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Inventory Security Agreement Template for Nigeria

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Key Requirements PROMPT example:

Inventory Security Agreement

"I need an Inventory Security Agreement under Nigerian law for a pharmaceutical manufacturing company, where the inventory includes controlled substances and requires special storage conditions and governmental approvals."

Document background
The Inventory Security Agreement is a specialized security document used in Nigeria when a lender requires security over a borrower's inventory as collateral for financing. This document is essential in trade finance, working capital facilities, and inventory financing arrangements. It must comply with the Secured Transactions in Movable Assets Act 2017 and other relevant Nigerian legislation, including registration requirements with the National Collateral Registry. The agreement typically supports underlying loan or facility agreements and provides detailed mechanisms for creating, perfecting, and enforcing security over inventory, which may include raw materials, work-in-progress, or finished goods. It is particularly important in sectors with significant inventory holdings and is designed to protect the lender's interests while allowing the borrower to continue normal business operations.
Suggested Sections

1. Parties: Identification of the Secured Party (Lender) and Grantor (Borrower), including full legal names and addresses

2. Background: Context of the security arrangement, reference to any underlying credit facility or loan agreement

3. Definitions and Interpretation: Definitions of key terms including 'Inventory', 'Secured Obligations', 'Event of Default', and interpretation rules

4. Grant of Security Interest: Express creation of the security interest over the inventory collateral

5. Description of Collateral: Detailed description of the inventory subject to the security interest, including present and after-acquired inventory

6. Representations and Warranties: Grantor's declarations regarding ownership, authority, and status of the inventory

7. Covenants: Ongoing obligations regarding maintenance, insurance, reporting, and disposal of inventory

8. Default and Enforcement: Events of default and secured party's enforcement rights and remedies

9. Perfection Requirements: Requirements for registration and maintaining perfection of the security interest

10. Notice Requirements: Communication requirements between parties

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

Optional Sections

1. Third Party Rights: Required when inventory is stored with third parties or subject to warehouse arrangements

2. Priority Arrangements: Needed when there are multiple secured creditors requiring subordination or priority agreements

3. Insurance Requirements: Detailed section needed for high-value or high-risk inventory

4. Receivables: Required when security interest extends to proceeds from inventory sales

5. Foreign Currency Provisions: Necessary when inventory is traded internationally or valued in foreign currency

6. Environmental Compliance: Required for inventory of hazardous materials or environmentally sensitive goods

Suggested Schedules

1. Inventory Description Schedule: Detailed listing and description of all inventory covered by the agreement

2. Storage Locations Schedule: List of all locations where inventory is or will be stored

3. Permitted Disposals Schedule: Terms and conditions for authorized inventory sales or disposals

4. Form of Inventory Report: Template for periodic inventory reporting requirements

5. Insurance Requirements Schedule: Specific insurance requirements and minimum coverage levels

6. Third Party Agreements Schedule: Copies or summaries of relevant warehouse or storage agreements

7. Registration Forms: Forms required for registration under the Secured Transactions in Movable Assets Act

Authors

Alex Denne

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

Relevant legal definitions













































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Relevant Industries

Manufacturing

Retail

Wholesale Trade

Agriculture

Pharmaceuticals

Automotive

Consumer Goods

Food and Beverage

Electronics

Textiles

Construction Materials

Chemical Industry

Mining

Relevant Teams

Legal

Finance

Treasury

Operations

Risk Management

Compliance

Supply Chain

Warehouse Operations

Credit

Commercial

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Commercial Director

Operations Manager

Warehouse Manager

Credit Risk Manager

Security Portfolio Manager

Collateral Manager

Trade Finance Manager

Supply Chain Manager

Inventory Controller

Compliance Officer

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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