Effect of Release of Collateral Clause Samples
The "Effect of Release of Collateral" clause defines what happens when collateral securing an obligation is released, either in whole or in part. Typically, this clause clarifies whether the release of collateral affects the underlying obligations of the parties, such as whether the debtor is still liable for the debt or if any guarantees remain in force. For example, if a lender releases a piece of property held as security, the clause will specify if the borrower's obligations are reduced or remain unchanged. Its core function is to ensure all parties understand the legal and financial consequences of releasing collateral, thereby preventing disputes and maintaining clarity regarding ongoing obligations.
Effect of Release of Collateral. Upon the effectiveness of the release of the Collateral pursuant to Section 8.02, all right, title and interest of the Collateral Trustees and the Representatives on behalf of the Secured Holders in, to and under the Collateral Trust Estate, the Collateral and the Shared Collateral Documents shall terminate and shall revert to the Grantor and its successors and assigns, and the estate, right, title and interest of the Collateral Trustees therein shall thereupon cease; and in such case, upon the written request of the Grantor, its successors or assigns, and at the cost and expense of the Grantor, its successors or assigns, the Collateral Trustees shall promptly execute and deliver a satisfaction of the Shared Collateral Documents and such instruments as are necessary or desirable to terminate and remove of record any documents constituting public notice of the Shared Collateral Documents and the security interests granted thereunder and shall transfer, or cause to be transferred, and shall deliver or cause to be delivered to the Grantor, all property, including all moneys, instruments and securities of the Grantor then held by the Collateral Trustees. The cancellation and satisfaction of the Shared Collateral Documents shall be without prejudice to the rights of the Collateral Trustees or any successor trustee or trustees to charge and be reimbursed for any expenditures which they may thereafter incur in connection therewith.
Effect of Release of Collateral. Upon the effectiveness of the release of the Collateral pursuant to Section 7.1, all right, title and interest of the Closed-End Collateral Agent and the Secured Parties in, to and under the Collateral and the Collateral Documents shall terminate and shall revert to the Borrower, its successors and assigns, and the estate, right, title and interest of the Closed-End Collateral Agent therein shall thereupon cease, terminate and become void. The cancellation and satisfaction of such right, title and interest shall be without prejudice to the rights of the Closed-End Collateral Agent or any successor Closed-End Collateral Agent to charge and be reimbursed for any expenditures that it may thereafter incur in connection therewith.
Effect of Release of Collateral. Upon the satisfaction of the conditions in Section 1.03(e), all right, title and interest of the Conduit Lender and the Conduit Lender Eligible Lender Trustee in, to and under such Released Collateral shall terminate and revert to the Funding Note Issuer, its successors and assigns, and the right, title and interest of the Conduit Lender in such Released Collateral shall thereupon cease, terminate and become void; and, upon the written request of the Funding Note Issuer, and at the cost and expense of the Funding Note Issuer, the Conduit Administrator shall authorize and, if necessary, execute such UCC-3 financing statements and releases prepared by and submitted to the Conduit Administrator for authorization as are necessary or reasonably requested in writing by the Funding Note Issuer to terminate and remove of record any documents constituting public notice of the security interest in such Released Collateral Granted hereunder being released. The Funding Note Issuer shall be entitled to all Interest Subsidy Payments and Special Allowance Payments on any Financed Student Loans up to but not including the date on which the Conduit Lender and the Conduit Eligible Lender Trustee release their security interest in such Financed Student Loans and such Interest Subsidy Payments and Special Allowance Payments shall be included in Available Funds.