Collateral Release Clause Samples
The Collateral Release clause defines the conditions under which collateral held by one party is returned to the other party, typically after obligations secured by the collateral have been fulfilled. In practice, this clause may specify the procedures for confirming satisfaction of debts or obligations, outline any required notices or documentation, and set timelines for the release process. Its core function is to ensure that collateral is not held longer than necessary, providing assurance to the party providing collateral that it will be returned promptly once their obligations are met.
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Collateral Release. (a) Following the delivery of financial statements pursuant to Section 5.01 (a) or (b) (commencing with the financial statements for the period ending December 31, 2016) evidencing results for the most recent consecutive four Fiscal Quarter period of which (i) Consolidated Adjusted EBITDA exceeds $100,000,000 and (ii) the Total Net Leverage Ratio as of the last day of the Test Period covered by such financial statements is less than 3.00:1.00, then, so long as no Default or Event of Default shall have occurred and be continuing, the Parent shall have the right, by written notice to the Collateral Agent, to request that all Collateral then in effect be released from the security interest created by the Collateral Documents and the Collateral Agent shall use commercially reasonable efforts to cause such release to occur, and at the Obligors’ expense, execute and deliver to the applicable Obligor such documents as such Obligor may reasonably request to evidence the release of the Collateral from the assignment and security interest granted pursuant to the Loan Documents, within 30 days of the Parent’s request (the date of such request, the “Collateral Release Date”).
(b) If, at any time following a Collateral Release Date, financial statements delivered by the Borrower pursuant to Section 5.01(a) or (b) demonstrate that (x) Consolidated Adjusted EBITDA is equal to or below $100,000,000 and (ii) the Total Net Leverage Ratio as of the last day of the Test Period covered by such financial statements is equal to or greater than 3.00:1.00, (any such failure, event or condition, a “Collateral Redelivery Trigger”) each Obligor shall, at the Obligors’ expense, execute, acknowledge and deliver all instruments, agreements and other documents as the Administrative Agent and/or the Collateral Agent shall reasonably request in order to cause the Obligations to be secured by a first priority perfected Lien on (x) substantially all of the assets of the Obligors and their respective Domestic Restricted Subsidiaries (whether now owned or hereafter acquired) and (y) all of the outstanding Equity Interests of the Subsidiaries of the Parent (subject, in each case to the limitations and exceptions contained in the Loan Documents and the Collateral Documents, including that only 65% of the outstanding voting Equity Interests of any CFC or Foreign Subsidiary need be pledged), including, without limitation, any actions described in Section 5.10 that were not previously taken by the ...
Collateral Release. (i) Notwithstanding anything contained herein or any other Loan Document to the contrary, all Liens in favor of the Administrative Agent on the Collateral securing the Obligations shall be released upon the satisfaction of the following conditions precedent (the date on which such Liens are released being the “Release Date”): (i) receipt by the Administrative Agent of written notice from the Company at least ten (10) Business Days prior to the Release Date, specifying the proposed Release Date; (ii) as of the Release Date, the only Loans outstanding shall be Revolving Loans, the Existing Term Loan, and any Incremental Term Loan (other than any Incremental Term Loan structured as a term loan B); (iii) as of the Release Date, no Default or Event of Default shall have occurred and be continuing; (iv) as of the Release Date, there shall be no Lien on all or substantially all of the Collateral that was pari passu to the Liens on the Collateral securing the Obligations immediately prior to the Release Date; (v) immediately after giving pro forma effect to the release of Collateral and all other transactions consummated in connection therewith in contemplation of the Release Date, the Credit Parties shall be in compliance with the Pre-Collateral Financial Covenants computed as of the end of the period of twelve months most recently ended for which the Company has delivered financial statements pursuant to Section 6.01(a) or (b); (vi) receipt by the Administrative Agent of a certificate, dated the Release Date and executed by a Financial Officer of the Company, confirming the satisfaction of the conditions set forth in clauses (iii), (iv) and (v) above; and (vii) this Agreement shall have been amended in accordance with Section 6.11(d)(ii) below.
