Collateral Security Pledge Delivery Clause Samples

The 'Collateral Security; Pledge; Delivery' clause establishes the lender's right to receive and hold collateral from the borrower as security for a loan or obligation. In practice, this clause typically requires the borrower to deliver specified assets—such as cash, securities, or property—to the lender or a designated agent, who then holds these assets until the underlying debt is repaid or the obligation is fulfilled. By formalizing the process of pledging and delivering collateral, this clause ensures the lender has a tangible means of recourse if the borrower defaults, thereby reducing the lender's risk and providing assurance of repayment.