Additional Collateral Account Clause Samples
The Additional Collateral Account clause establishes a separate account where a party must deposit extra collateral to secure its obligations under an agreement. This account is typically used when the value of existing collateral falls below a required threshold or when certain credit events occur, prompting the need for additional security. By requiring and defining the use of an additional collateral account, the clause helps ensure that the secured party remains adequately protected against counterparty risk, thereby reducing the likelihood of loss if the other party defaults.
Additional Collateral Account. Commencing on or prior to the Tranche A Conversion Date, Borrower shall maintain a special depository account (the “Additional Collateral Account”). The Additional Collateral Account shall be funded pursuant to Section 6.1(c) (ix) hereof up to a maximum amount of $20,000,000 (the “Required Additional Collateral Balance”). The Lenders and the Institutional Lenders shall be entitled to use the funds in the Additional Collateral Account to satisfy payment obligations of Borrower under the Loan Instruments. If on any Calculation Delivery Date the Combined Debt Service Coverage Ratio and the Combined Projected Debt Service Coverage Ratio then delivered pursuant to Section 6.2 hereof are equal to or greater than 1.25 to 1.00, so long as no Event of Default has occurred and is continuing, then Agent shall transfer on instruction by Borrower the monies in the Additional Collateral Account for deposit in the Project Control Account as an item of Cash Revenues. Funds in the Additional Collateral Account may, upon three Banking Days’ prior written notice from Borrower to Agent, be used to prepay Agreement Term Loans (including a reduction in the Bond Letter of Credit Facilities) and Institutional Term Loans (together with the Yield-Maintenance Premium with respect to the principal amount of the Institutional Term Loans being prepaid) on a pro rata basis (such prepayments to be applied to whichever is the last maturing principal repayment as between the Tranche A Term Loan and the Tranche B Term Loan and to whichever is the last maturing principal repayment as between the Tranche A Institutional Term Loan and the Tranche B Institutional Term Loan). So long as no Event of Default has occurred and is continuing, on each Repayment Date, Agent shall transfer on instruction by Borrower any amount in excess of the Required Additional Collateral Balance for deposit in the Project Control Account as an item of Cash Revenues and such amount shall be applied on such date pursuant to the provisions of Section 6.1(c) hereof and shall be available for withdrawal by Borrower from the Project Control Account pursuant to Section 6.1(c) (xi) above on such date, subject to any prior applications pursuant to Section 6.1(c) hereof. 122
Additional Collateral Account. Upon (x) the satisfaction of the conditions precedent set forth in Section 4 hereof and (y) the payment in full by the Borrowers of any outstanding amounts under the Additional Letters of Credit, the Administrative Agent agrees to (i) immediately return to the Borrowers any amount of cash on deposit in the Additional Collateral Account and (ii) terminate such Additional Collateral Account.
Additional Collateral Account. Notwithstanding anything in this Section 4 to the contrary, to the extent that any cash proceeds of, or other moneys received in connection with, the Collateral Documents arise from Collateral that is subject to liens of the Second Lien Documents but not of the First Lien Documents and would otherwise have been deposited in the Collateral Account, such proceeds shall instead be placed in a separate Collateral Account (the "Additional Collateral Account") maintained by the Note Collateral Agent. The Note Collateral Agent shall maintain and administer such Additional Collateral Account in accordance with the procedures established for the Collateral Account in this Agreement; provided that any distributions from such Additional Collateral Account shall be made without regard to clauses First, Second, Third and Fourth of Section 4.2(b).
Additional Collateral Account. Upon the request of the US Borrower, the Administrative Agent shall withdraw for the account of the US Borrower an amount not to exceed the amount by which the aggregate amount of funds on deposit in the Additional Collateral Account exceeds 100% of the aggregate Available Amount of all outstanding Additional Letters of Credit at such time.”
F. Section 2.07(b)(i) of the Credit Agreement is hereby deleted in its entirety and the phrase “Intentionally Deleted” is inserted in place thereof.
G. Section 5.02(g) of the Credit Agreement is hereby amended to (i) delete the word “and” in the second line of clause (i) thereof and (ii) delete the period at the end of clause (ii) thereof and insert the following in place thereof: , and (iii) the US Borrower may purchase for fair market value its Equity Interests outstanding and currently held in trust pursuant to the PBGC Agreement in order to satisfy the remaining financial obligations under the PBGC Agreement.
H. Section 5.03(d) of the Credit Agreement is hereby deleted in its entirety and the phrase “Intentionally Deleted” is inserted in place thereof.
I. Section 5.03(p) of the Credit Agreement is hereby deleted in its entirety and the phrase “Intentionally Deleted” is inserted in place thereof.
J. Section 5.04(e) of the Credit Agreement is hereby amended to delete the reference to the word “less” in the second line thereof and insert the word “more” in place thereof.
Additional Collateral Account