Collateral Control Agreement Template for Indonesia

The Collateral Control Agreement is a crucial document in secured lending transactions under Indonesian law, typically used when a lender requires independent third-party control over financed goods or collateral assets. This arrangement is particularly common in trade finance, commodity financing, and working capital facilities where physical goods serve as security. The agreement establishes a three-way relationship between the lender, borrower, and collateral manager, detailing how the collateral will be monitored, controlled, and released. It ensures compliance with Indonesian secured transactions law, particularly regarding perfection of security interests and fiducia requirements. The document includes comprehensive operational procedures, reporting obligations, and risk allocation mechanisms, making it essential for transactions where physical control of collateral is critical for the lender's security.

1. Parties: Identifies the main parties: Lender, Borrower/Depositor, and Collateral Manager

2. Background: Explains the context of the agreement, referring to the underlying facility agreement and need for collateral control

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

4. Appointment and Scope of Services: Details the appointment of the collateral manager and scope of collateral control services

5. Rights and Obligations of the Collateral Manager: Specifies the duties, responsibilities, and authority of the collateral manager

6. Depositor's Obligations: Outlines the obligations of the borrower/depositor regarding the collateral

7. Lender's Rights and Instructions: Details the lender's rights to give instructions and receive reports

8. Operating Procedures: Specifies procedures for receiving, releasing, and maintaining collateral

9. Reporting Requirements: Details the reports and notifications required from the collateral manager

10. Fees and Expenses: Specifies the fees payable to the collateral manager and cost allocation

11. Representations and Warranties: Contains standard representations and warranties from all parties

12. Liability and Indemnification: Addresses liability limitations and indemnification obligations

13. Insurance: Specifies insurance requirements for the collateral

14. Term and Termination: Details the duration of the agreement and termination provisions

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

16. Miscellaneous: Contains standard boilerplate provisions