What is a collateral account control agreement?

An Account Control Agreement contractually obligates the securities intermediary to comply with the terms of the parties' security arrangement, while also providing the creditor with the requisite control over the collateral needed to perfect its security interest under state law.

Agreement General Form With Collateral In Fulton

Category:

Contracts - Factoring

State:

Multi-State

County:

Fulton

Control #:

US-00037DR

Format:

Instant download

Description

The Agreement General Form with Collateral in Fulton is a comprehensive document that facilitates the sale of accounts receivable between a seller and a factor. This agreement enables sellers to secure funds against their receivables, which are critical for maintaining business cash flow. Key features of the form include provisions for the assignment of accounts receivable, terms for sales and delivery of merchandise, and clear stipulations on credit approval and assumption of credit risks. The document emphasizes the need for proper notification to customers regarding the assigned accounts and outlines the responsibilities of both parties in maintaining records and providing financial statements. Filling and editing instructions highlight the importance of completing all sections including business details and specific financial terms, while ensuring compliance with state laws. Attorneys, partners, owners, associates, paralegals, and legal assistants can use this form to structure financing arrangements, manage credit risk, and facilitate smoother transactions in business operations. By using this agreement, parties can clearly define their rights and obligations, reducing the risk of disputes and fostering a more reliable funding source.

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FAQ

Examples of collateral documents are a security agreement, guarantee and collateral agreement, pledge agreement, deposit account control agreement, securities account control agreement, mortgage, and UCC-1s.

Unlike a payoff letter that terminates all security interests in connection with the repayment and satisfaction of obligations under a credit facility, this collateral release letter removes collateral support, but leaves a credit facility intact as an unsecured facility.

A collateral contract is a contract to enter into an future contract. Part of the consideration for the collateral contract is the promise to enter into the second contract. This is similar to a conditional contract whereby the consideration for one party is conditioned on the other party doing something.

These agreements allow the secured party to perfect a security interest in collateral posted by the pledgor while ensuring that, in the event of the bankruptcy or insolvency of the secured party, such collateral will not become a part of the secured party's estate and will, to the extent owed to the pledgor, be ...

Suppose you agree to rent an apartment. The lease agreement you sign with the landlord is the main contract. However, your landlord promises to fix the toilet drainage. Therefore, this is the collateral contract.

An Account Control Agreement contractually obligates the securities intermediary to comply with the terms of the parties' security arrangement, while also providing the creditor with the requisite control over the collateral needed to perfect its security interest under state law.

Collateral Account: An account at a Reserve Bank (a) used to hold collateral or (b) in which is recorded the receipt of an advice of custody evidencing that collateral is held by or for the pledgor subject to the security interest of the pledgee.

Definition: The term “Collateral” as used herein means the securities and obligations, any addition thereto or substitution therefor, all interest, dividends, distributions and sums distributed or payable therefrom, all other rights and privileges incident to such securities, and all proceeds and profits of such ...