Third Party Custody Clause Samples
The Third Party Custody clause designates an independent party to hold certain assets, documents, or funds on behalf of the contracting parties. In practice, this means that a neutral third party, such as an escrow agent or a bank, is entrusted with custody of items like payment funds, intellectual property, or sensitive documents until specific conditions outlined in the agreement are met. This arrangement helps ensure that both parties fulfill their obligations before the assets are released, thereby reducing the risk of non-performance and fostering trust between the parties.
Third Party Custody. In the event that any Collateral is in the possession of a third party, B▇▇▇▇▇▇▇ shall join with Lender in notifying such third party of L▇▇▇▇▇’s security interest and obtaining an acknowledgement from such third party that it is holding such Collateral for the benefit of Lender.
Third Party Custody. Upon written request by ▇▇▇▇▇▇ with respect to any Collateral that is in the possession of a third party, ▇▇▇▇▇▇▇▇ shall join with Lender in notifying such third party of ▇▇▇▇▇▇’s security interest and obtaining an acknowledgement from such third party that it is holding such Collateral for the benefit of Lender, which acknowledgment shall be in form and substance satisfactory to Lender, in ▇▇▇▇▇▇’s Permitted Discretion.