Reduction in Security Clause Samples
The 'Reduction in Security' clause allows for the decrease of a security deposit or other form of financial security provided under a contract once certain conditions are met. Typically, this clause specifies milestones or performance criteria—such as completion of a project phase or the passage of a set period without default—after which the security amount may be reduced. Its core practical function is to balance the protection of the party receiving security with the fair treatment of the party providing it, ensuring that excess funds are not unnecessarily tied up once risks have diminished.
Reduction in Security. A. At any time after October 31, 2013, Tenant may reduce the Security and Restoration Deposit or the Letter of Credit Amount, as applicable, to $125,000.00, on the condition that (i) Tenant has had two consecutive profitable quarters for the current fiscal year of Tenant, (ii) Tenant provides Landlord with an unaudited statement reporting such profitability, certified as true by Tenant’s Chief Financial Officer, and (iii) Tenant is not then in default under this Lease and has not previously been in default of its obligations beyond the expiration of all applicable notice and cure periods under this Lease.
Reduction in Security. During the construction of the Improvements, the Security may be reduced in accordance with the percentage of completion of the construction. The County Executive of TNR will execute Statements of Partial Reductions in the Amount of Security, when provided with the following documentation:
1) a professional engineer's certification of quantities of work completed;
2) a contractor's invoice for work completed; and
3) a TNR inspection report, indicating the completion of the portion of the work represented by the contractor's invoice. After the approval and acceptance of the construction of the Improvements, the Security for the public Improvements may be reduced by ninety percent (90%) of the cost of the approved construction and held for the one-year Performance Period. After the approval of the construction of the private Improvements, the Security posted for the private Improvements will be fully released. In addition, the County agrees to release or reduce, as appropriate, the Security provided by the Subdivider, if the County accepts a substitute Security for all or any portion of the Improvements.
Reduction in Security. No reduction in the amount of Security filed by the Developer with The Township in accordance with the terms of this Agreement will be permitted until such time as the Developer has entered into a Pre-Servicing or Subdivision Agreement with the Township for the Lands. Thereafter, any reductions in the Security posted by the Developer will be completed in accordance with the terms of the Pre- Servicing or Subdivision Agreement. For greater certainty, the Parties may agree to apply any Working Deposit, Securities or certificate of insurance delivered by the Developer to the Township on account to the Developer’s obligations under this Agreement to the Developer’s obligations under the Pre-Servicing or Subdivision Agreement.
Reduction in Security. Once all of the required improvements are at least 75 percent complete, as certified by a North Carolina Registered Professional Engineer, the County may reduce the total financial security by the ratio that the completed improvements bear to the total estimated cost of improvements required, provided that no more than one such reduction may be permitted prior to releasing the performance guarantee.
Reduction in Security. Provided an Event of Default has not occurred during the first nineteen (19) months of the Term, then Tenant shall be entitled to reduce the security (whether in the form of a Security Deposit or Letter of Credit) by fifty percent (50%). Landlord shall promptly take all actions requested by Tenant to effect such reduction.