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The Collateral Trust Agreement is a crucial document in secured financing transactions under Pakistani law, typically used in complex lending arrangements where multiple lenders require security over assets. This agreement establishes a trust structure where a trustee holds and manages collateral on behalf of secured creditors, providing a streamlined mechanism for collateral administration and enforcement. It becomes particularly important in syndicated lending, project finance, and large corporate financing transactions where multiple parties have security interests in the same collateral pool. The document must comply with Pakistani trust laws, banking regulations, and where applicable, Islamic banking principles. It includes detailed provisions for collateral valuation, maintenance, addition and release procedures, and enforcement mechanisms in case of default.

1. Parties: Identification of the grantor, trustee, secured parties, and any other relevant parties to the agreement

2. Background: Context of the agreement, including reference to related credit facilities and purpose of the trust arrangement

3. Definitions: Comprehensive definitions of terms used throughout the agreement, including specific Pakistani legal terminology

4. Appointment of Trustee: Formal appointment of the trustee and acceptance of the trust

5. Declaration of Trust: Establishment of the trust and specification of trust property

6. Collateral Requirements: Description of eligible collateral, valuation methods, and maintenance requirements

7. Deposit and Withdrawal of Collateral: Procedures for depositing and withdrawing collateral from the trust

8. Rights and Duties of Trustee: Detailed responsibilities, powers, and limitations of the trustee's authority

9. Representations and Warranties: Standard representations by all parties regarding capacity, authority, and compliance

10. Events of Default: Circumstances constituting default and resulting consequences

11. Enforcement: Procedures for enforcing security interests and liquidating collateral

12. Fees and Expenses: Trustee compensation and allocation of costs

13. Indemnification: Protection of trustee and other parties from claims and losses

14. Term and Termination: Duration of the agreement and circumstances for termination

15. Governing Law and Jurisdiction: Specification of Pakistani law and jurisdiction for disputes