5Liability for Collateral Clause Samples
The 'Liability for Collateral' clause defines the responsibilities and potential liabilities of parties in relation to collateral provided under an agreement. It typically outlines which party bears the risk of loss, damage, or depreciation of the collateral, and may specify obligations for maintaining, insuring, or safeguarding the collateral during the term of the contract. This clause is essential for clarifying who is accountable for the collateral's condition and value, thereby reducing disputes and allocating risk between the parties.
5Liability for Collateral. So long as Collateral Agent and the Lenders comply with reasonable banking practices regarding the safekeeping of the Collateral in the possession or under the control of Collateral Agent and the Lenders, Collateral Agent and the Lenders shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of loss, damage or destruction of the Collateral.
5Liability for Collateral. So long as Purchaser Agent and the Purchasers comply with reasonable banking practices regarding the safekeeping of the Collateral in the possession or under the control of Purchaser Agent and the Purchasers, Purchaser Agent and the Purchasers shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person. Except as a result of Purchaser Agent’s or any Purchaser’s gross negligence or willful misconduct as determined in a final, non-appealable judgment of a court of competent jurisdiction, the Obligors bear all risk of loss, damage or destruction of the Collateral.
5Liability for Collateral. So long as Agent and Lenders comply with reasonable banking practices regarding the safekeeping of the Collateral in their possession or under the control of Agent and/or Lenders, Agent and Lenders shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person. Furthermore, except for the safe custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, Agent shall have no duty as to any Collateral, as to ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Collateral, whether or not any Lender has or is deemed to have knowledge of such matters, or as to the taking of any necessary steps to preserve rights against any parties or any other rights pertaining to any Collateral. Borrower bears all risk of loss, damage or destruction of the Collateral.