Borrower’s Rights in Collateral Clause Samples

The "Borrower’s Rights in Collateral" clause defines the extent to which a borrower may use, manage, or otherwise exercise control over assets pledged as collateral for a loan. Typically, this clause outlines whether the borrower can sell, transfer, or otherwise dispose of the collateral during the loan term, and may set conditions or restrictions on such actions. Its core practical function is to balance the lender’s interest in securing the loan with the borrower’s need to utilize the collateral in the ordinary course of business, thereby reducing the risk of unauthorized disposal or depletion of the secured assets.
Borrower’s Rights in Collateral. (a) The parties agree that the grant of a security interest in the Collateral to Secured Party hereunder is intended solely for the purpose of securing the Obligations. Accordingly, prior to the occurrence of an Event of Default and the exercise of rights and remedies afforded Secured Party as a result of such Event of Default, and to the extent not inconsistent with the terms of this Agreement, Borrower will be entitled to exercise rights as the owner of the Collateral and will be entitled to receive and retain, any cash proceeds therefrom and to exercise any other rights appurtenant to the ownership of the Collateral; provided, however, Borrower shall not have the right to sell or transfer the Collateral outside Borrower’s ordinary course of business or, if outside the ordinary course of business, without Secured Party’s prior written consent. Secured Party in its sole discretion, may terminate and revoke the rights of Borrower described in the foregoing sentence upon any Event of Default. Any attempted sale or transfer of the Collateral not in accordance with provisions of this Section 5(a) shall be void and of no force or effect.
View SourceView Similar (3)
Borrower’s Rights in Collateral. Borrower hereby warrants and represents to Secured Party that it currently holds all right, title and interest in and to the Accounts; and that it has not transferred, assigned or granted any interest therein to any other persons or parties. Borrower further warrants and represents that until such time as the Obligations have been extinguished or satisfied in full that it will retain all rights, and interest in and to the Accounts; and shall not transfer, assign or convey any rights and interest in or to the Accounts to any third persons or parties except in the normal course of its retail sale operations.
View Source
Borrower’s Rights in Collateral. 5.1 The parties agree that the grant of a security interest in, and the assignment and pledge of, the Collateral to the Lender hereunder is intended solely for the purpose of securing the Obligations. Accordingly, prior to the occurrence of an Event of Default (as defined below) and the exercise of rights and remedies afforded the Lender as a result of such Event of Default, and to the extent not inconsistent with the terms of this Agreement, each Borrower will be entitled to exercise rights as the owner of its respective Pledged Shares and will be entitled to receive and retain, any cash distributions or allocations (“Distributions”), provided that all such distributions or allocations shall be first applied to the repayment of the outstanding principal and interest of the Loan as provided in the Founder Loan Agreement, and to exercise any other rights appurtenant to the ownership of the Collateral, but not including the right, without the Series A Director’s prior written consent (for and on behalf of the Lender), to sell or transfer the Collateral. The Lender shall not transfer on its books any Pledged Shares that have been sold or otherwise transferred in violation of any provisions of this Agreement or treat as owner of such Pledged Shares or to accord the right to vote or receive any Distributions to any purchaser or other transferee to whom such Pledged Shares shall have been so transferred. The Series A Director, in his or her sole discretion and acting for and on behalf of the Lender, may terminate and revoke the rights of any Borrower described in the foregoing sentence with respect to the Collateral pledged to the Lender upon any Event of Default. Any attempted sale or transfer of the Collateral not otherwise consented to by the Series A Director in writing is void and of no force or effect and the Lender shall not effect such a sale or transfer nor shall it treat any alleged transferee as the holder of the Collateral or any portion of it without the prior written consent of the Series A Director. Without limiting the generality of the foregoing, prior to the occurrence of an Event of Default, each Borrower will have the sole and absolute right to vote or exercise any and all other consensual rights in respect of the Collateral pledged by such Borrower hereunder.
View Source

Related to Borrower’s Rights in Collateral

  • Security Interests in Collateral To secure their Obligations under this Agreement and the other Loan Documents, the Loan Parties shall grant to the Collateral Agent, for its benefit and the ratable benefit of the other Secured Parties, a first-priority security interest in all of the Collateral pursuant to the Security Documents.

