collateral assignment of license agreement

§ 9:12. Collateral assignment of license agreement | Secondary Sources | Westlaw

§ 9:12. Collateral assignment of license agreement

Techlic § 9:12 multimedia and technology licensing agreements assignment agreements  (approx. 4 pages).

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Collateral Assignment of License Agreement - RedEnvelope Inc. and Wells Fargo Retail Finance LLC

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Collateral Assignment Of Lease

Jump to section, what is a collateral assignment of lease.

A collateral assignment of lease is a legal contract that transfers the rights to rental payments from the asset's owner to a lender to secure funding. In this contract, the lease’s rentals are like a loan from the funder to the lessor and the lease acts as security. Collateral assignment of lease agreements are often used in commercial real estate. In addition to the actual contract, the agreement is often accompanied by a promissory note and a security agreement. Throughout the duration of a collateral assignment of lease agreement, the lessor retains ownership of the leased asset.

Common Sections in Collateral Assignment Of Leases

Below is a list of common sections included in Collateral Assignment Of Leases. These sections are linked to the below sample agreement for you to explore.

Collateral Assignment Of Lease Sample

Reference : Security Exchange Commission - Edgar Database, EX-10.4 5 dex104.htm COLLATERAL ASSIGNMENT OF LEASES AND RENTS FOR THE LA CIENEGA-LA PROPERTY , Viewed November 9, 2021, View Source on SEC .

Who Helps With Collateral Assignment Of Leases?

Lawyers with backgrounds working on collateral assignment of leases work with clients to help. Do you need help with a collateral assignment of lease?

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Meet some of our Collateral Assignment Of Lease Lawyers

As a corporate lawyer, I have dealt with international transactions, complex litigation and arbitration, regulatory compliance, and multijurisdictional tax planning. In March 2021, I started my firm and shifted my professional focus to working with start-ups, small businesses, entrepreneurs, and families. I help my clients structure and run their businesses and take care of their assets, including intellectual property issues and estate planning for their families. I try to bring big law quality and small firm personal attention to every client.

I am a solo-practitioner with a practice mostly consisting of serving as a fractional general counsel to growth stage companies. With a practical business background, I aim to bring real-world, economically driven solutions to my client's legal problems and pride myself on efficient yet effective work.

Attorney that has worked in both litigation and transactional fields. Motivated and personable professional. Speaks fluent Spanish and very basic Portuguese.

Seven years experience reviewing and drafting corporate and transactional documents, including NDAs, LLC operating agreements, MSAs, employment agreements, etc.

Brittany S.

I am licensed in New York and New Jersey. I graduated with my J.D. from Touro University Law Center, Summa Cum Laude, in 2021. In 2018, I graduated from SUNY Farmingdale with a B.S. in Sport Management and a minor in Business Management. I have experience in real estate law and insurance defense, including employment law. Please note, I do not carry malpractice insurance.

Josh is a founding partner and the director of Art and Business Law for Twig, Trade, & Tribunal PLLC a local Fort Lauderdale law firm. His practice focuses on Art and Business law including art transactions, legal strategy, art leasing, due diligence, contract drafting, contract negotiations as well as other facets of Art Law including consulting for all market participants. He also advises clients regarding issues for Non-Fungible Tokens (NFTs) again focusing on contract drafting, strategic guidance, and other factors as it relates to art produced as NFTs having given numerous presentations on the subject.

If you're looking for an attorney who can help your business succeed, look no further! With my experience in the legal field, I can provide you with the legal advice you need with entity formation, contract drafting, business operations, and more, And because I'm committed to providing high quality service, you can be sure that your needs will always be met. Contact me today to learn more about how I can help your business thrive!

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• Life Insurance

What Is Collateral Assignment (of a Life Insurance Policy)?

Meredith Mangan is a senior editor for The Balance, focusing on insurance product reviews. She brings to the job 15 years of experience in finance, media, and financial markets. Prior to her editing career, Meredith was a licensed financial advisor and a licensed insurance agent in accident and health, variable, and life contracts. Meredith also spent five years as the managing editor for Money Crashers.

Definition and Examples of Collateral Assignment

How collateral assignment works, alternatives to collateral assignment.

Kilito Chan / Getty Images

If you assign your life insurance contract as collateral for a loan, you give the lender the right to collect from the policy’s cash value or death benefit in two circumstances. One is if you stop making payments; the other is if you die before the loan is repaid. Securing a loan with life insurance reduces the lender’s risk, which improves your chances of qualifying for the loan.

Before moving forward with a collateral assignment, learn how the process works, how it impacts your policy, and possible alternatives.

