Common use of CREDIT, FINANCIAL RESPONSIBILITY AND EVENTS OF DEFAULT Clause in Contracts

CREDIT, FINANCIAL RESPONSIBILITY AND EVENTS OF DEFAULT. 10.1. If either party (“X”) has reasonable grounds for insecurity regarding the performance of any obligation under this Contract (whether or not then due) by the other party (“Y”) (including, without limitation, as a result of the occurrence of a material change in the creditworthiness or financial condition of Y or its Guarantor, if applicable), X may demand Adequate Assurance of Performance. Y hereby grants to X a continuing first priority security interest in, lien on and right of setoff against all Adequate Assurance of Performance in the form of cash transferred by Y to X pursuant to this Section 10.1. Upon the return by X to Y of such Adequate Assurance of Performance, the security interest and lien granted hereunder on that Adequate Assurance of Performance shall be released automatically and, to the extent possible, without any further action by either party.