Common use of Pledged Bonds Clause in Contracts

Pledged Bonds. (A) Party B sells, disposes or otherwise transfers any of the Pledged Bonds (as such term is defined in the Specified Confirmations) or any interest therein (whether by way of security or otherwise), (B) Party B otherwise permits any lien, charge, adverse claim, security interest, mortgage or other encumbrance (other than the lien in favor of Party A) to be created on or extend to or otherwise arise upon or burden the Pledged Bonds or any part thereof, any interest therein or the proceeds thereof or (C) Party A otherwise ceases to have a first priority perfected security interest in all or any part of the Pledged Bonds, provided that if such cessation is a result of Party A’s gross negligence, willful misconduct or fraud, then Party A shall be the Affected Party for an event under this sub-clause (C). ”