Common use of Deposit and Guarantee Clause in Contracts

Deposit and Guarantee. 2.1 It is agreed that – 2.1.1 The Operator shall pay an upfront refundable deposit of ZAR300 000 (Three Hundred thousand rands only), excluding VAT, upon signing of the service level and lease agreement. – 2.1.1.1 Such R300 000.00 (Three Hundred thousand rand) deposit shall be retained by ACSA (“deposit”) as security for the performance by the Operator of its obligations under this agreement and shall be refunded by ACSA to the Operator at termination of this Agreement and subject to Clause 2.2. 2.1.1.2 The deposit shall be retained in an interest-bearing account. 2.2 The deposit shall be retained by ACSA until after the vacation of the Bulk Fuel Site and cessation of use of the hydrant system and/ or ground service equipment by the Operator and the complete discharge of all the Operator obligations to ACSA arising from this agreement, whereafter the deposit shall, be paid to the Operator. The Operator shall not be entitled to set-off any amount payable to ACSA in terms of this agreement against the deposit. 2.3 It is also agreed that the Operator shall secure and maintain for the duration of this agreement, a guarantee to the satisfaction of ACSA, with a minimum amount of 2 (two) calendar months’ worth of tariffs and fees payable to ACSA. The guarantee is to provide security for performance of the Operator of its obligations under this agreement. 2.4 ACSA shall have the right to apply the whole or any portion of the deposit and/or guarantee for payment of any amount or any liability of the Operator to ACSA under this agreement including without limitation any damages. If any portion of the deposit or guarantee is so applied, the Operator shall forthwith reinstate the deposit to its original amount on demand by ACSA.