Security Trust Agreement Template for Australia

A Security Trust Agreement is essential in Australian financing transactions involving multiple secured creditors, such as syndicated loans, bond issuances, or project financings. It creates a trust structure where a security trustee holds security interests over assets on behalf of various beneficiaries (typically lenders or bondholders), simplifying security administration and enforcement. The agreement is particularly important in the Australian legal context, where it must comply with the Personal Property Securities Act 2009 (Cth), state-specific trust laws, and other relevant legislation. It typically includes provisions for the appointment and replacement of the security trustee, the trustee's powers and duties, enforcement procedures, priority arrangements between creditors, and the distribution of enforcement proceeds. The document is fundamental to managing security interests efficiently and ensuring coordinated enforcement actions in complex financing arrangements.

1. Parties: Identifies the security trustee, beneficiaries (secured parties), and security provider(s)

2. Background: Sets out the context of the security trust arrangement, including reference to underlying facility agreements and security documents

3. Definitions and Interpretation: Defines key terms and establishes interpretation principles, including references to facility agreement definitions

4. Declaration of Trust: Establishes the security trust, declares the trust property, and specifies the trust's purpose

5. Security Trustee Appointment and Powers: Details the appointment of the security trustee and its powers in managing the security trust property

6. Trustee Duties and Obligations: Specifies the security trustee's duties, standard of care, and obligations to beneficiaries

7. Security and Enforcement: Covers the holding of security, enforcement procedures, and application of proceeds

8. Priority Arrangements: Sets out priority between secured parties and sharing of proceeds

9. Trustee Remuneration and Expenses: Details the trustee's fees, costs, and right to indemnification

10. Changes to Parties: Procedures for resignation/removal of trustee and appointment of successor trustee

11. Administrative Provisions: Includes notices, calculations, amendments, and other procedural matters

12. Governing Law and Jurisdiction: Specifies governing law and submission to jurisdiction