Common use of Collateral for Undrawn Letters of Credit Clause in Contracts

Collateral for Undrawn Letters of Credit. When any Event of Default, other than an Event of Default described in subsection (i) or (j) of Section 8.1, has occurred and is continuing, the Borrower shall, upon demand of the Agent (which demand shall be made upon the request of the Required Lenders), and when any Event of Default described in subsection (i) or (j) of Section 8.1 has occurred the Borrower shall, without notice or demand from the Agent, immediately pay to the Agent the full amount of each Letter of Credit then outstanding, the Borrower agreeing to immediately make such payment and acknowledging and agreeing that the Bank would not have an adequate remedy at law for failure of the Borrower to honor any such demand and that the Agent and the Lenders shall have the right to require the Borrower to specifically perform such undertaking whether or not any draws have been made under any such Letters of Credit. The Agent shall hold all such funds and proceeds thereof as additional collateral security for the obligations of the Borrower to the Lenders and Agent hereunder.