  • Rights in Collateral; Priority of Liens Borrower and each other Loan Party own the property granted by it as Collateral under the Collateral Documents, free and clear of any and all Liens in favor of third parties. Upon the proper filing of UCC financing statements, and the taking of the other actions required by the Required Lenders, the Liens granted pursuant to the Collateral Documents will constitute valid and enforceable first, prior and perfected Liens on the Collateral in favor of Agent, for the ratable benefit of Agent and Lenders.

  • Security Interest in Collateral The provisions of this Agreement and the other Loan Documents create legal and valid Liens on all of the Collateral in favor of the Administrative Agent, for the benefit of the Secured Parties, and such Liens constitute perfected and continuing Liens on the Collateral, securing the Secured Obligations, enforceable against the applicable Loan Party and all third parties, and having priority over all other Liens on the Collateral except in the case of (a) Permitted Encumbrances, to the extent any such Permitted Encumbrances would have priority over the Liens in favor of the Administrative Agent pursuant to any applicable law or agreement and (b) Liens perfected only by possession (including possession of any certificate of title) to the extent the Administrative Agent has not obtained or does not maintain possession of such Collateral.

  • Rights to Collateral (a) The Non-Lender Secured Parties shall not have any right whatsoever to do any of the following: (i) exercise any rights or remedies with respect to the Collateral (such term, as used in this Section 8, having the meaning assigned to it in the Credit Agreement) or to direct the Collateral Agent to do the same, including, without limitation, the right to (A) enforce any Liens or sell or otherwise foreclose on any portion of the Collateral, (B) request any action, institute any proceedings, exercise any voting rights, give any instructions, make any election, notify account debtors or make collections with respect to all or any portion of the Collateral or (C) release any Granting Party under this Agreement or release any Collateral from the Liens of any Security Document or consent to or otherwise approve any such release; (ii) demand, accept or obtain any Lien on any Collateral (except for Liens arising under, and subject to the terms of, this Agreement); (iii) vote in any Bankruptcy Case or similar proceeding in respect of Holdings or any of its Subsidiaries (any such proceeding, for purposes of this clause (a), a “Bankruptcy”) with respect to, or take any other actions concerning the Collateral; (iv) receive any proceeds from any sale, transfer or other disposition of any of the Collateral (except in accordance with this Agreement); (v) oppose any sale, transfer or other disposition of the Collateral; (vi) object to any debtor-in-possession financing in any Bankruptcy which is provided by one or more Lenders among others (including on a priming basis under Section 364(d) of the Bankruptcy Code); (vii) object to the use of cash collateral in respect of the Collateral in any Bankruptcy; or (viii) seek, or object to the Lenders or Agents seeking on an equal and ratable basis, any adequate protection or relief from the automatic stay with respect to the Collateral in any Bankruptcy. (b) Each Non-Lender Secured Party, by its acceptance of the benefits of this Agreement and the other Security Documents, agrees that in exercising rights and remedies with respect to the Collateral, the Collateral Agent and the Lenders, with the consent of the Collateral Agent, may enforce the provisions of the Security Documents and exercise remedies thereunder and under any other Loan Documents (or refrain from enforcing rights and exercising remedies), all in such order and in such manner as they may determine in the exercise of their sole business judgment. Such exercise and enforcement shall include, without limitation, the rights to collect, sell, dispose of or otherwise realize upon all or any part of the Collateral, to incur expenses in connection with such collection, sale, disposition or other realization and to exercise all the rights and remedies of a secured lender under the Uniform Commercial Code as in effect from time to time in any applicable jurisdiction. The Non-Lender Secured Parties by their acceptance of the benefits of this Agreement and the other Security Documents hereby agree not to contest or otherwise challenge any such collection, sale, disposition or other realization of or upon all or any of the Collateral. Whether or not a Bankruptcy Case has been commenced, the Non-Lender Secured Parties shall be deemed to have consented to any sale or other disposition of any property, business or assets of Holdings or any of its Subsidiaries and the release of any or all of the Collateral from the Liens of any Security Document in connection therewith. (c) Notwithstanding any provision of this Subsection 8.1, the Non-Lender Secured Parties shall be entitled subject to each applicable Intercreditor Agreement to file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleadings (A) in order to prevent any Person from seeking to foreclose on the Collateral or supersede the Non-Lender Secured Parties’ claim thereto or (B) in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of the Non-Lender Secured Parties. Each Non-Lender Secured Party, by its acceptance of the benefits of this Agreement, agrees to be bound by and to comply with each applicable Intercreditor Agreement and authorizes the Collateral Agent to enter into the Intercreditor Agreements on its behalf. (d) Each Non-Lender Secured Party, by its acceptance of the benefits of this Agreement, agrees that the Collateral Agent and the Lenders may deal with the Collateral, including any exchange, taking or release of Collateral, may change or increase the amount of the Borrower Obligations and/or the Guarantor Obligations, and may release any Granting Party from its Obligations hereunder, all without any liability or obligation (except as may be otherwise expressly provided herein) to the Non-Lender Secured Parties.

