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The Collateral Control Agreement is essential in secured lending transactions where a third-party agent is required to maintain control over collateral on behalf of a lender. This document is particularly relevant in situations involving inventory financing, commodity lending, or asset-based lending where physical control and monitoring of collateral are crucial. The agreement must comply with Canadian federal banking regulations and provincial secured transactions laws, particularly the Personal Property Security Act (PPSA) in common law provinces or the Civil Code in Quebec. It establishes the mechanisms for perfecting security interests, maintaining control over collateral, monitoring its value and condition, and providing regular reporting to the lender. The agreement is commonly used in conjunction with credit facilities and security agreements to create a comprehensive security package.

1. Parties: Identifies the main parties: Lender, Borrower, and Collateral Control Agent

2. Background: Explains the context of the agreement, including reference to any underlying credit facility and the purpose of the collateral control arrangement

3. Definitions: Defines key terms used throughout the agreement, including specific descriptions of the collateral and control mechanisms

4. Appointment of Collateral Control Agent: Formal appointment and acceptance of the Collateral Control Agent's role

5. Control of Collateral: Details the mechanisms and procedures for maintaining control over the collateral

6. Representations and Warranties: Standard representations from each party regarding their authority and capacity to enter into the agreement

7. Duties and Responsibilities: Specific obligations of the Collateral Control Agent regarding collateral maintenance and reporting

8. Instructions and Communications: Procedures for giving and receiving instructions regarding the collateral

9. Release of Collateral: Conditions and procedures for releasing collateral

10. Fees and Expenses: Compensation structure for the Collateral Control Agent and allocation of expenses

11. Indemnification: Provisions for indemnifying the Collateral Control Agent

12. Term and Termination: Duration of the agreement and termination procedures

13. Governing Law and Jurisdiction: Specifies applicable law and jurisdiction for dispute resolution

14. General Provisions: Standard boilerplate provisions including notices, amendments, and assignment restrictions