Assets as Collateral Prohibited Clause Samples

The 'Assets as Collateral Prohibited' clause prevents a party from using specified assets as security for loans or other obligations. In practice, this means that the party cannot pledge, mortgage, or otherwise encumber these assets to secure debts or financial commitments. This restriction ensures that the assets remain unencumbered and available, protecting the interests of the other party and reducing the risk of conflicting claims or asset depletion.