Purchase Money Security Agreement Template for England and Wales

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Key Requirements PROMPT example:

Purchase Money Security Agreement

"I need a Purchase Money Security Agreement under English law to secure financing for manufacturing equipment worth £2.5 million, with quarterly repayments starting from March 2025 and specific provisions for maintenance and insurance of the equipment."

Document background
A Purchase Money Security Agreement is utilized when a party requires financing to purchase specific property and the financing party wishes to secure their interest in that property. Under English and Welsh law, this document establishes the lender's priority interest in the purchased assets, protecting their position against other creditors. The agreement typically includes detailed descriptions of the collateral, payment terms, maintenance requirements, default provisions, and enforcement mechanisms. It's particularly important in commercial transactions where significant assets are being financed and must comply with registration requirements under the Companies Act 2006 where applicable.
Suggested Sections

1. Parties: Identification of secured party and debtor

2. Background: Context of the security agreement and underlying purchase

3. Definitions: Key terms used throughout the agreement

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

5. Description of Collateral: Detailed description of secured property

6. Purchase Money Security Interest: Specific provisions qualifying the security as PMSI

7. Representations and Warranties: Standard security agreement representations

8. Covenants: Ongoing obligations of the debtor

9. Events of Default: Circumstances constituting default

10. Remedies: Rights and remedies upon default

Optional Sections

1. Consumer Protection Provisions: Additional protections required when the debtor is a consumer

2. Insurance Requirements: Specific insurance obligations for high-value or specialized collateral

3. Cross-Default Provisions: Provisions linking defaults under related agreements

Suggested Schedules

1. Schedule of Collateral: Detailed inventory and description of all secured property

2. Form of Notice: Standard form for notifications under the agreement

3. Payment Schedule: Schedule of installment payments if applicable

4. Registration Requirements: Details of required filings and registrations

Authors

Alex Denne

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

Relevant legal definitions
Clauses
Relevant Industries
Relevant Teams
Relevant Roles
Industries

Companies Act 2006: Primary legislation governing company law in England and Wales, particularly relevant for registration of charges and company security interests

Consumer Credit Act 1974: Regulates consumer credit agreements and provides regulatory requirements for credit arrangements involving consumers

Financial Services and Markets Act 2000: Establishes the regulatory framework for financial services in the UK, including security arrangements

Sale of Goods Act 1979: Sets out fundamental principles governing sale of goods, including provisions on title and transfer of property

Bills of Sale Acts 1878 and 1882: Governs security over personal chattels where the borrower is an individual

Consumer Rights Act 2015: Provides protection for consumer transactions and contains provisions regarding unfair contract terms

Financial Collateral Arrangements (No.2) Regulations 2003: Specific regulations governing financial collateral arrangements

Registration of Charges (Companies) Regulations 2009: Details requirements for registering security interests at Companies House

Common Law Principles: Established case law principles governing security interests and their enforcement

Equity Principles: Fundamental principles of equity affecting security interests and their enforcement

Insolvency Act 1986: Governs the priority and enforcement of security interests in insolvency situations

Enterprise Act 2002: Contains important provisions regarding the enforcement of security interests

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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