As used in this chapter, unless the context otherwise requires: (1) "Active participation in the management" or "participation in the management" or "participate in the management" means actual participation in the management or operational affairs by the holder of the security interest and does not include the mere capacity, or ability to influence, or the unexercised right to control a site, vessel or facility operations. (A) A holder of a security interest is considered to be an active participant in the management, while the borrower is still in possession, only if the holder either: (i) Exercises decision-making control over the borrower's environmental compliance, such that the holder has undertaken responsibility for the borrower's disposal or hazardous substance handling practices; or (ii) Exercises control at a level comparable to that of a manager of the borrower's enterprise, such that the holder has assumed or manifested responsibility for the overall management of the enterprise encompassing day-to-day decision making of the enterprise with respect to: (a) Environmental compliance; or (b) All, or substantially all, of the operational (as opposed to financial or administrative) aspects of the enterprise other than environmental compliance. Operational aspects of the enterprise include functions such as that of facility or plant manager, operations manager, chief operating officer, or chief executive officer. Financial or administrative aspects include functions such as that of credit manager, accounts payable or receivable manager, or both, personnel manager, controller, chief financial officer, or similar functions. (B) No act or admission by a prospective lender prior to the time that indicia of ownership are held primarily to protect a security interest constitutes evidence of participation in management. A prospective holder who undertakes or requires an environmental inspection of the site, vessel or facility in which indicia of ownership are to be held, or requires a prospective borrower to clean up a site, vessel or facility or to comply or come into compliance (whether prior or subsequent to the time that indicia of ownership are held primarily to protect a security interest) with any applicable law or regulation, is not by such action considered to be participating in the site's, vessel's or facility's management; provided, that a holder shall not be required to conduct or require an inspection to qualify for the protection for holders granted pursuant to this chapter, and the liability of a holder shall not be based on or affected by the holder not conducting or not requiring an inspection. (C) Actions that are consistent with holding indicia of ownership primarily to protect a security interest do not constitute participation in management for the purposes of this chapter. The authority for the holder to take such actions may, but need not, be contained in contractual or other documents specifying requirements for financial, environmental, and other warranties, covenants, conditions, representations or promises from the borrower. Loan policing and work out activities cover and include all activities up to foreclosure and its equivalents. A holder who engages in: (i) Policing activities prior to foreclosure shall remain within the exemption; provided, that the holder does not by such actions participate in the management of the site, vessel or facility. Such actions include, but are not limited to, requiring the borrower to clean up the site, vessel or facility during the term of the security interest; requiring the borrower to comply or come into compliance with applicable federal, state, and local environmental and other laws, rules and regulations during the term of the security interest; securing or exercising authority to monitor or inspect the site, vessel or facility (including on-site inspections) in which indicia of ownership are maintained, or the borrower's business or financial conditions during the term of the security interest; or taking other actions to adequately police the loan or security interest (such as requiring a borrower to comply with any warranties, covenants, conditions, representations or promises from the borrower); and (ii) Work out activities prior to foreclosure and its equivalents shall remain within the exemption; provided, that the holder does not by such action participate in the management of the site, vessel or facility. For purposes of this part, "work out" refers to those actions by which a holder, at any time prior to foreclosure and its equivalents, seeks to prevent, cure, or mitigate a default by the borrower or obligor; or preserve or prevent the diminution of the value of the security. "Work out" activities, include, but are not limited to: restructuring or renegotiating the terms of the security interest; requiring payment of additional rent or interest; exercising forbearance; requiring or exercising rights pursuant to an assignment of accounts or other amounts owing to an obligor; requiring or exercising rights pursuant to an escrow agreement pertaining to amounts owing to an obligor; providing specific or general financial or other advice, suggestions, counseling, or guidance; and exercising any right or remedy the holder is entitled to by law or under any warranties, covenants, conditions, representations or promises from the borrower. (D) A holder does not participate in the management of a site, vessel or facility by making any response to or performing any response action or undertaking any clean up or removal or similar actions under the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ( 42 U.S.C. § 9601 et seq.) or any other local, state or federal environmental laws or regulations; (2) "Borrower," "debtor," or "obligor" is a person whose site, vessel or facility is encumbered by a security interest. These terms are used interchangeably; (3) "Date of