Security over Current Assets Clause Samples
The 'Security over Current Assets' clause establishes a lender's legal right to claim certain assets of the borrower, typically those that are short-term in nature such as inventory, accounts receivable, or cash, as collateral for a loan or other financial obligation. In practice, this means that if the borrower defaults on their obligations, the lender can seize and sell these current assets to recover the outstanding debt. This clause is essential for mitigating the lender's risk by providing a clear mechanism for recourse, thereby increasing the likelihood of repayment and potentially enabling the borrower to access financing on more favorable terms.
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Security over Current Assets. (a) To secure the performance of the obligations of the Borrowers under the Facility, each of the Borrowers and the Designated Subsidiaries that owns material inventory and accounts receivable must provide in favour of the Collateral Agent (for the benefit of the Agents and the Lenders) security over all of its present and future inventory and accounts receivable and other claims (including related assets), present and future.
(b) Any cash and cash equivalents deducted in the calculation of the Funded Debt to Capitalization Ratio (as contemplated by the definition of such ratio) must be held by Cascades, Cascades USA Inc. and Cascades Canada ULC in a bank account in Canada or the United States and be specifically subject to perfected security for the benefit of the Agents and the Lenders.
Security over Current Assets. To secure the performance of the obligations of the Borrowers under the Facilities (other than the Additional Revolving Facility) and the Hedging Agreements, each of the Borrowers and the Designated Subsidiaries that owns material inventory and accounts receivable must provide in favour of the Agent and the Lenders security over all of its present and future inventory and accounts receivable (including related assets), present and future.