(ii) This Agreement and the other Loan Documents shall be amended prior to or as of the Release Date to implement such changes to this Agreement and the other Loan Documents as the Administrative Agent deems necessary to give effect to the release of Liens contemplated by this Section 6.11(d) (including amendments to this Agreement to replace Sections 7.08 and 7.09 with sections implementing the Pre-Collateral Financial Covenants), and the Lenders hereby authorize the Administrative Agent to enter into such amendments.
Collateral Release. In the event that any Loan Party conveys, sells, leases, assigns, transfers or otherwise disposes of all or any portion of any of the Capital Stock or assets of any Guarantor to a person that is not (and is not required to become) a Loan Party in a transaction not prohibited by Section 6.06, the Administrative Agent shall promptly (and the Lenders hereby authorize the Administrative Agent to) take such action and execute any such documents as may be reasonably requested by the Parent Borrower and at the Parent Borrower’s expense to release any Liens created by any Loan Document in respect of such Capital Stock or assets, and, in the case of a disposition of the Capital Stock of any Guarantor in a transaction permitted by Section 6.06 and as a result of which such Guarantor would cease to be a Subsidiary, terminate such Guarantor’s obligations under the Guarantee Agreement as well as any Liens created by any Loan Documents in respect of the assets of such Guarantor.
Collateral Release. The Notes are secured pursuant to and entitled to all of the benefits of the Security Documents. In the event that at any time after the Closing Date, except during the Suspension Period, the Company shall have obtained an Acceptable Rating in respect of its long-term, senior unsecured debt, the Company may give written notice to each holder of Notes (which notice shall include copies of the letters to the Company from ▇▇▇▇▇'▇ and Standard & Poor's evidencing that such Acceptable Rating has been in full force and effect for the one hundred eighty (180) day period immediately preceding the date of such notice and, if such Acceptable Rating is in effect during the Suspension Period, for the one hundred eighty (180) day period following the conclusion of such Suspension Period) requesting that the holders of the Notes direct the Security Trustee to release the Collateral from the security interests created by the Security Documents on a date specified in such notice (the "Collateral Release Date") that is not less than thirty (30) days and not more than sixty (60) days after the date of such notice. The holders of the Notes agree to direct the Security Trustee to so release the Collateral, provided that the Collateral Release Conditions have been satisfied and the holders of the Notes and the Security Trustee shall have received an officer's certificate, executed by a Senior Officer and dated the Collateral Release Date, specifying that at the time of such release and after giving effect thereto, each of the Collateral Release Conditions are satisfied. Notwithstanding such release of Collateral, the provisions of Section 6.13 hereof shall continue to apply on and after the Collateral Release Date. For the avoidance of doubt, the Collateral Release Date may not occur during or within 180 days after the conclusion of the Suspension Period.
Collateral Release. A. As of December 1, 2011 or 31 days from the date of loss, whichever is later, the parties shall determine how much collateral will be required to be maintained within the Trust Fund, less any amount required under the Reserves Article. This calculation will be performed on a monthly basis until all liability has been extinguished.
B. For the purposes of paragraph C below, "Loss Amount" shall be defined as the sum of:
1. Losses and allocated loss adjustment expense paid by the Company; plus
2. Reserves for losses reported and outstanding; plus
3. Reserves for allocated loss adjustment expense reported and outstanding; plus
4. Reserves for losses incurred but not reported - to be mutually agreed in good faith.
C. For each potentially covered loss hereunder, the Company shall multiply the Loss Amount by the appropriate Buffer Loss Multiplier from the table below, based on the number of days which have elapsed since the event. The product of this calculation shall be defined as the Buffered Loss Amount ("BLA").
