Rights to Pledge Clause Samples
The 'Rights to Pledge' clause defines a party's authority to use certain assets as collateral for securing obligations or loans. Typically, this clause outlines which assets can be pledged, any restrictions or conditions on such pledges, and whether prior consent from the other party is required. For example, a borrower may be allowed to pledge inventory or receivables to a lender, provided they notify the lender in advance. The core function of this clause is to clarify and control the use of assets as security, thereby protecting the interests of both parties and preventing unauthorized encumbrances.
Rights to Pledge. Notwithstanding the foregoing provisions of this Section 8.1, the KELP may pledge all or any portion of its Class B Interest in the Company to a lender in connection with any financing or borrowing by the KELP permitted under the KELP Agreement, which financing or borrowing is made for the KELP’s purchase of KELP Points or Class B Interests, provided that if any such lender (or its assignee) becomes a Member or otherwise obtains economic rights with respect to such Interest, (i) such lender (or its assignee) shall have no voting rights with respect to such Class B Interest and (ii) the Company shall have the right to redeem at any time at a price equal to the Class B Valuation as measured for the most recent Valuation Period multiplied by the percentage of such Class B Interests held by such lender (or its assignee). The Company’s right to redeem such Class B Interest shall be exercised by written notice from the Company to such lender (or its assignee) and may be given at any time following such lender (or such assignee) taking ownership of such Class B Interest. Effective upon the Company’s redemption of such Class B Interest, such lender (or its assignee) shall no longer own such Class B Interest for purposes of this Agreement.
Rights to Pledge. Each Party shall have the right to pledge, mortgage, charge, grant any security interest in, or otherwise encumber all or part of its interest in its respective payload (and, in the case of ViaSat, the Common Elements), Deliverables, work-in-process under the Satellite Contract and such Party’s rights under this Agreement and the agreements contemplated hereby, provided that:
(a) such Party shall remain liable for all obligations hereunder;
(b) the encumbrance shall be subject to any necessary approvals or restrictions of any relevant governmental authority or telecommunications administration; and
(c) any financing by Loral of the Loral Payload shall be structured so as not to interfere with or preclude any financing by ViaSat of the other portions of the Satellite and shall include intercreditor arrangements on terms reasonably satisfactory to ViaSat and its creditors that shall facilitate such financing by ViaSat, provided that, subject to the foregoing, ViaSat shall work cooperatively with Loral and Telesat and use reasonable efforts to accommodate their current and planned financing requirements with respect to the Loral Payload; and
(d) satisfactory arrangements as agreed between the Parties (including a Party’s lenders) shall have been made to recognize and protect the rights of the other Party and its lenders under this Agreement and the Transaction Documents. Each of the Parties acknowledges and agrees that the other Party, in the course of the negotiation of this Agreement, used all commercially reasonable efforts to avoid any restriction on its ability to pledge its assets for any purpose, and that those negotiations resulted in the foregoing provisions.