Guarantee And Collateral Agreement Template for Nigeria

The Guarantee And Collateral Agreement is a crucial document in Nigerian commercial and financial transactions where additional security is required to support borrowing or other financial obligations. It is commonly used in various business contexts, from corporate lending to project finance, where a third party (guarantor) not only provides a personal guarantee but also pledges specific assets as collateral. The agreement must comply with Nigerian secured transactions laws, particularly the Secured Transactions in Movable Assets Act 2017 and the Companies and Allied Matters Act 2020. This document combines two security mechanisms: a personal guarantee and a grant of security interests over specific assets, providing the beneficiary with multiple routes to recover the secured obligations. It is essential for transactions requiring robust security arrangements and is particularly important in the Nigerian business environment where secured lending practices are increasingly sophisticated.

1. Parties: Identification of the Guarantor, Principal Debtor, and Beneficiary/Secured Party

2. Background: Context of the underlying obligation and purpose of the guarantee and security arrangement

3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including Nigerian law-specific terms

4. Guarantee: Scope and nature of the guarantee obligations, including whether continuing guarantee

5. Security Interest: Creation and terms of the security interest over the collateral

6. Representations and Warranties: Guarantor's representations regarding authority, ownership of collateral, and compliance with Nigerian law

7. Covenants: Ongoing obligations regarding maintenance and preservation of collateral

8. Registration and Perfection: Requirements for registration under STMA Act and other applicable Nigerian laws

9. Events of Default: Circumstances constituting default and triggering enforcement rights

10. Enforcement: Rights and remedies upon default, including power of sale and appointment of receivers

11. Payments and Recovery: Terms for payment, currency, and recovery of guaranteed amounts

12. Indemnity: Guarantor's indemnification obligations

13. Power of Attorney: Appointment of secured party as attorney for perfection and enforcement

14. Assignment and Transfer: Rights to assign or transfer the guarantee and security interests

15. Notices: Process for giving notices under the agreement

16. Governing Law and Jurisdiction: Nigerian law as governing law and jurisdiction for disputes