Equitable Subrogation Clause Samples
Equitable subrogation is a legal principle that allows one party, typically an insurer or lender, to step into the shoes of another party to assert their legal rights or claims after satisfying a debt or obligation. In practice, this means that if a party pays off a debt owed by another, they may pursue recovery from third parties who were responsible for the loss or who benefited from the payment. This clause is primarily used to prevent unjust enrichment and to ensure that the party who ultimately bears the loss is the one who was originally responsible, thereby promoting fairness and proper allocation of financial responsibility.
Equitable Subrogation. To the extent that Purchaser advances proceeds under this Agreement to Seller that are used to pay any prior indebtedness secured by any outstanding lien, security interest, charge or prior encumbrance against, in, on or to the Receivables, then such proceeds shall have been advanced by Purchaser at Seller’s request; and Purchaser shall be fully subrogated to any and all rights, titles, interests, powers, equities, liens, encumbrances, and security interests (collectively “Liens”) owned or granted by any owner or holder of such Liens, irrespective of whether said Liens are released of record, or otherwise, and all of said Liens shall fully inure to the benefit of Purchaser.
Equitable Subrogation. Administrative Agent on behalf of itself and the lenders hereby acknowledges and agrees that with respect to all funds due or to become due under any Bonded Contract, nothing herein or in the Credit Documents will waive, impair, or limit Surety's common law equitable subrogation rights, which are hereby expressly recognized by Administrative Agent. Administrative Agent will not instigate, promote, institute, or join as a party in institution of any action, suit, or proceeding seeking to challenge or limit, such equitable subrogation rights.
XVI-1 Surety Acknowledgment List of Exhibits
Equitable Subrogation. The parties agree that with respect to all funds due or to become due under any specific Bonded Contract: (i) nothing herein will waive, impair, or limit Surety’s right of equitable subrogation with respect to such Bonded Contract, which the parties hereby expressly recognize; and (ii) such funds will be trust funds pursuant to applicable statutes or the terms of the Underwriting Agreement; provided, however, notwithstanding the foregoing or anything to the contrary (a) set forth in any Surety Credit Document or (b) arising pursuant to principles of legal or equitable subrogation (including, without limitation, trust fund principles), Surety agrees that Surety will have no right or claim of any nature with respect to any funds that are received by any Lender Party out of such funds, or constituting proceeds of such funds, prior to (x) the occurrence of an Event of Default under (and as defined in) the Underwriting Agreement and (y) Lender Agent’s receipt of written notice from Surety identifying such Event of Default and indicating that Surety is expressly reserving its rights hereunder. The foregoing will not be construed to be a waiver by Surety of any requirement that Principal or Island Mechanical, Hawaii comply with applicable law and the provisions of the Underwriting Agreement.