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Collateral Security Agreement Template for Nigeria

A comprehensive legal document governed by Nigerian law that creates and evidences a security interest over specified collateral in favor of a secured party. The agreement complies with the Secured Transactions in Movable Assets Act 2017 and other relevant Nigerian legislation, establishing the terms and conditions under which assets are pledged as security for obligations. It includes detailed provisions for the creation, perfection, and enforcement of security interests, along with representations, warranties, and covenants specific to Nigerian security arrangements.

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What is a Collateral Security Agreement?

The Collateral Security Agreement is a crucial document in Nigerian secured lending transactions, used to create enforceable security interests over various types of assets. It is primarily utilized when a lender requires security for a loan or other financial obligations, ensuring they have recourse to specific assets in case of default. The agreement must comply with Nigerian law, particularly the Secured Transactions in Movable Assets Act 2017, Companies and Allied Matters Act 2020, and relevant Central Bank of Nigeria regulations. This document is essential for both commercial and corporate lending transactions, providing detailed mechanisms for creating, perfecting, and enforcing security interests while addressing specific requirements of Nigerian secured transactions law.

What sections should be included in a Collateral Security Agreement?

1. Parties: Identification of the security provider and security taker/creditor

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

3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement

4. Grant of Security Interest: Core provision creating the security interest over the collateral

5. Secured Obligations: Definition and scope of the obligations being secured

6. Representations and Warranties: Security provider's confirmations regarding ownership, authority, and status of collateral

7. Covenants: Ongoing obligations of the security provider regarding the collateral

8. Perfection Requirements: Actions required to perfect the security interest including registration

9. Events of Default: Circumstances triggering enforcement rights

10. Enforcement: Rights and remedies upon default

11. Power of Attorney: Appointment of security taker as attorney for enforcement purposes

12. General Provisions: Standard boilerplate clauses 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 - used for complex collateral structures

2. Insurance: Insurance requirements for physical collateral - included when collateral includes tangible assets

3. Collection Account: Provisions for collection and management of receivables - used when collateral includes receivables

4. Control Agreement Provisions: Required when collateral includes bank accounts or investment property

5. Intellectual Property Provisions: Specific provisions for IP collateral - used when security includes intellectual property rights

6. Priority Arrangements: Used when there are multiple security interests or intercreditor arrangements

What schedules should be included in a Collateral Security Agreement?

1. Schedule 1 - Description of Collateral: Detailed description and/or list of all assets subject to the security interest

2. Schedule 2 - Secured Obligations: Detailed description of the secured obligations including facility agreements

3. Schedule 3 - Perfection Requirements: List of specific actions required to perfect the security interest

4. Schedule 4 - Forms: Standard forms including notice to debtors, registration forms, etc.

5. Schedule 5 - Existing Security Interests: List of any existing security interests affecting the collateral

6. Appendix A - Required Filings: List of all necessary filings with governmental authorities

7. Appendix B - Relevant Contracts: Copies or details of relevant underlying contracts

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Nigeria

Document Type

Security Agreement

Cost

Free to use

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