Common use of Provision of Collateral Clause in Contracts

Provision of Collateral. 1.1 The BRP shall provide collateral ("Collateral") to eSett as security against the risk ("Counterparty Risk") that the BRP is unable to fulfill its obligations towards eSett in the Imbalance Settlement, such as the payment of outstanding and future Settlement Amounts, or any other obligations of the BRP in the Imbalance Settlement. 1.2 The BRP shall provide the collateral in the form of cash ("Cash Collateral") or on-demand guarantee issued by a financial institution ("On-Demand Guarantee"), or a combination thereof. 1.3 Any Cash Collateral shall be held on a cash account (“Collateral Account”) in a bank that fulfils eSett’s requirements and is approved by eSett for use in the Imbalance Settlement ("Settlement Bank"). Prior to the provision of Cash Collateral, the BRP shall pledge the Collateral Account to eSett and grant eSett unconditional and irrevocable disposal rights to the Collateral Account by signing a Pledged Cash Account Agreement, the terms of which shall be defined by eSett. 1.4 Any On-Demand Guarantee shall be unconditional, irrevocable and payable on first demand, and issued by a financial institution that fulfils eSett’s requirements and is approved by eSett for use in the Imbalance Settlement (“Guarantor”). The terms of the On-Demand Guarantee shall be defined by eSett. The On-Demand Guarantee shall be delivered to eSett for safekeeping. 1.5 Cash Collateral and On-Demand Guarantees provided by the BRP and meeting the requirements set out herein are collectively referred to as "Deposited Collateral". 1.6 Sufficient Deposited Collateral, as specified in this Appendix, shall be provided by the BRP for it to be entitled to act as a Balance Responsible Party. 1.7 If the Settlement Bank where the Cash Collateral is held or the Guarantor that has issued the On- Demand Guarantee no longer fulfils eSett’s requirements, including but not limited to eSett’s requirements on credit ratings, or if the Deposited Collateral becomes unenforceable for any reason, the BRP shall, when so demanded by eSett, without delay provide a new Collateral that meets the requirements set out herein.

Appears in 5 contracts

Samples: Imbalance Settlement Agreement, Imbalance Settlement Agreement, Imbalance Settlement Agreement

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