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Cross Collateral Agreement for the United Kingdom

Cross Collateral Agreement Template for England and Wales

A Cross Collateral Agreement under English and Welsh law is a legal instrument that enables multiple loans or credit facilities to be secured against the same collateral or allows multiple assets to secure a single loan. This agreement is commonly used in complex financing arrangements where lenders seek to maximize their security position. It operates within the framework of English property and security law, providing mechanisms for cross-default and consolidated enforcement rights.

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Cross Collateral Agreement

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What is a Cross Collateral Agreement?

Cross Collateral Agreements are essential tools in modern financing structures under English and Welsh law. They are typically employed when a borrower has multiple credit facilities with one or more lenders, or when multiple assets are used to secure various obligations. The agreement establishes the framework for how different security interests interact, priorities between creditors, and enforcement mechanisms. This document type is particularly relevant in scenarios involving property portfolios, business expansion, or refinancing arrangements where existing security needs to be preserved or consolidated.

What sections should be included in a Cross Collateral Agreement?

1. Parties: Identification and details of all parties to the agreement

2. Background: Context of the agreement and existing security arrangements

3. Definitions: Key terms used throughout the agreement

4. Grant of Security: Terms of the cross-collateralization arrangement

5. Secured Obligations: Definition of obligations covered by the cross-collateral

6. Enforcement: Rights and procedures for enforcing security

7. Representations and Warranties: Standard declarations by the parties

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

1. Consumer Protection Provisions: Required when any party is a consumer rather than a business, incorporating Consumer Credit Act requirements

2. Regulatory Compliance: FCA/PRA compliance provisions for regulated entities

3. Priority Arrangements: Provisions regarding ranking of security interests when multiple security interests exist

What schedules should be included in a Cross Collateral Agreement?

1. Schedule of Secured Assets: Detailed list of all assets subject to cross-collateralization

2. Schedule of Existing Security: Details of pre-existing security arrangements

3. Form of Notices: Template notices required for perfection of security

4. Conditions Precedent: List of conditions to be satisfied before agreement becomes effective

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

Jurisdiction

England and Wales

Publisher

Ƶ

Document Type

Security Agreement

Cost

Free to use
Relevant legal definitions



































Clauses






























Industries

Law of Property Act 1925: Primary legislation governing real property and security interests. Defines legal requirements for creating charges over property and fundamental principles of property law.

Financial Services and Markets Act 2000: Regulatory framework for financial services and markets in the UK. Essential consideration for financial institutions involved in secured lending and cross-collateral arrangements.

Consumer Credit Act 1974: Legislation governing consumer credit arrangements. Must be considered if any of the collateralized obligations involve consumer credit facilities or consumer protection measures.

Land Registration Act 2002: Legislation governing the registration of land and charges. Critical for cases where registered land is used as collateral in the agreement.

FCA Regulations: Financial Conduct Authority regulations, including conduct of business rules. Particularly relevant if regulated entities are parties to the agreement.

PRA Requirements: Prudential Regulation Authority requirements, including capital adequacy requirements for regulated financial institutions involved in secured lending.

Common Law Principles: Established legal principles covering security interests, contractual obligations, and equitable principles relevant to cross-collateral arrangements.

Companies Act 2006: Corporate law framework relevant when corporate entities are involved, including requirements for registration of company charges.

Enterprise Act 2002: Legislation governing enforcement of security and insolvency provisions, crucial for understanding enforcement rights in cross-collateral situations.

European Retained Law: Relevant EU regulations retained in UK law post-Brexit, including provisions relating to financial collateral arrangements.

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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