9b ADDITIONAL BOND SECURITY Clause Samples
The 'ADDITIONAL BOND SECURITY' clause requires the provision of extra security or collateral to support a bond, typically in situations where the original security is deemed insufficient. This may involve the obligor furnishing additional assets, guarantees, or other forms of assurance to the bondholder, often triggered by specific events such as a decline in asset value or a downgrade in credit rating. The core function of this clause is to protect the interests of bondholders by ensuring that adequate security is maintained throughout the life of the bond, thereby mitigating the risk of default.
9b ADDITIONAL BOND SECURITY. The Seller shall promptly furnish additional security required to protect the Company, the Government, and persons supplying labor or materials under this Agreement if:
(a) Any surety upon any bond, or issuing financial institution for other security, furnished with this Agreement becomes unacceptable to the Government;
(b) Any surety fails to furnish reports on its financial condition as required by the Government;
(c) The Agreement price is increased so that the penal sum of any bond becomes inadequate in the opinion of the Company; or