2006 New York Code - Assignment Of Proceeds.



 
  Section 5--114. Assignment of proceeds.
    (a) In  this section, "proceeds of a letter of credit" means the cash,
  check, accepted draft, or other item of value  paid  or  delivered  upon
  honor or giving of value by the issuer or any nominated person under the
  letter  of  credit.  The  term  does not include a beneficiary's drawing
  rights or documents presented by the beneficiary.
    (b) A beneficiary may assign its right to part or all of the  proceeds
  of  a letter of credit. The beneficiary may do so before presentation as
  a present assignment of its right to receive  proceeds  contingent  upon
  its compliance with the terms and conditions of the letter of credit.
    (c) An  issuer or nominated person need not recognize an assignment of
  proceeds of a letter of credit until it consents to the assignment.
    (d) An issuer or  nominated  person  has  no  obligation  to  give  or
  withhold its consent to an assignment of proceeds of a letter of credit,
  but  consent  may not be unreasonably withheld if the assignee possesses
  and exhibits the letter of credit and  presentation  of  the  letter  of
  credit is a condition to honor.
    (e) Rights  of  a  transferee  beneficiary  or  nominated  person  are
  independent of the beneficiary's assignment of the proceeds of a  letter
  of credit and are superior to the assignee's right to the proceeds.
    (f) Neither  the rights recognized by this section between an assignee
  and an issuer, transferee  beneficiary,  or  nominated  person  nor  the
  issuer's  or  nominated person's payment of proceeds to an assignee or a
  third person affect the rights between the assignee and any person other
  than the issuer, transferee beneficiary, or nominated person.  The  mode
  of  creating  and  perfecting  a  security  interest  in  or granting an
  assignment of a beneficiary's rights to proceeds is governed by  article
  9  or  other  law.  Against  persons  other  than the issuer, transferee
  beneficiary, or nominated person, the  rights  and  obligations  arising
  upon  the  creation  of  a  security  interest  or other assignment of a
  beneficiary's right to proceeds  and  its  perfection  are  governed  by
  article 9 or other law.

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