Article 46 - Disposal rights of Secured Party
(1) Subject to Article 48, in the event of
Default under a Security Agreement, a Secured Party may dispose of the Collateral:
(A) in its existing condition;
(B) after repair, processing or preparation for disposition;
(C) as a whole or in commercial units or parts;
(D) forthwith or after a period of delay;
(E) by public sale, including public auction or competitive tender;
(F) by private sale;
(G) by purchase in accordance with paragraph (2); or
(G) insofar as permitted by the
(i) by lease, licence or other disposition;
(ii) on terms as to immediate or deferred payment;
provided in all cases that the method, manner, time, place and other terms of disposition and any repair, processing or preparation of the
Collateral are commercially reasonable.
Secured Party may purchase Collateral:
(A) at a public sale, including public auction or competitive tender; or
(B) if the
Collateral is of a kind that is customarily sold on a recognised market or the subject of widely distributed market price quotations, by private sale at the market price.
(3) If a
Secured Party disposes of Collateral to a purchaser who acquires the interest for value and in good faith and who takes possession of it, the purchaser acquires the Collateral free of:
(A) the interest of the
(B) an interest subordinate to that of the
Security Interest and any subordinate Security Interest to the extent it relates to that Collateral,
whether or not the requirements of this Article have been complied with by the
Secured Party, and all obligations secured by the Security Interest and any Security Interest and any subordinate Security Interest to the extent that it relates to that Collateral are deemed to be performed for the purposes of the Companies Regulations.
(A) who is liable to a
Secured Party pursuant to a guarantee, endorsement, covenant, repurchase agreement or the like; and
(B) who receives a transfer of
Collateral from the Secured Party or who is subrogated to the rights of the Secured Party,
has thereafter the rights and duties of the
Secured Party, and the transfer of Collateral is not a disposition of the Collateral.
(5) Any proceeds of disposition must be dealt with in accordance with Article 49.
(6) Notwithstanding any other provision of this Part, where the
Collateral is a licence, the Collateral may be disposed of only in accordance with the terms and conditions under which the licence was granted or which otherwise pertain to it.