Collateral Trust Agreement Template for Germany

The Collateral Trust Agreement is essential in German banking and finance transactions where security interests need to be managed on behalf of multiple creditors. It is particularly relevant in syndicated lending, project finance, and structured finance transactions under German law. The document establishes the legal framework for the security trustee to hold and manage collateral, incorporating specific German law concepts such as parallel debt (Parallelschuld) and addressing the requirements of German security and trust laws. The agreement is crucial when there are multiple secured parties or when security interests need to be managed centrally, providing mechanisms for the creation, perfection, administration, and enforcement of security interests while ensuring compliance with German regulatory requirements. It includes detailed provisions on trustee duties, liability limitations, enforcement procedures, and the distribution of enforcement proceeds.

1. Parties: Identification of the security trustee, security grantor(s), and beneficiaries

2. Background: Context of the agreement, reference to underlying obligations and security arrangement purpose

3. Definitions and Interpretation: Definitions of key terms, interpretation rules, and language considerations for English/German terms

4. Appointment and Duties of Security Trustee: Formal appointment of trustee, scope of duties, and general principles of trustee action

5. Creation of Security Interest: Provisions regarding the creation and perfection of security interests over various asset types

6. Parallel Debt: Establishment of parallel debt structure common in German security trust arrangements

7. Security Trust: Core trust provisions, holding of security assets, and trust purpose

8. Administration of Security Assets: Day-to-day management of security assets and related procedures

9. Enforcement of Security: Conditions and procedures for security enforcement, application of proceeds

10. Representations and Warranties: Standard representations by parties regarding capacity, authority, and security assets

11. Liability and Indemnification: Trustee liability limitations and indemnification provisions

12. Fees and Expenses: Trustee compensation and expense reimbursement provisions

13. Term and Termination: Duration of agreement, termination events, and consequences

14. Governing Law and Jurisdiction: Choice of German law and jurisdiction provisions