Immediate collateralisation Clause Samples
The Immediate Collateralisation clause requires a party to provide collateral to secure its obligations as soon as certain conditions are met, without delay. In practice, this means that if a party's exposure exceeds a specified threshold or a triggering event occurs, they must promptly transfer eligible assets, such as cash or securities, to the other party as collateral. This mechanism ensures that the counterparty is protected against credit risk by maintaining adequate security at all times, thereby reducing the risk of loss in the event of default.
Immediate collateralisation. On so notifying the Obligors, the Affected Bank’s obligations under this Agreement that are unlawful shall terminate at the end of the expiry of 5 Banking Days’ notice (unless the circumstances necessitate termination forthwith) and the Required Collateral Amount shall be increased so that thereafter it is the amount that it would otherwise have been plus all amounts for which the Affected Bank is actually or contingently liable under all Letters of Credit then outstanding (subject to a maximum amount equal to the Sterling Equivalent Amount of the aggregate face amount of all outstanding Letters of Credit), and the parties shall use reasonable endeavours in good faith to negotiate arrangements whereby the Letters of Credit then outstanding may be replaced by letters of credit or other assets on terms under which the Affected Bank is either not involved or is involved in a manner that is not unlawful for it.