Expiration Date; Cash Collateralization Clause Samples
The 'Expiration Date; Cash Collateralization' clause defines the point at which an agreement or obligation ends and outlines requirements for providing cash as collateral at or near that time. Typically, this clause specifies that as the contract approaches its expiration date, any outstanding obligations must be secured by cash, either to cover potential losses or to ensure payment of final amounts due. This mechanism ensures that parties are protected against default or non-payment at the end of the contract, thereby reducing credit risk and providing certainty regarding settlement of outstanding obligations.
Expiration Date; Cash Collateralization. Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date up to twenty-four months after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, up to twenty-four months after such renewal or extension) (provided that any Letter of Credit may provide for the renewal thereof for additional up to twenty-four month periods not to extend past the date in clause (ii) below) and (ii) the date five Business Days prior to the Maturity Date; provided that the expiration date of a Letter of Credit may extend beyond the date referenced in clause (ii) above if the Borrower has on the date of its issuance: (A) posted cash collateral to the Administrative Agent in an amount in the applicable currency in which the related Letter of Credit is issued and in immediate available funds equal to the amount of the related LC Exposure plus any accrued and unpaid interest thereon (any cash collateral provided to secure any LC Exposure is herein referred to as the “Cash Collateral”) in accordance with Section 2.06(i), (B) delivered a backstop Letter of Credit to the Administrative Agent in such amount or (C) otherwise entered into alternative arrangement with respect to securing the LC Exposure applicable to such Letter of Credit, in each case of clause (A), (B) and (C) preceding on terms reasonably satisfactory to the Administrative Agent. If the Borrower is required to provide Cash Collateral pursuant to the provisions of this paragraph (c) with respect to a Letter of Credit, such Cash Collateral (to the extent not applied by the Administrative Agent to reimburse the Issuing Bank as provided in Section 2.06(i)) shall be returned to the Borrower after the expiry date applicable to such Letter of Credit (as such date may be extended by any period required by Rule 3.14 of ISP).
Expiration Date; Cash Collateralization. Upon the request of the Bank, if, on the Expiration Date, any Letter of Credit Obligation for any reason remains outstanding, Borrower shall, in each case, immediately Cash Collateralize the then outstanding amount of all Letter of Credit Obligations in an amount not less than the Minimum Collateral Amount.