Common use of Care of Posted Collateral Clause in Contracts

Care of Posted Collateral. The Secured Party shall exercise reasonable care to assure the safe custody of all Posted Collateral to the extent required by applicable law, and, in any event, the Secured Party will be deemed to have exercised reasonable care if it exercises at least the same degree of care as it would exercise with respect to its own property. Except as specified in the preceding sentence, the Secured Party will have no duty with respect to Posted Collateral, including without limitation, any duty to collect any distributions, or to enforce or preserve any rights pertaining thereto. The Secured Party will be entitled to hold Posted Collateral or, at its option and with the consent of the Posting Party (not to be unreasonably withheld or delayed), to appoint a custodian to hold such Posted Collateral on its behalf. The Parties shall negotiate in good faith a custody agreement with any such custodian. Upon the execution of such an agreement, the appointment of the custodian, and the delivery to the custodian of any Posted Collateral held by the Secured Party, the Posting Party’s obligations to make any transfer of Eligible Collateral to such Secured Party will be discharged by making such transfer to that custodian. The Secured Party will not be liable for the acts or omissions of its custodian so appointed.