Common use of Security Amount Clause in Contracts

Security Amount. 5.1. The Retail Partner hereby understands that by virtue of the Company making available the Platform, Website and/or Company Services to Retail Partner and Services being provided by Retail Partner, the Company is exposed to various risks, including credit risk, operational risk, reputational risk, compliance risk and contractual risk. a) The Retail Partner agrees and acknowledges that the Company may, in order to manage the risks associated with the transactions on Website / Platform and Services being provided by Retail Partner, require the Retail Partner to maintain a non-interest bearing security with Company, either directly or with the assistance of BP from time to time (“Security Amount”) in such manner and form as maybe required by the Company. b) Retail Partner hereby acknowledges and agrees that depending upon the nature of Services or Company Services, the Company shall have the right, from time to time, to restrict/ permit certain/all transactions on Website / Platform up to a maximum limit (the “Transaction Limit”). The Transaction Limit for a Retail Partner shall be determined at the sole discretion of Company, relying on factors including but not limited to, the Security Amount maintained by the Retail Partner with Company, Retail Partner’s creditworthiness, any amounts due from the Retail Partner to the Company and performance record and/or nature of Services provided by the Retail Partner. c) The Retail Partner acknowledges and understands that: (i) the Company has contractual arrangements with vendors and upon the Retail Partner availing Company Services and undertaking transactions on Website / Platform, the vendors charge certain amount/ fees to the Company for the service availed (“Vendor Payments”); (ii) the Company has agreed to provide Company Services, including goods or products (including Company developed products and services and third-party goods), to the Retail Partner in consideration of the Retail Partner paying the Company Service Fee to the Company on a daily settlement cycle, and the Company faces credit risks associated with the Retail Partner not paying the Company Service Fee and the Vendor Payments (Company Service Fee and Vendor Payments collectively referred as “Due Amounts”). The Retail Partner hereby unconditionally agrees to a daily settlement cycle for Due Amounts, and it shall be obliged to pay the respective Due Amounts on an end-of-day basis (i.e., before 11pm). In the event that Retail Partner fails to pay all or any part of the Due Amounts on an end-of-day basis (before 11pm), it shall amount to a payment default by the Retail Partner and the Company shall have the irrevocable right to deduct the required amount from Security Amount, as in the opinion of Company, is necessary to ensure due payment of Due Amounts by the Retail Partner and the Security Amount shall be reduced by such amounts deducted. It is hereby clarified that deduction of Due Amounts from the Security Amount by the Company pursuant to this Clause 5.4 shall be a valid discharge of Retail Partner’s payment obligation of the respective Due Amounts for the specific day. d) Retail Partner agrees and understands that any payments made by it to Company shall be first applied towards settlement of Due Amounts and any surplus amounts shall then be applied towards increasing or replenishing the Security Amount.