Collateral assignment is the practice of using a life insurance policy as collateral for a loan . Collateral is any asset that your lender can take if you default on the loan.

For example, you might apply for a $25,000 loan to start a business. But your lender is unwilling to approve the loan without sufficient collateral. If you have a permanent life insurance policy with a cash value of $40,000 and a death benefit of $300,000, you could use that life insurance policy to collateralize the loan. Via collateral assignment of your policy, you authorize the insurance company to give the lender the amount you owe if you’re unable to keep up with payments (or if you die before repaying the loan).

Lenders have two ways to collect under a collateral assignment arrangement:

• If you die, the lender gets a portion of the death benefit—up to your remaining loan balance.
• With permanent insurance policies, the lender can surrender your life insurance policy in order to access the cash value if you stop making payments.

Lenders are only entitled to the amount you owe, and are not generally named as beneficiaries on the policy. If your cash value or the death benefit exceeds your outstanding loan balance, the remaining money belongs to you or your beneficiaries.

Whenever lenders approve a loan, they can’t be certain that you’ll repay. Your credit history is an indicator, but sometimes lenders want additional security. Plus, surprises happen, and even those with the strongest credit profiles can die unexpectedly.

Assigning a life insurance policy as collateral gives lenders yet another way to secure their interests and can make approval easier for borrowers.

Types of Life Insurance Collateral

Life insurance falls into two broad categories: permanent insurance and term insurance . You can use both types of insurance for a collateral assignment, but lenders may prefer that you use permanent insurance.

• Permanent insurance : Permanent insurance, such as universal and whole life insurance, is lifelong insurance coverage that contains a cash value. If you default on the loan, lenders can surrender your policy and use that cash value to pay down the balance. If you die, the lender has a right to the death benefit, up to the amount you still owe.
• Term insurance : Term insurance provides a death benefit, but coverage is limited to a certain number of years (20 or 30, for example). Since there’s no cash value in these policies, they only protect your lender if you die before the debt is repaid. The duration of a term policy used as collateral needs to be at least as long as your loan term.

A Note on Annuities

You may also be able to use an annuity as collateral for a bank loan. The process is similar to using a life insurance policy, but there is one key difference to be aware of. Any amount assigned as collateral in an annuity is treated as a distribution for tax purposes. In other words, the amount assigned will be taxed as income up to the amount of any gain in the contract, and may be subject to an additional 10% tax if you’re under 59 ½.

A collateral assignment is similar to a lien on your home . Somebody else has a financial interest in your property, but you keep ownership of it.

The Process

To use life insurance as collateral, the lender must be willing to accept a collateral assignment. When that’s the case, the policy owner, or “assignor,” submits a form to the insurance company to establish the arrangement. That form includes information about the lender, or “assignee,” and details about the lender’s and borrower’s rights.

Policy owners generally have control over policies. They may cancel or surrender coverage, change beneficiaries, or assign the contract as collateral. But if the policy has an irrevocable beneficiary, that beneficiary will need to approve any collateral assignment.

State laws typically require you to notify the insurer that you intend to pledge your insurance policy as collateral, and you must do so in writing. In practice, most insurers have specific forms that detail the terms of your assignment.

Some lenders might require you to get a new policy to secure a loan, but others allow you to add a collateral assignment to an existing policy. After submitting your form, it can take 24 to 48 hours for the assignment to go into effect.

Lenders Get Paid First

If you die and the policy pays a death benefit , the lender receives the amount you owe first. Your beneficiaries get any remaining funds once the lender is paid. In other words, your lender takes priority over your beneficiaries when you use this strategy. Be sure to consider the impact on your beneficiaries before you complete a collateral assignment.

After you repay your loan, your lender does not have any right to your life insurance policy, and you can request that the lender release the assignment. Your life insurance company should have a form for that. However, if a lender pays premiums to keep your policy in force, the lender may add those premium payments (plus interest) to your total debt—and collect that extra money.

There may be several other ways for you to get approved for a loan—with or without life insurance:

• Surrender a policy : If you have a cash value life insurance policy that you no longer need, you could potentially surrender the policy and use the cash value. Doing so might prevent the need to borrow, or you might borrow substantially less. However, surrendering a policy ends your coverage, meaning your beneficiaries will not get a death benefit. Also, you’ll likely owe taxes on any gains.
• Borrow from your policy : You may be able to borrow against the cash value in your permanent life insurance policy to get the funds you need. This approach could eliminate the need to work with a traditional lender, and creditworthiness would not be an issue. But borrowing can be risky, as any unpaid loan balance reduces the amount your beneficiaries receive. Plus, over time, deductions for the cost of insurance and compounding loan interest may negate your cash value and the policy could lapse, so it’s critical to monitor.
• Consider other solutions : You may have other options unrelated to a life insurance policy. For example, you could use the equity in your home as collateral for a loan, but you could lose your home in foreclosure if you can’t make the payments. A co-signer could also help you qualify, although the co-signer takes a significant risk by guaranteeing your loan.

