SECURITY AND APPLICATION Clause Samples
The 'Security and Application' clause defines the requirements and procedures for providing security, such as deposits or guarantees, and specifies how these securities are to be applied or used under the agreement. Typically, this clause outlines the types of security acceptable (for example, cash deposits or bank guarantees), the conditions under which the security may be drawn upon, and the process for returning or releasing the security once obligations are fulfilled. Its core function is to protect the interests of the party receiving the security by ensuring there are clear rules for both the provision and use of security, thereby reducing the risk of non-performance or default.
SECURITY AND APPLICATION. 16.1 The Borrower hereby undertakes with the Lender to execute, deliver and perform the provisions of, and procure the execution, delivery and performance by the other parties thereto (other than the Lender) of, the Security Documents and the provisions thereof at the times and in the manner provided in this Agreement and in the Security Documents so that all such documents shall both at the date of such execution and delivery and at all times during the Security Period be valid and binding obligations of the Borrower and such other parties enforceable in accordance with their respective terms.
16.2 All moneys received by the Lender under or pursuant to this Agreement or any of the Security Documents and expressed to be applicable in accordance with the provisions of this Clause 16.2 shall (unless the Lender otherwise requires) be applied by the Lender in the following manner: FIRST: in or towards satisfaction of any amounts as are then accrued due and payable under this Agreement, the Master Agreement and the Security Documents (or any of them) or are then due and payable by virtue of payment demanded under this Agreement, the Master Agreement and the Security Documents (or any of them) in such order of application as the Lender shall think fit; SECONDLY: at the option of the Lender (i) in retention of an amount equal to any amounts which are not then accrued due and payable under this Agreement, the Master Agreement and the Security Documents (or any of them) or are not then due and payable by virtue of payment demanded under this Agreement, the Master Agreement and the Security Documents (or any of them) but which (in the sole and absolute opinion of the Lender) will or may become due and payable in the future and, upon the same becoming due and payable, in or towards satisfaction thereof in accordance with the foregoing provisions of this Clause 16.2 and/or (ii) in or towards prepayment of the Loan in accordance with sub-clauses (d) and (e) of Clause 4.2; and
SECURITY AND APPLICATION. 32 17 COMMUNICATIONS......................................................33 18 ASSIGNMENTS.........................................................34 19 MISCELLANEOUS.......................................................35