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Security Agreement Form for Germany

Security Agreement Form Template for Germany

A German law Security Agreement Form (Sicherungsvertrag) is a formal legal document that establishes and governs security interests over assets to secure financial obligations. Governed by German civil and commercial law, particularly the Bürgerliches Gesetzbuch (BGB) and Handelsgesetzbuch (HGB), this agreement details the creation, perfection, and enforcement of security interests. It must comply with German legal requirements, including the principle of publicity (Publizitätsgrundsatz), and contains specific provisions for the type of collateral involved, whether movable assets, receivables, bank accounts, or other assets.

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What is a Security Agreement Form?

The Security Agreement Form is a fundamental document in German secured financing transactions, used to create legally enforceable security interests over various types of assets. It is typically employed in lending arrangements, asset financing, or other credit facilities where collateral is required to secure the obligations of a debtor. The agreement must comply with strict German law requirements, including specific formalities for different types of security interests and the principle of publicity. Key considerations include the type of collateral, perfection requirements, and enforcement mechanisms. The document is particularly important in commercial lending, project finance, and corporate transactions where lenders require security over borrowers' assets.

What sections should be included in a Security Agreement Form?

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

2. Background: Context of the security arrangement, reference to any underlying credit or facility agreement, and the purpose of the security

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

4. Creation of Security Interest: Express provisions creating and describing the security interest, including detailed description of the collateral

5. Secured Obligations: Definition and scope of the obligations being secured (gesicherte Forderungen)

6. Perfection Requirements: Steps required to perfect the security interest under German law, including any registration or notification requirements

7. Representations and Warranties: Security provider's confirmations regarding ownership, authority, and absence of encumbrances

8. Obligations of the Security Provider: Ongoing obligations regarding maintenance, insurance, and preservation of the collateral

9. Enforcement: Rights and procedures for enforcing the security interest upon default

10. Release of Security: Conditions and process for releasing the security interest upon satisfaction of secured obligations

11. Governing Law and Jurisdiction: Confirmation of German law as governing law and jurisdiction of German courts

What sections are optional to include in a Security Agreement Form?

1. Further Assurance: Additional cooperation obligations - particularly relevant for complex security arrangements or where future actions may be needed

2. Power of Attorney: Authorization for the security taker to perfect or enforce the security - include when immediate action might be required

3. Bank Accounts: Specific provisions for bank account pledges - include when bank accounts form part of the security

4. Insurance Provisions: Detailed insurance requirements - include for valuable physical assets

5. Costs and Expenses: Allocation of costs related to creation and maintenance of security - include for complex arrangements

6. Transfer and Assignment: Provisions regarding transferability of rights - include when transferability is anticipated

7. Parallel Debt: Creation of parallel obligations for security agent structures - include in syndicated arrangements

What schedules should be included in a Security Agreement Form?

1. Schedule 1 - Description of Collateral: Detailed description and/or list of assets subject to the security interest

2. Schedule 2 - Form of Notice: Template notices required for perfection (e.g., for account pledges or receivables security)

3. Schedule 3 - Form of Acknowledgment: Template acknowledgments from relevant third parties

4. Schedule 4 - Filing and Registration Requirements: List of required filings and registrations for different types of collateral

5. Appendix A - Power of Attorney: Form of power of attorney if required

6. Appendix B - List of Bank Accounts: Details of bank accounts if included in security package

Authors

Alex Denne

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

Jurisdiction

Germany

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use

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