  • Remedies; Disposition of the Collateral If any Event of Default shall have occurred and be continuing, then any Collateral repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and any other Collateral whether or not so repossessed by the Collateral Agent, may be sold, assigned, leased or otherwise disposed of under one or more contracts or as an entirety, and without the necessity of gathering at the place of sale the property to be sold, and in general in such manner, at such time or times, at such place or places and on such terms as the Collateral Agent may, in compliance with any mandatory requirements of applicable law, determine to be commercially reasonable. Any of the Collateral may be sold, leased or otherwise disposed of, in the condition in which the same existed when taken by the Collateral Agent or after any overhaul or repair at the expense of the relevant Assignor which the Collateral Agent shall determine to be commercially reasonable. Any such disposition which shall be a private sale or other private proceedings permitted by such requirements shall be made upon not less than 10 days' prior written notice to the relevant Assignor specifying the time at which such disposition is to be made and the intended sale price or other consideration therefor, and shall be subject, for the 10 days after the giving of such notice, to the right of the relevant Assignor or any nominee of such Assignor to acquire the Collateral involved at a price or for such other consideration at least equal to the intended sale price or other consideration so specified. Any such disposition which shall be a public sale permitted by such requirements shall be made upon not less than 10 days' prior written notice to the relevant Assignor specifying the time and place of such sale and, in the absence of applicable requirements of law, shall be by public auction (which may, at the Collateral Agent's option, be subject to reserve), after publication of notice of such auction (where required by applicable law) not less than 10 days prior thereto. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the sale may be so adjourned. To the extent permitted by any such requirement of law, the Collateral Agent may bid for and become the purchaser of the Collateral or any item thereof, offered for sale in accordance with this Section without accountability to the relevant Assignor. If, under mandatory requirements of applicable law, the Collateral Agent shall be required to make disposition of the Collateral within a period of time which does not permit the giving of notice to the relevant Assignor as hereinabove specified, the Collateral Agent need give such Assignor only such notice of disposition as shall be reasonably practicable in view of such mandatory requirements of applicable law. Each Assignor agrees to do or cause to be done all such other acts and things as may be reasonably necessary to make such sale or sales of all or any portion of the Collateral valid and binding and in compliance with any and all applicable laws, regulations, orders, writs, injunctions, decrees or awards of any and all courts, arbitrators or governmental instrumentalities, domestic or foreign, having jurisdiction over any such sale or sales, all at such Assignor's expense.