Draws on Credit Support Clause Samples

The "Draws on Credit Support" clause defines the conditions and procedures under which a party may access or utilize credit support provided by the other party, such as a letter of credit, guarantee, or collateral. Typically, this clause outlines the specific events or defaults that trigger the right to draw on the credit support, the method for making a draw, and any notice requirements. Its core practical function is to ensure that a party has a reliable means of securing payment or performance if the counterparty fails to meet its obligations, thereby mitigating credit risk and providing financial assurance.
Draws on Credit Support. The Credit Support will be maintained at the expense of Seller, and Purchaser shall be entitled to access the Credit Support as necessary to secure Seller’s performance pursuant to this Agreement, including for satisfaction of any amounts owed to Purchaser herein. Purchaser shall have the right to draw against the Seller Letter of Credit and/or claim against the Seller Guaranty (i) upon the occurrence of a Seller Default, (ii) to satisfy any Claim by Purchaser under Section 23.1, (iii) as to any Seller Letter of Credit, if Seller fails to timely renew or extend such Seller Letter of Credit or provide substitute Credit Support, or the issuer no longer qualifies as a Qualified Issuer, and (iv) as to any Seller Guaranty, if Seller fails to timely provide a replacement Seller Guaranty from a qualified Seller Guarantor or provide alternate Credit Support as provided in Section 16.3. Notwithstanding the foregoing, solely with respect to Purchaser’s completion of the Seller Punch List Items pursuant to Section 9.5, Purchaser acknowledges and agrees that it shall not be entitled to access Credit Support until Purchaser has exhausted the Punch List Holdback. Amounts drawn pursuant to Section 16.2(iii) and (iv) may be applied to amounts owed under Section 16.2(i) and (ii) and shall otherwise be held in an interest bearing escrow account and returned to Seller upon Seller’s replacement of such Seller Letter of Credit or Seller Guaranty with a replacement Seller Letter of Credit or Seller Guaranty meeting the requirements of Section 16.1. 45
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Related to Draws on Credit Support

  • Credit Support A Credit Support Document between the Parties may apply to obligations governed by the Agreement. If the Parties have executed a Credit Support Document, such Credit Support Document shall be subject to the terms of the Agreement and is hereby incorporated by reference in the Agreement. In the event of any conflict between a Credit Support Document and the Agreement, the Agreement shall prevail, except for any provision in such Credit Support Document in respect of governing law.

  • Credit Support Provider Credit Support Provider means in relation to Party A: (1) Party A in its capacity as a party to the Credit Support Document and (2) the guarantor under any Eligible Guarantee, and in relation to Party B, Party B in its capacity as a party to the Credit Support Document.

  • Certain Credit Support Events If (i) the L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, (ii) as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, (iii) the Borrower shall be required to provide Cash Collateral pursuant to Section 2.05 or 8.02(c), or (iv) there shall exist a Defaulting Lender, the Borrower shall immediately (in the case of clause (iii) above) or within one (1) Business Day (in all other cases) following any request by the Administrative Agent or the L/C Issuer, provide Cash Collateral in an amount not less than the applicable Minimum Collateral Amount (determined in the case of Cash Collateral provided pursuant to clause (iv) above, after giving effect to Section 2.15(a)(iv) and any Cash Collateral provided by the Defaulting Lender).

  • Credit Support Obligations (i) Delivery Amount, Return Amount and Credit Support Amount.

  • Credit Support Default (1) Failure by the party or any Credit Support Provider of such party to comply with or perform any agreement or obligation to be complied with or performed by it in accordance with any Credit Support Document if such failure is continuing after any applicable grace period has elapsed; (2) the expiration or termination of such Credit Support Document or the failing or ceasing of such Credit Support Document to be in full force and effect for the purpose of this Agreement (in either case other than in accordance with its terms) prior to the satisfaction of all obligations of such party under each Transaction to which such Credit Support Document relates without the written consent of the other party; or (3) the party or such Credit Support Provider disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity of, such Credit Support Document;