Xavier, owner of a manufacturing plant, secures a line of credit from Stroh’s Bank in the amount of $500,000, putting up all of his equipment and after-acquired equipment as collateral. The security agreement includes any future advances Xavier takes. On February 1, Abe takes $100,000 from the Bank. On June 15, he takes another $100,000 from the Bank. Which of the following is true?

Select one:

a. Stroh’s Bank must execute a security agreement in both February and June to preserve its interest in the equipment.

b. Because Xavier has a line of credit, the bank really is not secured and may never repossess the equipment.

c. Stroh’s Bank does not need to execute additional security agreements after the line of credit is granted.

d. Stroh’s Bank only has a security interest in equipment Zavier owned in February, and not any new equipment, even if purchased with money taken in June.