Common use of Preservation and Protection of Collateral Clause in Contracts

Preservation and Protection of Collateral. (a) Pledgee shall be under no duty or liability with respect to the collection, protection or preservation of the Pledged Securities, or otherwise, other than the obligation to deal with the Pledged Securities while in its possession in the same manner as Pledgee deals with similar securities or property for its own account. (b) Pledgor agrees to pay when due all taxes, charges, Liens and assessments against its respective Pledged Securities in which it has an interest, unless being contested in good faith by appropriate proceedings diligently conducted and against which adequate reserves have been established in accordance with GAAP and evidenced to the satisfaction of Pledgee and provided further that all enforcement proceedings in the nature of levy or foreclosure are effectively stayed. Upon the failure of Pledgor to so pay or contest such taxes, charges, Liens or assessments, Pledgee at its sole option may pay or contest any of them (Pledgee having the sole right to determine the legality or validity and the amount necessary to discharge such taxes, charges, Liens or assessments.)