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A Collateral Security Agreement is a crucial document in Saudi Arabian secured financing transactions, used to create security interests over assets while ensuring compliance with both modern commercial laws and Islamic finance principles. This document is typically employed when a party (Security Provider) needs to grant security over assets to secure financial obligations owed to another party (Security Taker), whether in conventional or Islamic financing structures. The agreement must conform to the Saudi Commercial Pledge Law of 2018, which modernized the secured lending framework, while adhering to Shariah principles. It contains detailed provisions regarding the creation, perfection, and enforcement of security interests, including specific requirements for registration in the Saudi Unified Registry for Security Interests over Movable Assets where applicable.

1. Parties: Identification of the Security Provider/Grantor and the Security Taker/Beneficiary, including full legal names and address details

2. Background: Context of the security arrangement, reference to main facility agreement, and purpose of the security

3. Definitions and Interpretation: Key terms used throughout the agreement, including defined terms from related financing documents

4. Creation of Security: Express provisions creating the security interest over the collateral, including the type of security being created

5. Secured Obligations: Clear description of the obligations being secured, including principal, profit, fees, and other amounts

6. Collateral Description: Detailed description of the assets being provided as security, including all relevant identifying information

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

8. Covenants: Ongoing obligations of the Security Provider regarding maintenance and preservation of the collateral

9. Perfection Requirements: Actions required to perfect the security interest, including registration requirements

10. Enforcement: Rights and remedies available upon default, consistent with Saudi law and Shariah principles

11. Power of Attorney: Appointment of the Security Taker as attorney for enforcement purposes

12. Further Assurance: Obligation to execute further documents and take additional steps if required

13. Notices: Communication procedures between parties

14. Governing Law and Jurisdiction: Confirmation of Saudi law governance and jurisdiction of Saudi courts