Covenants of the Loan Parties and Other Collateral Matters Sample Clauses

This clause outlines the ongoing promises and obligations (covenants) that the loan parties must fulfill in relation to the loan agreement, particularly concerning the management and protection of collateral. It typically requires the loan parties to maintain the value of the collateral, provide regular updates or access to information about the collateral, and refrain from actions that could impair the lender’s security interest, such as selling or encumbering the collateral without consent. The core function of this clause is to safeguard the lender’s interests by ensuring the collateral remains available and sufficient to secure the loan, thereby reducing the lender’s risk of loss.