Backup Security Interest Sample Clauses
A Backup Security Interest clause establishes a secondary or additional security interest in collateral to protect a lender or creditor if the primary security interest becomes invalid or unenforceable. In practice, this clause ensures that the lender retains a claim on the borrower's assets even if the original security arrangement fails due to legal or technical reasons. For example, if a court finds the primary security interest defective, the backup interest automatically takes effect to maintain the lender's secured position. The core function of this clause is to provide an extra layer of protection for creditors, minimizing the risk of unsecured exposure and ensuring the enforceability of their rights to collateral.
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Backup Security Interest. (a) It is the express intent of the Seller and the Purchaser that each Conveyance of Transferred Assets by the Seller to the Purchaser pursuant to this Agreement be construed as an absolute sale of such Transferred Assets by the Seller to the Purchaser providing Purchaser with the full risks and benefits of ownership of the Transferred Assets. Further, it is not the intention of the Seller and the Purchaser that any Conveyance be deemed a grant of a security interest in the Transferred Assets by the Seller to the Purchaser to secure a debt or other obligation of the Seller. However, in the event that, notwithstanding the intent of the parties expressed herein, the Conveyances hereunder shall be characterized as loans and not as sales, then (i) this Agreement also shall be deemed to be, and hereby is, a security agreement within the meaning of the UCC and other applicable law, (ii) the Conveyances by the Seller provided for in this Agreement shall be deemed to be, and the Seller hereby grants to the Purchaser, a security interest in, to and under all of the Seller’s right, title and interest in, to and under, whether now owned or hereafter acquired, such Transferred Assets and all proceeds of the foregoing and (iii) the Purchaser and the Seller each represents and warrants as to itself that each remittance (if any) from the Purchaser to the Seller with respect to the Conveyances has been (x) in payment of an obligation incurred by the Purchaser in the ordinary course of business or financial affairs of each of the Seller and the Purchaser and (y) made in the ordinary course of business or financial affairs of each of the Seller and the Purchaser. The Purchaser and its assignees shall have, with respect to such Transferred Assets and other related rights, in addition to all the other rights and remedies available to the Purchaser and its assignees hereunder and under the Underlying Instruments, all the rights and remedies of a secured party under any applicable UCC.
(b) The Seller and the Purchaser shall, to the extent consistent with this Agreement, take such actions as may be necessary to ensure that, if this Agreement were deemed to create a security interest in the Transferred Assets to secure a debt or other obligation, such security interest would be deemed to be a perfected security interest in favor of the Purchaser under applicable law and will be maintained as such throughout the term of this Agreement.
(c) In connection with the Initial Conveyance...
Backup Security Interest. It is the intention of the parties hereto that the conveyance of the A Participation contemplated by this Agreement shall constitute a conveyance, transfer and assignment of an undivided beneficial interest in the Loans (and all Loan Documents related thereto) and the proceeds thereof from B Participant to A Participant and that such beneficial interest in the Loans of B Participant shall not be part of A Participant's estate in the event of the filing of a bankruptcy petition by or against A Participant under any bankruptcy law. In the event that, notwithstanding the intent of the parties hereto, the conveyance, transfer and assignment contemplated hereby is not recognized as such, this Agreement shall constitute a security agreement under applicable law, and, in furtherance thereof B Participant shall be deemed to have granted, and does hereby grant, to A Participant a security interest in the Loans for the benefit of A Participant and its assignees as security for B Participant's obligations hereunder, which pledge will be perfected by the possession of the promissory notes and participation certificates with respect to the Loans on behalf of A Participant by a financial institution agreed to by the Lenders.
Backup Security Interest. In the event that, notwithstanding the intent of the parties, the Conveyances hereunder shall be characterized as loans and not as sales and/or contributions, then:
(i) this Agreement creates a valid and continuing lien and security interest on the Seller’s right, title and interest in and to the Transferred Assets in favor of the Purchaser and the Trustee, as assignee, for the benefit of the Secured Parties, which security interest is validly perfected under Article 9 of the UCC (to the extent such security interest may be perfected by filing a UCC financing statement under such article), and is enforceable as such against creditors of and purchasers from the Seller;
(ii) the Transferred Assets are comprised of interests in instruments, security entitlements, general intangibles, accounts, certificated securities, uncertificated securities, securities accounts, deposit accounts, supporting obligations, insurance, investment property and proceeds (each as defined in the UCC) and such other categories of collateral under the UCC as to which the Seller has complied with its obligations as set forth herein;
(iii) the Seller has received all consents and approvals required by the terms of any Loan Asset to the sale and granting of a security interest in the Loan Assets hereunder to the Purchaser and the Trustee, as assignee on behalf of the Secured Parties; the Seller has taken all necessary steps to file or authorize the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in that portion of the Transferred Assets in which a security interest may be perfected by filing pursuant to Article 9 of the UCC as in effect in Maryland;
(iv) none of the underlying promissory notes that constitute or evidence the Loan Assets has any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Purchaser and the Trustee, as assignee on behalf of the Secured Parties; and
(v) with respect to a Transferred Asset that constitutes a “certificated security,” such certificated security has been delivered to the Trustee, or will be delivered to the Trustee, and, if in registered form, has been specially Indorsed to the Trustee or in blank by an effective Indorsement or has been registered in the name of the Trustee upon original issue or registration of transfer by the Seller of such certificated security, ...
Backup Security Interest. (a) In the event that, for any reason, any Transaction is construed by any court as a secured loan rather than a purchase and sale, the parties intend that Seller shall have granted to Buyer a security interest in all of the Purchased Securities, which security interest is not subject to any prior security interests created under the Uniform Commercial Code in the appropriate jurisdiction.
(b) Seller shall pay all fees and expense associated with perfecting and maintaining such security interest including, without limitation, the cost of filing financing statements and continuation statements under the Uniform Commercial Code and the recording of any assignment of Mortgage in the appropriate jurisdiction as and when required thereunder or specified by Buyer.
(c) In the event that Buyer elects to engage in repurchase transactions with the Purchased Securities or otherwise elects to pledge or hypothecate the Purchased Securities, Seller shall, at the request of Buyer and at the expense of Seller, do and perform such acts and things necessary to enable the Custodian to do and perform such further acts and things and to execute and deliver to Buyer and its counterparty such additional documents, acknowledgments, powers and instruments as are reasonably required by Buyer in connection with such transaction and such counterparty, it being understood and agreed that Seller will retain all servicing rights in respect of any Purchased Securities so transferred.
Backup Security Interest. In the event that, notwithstanding the intent of the parties, the Conveyances hereunder shall be characterized as loans and not as sales and/or participations, then:
(i) this Agreement creates a valid and continuing lien on the Seller’s right, title and interest in and to the Transferred Assets in favor of the Purchaser, which security interest is validly perfected under Article 9 of the UCC (to the extent such security interest may be perfected by filing a UCC financing statement under such article), and is enforceable as such against creditors of and purchasers from the Seller;
(ii) the Transferred Assets are comprised of “instruments”, “security entitlements”, “general intangibles”, “certificated securities”, “uncertificated securities”, “securities accounts”, “investment property” and “proceeds” and such other categories of collateral under the applicable UCC as to which the Seller has complied with its obligations as set forth herein;