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Collateral Assignment Of Purchase Agreement for Canada

Collateral Assignment Of Purchase Agreement Template for Canada

A Canadian legal document used to create a security interest by assigning rights under a purchase agreement to a lender or other security holder. The document enables the assignor to use their rights under an existing purchase agreement as collateral for financing or other obligations. It complies with Canadian federal and provincial security and property laws, particularly the Personal Property Security Act (PPSA) of the relevant province. The document includes detailed provisions for the creation, perfection, and enforcement of the security interest, along with necessary representations, warranties, and covenants to protect all parties' interests.

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What is a Collateral Assignment Of Purchase Agreement?

The Collateral Assignment of Purchase Agreement is a crucial document in Canadian secured financing transactions, used when a purchaser needs to leverage their rights under an existing purchase agreement as security for financing or other obligations. This document is particularly common in real estate developments, large equipment purchases, and commercial property transactions. It must comply with provincial Personal Property Security Act (PPSA) requirements and other relevant federal and provincial laws. The agreement includes essential provisions regarding the creation and perfection of the security interest, the rights and obligations of all parties, default scenarios, and enforcement mechanisms. It's typically used when the assignor requires additional financing but wants to maintain their primary rights under the purchase agreement while providing security to their lender.

What sections should be included in a Collateral Assignment Of Purchase Agreement?

1. Parties: Identifies the assignor (original purchaser), assignee (typically a lender), and acknowledgment of the vendor from the original purchase agreement

2. Background/Recitals: Sets out the context of the original purchase agreement and the purpose of the assignment as security

3. Definitions: Defines key terms including 'Purchase Agreement', 'Property', 'Secured Obligations', and other relevant terms

4. Assignment: Core provision detailing the assignment of rights under the purchase agreement as security

5. Security Interest: Establishes the security interest being created and its scope

6. Representations and Warranties: Assignor's representations regarding ownership, authority, and status of the purchase agreement

7. Covenants: Ongoing obligations of the assignor regarding the purchase agreement and secured obligations

8. Rights and Remedies: Details the assignee's rights upon default and available remedies

9. Term and Termination: Duration of the assignment and conditions for termination

10. General Provisions: Standard boilerplate clauses including notices, amendments, governing law, etc.

11. Execution: Signature blocks for all parties including any required witnesses

What sections are optional to include in a Collateral Assignment Of Purchase Agreement?

1. Vendor Consent: Required if the original purchase agreement requires vendor consent for assignment

2. Priority Agreements: Needed if there are other secured parties with interests in the purchase agreement

3. Insurance: Required if specific insurance obligations are being imposed on the assignor

4. Further Assurances: Detailed section on additional documentation or actions required to perfect the security interest

5. Power of Attorney: Optional provision granting the assignee power to act on behalf of the assignor in certain circumstances

6. Assignment of Related Rights: If there are additional rights or agreements related to the purchase agreement being assigned

What schedules should be included in a Collateral Assignment Of Purchase Agreement?

1. Schedule A - Purchase Agreement: Copy of the original purchase agreement being assigned

2. Schedule B - Property Description: Detailed description of the property subject to the purchase agreement

3. Schedule C - Secured Obligations: Description or list of the obligations being secured by the assignment

4. Schedule D - Existing Encumbrances: List of any existing assignments, security interests or encumbrances affecting the purchase agreement

5. Appendix 1 - Form of Notice: Standard form for notices to be given under the agreement

6. Appendix 2 - Vendor Acknowledgment: Form of acknowledgment to be signed by the vendor of the original purchase agreement

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions





























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Relevant Industries

Real Estate

Commercial Banking

Construction

Property Development

Manufacturing

Infrastructure

Energy

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Healthcare

Retail

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Relevant Teams

Legal

Finance

Real Estate

Risk Management

Treasury

Procurement

Commercial

Credit

Corporate Development

Asset Management

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Real Estate Manager

Property Development Manager

Contract Administrator

Risk Manager

Treasury Manager

Credit Manager

Commercial Banking Officer

Asset Manager

Finance Manager

Real Estate Development Director

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Commercial Director

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