How to build a clause extraction table for Security Agreements

Build a grantor-side clause extraction table by separating each operative provision into collateral scope, incorporated definitions, exclusions, duties, and conditions. Link every entry to a controlled document version and precise source location, then distinguish verified wording from interpretation and missing evidence. The resulting deliverable should identify which grantor assets the agreement describes, what obligations they secure, what the grantor must do, and which questions remain unresolved. It should not present contractual extraction as a completed attachment, perfection, or priority opinion.

When to use this workflow

Use this workflow when finance counsel or an in-house team receives a proposed security agreement, reviews an amended collateral package, or summarizes executed terms. It is particularly useful where multiple grantors, asset schedules, and incorporated credit-agreement definitions make a narrative summary difficult to verify.

The scope is extraction and validation, not complete collateral diligence or negotiation. Work from the grantor’s perspective: identify both the security interest’s stated breadth and the obligations imposed on the business.

This guide addresses US commercial transactions, using New York Article 9 as a specified reference, with an October 13, 2026 research cutoff. Actual language, applicable law, collateral classification, debtor location, and transaction timing require matter-specific analysis. Check applicable statutory versions and transition provisions for older transactions; the official § 9-204 and § 9-301 pages identify revisions dated June 5, 2026.

What you need

Assemble a controlled source set:

• The security agreement, labeled proposed, approved, or executed, with schedules, exhibits, amendments, and joinders.
• Documents defining secured obligations, excluded assets, defaults, and release conditions, including the relevant credit agreement or indenture.
• Referenced intercreditor and control agreements, distinguishing documents received from those merely mentioned.
• A grantor list showing legal names, organizational jurisdictions, and understood asset ownership.
• Available account lists, equity holdings, intellectual property schedules, equipment records, and identified commercial tort claims.
• Review instructions identifying approved grantor positions and decision-makers for legal, treasury, and operational questions.

Assign each document a stable ID and version label. Do not silently substitute a later draft for an existing row’s source. Identify unavailable documents before making unqualified findings: readable operative language may still depend on missing definitions or schedules.

Use the template

Use the companion Security Agreements — Clause extraction table below. You can copy this table into your working document or spreadsheet.

Keep one operative proposition per row. An equipment grant and a duty to report equipment locations deserve separate rows because they answer different questions.

Source/version/location identifies the document ID, version, section, and page where available. Operative text preserves decisive wording; explicitly label paraphrases. Scope/definitions identifies collateral classes, secured debt, and incorporated terms. Duty/trigger/timing captures the actor, recipient, delivery method, and timing qualifications when relevant.

Use Exceptions/dependencies for exclusions, conditions, missing schedules, and cross-references. In Status/question, distinguish verified wording, interpretation required, missing evidence, and not found in the reviewed set. “Verified” describes the extraction, not a legal conclusion. Action/owner states the next step, responsible person, and resolution milestone. Link related rows by ID rather than repeatedly copying definitions.

Step by step

1. Establish the document boundary

Create a source index identifying each document’s status and relationship to the security agreement. Check which amendments modify which provisions and whether each grantor signed or joined separately.

Start with the operative version, retaining amendment references rather than assuming the latest date resolves every inconsistency. Where execution status is uncertain, label the document “as received,” not “executed.” Fix the review boundary before extracting across multiple documents.

Record: document IDs and versions in each row. Enter missing joinders, schedules, or amendments as evidence gaps with owners. Do not extend one entity’s extraction to the entire grantor group without supporting sources.

2. Extract the grant and secured-obligation definitions together

Read the granting clause alongside collateral, secured obligations, grantor, and secured-party definitions. Follow incorporated terms into the credit agreement or indenture rather than substituting “all loan obligations.”

Identify future advances, guarantees, hedging, cash-management obligations, and other categories only where the text supports them. New York UCC § 9-204(c) permits security for future advances or other value, including value outside a commitment. That permission does not establish what this agreement secures; inspect its operative grant and definitions. See New York UCC § 9-204(c).

Record: separate rows for the grant and definitions materially changing its reach. Link eligibility conditions and missing incorporated documents rather than inferring their contents.

3. Break collateral coverage into identifiable classes

Extract each collateral category and its limitations. Attribute it to the relevant grantor and retain references to schedules or particular assets. Separate present assets, after-acquired property, and proceeds where their treatment differs.

New York UCC § 9-108 generally requires descriptions that reasonably identify collateral; subsection (c) rejects an all-assets description alone. Do not treat that shorthand as satisfying the security agreement’s description requirement or apply it interchangeably with financing-statement requirements. The section contains additional rules and exceptions. See New York UCC § 9-108.

Record: the descriptive language, collateral class, and supporting schedule. If a schedule is missing, mark asset-level coverage unverified. Do not declare inclusion or exclusion solely because supporting evidence is unavailable.

4. Preserve exclusions and their conditions

Read exclusions against the grant. Determine whether each is absolute, lasts only while a restriction continues, or changes upon consent or another event. Extract separate proceeds treatment and any duty to obtain consent.

Commercial tort claims require particular attention. Section 9-108(e) makes description solely by collateral type insufficient. Section 9-204(b) generally prevents attachment to these claims through after-acquired clauses, subject to subsection (b-1)’s specified proceeds-related routes. Do not assume every later claim is covered—or that proceeds-related attachment is impossible. See § 9-108(e) and § 9-204(b)–(b-1).

Record: the exclusion, its terminating condition, related proceeds wording, and unresolved classification questions. Keep statutory analysis distinct from contractual extraction.

5. Extract duties as conditional instructions

For reporting, further assurances, collateral changes, notices, and delivery obligations, capture who acts, what triggers performance, what must be delivered, to whom, and when. Preserve reasonable-request, materiality, knowledge, and consent qualifications.

