Cross Collateral Agreement Template for South Africa

The Cross Collateral Agreement is essential in South African financing arrangements where multiple credit facilities and security interests need to be interconnected. It is commonly used when a borrower has several loans or credit facilities with the same lender and wants to use various assets as collective security. The document must comply with South African legislation, particularly the National Credit Act 34 of 2005, the Security by Means of Movable Property Act, and relevant property laws. It typically includes detailed descriptions of all secured obligations, comprehensive listings of collateral assets, and specific enforcement provisions. This agreement is particularly valuable in complex financing structures where optimizing security arrangements and reducing documentation complexity is desired.

1. Parties: Identification of the lender(s) and borrower(s), including registration numbers and addresses

2. Background: Context of the agreement, including references to existing facility agreements and reason for cross-collateralization

3. Definitions and Interpretation: Key terms used in the agreement, including definition of Secured Property, Secured Obligations, and Events of Default

4. Creation of Security Interest: Legal provisions establishing the security interest over all collateral assets

5. Secured Obligations: Definition and scope of obligations secured by the cross-collateral arrangement

6. Cross-Collateralization Provisions: Specific terms making each collateral asset security for all obligations

7. Representations and Warranties: Borrower's confirmations regarding ownership, authority, and status of collateral

8. Covenants: Ongoing obligations regarding maintenance, insurance, and preservation of collateral

9. Events of Default: Circumstances triggering enforcement rights

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

11. Power of Attorney: Appointment of lender as attorney for perfection and enforcement purposes

12. General Provisions: Standard clauses including notices, amendments, governing law, and jurisdiction