Security Trust Deed Template for Pakistan

The Security Trust Deed is a fundamental document in secured financing arrangements under Pakistani law, particularly useful in scenarios involving multiple lenders or complex security arrangements. This document becomes necessary when there's a need to establish a trust structure to hold and manage security interests efficiently, especially in syndicated lending, bond issuances, or project finance transactions. The deed must comply with Pakistani legislation, including the Trust Act 1882, Companies Act 2017, and relevant financial regulations. It details the appointment of the security trustee, the creation and holding of security interests, enforcement mechanisms, and the rights and obligations of all parties. The Security Trust Deed is particularly valuable in transactions where direct holding of security by multiple parties would be impractical or legally complex, providing a streamlined approach to security management and enforcement.

1. Parties: Identification of the Security Trustee, Principal (typically the lender/security holder), and the Security Provider

2. Background: Context of the security arrangement, reference to primary facility agreements, and purpose of the trust

3. Definitions and Interpretation: Definitions of key terms, interpretation rules, and references to defined terms in related documents

4. Declaration of Trust: Formal establishment of the trust, appointment of trustee, and declaration of trust assets

5. Security Trustee Powers and Duties: Detailed powers granted to the trustee and their duties in managing the security

6. Security: Nature and scope of security interests being created and held in trust

7. Representations and Warranties: Standard representations and warranties from the security provider and other parties

8. Covenants: Positive and negative obligations of the security provider and other parties

9. Events of Default: Circumstances constituting default and consequences thereof

10. Enforcement: Rights and procedures for enforcing security upon default

11. Trust Costs and Indemnities: Provisions for costs, expenses, and indemnification of the security trustee

12. Changes to Parties: Procedures for replacement of security trustee and transfers of rights

13. Termination: Circumstances and process for terminating the trust arrangement

14. Notices: Communication procedures between parties

15. Governing Law and Jurisdiction: Specification of Pakistani law as governing law and jurisdiction for disputes