Common use of Care of Performance Assurance Clause in Contracts

Care of Performance Assurance. Beyond the exercise of reasonable care in the custody thereof, Secured Group shall have no duty as to any Performance Assurance in its possession or control or in the possession or control of any Custodian or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. Secured Group shall be deemed to have exercised reasonable care in the custody and preservation of the Performance Assurance in its possession, and/or in the possession of its Custodian, if the Performance Assurance is accorded treatment substantially equal to that which it accords its own property, and shall not be liable or responsible for any loss or damage to any of the Performance Assurance, or for any diminution in the value thereof, by reason of the act or omission of any Custodian selected by Secured Group in good faith except to the extent such loss or damage is the result of such Custodian's willful misconduct or negligence. Unless held by a Custodian and subject to Paragraph 6(a)(iv)(A), Secured Group shall at all times retain possession or control of any Performance Assurance delivered to it. The holding of Performance Assurance by a Custodian for the benefit of Secured Group shall be deemed to be the holding and possession of such Performance Assurance by Secured Group for the purpose of perfecting the security interest in the Performance Assurance. Except as otherwise provided in paragraph 6(a)(iv), nothing in this Collateral Annex shall be construed as requiring Secured Group to select a Custodian for the keeping of Performance Assurance for its benefit.