Opportunity for Gain Sample Clauses

Opportunity for Gain. Another important factor courts have examined in determining whether a transaction constitutes a secured financing or a sale is whether the assignor has transferred all opportunity for gain with respect to the assets. Where the assignee must account to the assignor for any surplus received from the assignment over the bargained-for amount, courts have held such factor to indicate that the transaction constitutes a secured financing. See In re Evergreen Valley Resort, Inc., 23 B.R. at 661, citing Gold Coast Leasing Co. v. California Carrots, Inc., 93 Cal. App. 3d 274, 279 (1979). For example, the court in In re Carolina Utilities Supply Co., Inc., 118 B.R. To the Persons listed on Schedule I hereto Page 14 [*], 2000 412, 416-17 (Bankr. D.S.C. 1990), noting that the bank purporting to purchase accounts receivable from the company had to account to the company for any surplus collected on each account over 80% of the invoice amount which the bank initially advanced to the company, found that the accounts were security for a loan by the bank to the company. See also, U.C.C. §9-502(2) (“If the security agreement secures an indebtedness, the secured party must account to the debtor for any surplus.”). In the Transaction, the Company has no obligation to remit any Collections on the Receivables back to the Contributor unless and only to the extent that a Receivable constitutes an Ineligible Receivable that is not a Designated Ineligible Receivable and the Contributor has repurchased such Ineligible Receivable as a result of a material breach of a representation or warranty, in which event, any Collections with respect thereto will be remitted by the Collection Agent to the Contributor. Other than as set forth in the preceding sentence, all Collections (including Collections in respect of Designated Ineligible Receivables) will be for the sole benefit of the Company (subject to the rights of the Administrative Agent in respect thereof pursuant to the Loan Agreement). The Contributor is not entitled to any surplus or gain in respect of the Collections (including Collections in respect of Designated Ineligible Receivables). There is no guarantee by the Contributor as to the minimum or maximum “rate of return” to the Company and no mechanism to limit how much of the Collections the Company receives. The Company has no direct payment obligation to the Contributor with respect to the Receivables.