D. With respect to each event for which the BLA exceeds the Company's retention as defined under the Retention and Limit Article, an amount equal to the Reinsurer's share of the lesser of (1) the amount by which the BLA exceeds the Company's retention as defined under the Retention and Limit Article, or (2) the Reinsurer's per occurrence limit as defined under the Retention and Limit Article, shall be deemed to equal the event specific collateral amount at the calculation date (the "Event Collateral Amount" or the "ECA").
E. In respect of all events for which an ECA exceeds $0, the aggregate amount of the required collateral to be held in the Trust Fund shall be equal to the amount by which the lesser of (1) the sum of the ECAs, or (2) the Reinsurer's term limit as defined under the Retention and Limit Article, exceeds amounts paid to date by the Reinsurer. Such aggregate amount shall be deemed to be the "Aggregate Collateral Obligation" or the "ACO."
F. At any month-end at which there is any security on deposit in the Trust Fund, the Company shall perform this calculation within 10 days after the end of such month and report to the Reinsurer and Trustee named in the Trust Agreement information supporting any BLA, ECA and ACO amounts greater than $0. The Assets in the Trust Fund will be adjusted monthly based on this calculation. In the event the balance of the Trust Fund is greater than the amount required to fully fund the Obligations, as defined by...
Collateral Release. The terms of the related Mezzanine Pledge Agreement or related Purchased Asset Documents do not provide for release of any material portion of the collateral securing the Mezzanine Loan from the lien of the Mezzanine Pledge Agreement except
(a) a partial release, accompanied by principal repayment of not less than a specified percentage at least equal to the lesser of (i) 110% of the related allocated loan amount of such portion of the collateral securing the Mezzanine Loan and (ii) the outstanding principal balance of the Purchased Asset, or (b) upon payment in full of such Purchased Asset.
Collateral Release. (a) Immediately upon the commencement of any Collateral Release Period, the security interests of the Collateral Agent and the other Secured Parties in the Collateral shall automatically be terminated and released; provided that the Guarantee of each Loan Party of the Obligations pursuant to the Loan Documents shall remain in effect during any such Collateral Release Period. During any Collateral Release Period, the Administrative Agent and the Collateral Agent shall execute and deliver, at the U.S. Borrower’s expense, all documents or other instruments that the U.S. Borrower shall reasonably request to evidence the termination and release of such security interests and shall return all Collateral in their possession to the U.S. Borrower.
(b) During any Collateral Release Period:
(i) The representations and warranties set forth in Section 3.17 shall not be required to be true and correct in any respect in connection with any Credit Event occurring during such period, and the inaccuracy in any respect of such representations and warranties shall not give rise to any Default or Event of Default pursuant to Section 7.01(a);
(ii) Holdings, Intermediate Holdings and the Borrowers shall not be required to comply with the terms of Sections 5.02(b), (c), (d) or (e);
(iii) Holdings, Intermediate Holdings and the Borrowers shall not be required to comply with the terms of Section 5.10 to the extent such terms require the creation and perfection of security interests or Liens on Collateral (it being understood that Holdings, Intermediate Holdings and the Borrowers shall continue to be required to comply with the terms of Section 5.10 that require the provision of Guarantees by Loan Parties in respect of the Obligations); and
(iv) The occurrence of any of the events described in Section 7.01(l)(ii) shall not constitute or give rise to any Default or Event of Default.
(c) Upon the termination of any Collateral Release Period, the security interests of the Collateral Agent and the Secured Parties in the Collateral shall automatically, without any further action on the part of the Administrative Agent, the Collateral Agent, the Secured Parties or any Loan Party, be reinstated and the provisions of Section 5.15(a) and (b) shall no longer apply (until the commencement of a subsequent Collateral Release Period). Promptly following the termination of any Collateral Release Period, the Loan Parties shall execute any and all documents, financing statements, agreements and inst...