Do not convert an on-request duty into a recurring calendar item. Section 4.1(a) of a 2025 SEC-filed Pledge and Security Agreement addresses materially complete and accurate collateral records and reports requested through its specified agent-and-holder mechanism. It does not itself establish a periodic reporting calendar. This illustrates negotiated wording, not a general requirement.

Record: the complete trigger and timing expression, distinguishing advance notice, post-event notice, consent, and performance. Ask operations about feasibility without rewriting the extracted obligation to match current practice.

6. Capture enforcement and release qualifications

Extract conditions governing powers of attorney, collection rights, expenses, remedies, and releases. Identify whether powers operate immediately or depend on a defined event. Follow release provisions into incorporated documents and check whether intercreditor language qualifies remedies.

The grantor-side question is when a right becomes exercisable, against which assets, and subject to which conditions—not merely whether it appears. For releases, distinguish the contractual release condition from any required documents or actions. Do not turn either extraction into an enforceability conclusion.

Record: the right, activation condition, and release dependency in separate linked rows where necessary. Assign unavailable default definitions or incorporated release language for follow-up.

7. Validate the table and assign unresolved questions

Read every row against its source and surrounding qualifications. Then reverse-check headings, definitions, schedules, amendments, and joinders for omitted provisions. For final documents, reconcile changed language rather than carrying forward draft findings unchanged.

Keep contractual governing law separate from perfection and priority analysis. New York UCC § 9-301 generally uses debtor-location law, subject to its exceptions and §§ 9-303 through 9-306B. A governing-law clause alone does not resolve that analysis. See New York UCC § 9-301.

Record: verified status only for the proposition checked. Assign legal interpretation, business decisions, and evidence collection separately, each with an owner and resolution milestone.

Worked example

Fictional scenario: Alder Quay Components LLC reviews a proposed security agreement supporting a $24 million facility from Westhaven Commercial Bank. Counsel has SA-01, draft 4, and CA-01, draft 6. Referenced Schedule 3 and a designated cash-management agreement are absent. All parties, documents, amounts, and wording in this example are fictional.

An initial summary says all assets secure only the facility and collateral reporting is quarterly. Extraction tests those assertions rather than adopting them.

R01 prevents approval of a facility-only summary: the verified definition reaches another debt category, but the missing agreement prevents assessment of that exposure. R02 identifies the equipment grant’s schedule dependency without claiming that omitted evidence proves assets are excluded. R03 replaces the quarterly assumption with a request-driven duty and directs a concrete feasibility check.

Counsel can circulate these findings while marking the scope summary incomplete. Neither the missing schedule nor the cash-management terms should be reconstructed from assumptions. An operational concern about twelve Business Days supports a negotiation question, not a different extracted deadline.

Common mistakes

• Summarizing before following definitions. Extract the definition chain before stating secured-debt scope; a short grant can incorporate additional obligations.
• Merging grantors into one record. Attribute rows to the relevant entity and reconcile its joinders and schedules before making group-wide statements.
• Dropping conditions during normalization. Preserve when an exclusion ends and link that condition to affected collateral rows.
• Turning missing evidence into a negative finding. “Schedule not received” does not mean “asset not pledged.” Assign collection and qualify the finding.
• Treating extracted rights as legal conclusions. Separate contractual wording from attachment, perfection, priority, and enforceability questions requiring further analysis.

Final quality check

• Every substantive row identifies a document version and reproducible source location.
• Operative wording and surrounding qualifications match the source.
• Incorporated definitions are extracted, linked, or expressly unavailable.
• Grantor identities, collateral classes, schedules, and joinders reconcile.
• Exclusions, after-acquired language, and proceeds remain distinguishable.
• Duties retain actors, triggers, recipients, timing units, and delivery qualifications.
• Open issues are resolved or expressly assigned, with owners and milestones.

Complete the workflow with DecoverAI

DecoverAI is the Legal Intelligence Platform for litigation and transactions. Its contract review and tabular review capabilities support work across multiple documents. In Word, choose the represented party and provide grantor-specific instructions; findings quote clauses, locate text, rank severity, and identify missing language as not present. Counsel should distinguish absent language from unavailable source documents and validate cross-references. For larger packages, due diligence classification can organize documents and prioritize human review. Book a demo to discuss this extraction workflow while retaining legal judgment with the reviewing team.

Frequently asked questions

Should the table quote every clause in full?

No. Preserve decisive wording and qualifications, with precise source references. Separate independently actionable duties rather than placing an entire covenant section in one cell.

How should amendments appear?

Identify the original provision and modifying document. Consolidate the extraction only after reconciling them; retain uncertainty where their interaction remains unresolved.

Can “all assets” be a normalized collateral category?

Only as an organizational label, not a replacement for operative categories, exclusions, or legal analysis. New York’s description rule rejects that supergeneric wording alone. See § 9-108(c).

When is the table ready to circulate?

When its review boundary is explicit, material entries are source-verified, and gaps have owners. An interim table may circulate, but unresolved collateral coverage and secured-debt definitions must remain visible in the summary.

Sources

• New York UCC § 9-108 — Sufficiency of Description
• New York UCC § 9-204 — After-acquired Property; Future Advances
• New York UCC § 9-301 — Law Governing Perfection and Priority
• SEC-filed Pledge and Security Agreement, February 19, 2025, § 4.1(a), illustrating negotiated wording only.

This guide is general information about legal workflows, not legal advice for any matter. It was drafted and reviewed with AI assistance. The worked example is fictional. Contract rights and procedure depend on the governing law, the actual wording, and the facts, so check the cited sources and the rules that apply in your jurisdiction before relying on it.