Substitution of Collateral Clause Samples
The Substitution of Collateral clause allows a party that has posted collateral to replace it with different, but equivalent, collateral during the term of an agreement. In practice, this means that if a party has provided securities or cash as collateral, they may request to substitute these with other assets of equal value, subject to the approval of the counterparty and compliance with any specified conditions. This clause provides flexibility for the collateral provider to manage their assets more efficiently while ensuring the secured party remains protected, ultimately facilitating smoother financial operations and risk management.
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Substitution of Collateral. (a) Provided that no Event of Default has occurred and is continuing, the Company shall have the right (and, under the terms of the Indenture, in certain circumstances the obligation) to substitute promissory notes or other similar instruments or investment property that meet the terms and conditions of Section 4.9 of the Indenture (“Substituted Notes”) for Notes previously pledged as Collateral (“Released Notes”).
(b) The Company may make such a substitution by delivering to the Trustee:
(i) a written notice to the Trustee executed by an officer of the Company which contains (A) a description of the Substituted Note(s), (B) a statement that such Substituted Note has been pledged by the Company as Collateral under this Security Agreement, (C) a certification by the Company that the representations and warranties regarding Collateral contained in Section 6 below are true with respect to the Substituted Note, (D) a description of the Notes to be released from the Security Interest (i.e., a description of the Released Note(s)), and (E) a certification by the Company that upon the release of the Released Notes from the Security Interest, the value of the Collateral shall be at least 100% of the aggregate principal amount of the Securities then outstanding (the “Minimum Value”);
(ii) the original Substituted Note(s); and
(iii) an endorsement in blank for the Substituted Notes.
(c) So long as the aggregate value of the Collateral after the release of the Released Notes is at least the Minimum Value, the value of the Substituted Note(s) being substituted for the Released Note(s) may be less than the value of the Released Note(s).
(d) Upon the Trustee’s receipt of the documents described in Section 4(b), the Substituted Note(s) shall be deemed to be Collateral and the Released Note(s) shall be deemed to be released from the Security Interest and shall no longer be subject to the terms of this Security Agreement. The Trustee shall promptly thereafter return the Released Note(s) to the Company, together with any endorsement of such Released Note(s) made by the Company.
(e) In the event that the Trustee has filed (or has caused to be filed) a financing statement in order to perfect the Security Interest in a Note that has become a Released Note, the Trustee shall prepare and file a financing statement amendment which releases the Released Note from the Security Interest and the Security Agreement (the “Release”). The Trustee hereby authorizes the Company to file a co...
Substitution of Collateral. A Fund may substitute securities for any securities identified as Collateral by delivery to the Custodian of a Pledge Certificate executed by such Fund on behalf of the applicable Portfolio, indicating the securities pledged as Collateral.
Substitution of Collateral. The Fund acknowledges and agrees that, pursuant to any SLA, BBH&Co. may permit an Approved Borrower to substitute Collateral, which is of the type specified in Section 5 hereto, during the term of any loan so long as the required margin in respect of such loan continues to be satisfied at the time of such substitution.
Substitution of Collateral. Notwithstanding anything to the contrary herein, the Pledgor may, in the Pledgor’s sole discretion, add additional collateral to the Collateral and/or may substitute Collateral as the Pledgor deems fit, provided that the fair market value of the substituted Collateral may not be less than the aggregate principal balance of the Notes as of the date of any such substitution. Pledgor, as Company’s attorney-in-fact, shall be authorized to file a UCC Financing Statement Amendment (Form UCC3) with respect to each applicable Financing Statement to reflect such substitution of Collateral. Any portion of the Collateral replaced by the substituted Collateral that is held by or on behalf of Company shall be returned to the Pledgor within five (5) business days of Pledgor’s written notice of substitution, and Company shall timely execute and deliver to the Pledgor, and file and/or record, as necessary, all such documents as the Pledgor shall reasonably request to evidence such substitution of Collateral.
Substitution of Collateral. Upon the Bank's prior written approval, the Borrower may substitute collateral originally provided for the Revolving Credit Loan for collateral of equal value but such substituted collateral must be acceptable to the Bank and the acceptance thereof is solely within the discretion of the Bank.
Substitution of Collateral. The Borrowers shall have the right, subject to the consent of the Administrative Agent, such consent not to be unreasonably withheld, to substitute Oil and Gas Properties of EPPG for Oil and Gas Properties subject to a Mortgage, or, pending delivery of the Mortgage on such Properties, to substitute Cash Collateral for such Properties, provided that:
(i) The Borrower’s Representative provides notice of substitution to the Administrative Agent fifteen (15) days prior to the proposed substitution date;
(ii) Neither an Event of Default nor a Borrowing Base Deficiency exists on the proposed substitution date;
(iii) The Oil and Gas Properties proposed to be substituted for the Oil and Gas Properties subject to a Mortgage are of a type and nature similar to the Oil and Gas Properties subject to a Mortgage;
(iv) The substitution of the Oil and Gas Properties will not result in a decrease in the Borrowing Base as determined by the Administrative Agent in its sole discretion;
(v) The substitution of the Oil and Gas Properties will not result in the Collateral Coverage Ratio being less than 1.5 to 1; and
(vi) EPPG provides the supplemental or additional Security Documents referred to in Section 4.10(b) hereof. If the Oil and Gas Properties being substituted have a value in excess of 10% of the PV-10 Value of the Borrowing Base Properties at such time, the Borrowing Base shall be redetermined prior to the date of such substitution in accordance with the procedures set forth in subsection 4.9 which would have applied had a Borrower Redetermination Notice or a Lender Redetermination Notice been delivered.