Collateral Release. (a) At such time as the Secured Obligations have been paid in full (and all commitments of the Lenders to advance Loans hereunder have been terminated) and fully performed, the Collateral shall be automatically released from the Liens created hereby, and the Collateral Documents and all Guarantees and obligations (other than those expressly stated to survive such termination) of each Loan Party and each Secured Party under the Facility Documents shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Loan Parties. At the reasonable written request and sole expense of any Loan Party following any such termination, each Lender party hereto authorizes Agent to and Agent shall promptly deliver to the Loan Parties any Collateral held by Agent under the Facility Documents and execute and deliver to the Loan Parties such documents (including authorization to file UCC termination statements) as the Loan Parties shall reasonably request in writing to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or otherwise disposed of by any Loan Party in a transaction expressly permitted hereunder, then the security interest in, and Liens created hereunder on, such Collateral shall be automatically released. The Lenders hereby authorize Agent to and Agent, at the reasonable written request and sole expense of Loan Parties, shall execute and deliver to such Loan Party all releases or other documents reasonably necessary or desirable to evince or effectuate the release of the Liens created under the Collateral Documents on such Collateral. A Loan Party shall automatically be released from its obligations hereunder in the event that all the Stock of such Loan Party shall be sold, transferred or otherwise disposed of in a transaction expressly permitted hereunder (in each case, other than to any Loan Parties). The Lenders hereby authorize Agent to and Agent, at the reasonable written request and sole expense of Loan Parties, shall execute and deliver to such Loan Parties all releases or other documents reasonably necessary or desirable to evince or effectuate the release of such Loan Party from its obligations created under the Facility Documents; provided that Borrower shall have delivered to Agent, with reasonable written notice prior to the date of the proposed release, a written request for release identifying the relevant Loan Party and the terms of ...
Collateral Release. In lieu of all other provisions of the Loan Documents with respect to the release or substitution of Collateral (which provisions shall no longer be applicable), Lender agrees to release its lien on the Sites (the “Release Collateral”), upon payment to Lender (the “Release Price”) of the following amount with respect to each Site released:
Collateral Release. Notwithstanding anything in this Agreement or any other Surety Credit Document to the contrary, subject to prior or concurrent release by Bank of America, N.A., as Administrative Agent (the “Administrative Agent”) for the lenders under that certain Third Amended and Restated Credit Agreement, dated as of October 30, 2013, as amended, modified, supplemented and extended from time to time (including, without limitation, any renewals, restatements and replacements thereof) (the “Third Amended and Restated Credit Agreement”), among the Administrative Agent, such lenders, Quanta Services, Inc. and its subsidiaries party thereto, of the Administrative Agent’s liens and security interests granted pursuant to the Collateral Documents (as such term is defined in the Third Amended and Restated Credit Agreement), upon notice from Quanta Services, Inc., on the first date (the “Release Date”) on which two of the following three conditions are met: (i) the corporate credit rating of Quanta Services, Inc. is BBB- or higher by DM3\3445780.4 Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc. and any successor thereto (“S&P”), (ii) the corporate family rating of Quanta Services, Inc. is Baa3 or higher by ▇▇▇▇▇’▇ Investors Service, Inc. and any successor thereto (“Moody’s”) or (iii) the corporate credit rating of Quanta Services, Inc. is BBB- or higher by Fitch Ratings, Inc. and any successor thereto (“Fitch”) (each such rating described in clauses (i), (ii) and (iii), an “Investment Grade Rating”), and so long as no default or Event of Default exists on such date or immediately after giving effect to the release of liens contemplated hereby, any and all liens and security interests (including, without limitation, all Liens (as such term is defined in this Agreement) created by or arising in connection with this Agreement or any other Surety Credit Document shall automatically and immediately be fully released and all Collateral shall automatically and immediately be released from all such liens, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral or any other collateral or property constituting such a lien or subject to any such lien shall terminate and revert to the Indemnitors (the “Collateral Release”). At the request and sole expense of any Indemnitor following any such release, Surety shall deliver to such Indemnitor any Collateral or other such property held by Surety under any ...