxes imposed on the Collateral; keep the Collateral free from liens, except for liens in favor of Secured Party or for taxes not yet due; keep the Collateral in Debtor’s possession and ownership except as otherwise provided in this agreement; maintain the Collateral in good condition; and protect the Collateral against waste, except for ordinary wear and tear.

D.2.Pay all Secured Party’s expenses, including reasonable attorney’s fees and legal expenses [include for a loan transaction subject to Texas Finance Code section 342.502: assessed by a court], incurred to (a) obtain, preserve, perfect, defend, or enforce this agree­ment; (b) retake, hold, prepare for disposition, dispose, collect, or enforce the Collateral; or (c) collect or enforce the Obligation. These expenses will bear interest from the date of advance at the rate stated in the Note for matured, unpaid amounts and are payable on demand at the place where the Obligation is payable. These expenses and interest are part of the Obligation and are secured by this agreement.

D.3.Sign and deliver to Secured Party any documents or instruments that Secured Party considers necessary to obtain, maintain, and perfect this security interest in the Collat­eral.

D.4.Notify Secured Party immediately of any event of default and of any material change (a) in the Collateral, (b) in Debtor’s Mailing Address, (c) in the location of any Collat­eral, (d) in any other representation or warranty in this agreement, or (e) that may affect this security interest, or of any change (f) in Debtor’s name or (g) of any location set forth above to another state.

D.5.Use the Collateral primarily according to the stated classification.

D.6.Maintain accurate records of the Collateral at the address set forth above; fur­nish Secured Party any requested information related to the Collateral; and permit Secured Party to inspect and copy all records relating to the Collateral.

D.7.Perform all obligations to be performed by Debtor under the Company Agree­ment.

D.8.Notify Secured Party of any default known to Debtor of any other person under the Company Agreement and of any notice of default given under the Company Agreement.

D.9.Enforce the obligations of other persons under the Company Agreement and at Secured Party’s request, at Debtor’s expense, take action requested by Secured Party to enforce the obligations of other persons and exercise the rights of Debtor under the Company Agreement.

E.Debtor Agrees Not to—

E.1.Sell, transfer, or encumber any of the Collateral [include if applicable: , except in the ordinary course of Debtor’s business].

E.2.Change its name or jurisdiction of organization, merge or consolidate with any person, or convert to a different entity without notifying Secured Party in advance and taking action to continue the perfected status of the security interest in the Collateral.

E.2.Change the state in which Debtor’s place of business (or chief executive office if Debtor has more than one place of business) is located, change its name, or convert to a dif­ferent entity without notifying Secured Party in advance and taking action to continue the per­fected status of the security interest in the Collateral.

E.2.Change Debtor’s name or state of residence without notifying Secured Party in advance and taking action to continue the perfected status of the security interest in the Collat­eral.

E.3.Consent to or approve any modification of the Company Agreement.

E.4.Compromise or reduce any payment or distribution to be made to Debtor on the Collateral.

F.Secured Party Not Liable

Debtor remains liable under the Company Agreement for all its obligations thereunder. Secured Party has no liability thereunder because of this agreement. Secured Party is not lia­ble, because of this agreement, for any obligation of Debtor under the Company Agreement.

G.Default and Remedies

G.1.A default exists if—

a.Debtor, Obligor, or any secondary obligor fails to timely pay or perform any obligation or covenant in any written agreement between Secured Party and any of Debtor, Obligor, or secondary obligor;

b.any representation in this agreement or in any other written agreement between Secured Party and any of Debtor, Obligor, or secondary obligor is materially false when made;

c.a receiver is appointed for Debtor, Obligor, any secondary obligor, or any Collateral;

d.any Collateral is assigned for the benefit of creditors;

e.a bankruptcy or insolvency proceeding is commenced by Debtor, the Com­pany, a partnership in which Debtor is a general partner, Obligor, or any secondary obligor;

f.a bankruptcy or insolvency proceeding is commenced against Debtor, the Company, a partnership in which Debtor is a general partner, Obligor, or any secondary obligor, and the proceeding continues without dismissal for sixty days, the party against whom the proceeding is commenced admits the material allegations of the petition against it, or an order for relief is entered;

g.any of the following parties is terminated, begins to wind up its affairs, is authorized to terminate or wind up its affairs by its governing body or per­sons, or any event occurs or condition exists that permits the termination or winding up of the affairs of any of the following parties: Debtor; the Com­pany; a partnership of which Debtor is a general partner; Obligor; or any secondary obligor; or

h.any Collateral is impaired by loss, theft, damage, levy and execution, issu­ance of an official writ or order of seizure, or destruction, unless it is promptly replaced with collateral of like kind and quality or restored to its former condition.

G.2.If a default exists, Secured Party may—

a.demand, collect, convert, redeem, settle, compromise, receipt for, realize on, sue for, and adjust the Collateral either in Secured Party’s or Debtor’s name, as Secured Party desires, or take control of any proceeds of the Col­lateral and apply the proceeds against the Obligation;

b.take possession of any Collateral not already in Secured Party’s posses­sion, without demand or legal process, and for that purpose Debtor grants Secured Party the right to enter any premises where the Collateral may be located;

c.without taking possession, sell, lease, or otherwise dispose of the Collat­eral at any public or private sale in accordance with law;

d.exercise any rights and remedies granted by law or this agreement;

e.notify obligors on the Collateral to pay Secured Party directly;

f.as Debtor’s agent, make any endorsements in Debtor’s name and on Debtor’s behalf of any proceeds of the Collateral; or

g.exercise and enforce all rights, including voting rights, available to an owner of the Collateral.

