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Cross Collateral Agreement for Saudi Arabia

Cross Collateral Agreement Template for Saudi Arabia

A comprehensive security agreement governed by Saudi Arabian law that establishes a cross-collateralization structure whereby multiple assets or properties secure multiple obligations or facilities. The agreement must comply with both Saudi commercial regulations and Islamic Sharia principles, particularly in relation to the creation and enforcement of security interests. It details the secured obligations, collateral arrangements, enforcement mechanisms, and includes specific provisions required under Saudi law for perfection and registration of security interests, while ensuring all aspects remain Sharia-compliant.

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Cross Collateral Agreement

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What is a Cross Collateral Agreement?

The Cross Collateral Agreement is utilized in financing transactions where multiple assets are required to secure multiple obligations under Saudi Arabian law. This document is particularly relevant in complex financing arrangements where a party has multiple facilities or financing obligations with one or more financial institutions, and where the parties wish to establish a comprehensive security package. The agreement must be structured to comply with both Saudi commercial law requirements and Islamic Sharia principles, including specific provisions for the creation, perfection, and enforcement of security interests. It includes detailed descriptions of all secured obligations and collateral, mechanisms for cross-collateralization, enforcement procedures, and necessary provisions for registration with relevant Saudi authorities. This type of agreement is commonly used in project financing, corporate lending, and Islamic banking transactions where multiple assets and obligations are involved.

What sections should be included in a Cross Collateral Agreement?

1. Parties: Identification of all parties to the agreement including the security provider(s) and the secured party/parties

2. Background: Context of the agreement, reference to primary facilities/financing arrangements, and Sharia compliance declaration

3. Definitions: Definitions of key terms including Secured Obligations, Collateral, Events of Default, and relevant Islamic finance terms

4. Creation of Security Interest: Provisions establishing the security interest over all identified collateral in compliance with Sharia principles

5. Cross-Collateralization Provisions: Mechanism by which each collateral secures all obligations under various facilities

6. Representations and Warranties: Standard and specific representations regarding ownership, authority, and Sharia compliance

7. Covenants: Positive and negative obligations of the security provider regarding the collateral

8. Perfection Requirements: Steps required to perfect the security interest under Saudi law

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

10. Enforcement: Rights and procedures for enforcement in accordance with Saudi law and Sharia principles

11. Costs and Expenses: Allocation of costs related to creation, perfection, and enforcement of security

12. Notices: Communication procedures between parties

13. Governing Law and Jurisdiction: Confirmation of Saudi law governance and jurisdiction of Saudi courts

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

1. Additional Security Provider Provisions: Used when multiple security providers are involved, defining their relationships and obligations

2. Priority Arrangements: Include when there are multiple secured parties to establish ranking of security interests

3. Further Assurance: Optional detailed provisions regarding additional steps parties may need to take

4. Power of Attorney: Optional provision granting power of attorney for perfection/enforcement actions

5. Assignment and Transfer: Include when transferability of rights is contemplated

6. Currency Provisions: Required when secured obligations are in multiple currencies

7. Sharia Board Approval: Include when specific Sharia board approval is required by any party

What schedules should be included in a Cross Collateral Agreement?

1. Schedule 1 - Secured Obligations: Detailed list of all facilities and obligations secured by the cross-collateral arrangement

2. Schedule 2 - Collateral Description: Comprehensive description of all assets serving as collateral

3. Schedule 3 - Perfection Requirements: Specific requirements for each type of collateral under Saudi law

4. Schedule 4 - Form of Notices: Standard form notices required for perfection or enforcement

5. Schedule 5 - Security Provider Details: Details of security providers and their respective collateral when multiple providers involved

6. Appendix A - Required Documentation: List of documents required for perfection and registration

7. Appendix B - Sharia Principles: Relevant Sharia principles and structuring requirements applicable to the arrangement

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

Saudi Arabia

Publisher

Ƶ

Document Type

Security Agreement

Cost

Free to use
Relevant legal definitions

















































Clauses






























Relevant Industries

Banking & Financial Services

Real Estate & Construction

Manufacturing & Industrial

Trading & Commercial

Energy & Resources

Infrastructure & Projects

Healthcare

Hospitality & Tourism

Transportation & Logistics

Technology & Communications

Relevant Teams

Legal

Finance

Risk Management

Compliance

Sharia Advisory

Corporate Finance

Treasury

Banking Operations

Credit Administration

Transaction Management

Relevant Roles

Legal Counsel

Finance Manager

Credit Risk Manager

Compliance Officer

Sharia Compliance Officer

Transaction Manager

Security Trustee

Facility Agent

Investment Manager

Corporate Finance Manager

Chief Financial Officer

Treasury Manager

Legal Director

Banking Operations Manager

Risk Management Officer

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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