Exercise by Pledgee Clause Samples
The "Exercise by Pledgee" clause defines the rights and procedures by which a pledgee (the party holding a security interest in pledged assets) may enforce their rights over the pledged property. Typically, this clause outlines the circumstances under which the pledgee can take possession of, sell, or otherwise deal with the pledged assets, such as upon the pledgor's default. For example, it may specify notice requirements, methods of sale, or the application of proceeds from the sale of the assets. The core function of this clause is to provide a clear mechanism for the pledgee to realize the value of the collateral in the event of a default, thereby protecting their interests and ensuring the enforceability of the security arrangement.
Exercise by Pledgee. Notwithstanding the provisions of this Article 2, any person to whom OP Units have been pledged, in compliance with the terms of the Lock-up Agreement, may exercise its Exchange Right prior to the date that is one (1) year after the closing of the IPO, provided, however, such OP Units shall only be exchangeable for the Cash Amount.