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Purchase Money Security Agreement
"I need a Purchase Money Security Agreement under Indian law for financing industrial machinery worth ₹50 million, with quarterly payments over 5 years starting March 2025, and special provisions for maintenance and insurance of the equipment."
1. Parties: Identification of the secured party (seller/lender) and debtor (buyer/borrower) with full legal names and addresses
2. Background: Context of the transaction, including the purchase and the intention to create a security interest
3. Definitions: Key terms used throughout the agreement, including 'Collateral', 'Purchase Price', 'Security Interest', etc.
4. Purchase Terms: Details of the purchase transaction, including purchase price, payment terms, and delivery arrangements
5. Grant of Security Interest: Express creation of the security interest in the collateral
6. Description of Collateral: Detailed description of the property subject to the security interest
7. Representations and Warranties: Statements by the debtor regarding ownership, right to grant security, condition of collateral, etc.
8. Covenants: Ongoing obligations of the debtor regarding maintenance, insurance, and use of the collateral
9. Events of Default: Circumstances constituting default under the agreement
10. Remedies: Rights and remedies of the secured party upon default
11. Perfection of Security Interest: Requirements and procedures for perfecting the security interest
12. Governing Law: Specification of Indian law as governing law and jurisdiction provisions
1. Additional Collateral: Used when security interest extends beyond the purchased property
2. Guarantees: Include when there are third-party guarantors for the payment obligations
3. Insurance Requirements: Detailed insurance obligations when specific insurance coverage is required
4. Cross-Default Provisions: Include when default under other agreements should trigger default under this agreement
5. Assignment and Transfer: Include when either party needs right to assign or transfer their rights
6. Priority Arrangements: Used when there are multiple security interests or lenders involved
7. Environmental Provisions: Include for collateral that could have environmental implications
8. Tax Provisions: Include when specific tax considerations need to be addressed
1. Schedule A - Collateral Description: Detailed technical description of the collateral including serial numbers, locations, etc.
2. Schedule B - Payment Schedule: Detailed payment terms including amounts, dates, and method of payment
3. Schedule C - Insurance Requirements: Specific insurance requirements including types, amounts, and named insureds
4. Schedule D - Permitted Locations: List of locations where collateral may be kept or used
5. Schedule E - Prior Security Interests: List of any pre-existing security interests or liens on the collateral
6. Appendix 1 - Registration Forms: Forms required for registration of the security interest
7. Appendix 2 - Maintenance Requirements: Detailed maintenance and upkeep requirements for the collateral
8. Appendix 3 - Valuation Report: Independent valuation of the collateral if required
Authors
Banking and Financial Services
Manufacturing
Automotive
Heavy Equipment
Industrial Machinery
Agriculture
Construction
Technology and IT
Real Estate
Infrastructure
Retail
Transportation and Logistics
Legal
Finance
Risk Management
Procurement
Treasury
Compliance
Commercial Operations
Credit Administration
Asset Management
Corporate Finance
Business Development
Chief Financial Officer
Finance Manager
Legal Counsel
Contract Manager
Risk Manager
Credit Manager
Commercial Director
Procurement Manager
Asset Manager
Treasury Manager
Compliance Officer
Security Documentation Specialist
Corporate Finance Manager
Business Development Manager
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