Substitution of Collateral. Borrower shall have the right, but not the obligation, to request that Lender release its lien on the Property in exchange for a lien on the Substitute Collateral (the “Proposed Substitution”). In the event that Borrower requests the Proposed Substitution, Borrower shall promptly provide Lender with all information that Lender in its good faith discretion deems relevant to analyzing the Proposed Substitution. Lender agrees to reasonably consider Borrower’s request and to make reasonable efforts to modify the Loan to reflect that the Substitute Collateral (and not the Property) is part of the Collateral or, at Lender’s option, to make a new Loan secured by the Substitute Collateral on the same material economic terms (other than amount of Loan) as the Loan; provided, however, that it shall be considered reasonable for Lender to review any modification of the Loan or new Loan based upon Lender’s then current underwriting criteria for similar loans and collateral, including, without limitation, Lender’s requirements regarding current and projected loan-to-value-ratios and the financial condition of Borrower and the Borrower Affiliates. Borrower shall pay all reasonable costs and expenses incurred by Lender in connection with the foregoing analysis and Lender’s approval/disapproval thereof, including, without limitation, reasonable consultants’ fees, appraisal costs, title fees and reasonable attorneys’ fees and costs. Borrower acknowledges and agrees that its right to request the Proposed Substitution does not constitute a commitment on the part of Lender to agree to the Proposed Substitution; (ii) no modification of the Loan or new financing shall be deemed extended without issuance by Lender of a commitment letter executed by Lender (the “New Financing Commitment Letter”), and the modification of the Loan or extension of such financing by Lender shall be subject to satisfaction of all terms and conditions of the New Financing Commitment Letter, including, without limitation, with respect to the execution of new modification documents or loan documents.
Substitution of Collateral. At any time after the Release Date but prior to the Optional Prepayment Date, upon satisfaction of the following conditions, Lender shall, in the case of any of the Parcels permit Borrower to substitute a different property (a "Replacement Parcel") for an original Parcel (the "Replaced Parcel"), and following such substitution, Lender shall release the Mortgage and any other Loan Documents from the Replaced Parcel: (i) the sum of the Allocated Loan Amount for the proposed Replaced Parcel and the Allocated Loan Amounts for all other Replaced Parcels which have previously been substituted for shall not exceed One Hundred Percent (100%) of the amount of the Loan; (ii) no Event of Default shall have occurred and be continuing with respect to the Loan; (iii) the Borrower amends this Agreement, the Note and the other Loan Documents and executes such other documentation as Lender, the Servicer, or a Rating Agency may require to evidence the addition of the Replacement Parcel as collateral for the Loan and to confirm the enforceability of the Loan Documents; (iv) Lender receives a Qualified Survey for the Replacement Parcel; (v) Lender approves the status of title to the Replacement Parcel and obtains a Qualified Title Insurance Policy for the Replacement Parcel; (vi) Lender receives such environmental, engineering, soil, and other property condition reports regarding the Replacement Parcel as Lender may require, all of which reports must be satisfactory to Lender; (vii) Lender shall have received appraisals prepared in accordance with FIRREA which are satisfactory to Lender and which demonstrate that the fair market value of the Replacement Parcel equals or exceeds the fair market value of the Replaced Parcel; (viii) if the Replacement Parcel is a previously developed property, for the twelve month period prior to the transfer, the Net Operating Income for the Replacement Parcel shall have equaled or exceeded the Net Operating Income for the Replaced Parcel; (ix) if the Replacement Parcel is a newly developed property, the projected annualized Net Operating Income for the Replacement Parcel shall have equaled or exceeded the Net Operating Income for the Replaced Parcel for the twelve month period prior to the transfer; (x) on a pro forma basis, for the twelve month period after the transfer, the Net Operating Income for the Replacement Parcel is projected to equal or exceed the Net Operating Income for the Replaced Parcel; (xi) the Borrower confirms all warrantie...
Substitution of Collateral. To the extent the Client’s Board of Directors/Trustees permits the use of Non-Cash Collateral, the Client acknowledges and agrees that, pursuant to any SLA, the Lending Agent may permit an Approved Borrower to substitute Collateral of any type specified in Section 4 hereof during the term of any loan so long as the required margin in respect of such loan continues to be satisfied at the time of such substitution.
Substitution of Collateral. The Pledgor may substitute Collateral in accordance with the following provisions:
(1) Unless an Event of Default or a failure by the Pledgor to meet any of its obligations under Section 5(b) or (c) hereof has occurred and is continuing, the Pledgor shall have the right at any time and from time to time to deposit Eligible Collateral with the Collateral Agent in substitution for Pledged Items previously deposited hereunder ("Prior Collateral") and to obtain the release from the Lien hereof of such Prior Collateral.
(2) If the Pledgor wishes to deposit Eligible Collateral with the Collateral Agent in substitution for Prior Collateral, the Pledgor shall (i) give written notice to the Collateral Agent identifying the Prior Collateral to be released from the Lien hereof, and (ii) deliver to the Collateral Agent concurrently with such Eligible Collateral a certificate of the Pledgor substantially in the form of Exhibit A hereto and dated the date of such delivery, (A) identifying the items of Eligible Collateral being substituted for the Prior Collateral and the Prior Collateral that is to be transferred to the Pledgor and (B) certifying that the representations and warranties contained in such Exhibit A hereto are true and correct on and as of the date thereof. The Pledgor hereby covenants and agrees to take all actions required under Section 6(d) and any other actions necessary to create for the benefit of the Collateral Agent a valid, first priority perfected security interest in, and a first lien upon, such Eligible Collateral deposited with the Collateral Agent in substitution for Prior Collateral.
(3) No such substitution shall be made unless and until the Collateral Agent shall have determined that the aggregate Pledge Value of all of the Collateral at the time of such proposed substitution, after giving effect to the proposed substitution, shall at least equal the Pledge Value Requirement.