Common use of Composition of Security Clause in Contracts

Composition of Security. ‌ (a) Prior to the COD, the obligation of the Supplier to post and maintain Completion and Performance Security as required by Section 6.1(b)(i), 6.1(b)(ii) and 6.1(b)(iii) must be satisfied by the Supplier providing to the Sponsor a Letter of Credit for the full amount.‌ (b) From and after the date of receipt by the Supplier of the confirmation of the Sponsor described in Section 2.4(b) in respect of COD, the Completion and Performance Security shall be provided as set out in Section 6.2(b)(i) or 6.2(b)(ii) below: (i) a Letter of Credit for the full amount of the Completion and Performance Security; or‌ (ii) subject to Sections 6.2(c) and 6.2(d), a Guarantee, up to a maximum amount determined pursuant to Section 6.4, but not to exceed ninety percent (90%) of the amount of the Completion and Performance Security, together with a Letter of Credit for the balance of the amount of the Completion and Performance Security.‌ To the extent that the amount of the Guarantee requirement increases or decreases from time to time in accordance with this Article 6, the amount of the Letter of Credit shall correspondingly be required to be decreased or increased, respectively, so that the total amount of the Completion and Performance Security held by the Sponsor at all times from and after the COD remains in an aggregate amount as required pursuant to Section 6.1(b)(iv). (c) If the aggregate of the Supplier’s Creditworthiness Value determined pursuant to Section 6.4(b) and the principal amount of the Letter of Credit described in Section 6.2(b)(ii) is equal to or greater than the amount of the Completion and Performance Security, then no Guarantee is required.‌ (d) If a Guarantee forms part of the Completion and Performance Security and:‌ (i) the Creditworthiness Value of the Supplier determined pursuant to Section 6.4(b) is equal to or greater than the Creditworthiness Value of the Guarantor determined pursuant to Section 6.4(b), provided the Guarantor has a Credit Rating required of a Guarantor as set out in Section 6.4, or (ii) the aggregate of the Supplier’s Creditworthiness Value and the principal amount of the Letter of Credit described in Section 6.2(b)(ii) is equal to or greater than the amount of the Completion and Performance Security, then, provided the Supplier is not then in default under this Agreement, the Sponsor shall, upon request by the Supplier, return the Guarantee to the Supplier. (e) For greater certainty, the Completion and Performance Security may not be pooled or combined with security under any other agreement with the Sponsor.

Composition of Security. ‌ (a) Prior to If Performance Security is required by the CODBuyer, the obligation of the Supplier to post and maintain Completion and “Performance Security as required by Section 6.1(b)(i), 6.1(b)(ii) and 6.1(b)(iii) must be satisfied by the Supplier providing to the Sponsor a Letter of Credit for the full amount.‌ (b) From and after the date of receipt by the Supplier of the confirmation of the Sponsor described in Section 2.4(b) in respect of COD, the Completion and Performance Security Security” shall be provided as set out in Section 6.2(b)(i6.2(a)(i) or 6.2(b)(ii(ii) below:below:‌ (i) a Letter of Credit for the full amount of the Completion and Performance Security; or‌ (ii) subject to Sections Section 6.2(c) and 6.2(d), a Guarantee, up to a maximum amount determined pursuant to Section 6.4, but not to exceed ninety percent (90%) of the amount of the Completion and Performance Security, together with a Letter of Credit for the balance of the amount of the Completion and Performance Security.‌ To the extent that the amount of the Guarantee requirement increases or decreases from time to time in accordance with this Article 6, the amount of the Letter of Credit shall correspondingly be required to be decreased or increased, respectively, so that the total amount of the Completion and Performance Security held by the Sponsor Buyer at all times from and after the COD remains in an aggregate amount as required pursuant to Section 6.1(b)(iv)6.1. (cb) If the aggregate of the Supplier’s Creditworthiness Value determined pursuant to Section 6.4(b) and the principal amount of the Letter of Credit described in Section 6.2(b)(ii) is equal to or greater than the amount of the Completion and Performance Security, then no Guarantee is required.‌required. (dc) If a Guarantee forms part of the Completion and Performance Security and:‌ (i) the Creditworthiness Value of the Supplier determined pursuant to Section 6.4(b) is equal to or greater than the Creditworthiness Value of the Guarantor determined pursuant to Section 6.4(b), provided the Guarantor has a Credit Rating required of a Guarantor as set out in Section 6.4, or (ii) the aggregate of the Supplier’s Creditworthiness Value and the principal amount of the Letter of Credit described in Section 6.2(b)(ii) is equal to or greater than the amount of the Completion and Performance Security, then, provided the Supplier is not then in default under this Agreement, the Sponsor Buyer shall, upon request by the Supplier, return the Guarantee to the Supplier. (e) For greater certainty, the Completion and Performance Security may not be pooled or combined with security under any other agreement with the Sponsor.