Contingent Collateral Clause Samples
The Contingent Collateral clause establishes the requirement for a party to provide additional collateral if certain predefined events or conditions occur. In practice, this means that if a party's creditworthiness declines, market values fluctuate, or specific financial thresholds are breached, extra collateral must be posted to secure ongoing obligations. This clause serves to protect the non-defaulting party from increased credit risk by ensuring that sufficient security is maintained throughout the duration of the agreement.
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Contingent Collateral. (a) Upon the occurrence of (x) a Contingent Collateral Trigger Event, (y) an event of default (other than an insolvency event of default) or an additional termination event in respect of which the relevant Swap Provider is the defaulting party or the affected party, as applicable, or (z) a Downgrade Trigger Event, in each case, in respect of the Interest Rate Swap Agreement or the Covered Bond Swap Agreement, the relevant Swap Provider, in its capacity as (and provided it is) the lender under this Agreement, may deliver a notice substantially in the form attached as Schedule 3 hereto (each, a “Contingent Collateral Notice”) to the Guarantor under which it elects to decrease the amount of the Demand Loan with a corresponding increase in the amount of the Guarantee Loan, in each case, in an amount equal to the related Contingent Collateral Amount(s). A Contingent Collateral Notice may only be delivered if the balance of the Demand Loan (determined in accordance with Section 3.2 without regard to the related Contingent Collateral Amount) at such time exceeds the related Contingent Collateral Amount.
(b) At any time that a Contingent Collateral Notice is in effect, the Guarantor (or the Cash Manager on its behalf) shall determine the Contingent Collateral Amount(s), the balance of the Guarantee Loan and the balance of the Demand Loan on each Canadian Business Day.
(c) If (i) the circumstances triggering the delivery of a particular Contingent Collateral Notice have been cured, or (ii) the relevant Swap Provider and the Guarantor mutually agree to terminate a particular Contingent Collateral Notice, such Contingent Collateral Notice will be automatically revoked and of no further effect and the related Contingent Collateral Amount shall no longer be applicable in the determination of “W” in accordance with Section 3.2.
Contingent Collateral. At any time subsequent to the inception of this Reinsurance Agreement, in the event that:
1. the Reinsurer has been assigned an A.M. Best’s insurer financial strength rating below “A-” or a Standard & Poor’s insurer financial strength rating below “A-” (a Standard & Poor’s Insurance Solvency International rating of less than “BBB” shall apply as respects alien Reinsurers other than Underwriting Members of Lloyd’s, London, and a Lloyd’s Syndicate Assessment (LSA) rating of less than three shall apply as respects Underwriting Members of Lloyd’s London); or
2. the Reinsurer’s policyholders’ surplus (or the equivalent under the Reinsuer’s accounting system) as reported in such financial statements of the Reinsurer as designated by the Company has been reduced by 25% of the amount therof from either the inception date of this Reinsurance Agreement or from any date during the 12-month period preceding the inception of this Reinsurance Agreement; or ,
3. the Reinsurer ceases writing new or renewal assumed reinsurance business, the Company may require that the Reinsurer provide Letters of Credit and/or establish a Trust Agreement, at the Reinsurer’s own expense, to collateralize the sum of the following under this Reinsurance Agreement, as reported by the Company (hereinafter the “Reinsurer’s Collateral”):
a. the amount of loss and loss expense paid by the Company but not recovered from the Reinsurer;
b. reserves for loss and loss expense reported and outstanding;
c. reserves for loss and loss expense incurred but not reported; and
d. if applicable, unearned premium. Such Reinsurer’s Collateral shall be established by the Reinsurer within ten business days of receipt by the Reinsurer of the Company’s written notice requesting the establishment of such Reinsurer’s Collateral, and the notice shall be sent by the Company, to the Reinsurer, via certified mail or internationally recognized overnight courier service. The Reinsurer’s Collateral shall be established and maintained in accordance with the provisions of the Funding of Reserves Article stated in this Reinsurance Agreement. If a Trust Agreement is established, the Reinsurer shall select the trustee bank with the consent of the Company, with such consent not to be unreasonably withheld. If the Reinsurer does not agree with the statement of the Reinsurer’s Collateral as furnished by the Company, a mutually agreed upon independent national actuarial firm shall be engaged to evaluate the Reinsurer’s Collateral. Du...
Contingent Collateral. (This Article shall apply only to a Reinsurer with an A.M. Best insurance financial strength rating of “A” or below or a Standard & Poor’s insurance financial strength rating of “A” or below at the effective date of this Agreement.)
Contingent Collateral. (This Article shall apply only to a Reinsurer with an A.M. Best insurance financial strength rating of "A" or below or a Standard & Poor's insurer financial strength rating of "A" or below at the effective date of this Agreement.) (This Article shall not apply to Lloyd's Syndicates who have satisfied their funding obligations to the Credit for Reinsurance Trust Fund (CRTF); however, in the instance where such funding requirements are reduced below 100%, then the provisions of this Article shall apply to any Lloyd's Syndicate and funding shall be required for the difference between 100% of the Reinsurer's Collateral funded to the CRTF.)