Common use of Guaranty and Grant of Security Interest Clause in Contracts

Guaranty and Grant of Security Interest. (a) As security for the payment and performance of the Secured Obligations, each Grantor hereby pledges, hypothecates, delivers and assigns to the Secured Party, and creates in favor of the Secured Party, a first priority security interest in and to, all of such Grantor’s right, title and interest in and to all the following property, in all its forms, in each case whether now or hereafter existing, whether now owned or hereafter acquired, created or arising, and wherever located (collectively, but without duplication, the “Collateral”): (i) All Equipment; (ii) All Inventory and other Goods; (iii) All Accounts; (iv) All General Intangibles; (v) All Fixtures; (vi) All Documents, Letter-of-Credit Rights, and Chattel Paper; (vii) All Deposit Accounts; (viii) All Instruments and Investment Property; (ix) All Commercial Tort Claims; (x) All Supporting Obligations; (xi) All As-Extracted Collateral; and (xii) All Proceeds of any and all of the foregoing. Notwithstanding the foregoing, nothing herein shall be deemed to constitute an assignment of any asset which, in the event of an assignment, becomes void by operation of applicable Law or the assignment of which is otherwise prohibited by applicable Law (in each case to the extent that such applicable Law is not overridden by Sections 9-406, 9-407 and/or 9-408 of the Uniform Commercial Code or other similar applicable Law); provided, however, that to the extent permitted by applicable Law, this Agreement shall create a valid security interest in such asset and, to the extent permitted by applicable Law, this Agreement shall create a valid security interest in the Proceeds of such asset. (b) For the avoidance of doubt, the Subsidiary Guarantors hereby jointly and severally agree to act as surety for the Borrower’s obligations under the Notes, and irrevocably and unconditionally guaranty to the Secured Party that the Notes shall be paid in full when due and payable, whether at the stated or accelerated maturity thereof or upon any mandatory or voluntary prepayment or otherwise. Notwithstanding the foregoing, the liability of each Subsidiary Guarantor hereunder is limited to an amount equal to (x) the amount that would render this guaranty void, voidable or unenforceable against such Subsidiary Guarantor’s creditors or creditors’ representatives under any applicable fraudulent conveyance, fraudulent transfer or similar act or under Section 544 or 548 of the Bankruptcy Code of 1978, as amended, minus (y) $1.00 (one U.S. Dollar). (c) Secured Party acknowledges that Borrower is seeking to sell, to an unaffiliated third party on arms-length terms, certain assets (the “Sold Assets”) located in the counties set forth on Schedule 2. Secured Party shall, prior to or upon the closing of any sale of Sold Assets to an unaffiliated party, and without requiring any payment on the Notes in connection therewith, release the security interest granted to Secured Party hereby with respect to the Collateral included in the Sold Assets sold by Borrower in such transaction(s). In connection therewith, Secured Party shall file, or authorize the party acquiring such Sold Assets to file, termination statements and/or amendments to financing statements (as appropriate) under the Uniform Commercial Code and take such other action as may be appropriate to evidence the release of such Collateral from the security interest granted hereby. For the avoidance of doubt, no such sale shall require or result in the release of any security interest of the Secured Party of Collateral not included in such sale, including any Sold Assets not included in such sale.

Appears in 1 contract

Sources: Security Agreement (Universal Property Development & Acquisition Corp)

Guaranty and Grant of Security Interest. (a) As security for the payment and performance of the Secured Obligations, each Grantor hereby pledges, hypothecates, delivers and assigns to the Secured Party, and creates in favor of the Secured Party, a first priority security interest in and to, all of such Grantor’s right, title and interest in and to all the following property, in all its forms, in each case whether now or hereafter existing, whether now owned or hereafter acquired, created or arising, and wherever located (collectively, but without duplication, the “Collateral”): (i) All Equipment; (ii) All Inventory and other Goods; (iii) All Accounts; (iv) All General Intangibles; ; (v) All Fixtures; (vi) All Documents, Letter-of-Credit Rights, and Chattel Paper; (vii) All Deposit Accounts; (viii) All Instruments and Investment Property; (ix) All Commercial Tort Claims; ; (x) All Supporting Obligations; ; (xi) All As-Extracted Collateral; and (xii) All Proceeds of any and all of the foregoing. Notwithstanding the foregoing, nothing herein shall be deemed to constitute an assignment of any asset which, in the event of an assignment, becomes void by operation of applicable Law or the assignment of which is otherwise prohibited by applicable Law (in each case to the extent that such applicable Law is not overridden by Sections 9-406, 9-407 and/or 9-408 of the Uniform Commercial Code or other similar applicable Law); provided, however, that to the extent permitted by applicable Law, this Agreement shall create a valid security interest in such asset and, to the extent permitted by applicable Law, this Agreement shall create a valid security interest in the Proceeds of such asset. (b) For the avoidance of doubt, the Subsidiary Guarantors hereby jointly and severally agree to act as surety for the Borrower’s obligations under the Notes, and irrevocably and unconditionally guaranty to the Secured Party that the Notes shall be paid in full when due and payable, whether at the stated or accelerated maturity thereof or upon any mandatory or voluntary prepayment or otherwise. Notwithstanding the foregoing, the liability of each Subsidiary Guarantor hereunder is limited to an amount equal to (x) the amount that would render this guaranty void, voidable or unenforceable against such Subsidiary Guarantor’s creditors or creditors’ representatives under any applicable fraudulent conveyance, fraudulent transfer or similar act or under Section 544 or 548 of the Bankruptcy Code of 1978, as amended, minus (y) $1.00 (one U.S. Dollar). (c) Secured Party acknowledges that Borrower is seeking to sell, to an unaffiliated third party on arms-length terms, certain assets (the “Sold Assets”) located in the counties set forth on Schedule 2. Secured Party shall, prior to or upon the closing of any sale of Sold Assets to an unaffiliated party, and without requiring any payment on the Notes in connection therewith, release the security interest granted to Secured Party hereby with respect to the Collateral included in the Sold Assets sold by Borrower in such transaction(s). In connection therewith, Secured Party shall file, or authorize the party acquiring such Sold Assets to file, termination statements and/or amendments to financing statements (as appropriate) under the Uniform Commercial Code and take such other action as may be appropriate to evidence the release of such Collateral from the security interest granted hereby. For the avoidance of doubt, no such sale shall require or result in the release of any security interest of the Secured Party of Collateral not included in such sale, including any Sold Assets not included in such sale.

Appears in 1 contract

Sources: Security Agreement (Heartland Oil & Gas Corp)