G.3.Foreclosure of this security interest by suit does not limit Secured Party’s reme­dies, including the right to sell the Collateral under the terms of this agreement. Secured Party may exercise all remedies at the same or different times, and no remedy is a defense to any other. Secured Party’s rights and remedies include all those granted by law and those specified in this agreement.

G.4.Secured Party’s delay in exercising, partial exercise of, or failure to exercise any of its remedies or rights does not waive Secured Party’s rights to subsequently exercise those remedies or rights. Secured Party’s waiver of any default does not waive any other default by Debtor. Secured Party’s waiver of any right in this agreement or of any default is binding only if it is in writing. Secured Party may remedy any default without waiving it.

G.5.Secured Party has no obligation to clean or otherwise prepare the Collateral for sale.

G.6.Secured Party has no obligation to collect any of the Collateral and is not liable for failure to collect any of the Collateral, for failure to preserve any right pertaining to the Collateral, or for any act or omission on the part of Secured Party or Secured Party’s officers, agents, or employees, except willful misconduct.

G.7.Secured Party has no obligation to satisfy the Obligation by attempting to col­lect the Obligation from any other person liable for it. Secured Party may release, modify, or waive any collateral provided by any other person to secure any of the Obligation. If Secured Party attempts to collect the Obligation from any other person liable for it or releases, modi­fies, or waives any collateral provided by any other person, that will not affect Secured Party’s rights against Debtor. Debtor waives any right Debtor may have to require Secured Party to pursue any third person for any of the Obligation.

G.8.If Secured Party must comply with any applicable state or federal law require­ments in connection with a disposition of the Collateral, such compliance will not be consid­ered to adversely affect the commercial reasonableness of a sale of the Collateral.

G.9.Secured Party may sell the Collateral without giving any warranties as to the Collateral. Secured Party may specifically disclaim any warranties of title or the like. This procedure will not be considered to adversely affect the commercial reasonableness of a sale of the Collateral.

G.10.If Secured Party sells any of the Collateral on credit, Debtor will be credited only with payments actually made by the purchaser and received by Secured Party for appli­cation to the indebtedness of the purchaser. If the purchaser fails to pay for the Collateral, Secured Party may resell the Collateral and Debtor will be credited with the proceeds of the sale.

G.11.If Secured Party purchases any of the Collateral being sold, Secured Party may pay for the Collateral by crediting the purchase price against the Obligation.

G.12.Secured Party has no obligation to marshal any assets in favor of Debtor or against or in payment of the Note, any of the Other Obligation[s], or any other obligation owed to Secured Party by Debtor or any other person.

G.13.If the Collateral is sold after default, recitals in the bill of sale or transfer will be prima facie evidence of their truth and all prerequisites to the sale specified by this agreement and by law will be presumed satisfied.

H.General

H.1.Notice is reasonable if it is mailed, postage prepaid, to Debtor at Debtor’s Mail­ing Address at least ten days before any public sale or ten days before the time when the Col­lateral may be otherwise disposed of without further notice to Debtor.

H.2.This security interest will neither affect nor be affected by any other security for any of the Obligation. Neither extensions of any of the Obligation nor releases of any of the Collateral will affect the priority or validity of this security interest.

H.3.This agreement binds, benefits, and may be enforced by the successors in inter­est of Secured Party and will bind all persons who become bound as debtors to this agreement. Assignment of any part of the Obligation and Secured Party’s delivery of any part of the Col­lateral will fully discharge Secured Party from responsibility for that part of the Collateral. If such an assignment is made, Debtor will render performance under this agreement to the assignee. Debtor waives and will not assert against any assignee any claims, defenses, or setoffs that Debtor could assert against Secured Party except defenses that cannot be waived. All representations and obligations are joint and several as to each Debtor.

H.4.This agreement may be amended only by an instrument in writing signed by Secured Party and Debtor.

H.5.The unenforceability of any provision of this agreement will not affect the enforceability or validity of any other provision.

H.6.This agreement will be construed according to Texas law, without regard to choice-of-law rules of any jurisdiction. This agreement is to be performed in [include if appli­cable in a consumer transaction: , and has been signed by Debtor in,] the county of Secured Party’s Mailing Address.

H.7.Interest on the Obligation secured by this agreement will not exceed the maxi­mum amount of nonusurious interest that may be contracted for, taken, reserved, charged, or received under law. Any interest in excess of that maximum amount will be credited on the principal of the Obligation or, if that has been paid, refunded. On any acceleration or required or permitted prepayment, any such excess will be canceled automatically as of the accelera­tion or prepayment or, if already paid, credited on the principal of the Obligation or, if the principal of the Obligation has been paid, refunded. This provision overrides any conflicting provisions in this and all other instruments concerning the Obligation.

H.8.In no event may this agreement secure payment of any debt that may not law­fully be secured by a lien on real estate or create a lien otherwise prohibited by law.

H.9.When the context requires, singular nouns and pronouns include the plural.

H.10.Any term defined in sections 1.101 to 9.709 of the Texas Business and Com­merce Code and not defined in this agreement has the meaning given to the term in the Code.

   
[Name of debtor]