The Bank Account Control Agreement (BACA) is a critical security document used in German financing transactions where lenders require control over a borrower's bank accounts as collateral. This agreement is commonly used in project finance, acquisition finance, and general corporate lending scenarios where cash flow control is essential for the security package. The document complies with German banking regulations and security interest requirements, establishing the mechanisms for account control while respecting German law requirements for bank account pledges and security arrangements. The BACA details how the account will be operated in normal circumstances and following a trigger event, including specific provisions for instruction rights, permitted withdrawals, and the bank's obligations. It's particularly important in the German market where direct security over bank accounts requires specific formalities and operational arrangements to be effective.
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1. Parties: Identifies the account holder, the bank, and the security agent/beneficiary
2. Background: Explains the context of the agreement, including reference to related financing arrangements
3. Definitions and Interpretation: Defines key terms and establishes interpretation principles
4. Account Control and Security: Establishes the security interest and control rights over the account
5. Operation of the Controlled Account: Details the mechanisms for operating the account, including payment instructions and permitted withdrawals
6. Bank's Rights and Obligations: Specifies the bank's role, including following instructions and maintaining the account
7. Account Holder's Rights and Obligations: Details the account holder's permissions and restrictions regarding the account
8. Security Agent's Rights and Authority: Outlines the security agent's control rights and authority to give instructions
9. Representations and Warranties: Contains standard representations from each party
10. Bank Fees and Expenses: Covers the bank's compensation and expense reimbursement
11. Notices: Specifies how formal communications between parties should be made
12. Term and Termination: Details duration of the agreement and termination circumstances
13. Liability and Indemnification: Addresses liability limitations and indemnification obligations
14. Governing Law and Jurisdiction: Specifies German law as governing law and jurisdiction for disputes
1. Security Agent Succession: Include when security agent transfer provisions are needed for syndicated facilities
2. Multi-Currency Provisions: Include for accounts that can hold multiple currencies
3. Internet Banking Arrangements: Include if online banking access and restrictions need to be addressed
4. Blocking Period: Include if specific blocking periods apply to the account
5. KYC Requirements: Include detailed KYC provisions if required by the bank's policies
6. Data Protection: Include detailed GDPR compliance provisions if personal data processing is extensive
7. Force Majeure: Include specific force majeure provisions if required by bank policy
1. Account Details: Schedule listing the controlled account(s) details and account numbers
2. Authorized Signatories: List of persons authorized to give instructions for each party
3. Form of Notice of Exclusive Control: Template for security agent to assume exclusive control
4. Form of Bank Fee Schedule: Details of bank's fees and charges
5. Operating Procedures: Detailed procedures for account operation and instruction processing
6. Form of Payment Instruction: Template for standard payment instructions
7. Notification Details: Contact details for notices to all parties
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