Ability to Enforce Collateral Clause Samples
The "Ability to Enforce Collateral" clause grants a lender or secured party the right to take possession of and sell collateral if the borrower defaults on their obligations. In practice, this means that if a borrower fails to repay a loan or breaches the agreement, the lender can seize assets such as property, equipment, or securities that were pledged as security. This clause ensures that the lender has a clear legal pathway to recover losses, thereby reducing the risk of non-payment and encouraging responsible borrowing.
Ability to Enforce Collateral. In accordance with the terms of this Agreement, the Indemnification Provisions and the Ancillary Agreements, from time to time, Secured Party may determine that it or any of the other Acquiror Indemnified Parties is owed an amount in respect of the Obligations, which amount may be equal in value to all or any part of the amount to the credit of the Indemnification Collateral Account. In such event, which may occur multiple times as provided in the agreements or provisions constituting the Obligations, Secured Party is entitled in accordance with the Indemnification Provisions to make a demand upon Pledgor for, or otherwise receive, payment for such Obligations (for its own benefit or the benefit of the other applicable Acquiror Indemnified Parties). Pursuant to Section 11.05(a) of the Amended Stock Purchase Agreement, Pledgor may in some instances satisfy such demand by delivering Eligible Collateral that is credited to the Indemnification Collateral Account with a Fair Value equal to the amount demanded; provided, however, that any such delivery of Eligible Collateral will be made in the following order of priority: (i) first, in cash and Permitted Investments then held in the Indemnification Collateral Account; provided, that any such Permitted Investments shall have been liquidated into cash in accordance with the Investment Guidelines (the “Liquidation Cash Proceeds”) prior to making any such delivery from the Indemnification Collateral Account; and (ii), only to the extent that the aggregate Fair Value of the cash and such Liquidation Cash Proceeds then held in the Indemnification Collateral Account is less than the amount required to be delivered by the Pledgor, second, by delivery of any cash and such Liquidation Cash Proceeds then held in the Indemnification Collateral Account, plus such number of Common Equity Units credited to the Indemnification Collateral Account the Fair Value of which equals the amount required to be so delivered less the Fair Value of any such cash and Liquidation Cash Proceeds then held in the Indemnification Control Account. Upon receipt from Pledgor of a request complying with the requirements of such Section 11.05(a) that some or all of the amount demanded be paid using Eligible Collateral constituting Indemnification Collateral, Secured Party agrees to instruct Securities Intermediary to withdraw the requested amount of cash from the Indemnification Collateral Account and/or debit the requested number of Common Equity U...