Common use of Removal of Collateral Clause in Contracts

Removal of Collateral. Notwithstanding language herein to the contrary, after giving effect to any release of Collateral (whether in connection with an Optional Prepayment pursuant to Section 2.10(a) above or pursuant to any other provision of this Agreement), the following conditions must be satisfied: (i) no selection procedures are used with respect to identification of Assets to be released or retained that are materially adverse to the Secured Parties; (ii) no Borrowing Base Deficiency, Potential Event of Default or Event of Default shall exist either prior to, or after giving effect to the prepayment of the applicable portion of the Advances outstanding and/or the release of the related Collateral (unless, in the case of a Borrowing Base Deficiency or Funding Base Deficiency, (x) the amount of such deficiency is eliminated as a result of such prepayment and release or (y) the release is in connection with a sale to an unaffiliated third-party purchaser and the following conditions are satisfied (i) the purchaser has agreed to pay the purchase price for the released Collateral to the Administrative Agent as a prepayment of the Advances, and (ii) after giving effect to such prepayment, the weighted average of the Effective Advance Rates for the Agencies is the same or lower as it had been prior to the release of the related Collateral); and (iii) the representations and warranties set forth in Article IV are true and correct as of such Redemption Date (except to the extent such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall have been true and correct as of such earlier date) after giving effect to the prepayment of the applicable portion of the Advances outstanding and release of the related Collateral.