Common use of Disposal of Collateral Clause in Contracts

Disposal of Collateral. 3.1 Within the term of the pledge, the Pledgor may not assign, re-pledge, or otherwise dispose of the Collateral without the prior written consent of the Pledgee. 3.2 The Pledgor shall ensure that the Collateral be free from any freeze, seizure, attachment or any other litigation, or the Pledgee may immediately enforce the pledge and claim its creditor’s rights thereunder, and the Pledgor shall warrant that the Pledgee has the first priority of compensation. 3.3 If the Debtor fails to perform its obligations under the Principal Contract, or the Debtor or the Pledgor fails to comply any other provision under the Principal Contract or this Agreement or any other agreement with the Pledgee, whereby the Pledgee accelerates realizing its creditor’s right or the Principal Contact is held invalid after occurrence of the borrower-lender relationship contemplated thereunder, the Pledgee shall have sole discretion to dispose of the Collateral without prior disposal of or recovery of any other security provided by the Debtor or provided under the Principal Contract, if any (including, without limitation, any warranty, mortgage, pledge, letter of guarantee, or stand-by letter of credit), and the Pledgor may not object to such disposal by the Pledgee. The Pledgee may enforce its rights under the pledge by cashing out the certificate of deposit, and any proceeds from such enforcement shall be first applied to repay all debts owed by the Debtor to the Pledgee under the Principal Contract secured by the Pledgor, regardless of whether or not certificate of deposit becomes due and payable. 3.4 If the Pledgor fails to disclose the existence of any joint ownership, title dispute, seizure or attachment of the Collateral and cause any damage to the Pledgee, the Pledgor shall make full indemnity to the Pledge; if any of such circumstances which is adverse to the Pledgee’s realization of its rights fails to be effectively eliminated within reasonable period of time requested by the Pledgee, the Pledgee may accelerate realizing its rights under the pledge or require the Pledgor to provide new security acceptable to the Pledgee. 3.5 If the Pledgor breaches any provision in this Agreement or any representation or warranty made by the Pledgor in this Agreement becomes inaccurate or misleading, the Pledgee shall have the right to accelerate realizing its rights under the pledge and hold the Pledgor liable for any loss incurred by the Pledge arising therefrom. 3.6 The Pledgor is under obligation to cooperate with the Pledgee in disposal of the Collateral and use the proceeds from the disposal to repay the debts secured under this Agreement. 3.7 The Pledgor agrees that the Pledgee have the right to use the proceeds from the disposal of the Collateral to repay the principal and interests and relevant expenses (if any) of the debt provided the Principal Contract.