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Security Agreement Form for Philippines

Security Agreement Form Template for Philippines

A Security Agreement Form under Philippine law is a legally binding document that creates and evidences a security interest in specified collateral to secure the performance of obligations. The agreement must comply with Republic Act No. 11057 (Personal Property Security Act) and relevant provisions of the Civil Code of the Philippines. It establishes the rights and obligations of both the secured party and the grantor, details the collateral, specifies enforcement mechanisms, and includes provisions for perfection and priority of the security interest. The document is crucial for secured lending transactions and must meet specific requirements under Philippine law for enforceability and registration.

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What is a Security Agreement Form?

The Security Agreement Form is a fundamental document in Philippine secured transactions, essential for creating enforceable security interests in both personal and real property. Used primarily in lending and financing arrangements, this agreement establishes the legal framework for securing obligations with collateral. It must comply with Republic Act No. 11057 (Personal Property Security Act), the Civil Code of the Philippines, and other relevant legislation. The document is typically used when a lender requires security for a loan or when parties want to create a legally enforceable security interest in assets. It includes detailed provisions on the nature of the security interest, description of collateral, rights and obligations of parties, enforcement mechanisms, and requirements for perfection. The agreement is particularly important in the Philippine context due to specific local law requirements for creating and enforcing security interests.

What sections should be included in a Security Agreement Form?

1. Parties: Identification of the Secured Party and the Grantor, including their complete legal names and addresses

2. Background: Context of the security agreement, reference to any related agreements (e.g., loan agreement), and purpose of the security interest

3. Definitions: Definitions of key terms used throughout the agreement, including specific Philippine law references

4. Grant of Security Interest: Express creation and grant of the security interest by the Grantor in favor of the Secured Party

5. Collateral Description: Detailed description of the collateral subject to the security interest, meeting requirements of RA 11057

6. Secured Obligations: Description of the obligations secured by the agreement, including principal, interest, and other amounts

7. Representations and Warranties: Grantor's representations regarding ownership, authority, and status of collateral

8. Covenants: Ongoing obligations of the Grantor regarding maintenance, insurance, and use of collateral

9. Events of Default: Circumstances constituting default under the agreement

10. Enforcement Rights: Rights and remedies of the Secured Party upon default, including collection and disposition rights

11. Perfection and Priority: Requirements and procedures for perfecting the security interest and maintaining priority

12. General Provisions: Standard contract provisions including governing law, notices, amendments, and severability

13. Execution: Signature blocks and notarial requirements

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

1. Control Agreements: Required when collateral includes deposit accounts or investment property requiring control agreements with third parties

2. Insurance Requirements: Detailed insurance provisions when collateral requires specific insurance coverage

3. Third Party Consents: Required when security interest requires consent from third parties or government authorities

4. Registration Requirements: Specific provisions for registration when collateral requires special registration (e.g., vehicles, intellectual property)

5. Intercreditor Provisions: Required when there are multiple secured creditors and priority arrangements need to be addressed

6. Special Collateral Provisions: Specific provisions for unique types of collateral such as intellectual property, receivables, or inventory

What schedules should be included in a Security Agreement Form?

1. Schedule A - Collateral Description: Detailed itemization and description of all collateral covered by the agreement

2. Schedule B - Permitted Liens: List of pre-existing or permitted encumbrances on the collateral

3. Schedule C - Locations of Collateral: List of all locations where collateral is or will be kept

4. Schedule D - Intellectual Property: Detailed list of any intellectual property included as collateral

5. Schedule E - Required Filings: List of all required filings and registrations for perfection

6. Appendix 1 - Form of Notice: Standard form for notices required under the agreement

7. Appendix 2 - Form of Acknowledgment: Form of acknowledgment for third party consents or control agreements

Authors

Alex Denne

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

Jurisdiction

Philippines

Document Type

Agreement Contract

Cost

Free to use

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