Collateral Access Agreement Template for Philippines

The Collateral Access Agreement is a crucial document in secured lending transactions under Philippine law, particularly where collateral is held by a third-party custodian or warehouse operator. This agreement becomes necessary when a lender needs to ensure they have proper access rights to inspect and potentially take possession of collateral securing their loans. The document complies with Republic Act No. 11057 (Personal Property Security Act) and Bangko Sentral ng Pilipinas regulations, providing detailed procedures for access, inspection, and potential possession of collateral. It is commonly used in conjunction with credit facilities, particularly in industries where inventory or equipment serves as collateral and is stored in third-party facilities. The agreement balances the rights of secured creditors with the operational needs of custodians and borrowers, while ensuring compliance with Philippine legal requirements for enforceability.

1. Parties: Identification of the primary parties: typically the Collateral Agent/Lender, the Borrower/Grantor, and the Custodian/Warehouse Operator

2. Background: Context of the agreement, referring to the primary credit facility and the need for collateral access arrangements

3. Definitions: Key terms used throughout the agreement, including specific definitions for Collateral, Access Rights, Event of Default, etc.

4. Grant of Access Rights: Core provisions detailing the rights of the Collateral Agent to access, inspect, and take possession of the collateral

5. Custodian Obligations: Duties and responsibilities of the custodian in maintaining, protecting, and providing access to the collateral

6. Representations and Warranties: Statements of fact and assurances from each party regarding their authority, the collateral, and compliance with laws

7. Access Procedures: Detailed procedures for requesting and granting access, including notice requirements and timing

8. Security Measures: Protocols for maintaining security and integrity of the collateral during storage and access

9. Costs and Expenses: Allocation of costs related to storage, access, and maintenance of collateral

10. Term and Termination: Duration of the agreement and circumstances under which it can be terminated

11. Governing Law and Jurisdiction: Specification of Philippine law as governing law and jurisdiction for disputes