274 NEWSLETTER 2021 Credit Support and Performance Assurance The parties may agree at any time on the circumstances in which they will be required to provide credit support documents and the form and amount of such guarantees. In such case, the agreed credit support documents should be provided pursuant to the parties’ agreement. In addition, when a material adverse change occurs as to a party, the other party may request additional securities as guarantees for the performance of the party about which such a material adverse change has occurred. The General Agreement, under section §17.2, lists the circumstances which are classified as material adverse changes. Term, Termination and Close-Out Netting The General Agreement does not have an expiration term unless the parties specify such a term in the Election Sheet. This is in line with the fact that electricity supply agreements tend to be for a long term. However, either party may terminate the General Agreement by giving 30 days’ notice in accordance with §10.2 if no expiration date is specified in the Election Sheet. This is referred as ordinary termination. In case the right to ordinary termination is exercised, the General Agreement will stay valid until the obligations arising out of existing individual contracts are carried out. That is to say, the close-out netting provisions of the General Agreement will not be triggered in this case. In addition to ordinary termination, §10.3 regulates early termination, which may take place if one of the material reasons listed in this provision occurs. The General Agreement provides that, unless otherwise stated in the Election Sheet, the material reasons defined in the General Agreement are the exclusive grounds for early termination. In the event of early termination, unlike ordinary termination, the Individual Contracts will also be terminated and the parties’ contractual relationship will be liquidated, through the application of the concept of close-out netting, into a single amount which will be payable from one party to the other.
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