foreclosure" means the date on which the holder obtains legal or equitable title or possession to the site, vessel or facility pursuant to or incident to foreclosure; (4) "Department" means the department of environment and conservation; (5) "Facility" means: (A) Any building, structure, installation, equipment, pipe or pipeline (including any pipe into a sewer or publicly owned treatment works), well, pit, pond, lagoon, impoundment, ditch, landfill, storage container, motor vehicle, rolling stock, or aircraft; or (B) Any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located; (6) "Fair consideration" means the value of the security interest when calculated as an amount equal to or in excess of the sum of the outstanding principal (or comparable amount in the case of a lease that constitutes a security interest) owed to the holder immediately preceding the acquisition of full title (or possession in the case of property subject to a lease financing transaction) pursuant to foreclosure and its equivalents, plus any unpaid interest, rent or penalties (whether arising before or after foreclosure and its equivalents), plus all reasonable and necessary costs, fees, or other charges incurred by the holder incident to work out, foreclosure and its equivalents, retention, maintaining the business activities of the enterprise, preserving, protecting and preparing the site, vessel or facility prior to sale, re-lease of property held pursuant to a lease financing transaction (whether by a new lease financing transaction or substitution of the lessee) or other disposition, plus response costs incurred under applicable federal, state or local environmental cleanup laws or regulations, or at the direction of an on-scene coordinator, less any amounts received by the holder in connection with a partial disposition of the property, net revenues received as a result of maintaining the business activities of the enterprise, and any amounts paid by the borrower subsequent to the acquisition of full title (or possession in the case of properties subject to lease financing transactions) pursuant to foreclosure and its equivalents. In the case of a holder maintaining an indicia of ownership primarily to protect a junior security interest, fair consideration is the value of all outstanding higher priority security interests plus the value of the security interest held by the junior holder, each calculated as set forth in this definition; (7) "Foreclosure" or "foreclosure and its equivalents" means purchase at foreclosure sale, acquisition or assignment of title in lieu of foreclosure, termination of a lease or other repossession, acquisition of a right to title or possession, an agreement in satisfaction of the obligation, or any other formal or informal manner (whether pursuant to law or under warranties, covenants, conditions, representations or promises from the borrower) by which the holder acquires title to or possession of the secured property; (8) "Holder" is a person who maintains indicia of ownership primarily to protect a security interest. A holder includes the initial holder or purchaser (such as a loan originator), any subsequent holder (such as a successor-in-interest or subsequent purchaser of the security interest on the secondary market), any subsequent assignee, transferee or purchaser from a holder, a guarantor of an obligation, surety, or any other person who holds ownership indicia primarily to protect a security interest, or a receiver or other person who acts on behalf of or for the benefit of a holder; (9) "Indicia of ownership" means evidence of a security interest, evidence of an interest in a security interest, or evidence of an interest in real or personal property securing a loan or other obligation, including any legal or equitable title to real or personal property acquired incident to foreclosure and its equivalents. Evidence of such interests include, but are not limited to, mortgages, deeds of trust, liens, surety bonds and guarantees of obligations, title held pursuant to a lease financing transaction in which the lessor does not select initially the leased property (herein "lease financing transaction"), legal or equitable title obtained pursuant to foreclosure, and their equivalents. Evidence of such interests also includes assignments, pledges, or other rights to or other forms of encumbrance against property that are held primarily to protect a security interest. A person is not required to hold title or a security interest in order to maintain indicia of ownership; (10) "Primarily to protect a security interest" means that the holder's indicia of ownership are held primarily for the purpose of securing payment or performance of an obligation, but does not include indicia of ownership held primarily for investment purposes, nor ownership indicia held primarily for purposes other than as a protection of a security interest. A holder may have other, secondary reasons for maintaining indicia of ownership, but the primary reason why ownership indicia are held shall be for protection of a security interest; (11) "Security interest" means an interest in a site, vessel or facility created or established for the purpose of securing a loan or other obligation. Security interests include, but are not limited to, mortgages, deeds of trust, liens, and title pursuant to lease financing transactions. Security interests may also arise from transactions such as sale and leasebacks, conditional sales, installment sales, trust receipt transactions, certain assignments, factoring agreements, accounts receivable financing arrangements, inventory and/or other personal property financing arrangements and consignments, if the transaction creates or establishes an interest in a site, vessel or facility for the purpose of securing a loan or other obligation; and (12) "Vessel" means every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water.