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Collateral Contract for Germany

Collateral Contract Template for Germany

A German law collateral contract (Sicherungsvertrag) is a legally binding agreement that establishes security interests over specific assets to secure the performance of obligations. The document complies with German civil law requirements, particularly the provisions of the Bürgerliches Gesetzbuch (BGB) and related commercial legislation. It details the nature of the collateral, the secured obligations, creation and perfection requirements, enforcement mechanisms, and the rights and obligations of all parties involved. The agreement includes specific provisions for the maintenance and protection of the collateral, default scenarios, and enforcement procedures in accordance with German law.

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What is a Collateral Contract?

The Collateral Contract (Sicherungsvertrag) is a fundamental document in German secured lending and financial transactions. It is used when parties need to create security interests over assets to secure the performance of obligations, whether in the context of loan agreements, trading arrangements, or other commercial transactions. The document must comply with German civil law requirements, particularly the specificity principle (Bestimmtheitsgrundsatz) under the BGB. It contains detailed provisions regarding the creation, perfection, and enforcement of security interests, addressing various forms of collateral including tangible assets, receivables, and financial instruments. This contract type is essential in risk mitigation strategies and is commonly used in both commercial and financial sector transactions where secured obligations are involved.

What sections should be included in a Collateral Contract?

1. Parties: Identification of the collateral provider (Sicherungsgeber) and collateral taker (Sicherungsnehmer), including full legal names and addresses

2. Background: Context of the security arrangement, reference to the underlying obligation(s) being secured

3. Definitions: Definitions of key terms used throughout the agreement, including specific German legal terminology

4. Subject Matter of Security: Detailed description of the collateral being provided and the method of security (pledge, transfer of title, etc.)

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

6. Creation of Security Interest: Specific provisions regarding the creation and perfection of the security interest

7. Representations and Warranties: Statements regarding ownership, authority to grant security, and status of collateral

8. Rights and Obligations: Ongoing obligations regarding maintenance, insurance, and use of collateral

9. Enforcement: Procedures and rights for enforcing the security interest upon default

10. Costs and Expenses: Allocation of costs related to the creation, maintenance, and enforcement of the security

11. Notices: Communication requirements and contact details

12. Governing Law and Jurisdiction: Confirmation of German law application and jurisdiction

What sections are optional to include in a Collateral Contract?

1. Further Assurance: Additional actions required to perfect or maintain the security interest, used when complex collateral is involved

2. Release and Discharge: Conditions and process for releasing the security interest, important for temporary security arrangements

3. Assignment and Transfer: Rights to transfer the security interest or secured obligations, relevant for transferable securities

4. Multiple Parties: Special provisions for multiple collateral providers or takers, used in syndicated arrangements

5. Priority Arrangements: Provisions regarding ranking of security interests, needed when multiple security interests exist

6. Information Rights: Additional reporting or inspection rights, important for valuable or changing collateral

7. Insurance: Specific insurance requirements and arrangements, necessary for valuable physical collateral

What schedules should be included in a Collateral Contract?

1. Schedule 1 - Collateral Description: Detailed technical or legal description of the collateral assets

2. Schedule 2 - Secured Obligations: Detailed description of the secured obligations, including specific agreements or facilities

3. Schedule 3 - Form of Notice: Template notices for perfection requirements or third-party notifications

4. Schedule 4 - Existing Security Interests: List of any existing security interests affecting the collateral

5. Schedule 5 - Required Filings: List of necessary registrations or filings for perfection

6. Appendix A - Power of Attorney: Form of power of attorney for enforcement or perfection actions

7. Appendix B - Compliance Documents: Forms or certificates required for ongoing compliance

Authors

Alex Denne

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

Jurisdiction

Germany

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions






























Clauses





























Relevant Industries

Banking

Financial Services

Real Estate

Manufacturing

Automotive

Energy

Infrastructure

Trade and Commerce

Technology

Construction

Agriculture

Shipping and Maritime

Relevant Teams

Legal

Finance

Risk Management

Treasury

Compliance

Credit Administration

Corporate Banking

Operations

Security Administration

Portfolio Management

Transaction Management

Relevant Roles

Legal Counsel

Finance Director

Credit Risk Manager

Collateral Manager

Treasury Manager

Loan Officer

Security Trustee Officer

Compliance Officer

Corporate Lawyer

Banking Relationship Manager

Credit Analyst

Transaction Manager

Security Administrator

Portfolio 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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