Collateral Agency Agreement Template for Indonesia

The Collateral Agency Agreement is essential in secured financing transactions under Indonesian law where multiple creditors are involved and security interests need to be managed efficiently. This document is typically used in conjunction with facility agreements, security documents, and intercreditor arrangements, particularly in syndicated lending, project finance, or large corporate financing transactions. It ensures compliance with Indonesian security laws, including Law No. 42 of 1999 on Fiduciary Security and Law No. 4 of 1996 on Mortgage Rights, while establishing clear procedures for security management and enforcement. The agreement becomes particularly important given Indonesia's specific requirements for security creation, perfection, and enforcement, including mandatory fiduciary registration and the need for specific enforcement procedures.

1. Parties: Identifies all parties to the agreement including the collateral agent, security providers, secured parties, and any other relevant parties

2. Background: Sets out the context of the agreement, including reference to the underlying facility agreement and the need for a collateral agent

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation principles

4. Appointment and Authority: Details the appointment of the collateral agent and scope of its authority

5. Duties and Responsibilities: Specifies the collateral agent's duties in managing and enforcing security interests

6. Security Holding: Establishes the basis on which the collateral agent holds the security interests

7. Instructions and Communications: Procedures for secured parties to give instructions to the collateral agent

8. Enforcement of Security: Procedures and circumstances for enforcing security interests

9. Payments and Distributions: Mechanisms for handling and distributing proceeds from security enforcement

10. Fees and Expenses: Details of the collateral agent's compensation and expense reimbursement

11. Indemnification: Provisions protecting the collateral agent from liability

12. Resignation and Replacement: Procedures for changing the collateral agent

13. Representations and Warranties: Standard representations by all parties

14. Term and Termination: Duration of the agreement and termination circumstances

15. Governing Law and Dispute Resolution: Specifies Indonesian law as governing law and dispute resolution mechanisms