Key Takeaways

• Life insurance can help you get approved for a loan when you use a collateral assignment.
• If you die, your lender receives the amount you owe, and your beneficiaries get any remaining death benefit.
• With permanent insurance, your lender can cash out your policy to pay down your loan balance.
• An annuity can be used as collateral for a loan but may not be a good idea because of tax consequences.
• Other strategies can help you get approved without putting your life insurance coverage at risk.

NYSBA. " Life Insurance and Annuity Contracts Within and Without Tax Qualified Retirement Plans and Life Insurance Trusts ." Accessed April 12, 2021.

IRS. " Publication 575 (2020), Pension and Annuity Income ." Accessed April 12, 2021.

Practical Law. " Security Interests: Life Insurance Policies ." Accessed April 12, 2021.

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Best Practices: Review of the Most Commonly Negotiated Points in Landlord Subordination Agreements

• October 2, 2019
• Katherine D. Tohanczyn

Many small businesses that seek financing under the SBA 7(a) Loan Program operate from buildings that are leased from a third-party landlord, which can take the form of stand-alone buildings, shopping centers or commercial office parks. These loans are generally underwritten on a cash-flow basis and the primary (or oftentimes the only) collateral is the tangible, business personal property (e.g., equipment, furniture, and inventory) of the borrower located at the leased property.

Whenever a SBA loan includes the borrower’s tangible personal property as collateral, the SBA requires lenders to obtain a lien subordination agreement prior to closing from landlords and sub-landlords, as applicable, giving the lender, at a minimum, in addition to lien subordination provisions: (i) notice of the borrower’s default under the lease, (ii) an opportunity to cure the default, and (iii) access to the leased premises in order to remove collateral. Further, “[w]hen a substantial portion of the loan proceeds are to be used for leasehold improvements or [ii] a substantial portion of the collateral consists of leasehold improvements, fixtures, machinery, or equipment that is attached to leased real estate,” the SBA also requires lenders to obtain a collateral assignment of the lease.

Ideally, lenders should provide the borrower and landlord with a copy of the lender’s form landlord subordination agreement early on in the closing process to provide adequate time for negotiations prior to closing. Commonly negotiated provisions include (i) notice, (ii) time of lender’s possession, (iii) payment of rent, and (iv) assignment of lease.

Most SBA landlord subordination forms require landlord to provide notice to the lender of the borrower’s default under the lease. This notice is important as borrowers often default under the lease prior to defaulting under the subject SBA loan. While the lender’s loan documents may provide that a lease default constitutes a default under the loan, that does not protect the lender if it does not know of the lease default. As such, the landlord subordination agreement should provide that the landlord may not terminate the lease or remove, sell or otherwise dispose of the borrower’s personal property without first providing the lender notice of the borrower’s default and an opportunity to cure or exercise lender’s rights under the landlord subordination agreement.

Time of Possession

Another frequently negotiated section of any landlord subordination agreement is lender’s right to access and occupy the premises in order to inspect and/or remove collateral.  Lenders generally request 60-90 days to enter and remove the collateral but, in some cases, landlords want the property removed in as little as five days. Lenders should carefully consider the minimum amount of time needed based on the location of the property and type of property to be removed.

While a lender is occupying the property, it is usually requested that the lender pay rent to the landlord. However, it is important for lenders to review the language used by the landlord in reference to the amount of rent owed. In some instances, landlords will request that the lender pay rent due and owing under the lease, which appears reasonable on its face. However, a review of the lease may reveal various types and amount of rent. Additionally, lenders should ensure that they are only obligated to pay rent for the time that the lender is actually in possession of the premises.  The lender should ensure it is agreeable to what rent is being paid and limit, if necessary.

Collateral Assignment of Lease

A collateral assignment of lease provision allows the lender to collaterally assign the lease over to a new borrower who is willing to assume the loan and business operation of an original borrower. Landlords are generally hesitant to agree to allow the lender to choose a new tenant. A landlord may be agreeable to allowing an assignment with the landlord’s prior written approval, which approval is generally subject to a review of the creditworthiness of the new tenant. Ultimately, the collateral assignment means that the lender is assisting the landlord with finding a new tenant to rent the property, which is to the benefit of both the landlord and the lender, assuming that the new tenant also assumes part or all of the loan.

