Common use of Indemnification for Borrower Defaults Clause in Contracts

Indemnification for Borrower Defaults. If there occurs an event of default by the Borrower under a Lending Agreement, the Agent shall indemnify the Lender as follows: the Agent shall liquidate the Collateral for its use in connection with this indemnification and within five (5) business days after the date of declaration of the default: (i) replace the Loaned Securities or purchase “Replacement Securities” or “Equivalent Securities” as such terms are defined in the relevant Lending Agreement (as more fully set forth on Schedule VI); or (ii) if Replacement Securities or Equivalent Securities cannot be obtained within five (5) business days, pay the Applicable Lender an amount that is equal to the value of the Loaned Securities at the time at which the Loaned Securities were due to have been returned by the Borrower, or, if at such time a value is not determinable, the latest prior time at which a value is determinable. Replacement under clause (b)(i) or payment under clause (b)(ii) shall include payment by the Agent for any manufactured income which remains unpaid through the date of replacement or payment, the amount of any overdraft charges charged by the custodian and (if the replacement occurs through a buy-in) the costs and penalties associated with such buy-in. Consistent with market practice, the Agent may decline to declare an event of default in cases where it determines that a solvent Borrower’s failure to return a Loaned Security is temporary or administrative in nature and such failure is remedied within two (2) business days, but in no event shall the delivery of Replacement Securities or Equivalent Securities exceed the five (5) business days provided under clause (b)(i). To the extent that there is a conflict between this provision and the indemnification of Agent in Section 4(c) below, the terms of this provision shall govern.