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The Blocked Account Control Agreement (BACA) is a crucial document in secured lending transactions under Canadian law, used when a lender requires control over a borrower's deposit accounts as collateral security. This agreement is typically implemented alongside credit facilities or security arrangements and is essential for perfecting a security interest in deposit accounts under Canadian personal property security legislation. The BACA establishes the operational framework for account control, defining how and when the secured party can issue instructions regarding the account, the bank's obligations to comply with such instructions, and the account holder's rights and restrictions regarding account access. The agreement is particularly important in project finance, asset-based lending, and other secured financing transactions where cash control is critical for the lender's security package.

1. Parties: Identifies the three main parties: Depositary Bank, Account Holder, and Secured Party

2. Background: Explains the context of the agreement, including reference to any underlying security agreement and the existence of the relevant account(s)

3. Definitions: Defines key terms including 'Blocked Account', 'Control', 'Instructions', 'Security Interest', and other relevant terms

4. Account Control: Establishes the secured party's control over the account and the nature of that control

5. Blocked Account: Details regarding the specific account(s) subject to the agreement and their designation as blocked accounts

6. Operating Procedures: Procedures for giving instructions, processing withdrawals, and handling communications

7. Security Interest and Rights: Confirms the security interest and rights of the secured party over the account

8. Bank's Rights and Responsibilities: Sets out the bank's obligations, including compliance with instructions and maintaining the account

9. Fees and Expenses: Details of fees payable to the bank and responsibility for expenses

10. Representations and Warranties: Standard representations and warranties from each party

11. Indemnification: Provisions for indemnifying the bank and other parties as agreed

12. Term and Termination: Duration of the agreement and circumstances for termination

13. Miscellaneous: Standard boilerplate provisions including notices, amendments, governing law, etc.