Although landlord subordination agreements are generally one to two pages documents, these documents can be challenging to finalize and often result in lengthy negotiations. It is important that lenders are familiar with the terms of the landlord subordination agreement and understand both the lender’s internal policies and SBA requirements when negotiating with landlords.

For more information on negotiating landlord waivers, please contact the attorneys at Starfield & Smith, P.C. at 215.542.7070 or email us at [email protected].

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It looks like Graceland won't be auctioned off. But how did the possibility ever occur?

Amid the ongoing foreclosure debacle of the Graceland estate , Shelby County Register of Deeds said that they do not have a deed of trust on file for the property.

A representative from the Shelby County Register of Deeds said that this was extremely uncommon and that a typical document filed during foreclosure proceedings like an assignment of substitute trustee or substitute trustee's deed were not on file in the office either.

Wednesday morning, a Memphis judge ruled that a  foreclosure auction of Elvis Presley’s iconic Graceland estate  cannot proceed. Chancellor JoeDae Jenkins issued the ruling in Shelby County Chancery Court in Memphis. Representatives from the company behind the sale did not appear in court.

Shortly after the hearing, The Daily Memphian reported that "someone claiming to represent the company," said in an email statement Naussany Investments and Private Lending would be dropping their case.

However, the Shelby County Chancery Clerk's office confirmed it has not received any correspondence from Naussany Investments since the court proceeding ended Wednesday.

Why was a foreclosure sale possible for Graceland?

Public notice for  the foreclosure sale of the property was posted earlier this month . The notice alleged that Promenade Trust, which controls the Graceland estate at 3734 Elvis Presley Blvd., owed $3.8 million to Naussany Investments and Private Lending after failing to repay a loan taken out by Lisa Marie Presley on May 16, 2018. Naussany says Graceland was used as collateral on the loan.

A foreclosure is the forced sale of a property due to non-payment of a loan. The lender will sell the property to recover the loss of funds due to the owner not paying the balance of a loan.

Tennessee is a "deed of trust state," meaning that in the event of a default on a loan, the lender is required to publicly notice a public sale of the property. This non-judicial sale of a property can be done without going through the courts.

"Tennessee specifically does have a very quick ability for non-judicial foreclosure sale," John D Smith, a real estate attorney in Memphis said.

In Tennessee, the lender is required by state law to issue a notice advertising a public sale for three consecutive weeks in a newspaper of local circulation. Naussany Investments and Private Lending LLC advertised the notice of foreclosure sale in The Commercial Appeal for three consecutive weeks beginning on May 5.

"It used to be some time ago that there was a requirement that you had to give an actual notice of default to the borrower and that the publication could not start until 60 days had passed from that initial notice of default," Smith said.

Attorneys: Potential Graceland foreclosure was unusual

Darrell Castle, another attorney who specializes in foreclosures in Memphis, said that these circumstances are not common.

"I'm not sure I have seen it before. OK, of course, I've only been doing this for 40 years," Castle said. "How do you foreclose without it, without a deed (of trust)? I don't get that one."

Smith also said this is uncommon, and it complicates the foreclosure process.

According to Rocket Mortgage , a deed of trust is a documented agreement between a lender and a home buyer at the closing of a property. A deed of trust is similar to a mortgage but involves a third party that uses the home as collateral for a loan.

The third party holds the estate's legal title, in the event that the purchaser cannot pay the loan the third party would then hold the rights to the property.

In the case of the Graceland estate, there is no deed of trust on file for the property. Smith said in the case of the now defunct foreclosure sale of Graceland, Tennessee is a "race-notice state," which means that a deed of trust must be of record in order for it to be enforceable.

"If it's true, that (the deed of trust) is not there, I think that that would give a strong case for Elvis's heirs or granddaughter to make the case that this is a fraudulent transaction," Smith said.

Memphis-based law firm Morton and Germany is representing Keough and Promenade Trust. During Wednesday's hearing, attorney Jeff Germany argued that without any opposition present, the court should adhere to the facts presented before it. Germany discussed the alleged falsified deed of trust attached to the lawsuit.

In the lawsuit, the defense claims a stamp from notary Kimberly Philbrick, whose notary stamp appeared to be listed on the deed of trust, was forged. Germany said Philbrick has attested she did not notarize any such document, nor has she met ever Lisa Marie Presley.

Brooke Muckerman covers Shelby County Government for The Commercial Appeal. She can be reached at (901) 484-6225, [email protected] and followed on X, formerly known as Twitter  @BrookeMuckerman.