Common use of Surety Agreement Clause in Contracts

Surety Agreement. In the event that any claim or Lien is asserted against any Vessel for loss, damage or expense which is covered by insurance hereunder and it is necessary for the Mortgagor to obtain a bond or supply other security to prevent arrest of such Vessel or to release such Vessel from arrest on account of said claim or Lien, the Mortgagee, on the Mortgagor’s Request, may, at the Mortgagee’s sole option, assign to any Person executing a surety or guaranty bond or other agreement to save or release such Vessel from such arrest, all right, title and interest of the Mortgagee in and to said insurance covering such loss, damage or expense as collateral security to indemnify against liability under said bond or other agreement.