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Collateral Security Agreement for United Arab Emirates

Collateral Security Agreement Template for United Arab Emirates

A comprehensive legal document governed by UAE law that creates and evidences a security interest over specified assets (collateral) to secure the performance of certain obligations. The agreement complies with UAE Federal Laws, particularly Law No. 20 of 2016 and Law No. 4 of 2020, and details the nature of the security, the secured obligations, rights and obligations of parties, enforcement mechanisms, and registration requirements. It includes specific provisions for perfection of security interests under UAE law and incorporates local legal requirements for enforceability.

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Collateral Security Agreement

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What is a Collateral Security Agreement?

The Collateral Security Agreement is a crucial document in UAE secured financing transactions, used when a party (the grantor) provides security over specific assets to secure obligations owed to another party (the secured party). This document is essential in various commercial contexts, from straightforward bilateral arrangements to complex syndicated facilities. It must comply with UAE Federal Laws, particularly regarding creation, perfection, and enforcement of security interests. The agreement details the secured assets, mechanisms for enforcement, and includes mandatory provisions required under UAE law for creating valid and enforceable security interests. It's commonly used in conjunction with facility agreements, loan documents, or other primary financing arrangements.

What sections should be included in a Collateral Security Agreement?

1. Parties: Identification of the security provider (grantor) and security taker (secured party), including full legal names and addresses

2. Background: Context of the security arrangement, reference to underlying facility/credit agreement, and purpose of the security

3. Definitions and Interpretation: Definitions of key terms, interpretation rules, and references to relevant UAE laws

4. Creation of Security Interest: Express provisions creating the security interest, including type of security and compliance with UAE law requirements

5. Secured Obligations: Definition and scope of the obligations being secured, including principal, interest, and other amounts

6. Collateral: Detailed description of the assets subject to the security interest

7. Perfection and Registration: Requirements for perfecting the security interest under UAE law, including registration obligations

8. Representations and Warranties: Standard representations regarding ownership, authority, and status of collateral

9. Covenants: Ongoing obligations regarding maintenance, insurance, and preservation of collateral

10. Events of Default: Circumstances constituting default and triggering enforcement rights

11. Enforcement: Rights and remedies upon default, compliant with UAE enforcement procedures

12. Power of Attorney: Irrevocable power of attorney for security enforcement purposes

13. Miscellaneous: Standard boilerplate provisions including notices, amendments, and governing law

What sections are optional to include in a Collateral Security Agreement?

1. Further Assurance: Additional undertakings to perfect or protect the security interest, used in complex transactions

2. Insurance: Detailed insurance requirements, necessary when collateral requires specific insurance coverage

3. Bank Accounts: Required when security includes bank accounts or cash collateral

4. Intellectual Property: Necessary when security includes IP rights or licenses

5. Real Estate Provisions: Required when security includes real property or real estate-related rights

6. Share Security Provisions: Specific provisions for when security includes company shares

7. Receivables: Detailed provisions for security over receivables or book debts

8. Priority Arrangements: Required when there are multiple secured parties or ranking of security

9. Currency Provisions: Necessary for cross-border transactions or multiple currency arrangements

What schedules should be included in a Collateral Security Agreement?

1. Schedule 1 - Collateral Description: Detailed technical description of all assets comprising the collateral

2. Schedule 2 - Form of Notice: Standard forms of notices required for perfection of security

3. Schedule 3 - Existing Security Interests: List of any permitted existing security interests over the collateral

4. Schedule 4 - Bank Account Details: Details of relevant bank accounts if part of collateral

5. Schedule 5 - Intellectual Property: List and details of any IP rights included in the security

6. Schedule 6 - Forms of Registration: Templates for security interest registration forms under UAE law

7. Appendix A - Power of Attorney: Form of power of attorney required under UAE law

8. Appendix B - Security Perfection Requirements: Checklist of actions required to perfect the security interest

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Ƶ

Document Type

Security Agreement

Cost

Free to use
Relevant legal definitions






































Clauses





























Relevant Industries

Banking & Financial Services

Real Estate

Manufacturing

Trading & Commerce

Construction

Oil & Gas

Technology

Healthcare

Retail

Infrastructure

Telecommunications

Transportation & Logistics

Relevant Teams

Legal

Finance

Risk Management

Compliance

Treasury

Credit

Commercial

Corporate Secretarial

Banking Operations

Security Administration

Relevant Roles

Legal Counsel

Chief Financial Officer

Finance Director

Risk Manager

Compliance Officer

Treasury Manager

Credit Manager

Commercial Director

Corporate Secretary

Security Trustee

Relationship Manager

Transaction Manager

Legal Director

Banking Operations Manager

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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