Common use of Composition of Security Clause in Contracts

Composition of Security. ‌ (a) The Completion and Performance Security shall be provided as set out in Section 6.2(a)(i) or (ii) below:‌ (i) a Letter of Credit acceptable to the Buyer, for the full amount of the Completion and Performance Security; or‌ (ii) subject to Section 6.2(c), a Guarantee, up to a maximum amount determined pursuant to Section 6.4, but not to exceed ninety percent (90%) of the amount of the Completion and Performance Security, together with a Letter of Credit, certified cheque, bank draft, or other equivalent form of security acceptable to the Buyer, for the balance of the amount of the Completion and Performance Security.‌ To the extent that the amount of the Guarantee requirement increases or decreases from time to time in accordance with this Article 6, the amount of the Letter of Credit shall correspondingly be required to be decreased or increased, respectively, so that the total amount of the Completion and Performance Security held by the Buyer at all times from and after the Term Commencement Date remains in an aggregate amount as required pursuant to Section 6.1. (b) If the aggregate of the Supplier’s Creditworthiness Value determined pursuant to Section 6.4(b) and the principal amount of the Letter of Credit, certified cheque, bank draft, or other equivalent form of security acceptable to the Buyer described in Section 6.2(a)(ii) is equal to or greater than the amount of the Completion and Performance Security, then no Guarantee is required. (c) If a Guarantee forms part of the Completion and Performance Security and:‌ (i) the Creditworthiness Value of the Supplier determined pursuant to Section 6.4(b) is equal to or greater than the Creditworthiness Value of the Guarantor determined pursuant to Section 6.4(b), provided the Guarantor has a Credit Rating required of a Guarantor as set out in Section 6.4, or (ii) the aggregate of the Supplier’s Creditworthiness Value and the principal amount of the Letter of Credit, certified cheque, bank draft, or other equivalent form of security acceptable to the Buyer described in Section 6.2(a)(ii) is equal to or greater than the amount of the Completion and Performance Security, then, provided the Supplier is not then in default under this Agreement, the Buyer shall, upon request by the Supplier, return the Guarantee to the Supplier.

Composition of Security. ‌ (a) The Prior to the COD, the obligation of the Supplier to post and maintain Completion and Performance Security as required by Sections 6.1(b)(i) must be satisfied by the Supplier providing to the Buyer a Letter of Credit, certified cheque, bank draft, or other equivalent form of security acceptable to the Buyer for the full amount, but, for certainty, shall not include guarantees. (b) From and after the date of receipt by the Supplier of the confirmation of the Buyer described in Section 2.6(b) in respect of COD, the Completion and Performance Security shall be provided as set out in Section 6.2(a)(i6.2(b)(i) or (ii) below:‌below: (i) a Letter of Credit Credit, certified cheque, bank draft, or other equivalent form of security acceptable to the Buyer, for the full amount of the Completion and Performance Security; or‌or (ii) subject to Section 6.2(c6.2(d), a Guarantee, up to a maximum amount determined pursuant to Section 6.4, but not to exceed ninety percent (90%) of the amount of the Completion and Performance Security, together with a Letter of Credit, certified cheque, bank draft, or other equivalent form of security acceptable to the Buyer, for the balance of the amount of the Completion and Performance Security.‌ Security. To the extent that the amount of the Guarantee requirement increases or decreases from time to time in accordance with this Article 6, the amount of the Letter of Credit shall correspondingly be required to be decreased or increased, respectively, so that the total amount of the Completion and Performance Security held by the Buyer at all times from and after the Term Commencement Date COD remains in an aggregate amount as required pursuant to Section 6.1. (bc) If the aggregate of the Supplier’s Creditworthiness Value determined pursuant to Section 6.4(b) and the principal amount of the Letter of Credit, certified cheque, bank draft, or other equivalent form of security acceptable to the Buyer described in Section 6.2(a)(ii6.2(b)(ii) is equal to or greater than the amount of the Completion and Performance Security, then no Guarantee is required. (cd) If a Guarantee forms part of the Completion and Performance Security and:‌and: (i) the Creditworthiness Value of the Supplier determined pursuant to Section 6.4(b) is equal to or greater than the Creditworthiness Value of the Guarantor determined pursuant to Section 6.4(b), provided the Guarantor has a Credit Rating required of a Guarantor as set out in Section 6.4, or (ii) the aggregate of the Supplier’s Creditworthiness Value and the principal amount of the Letter of Credit, certified cheque, bank draft, or other equivalent form of security acceptable to the Buyer described in Section 6.2(a)(ii6.2(b)(ii) is equal to or greater than the amount of the Completion and Performance Security, then, provided the Supplier is not then in default under this Agreement, the Buyer shall, upon request by the Supplier, return the Guarantee to the Supplier.