Drafting collateral assignment agreements manually requires extensive research across UCC Article 9 provisions, state-specific requirements, and industry-standard templates. Attorneys spend hours verifying contract details, crafting precise representations and warranties, and ensuring compliance with secured transaction best practices—all while managing the risk of missing critical covenants or default provisions.
Drafting collateral assignment of contracts requires extensive knowledge of UCC Article 9, careful analysis of underlying loan agreements, and precise language to create enforceable security interests. Attorneys spend hours reviewing contracts, researching jurisdictional requirements, and ensuring all representations, covenants, and default provisions align with the transaction structure.
CaseMark automates the entire drafting process by analyzing your loan agreements and contracts, then generating comprehensive, UCC-compliant collateral assignment documents. Our AI ensures all critical provisions—from security interest grants to default remedies—are properly structured and tailored to your specific transaction.
This workflow is applicable across multiple practice areas and use cases
Corporate finance transactions frequently require collateral assignments of contracts to secure debt financing, asset-based lending, and leveraged buyouts.
Collateral assignment of contracts is a fundamental security mechanism in corporate finance deals, making this workflow essential for attorneys structuring secured financing arrangements.
M&A transactions often involve assignment of contracts as collateral for acquisition financing, seller financing, or earn-out arrangements requiring security interests.
Deal attorneys regularly need to draft collateral assignments when buyers use leveraged financing or when sellers require security for deferred purchase price payments.
Private equity and venture debt transactions require collateral assignments of key contracts, intellectual property licenses, and customer agreements to secure investment or debt facilities.
VC and PE attorneys frequently structure secured lending arrangements where portfolio companies assign valuable contracts as collateral for growth capital or bridge financing.
Asset purchase agreements often include seller financing or earn-outs secured by assignment of purchased contracts, customer agreements, or revenue streams.
Attorneys handling asset purchases regularly need to create security interests in assigned contracts when buyers finance acquisitions through seller notes or when sellers retain security interests.
Financial services attorneys draft collateral assignments for regulated lending institutions to perfect security interests in borrower contracts under UCC Article 9 compliance requirements.
Banks and financial institutions must properly document and perfect security interests in contract collateral, making this workflow valuable for regulatory compliance and risk management.
A collateral assignment of contracts is a security instrument where a borrower (assignor) grants a lender (assignee) a security interest in the borrower's rights under specific contracts as collateral for a debt. Unlike an absolute assignment, this transfers rights only as security, allowing the assignor to retain operational control until default. The assignment must comply with UCC Article 9 to create an enforceable security interest.
You need the underlying loan or credit agreement that the assignment secures, plus complete copies of all contracts being assigned as collateral. Optional documents include any prior security agreements, third-party consent letters if required, and corporate resolutions authorizing the assignment. CaseMark analyzes these documents to extract relevant terms and generate a customized assignment.
CaseMark incorporates UCC Article 9 requirements throughout the document, including proper grant language to create an enforceable security interest, provisions addressing proceeds and after-acquired property, and remedies available to secured parties upon default. The system also includes appropriate representations regarding the absence of prior security interests and covenants to maintain the collateral's value.
Yes, CaseMark tailors the assignment to the specific contracts being used as collateral, whether they are service agreements, purchase orders, licensing agreements, or other contract types. The system adjusts the description of assigned rights, payment collection provisions, and performance obligations based on the nature of the underlying contracts and your transaction structure.
The assignment includes detailed default provisions and remedies that activate upon specified events like payment failure or covenant breaches. Upon default, the lender can typically notify contract counterparties, collect payments directly, enforce contracts in their own name, and exercise all UCC Article 9 remedies. CaseMark ensures these provisions align with your loan agreement and provide comprehensive protection.