Common use of Financial Guarantee Clause in Contracts

Financial Guarantee. 7.1 The Service Provider shall provide to Transnet on or before the Effective Date, a Financial Guarantee in the form agreed to and included in Attachment F. This Financial Guarantee shall be the sum of 7.2 The Service Provider may, with prior notification to Transnet, substitute the form of Financial Guarantee provided to Transnet with a Parent Guarantee in a form agreed to and included in Attachment F. For the avoidance of doubt, Transnet must remain in an equal or better position by such substitution. The Service Provider shall not be entitled to substitute the form of Financial Guarantee after any event envisaged in clause 7.4 has occurred giving Transnet the right to encash the Financial Guarantee and Transnet has given the Call Notice envisaged in clause 7.4 to the Service Provider. 7.3 The Service Provider shall not be absolved of any of its obligations and liabilities under this Agreement by virtue of it having obtained a Financial Guarantee or Parent Guarantee, as applicable, and shall at all times remain liable to Transnet for the performance of the Services described herein in accordance with the terms of this Agreement. 7.4 Transnet shall be entitled on not less than 21 (twenty one) days written notice (the Call Notice) to the Service Provider to encash the Financial Guarantee or Parent Guarantee, as applicable, in accordance with the terms and conditions set out in Attachment F if: 7.4.1 an event occurs in respect of which this Agreement permits Transnet to recover a penalty or Service Credit from the Service Provider and the Service Provider fails to pay such penalty or Service Credit when it is due in terms of this Agreement 30 (thirty) days after having received written a demand from Transnet; or 7.4.2 the Service Provider materially breaches this Agreement and such breach is irremediable; or 7.4.3 the Service Provider materially breaches this Agreement, such breach is reasonably capable of being remedied and the Service Provider fails to remedy such breach in accordance with clause 50.2. 7.5 In the event that the Service Provider is unable to furnish the Financial Guarantee on the Effective Date in accordance with clause 7.1, Transnet shall withhold an amount of due to the Service Provider from the mobilization costs for Transition as detailed in Attachment G2. 7.6 The amount in clause 7.5 shall be retained solely in lieu of the Financial Guarantee and will be released to the Service Provider within 30 (thirty) days from presentation of the Financial Guarantee by the Service Provider to Transnet.

Financial Guarantee. 7.1 The Service Provider shall provide to Transnet on or before the Effective Date, a Financial Guarantee in the form agreed to and included in Attachment F. This Financial Guarantee shall be for R79 000 000.00 (seventy nine million rands) and shall remain in full force and effect for the sum ofduration of the Agreement (including any renewal hereof). 7.2 The Service Provider may, with prior notification to Transnet, substitute the form of Financial Guarantee provided to Transnet with a Parent Guarantee in a form agreed to and included in Attachment F. For the avoidance of doubt, Transnet must remain in an equal or better position by such substitution. The Service Provider shall not be entitled to substitute the form of Financial Guarantee after any event envisaged in clause 7.4 has occurred giving Transnet the right to encash the Financial Guarantee and Transnet has given the Call Notice envisaged in clause 7.4 to the Service Provider. 7.3 The Service Provider shall not be absolved of any of its obligations and liabilities under this Agreement by virtue of it having obtained a Financial Guarantee or Parent Guarantee, as applicable, and shall at all times remain liable to Transnet for the performance of the Services described herein in accordance with the terms of this Agreement. 7.4 Transnet shall be entitled on not less than 21 (twenty one) days written notice (the Call Notice) to the Service Provider to encash the Financial Guarantee or Parent Guarantee, as applicable, in accordance with the terms and conditions set out in Attachment F if: 7.4.1 an event occurs in respect of which this Agreement permits Transnet to recover a penalty or Service Credit from the Service Provider and the Service Provider fails to pay such penalty or Service Credit when it is due in terms of this Agreement 30 (thirty) days after having received written a demand from Transnet; or 7.4.2 the Service Provider materially breaches this Agreement and such breach is irremediable; or 7.4.3 the Service Provider materially breaches this Agreement, such breach is reasonably capable of being remedied and the Service Provider fails to remedy such breach in accordance with clause 50.248.2. 7.5 In the event that the Service Provider is unable to furnish the Financial Guarantee on the Effective Date in accordance with clause 7.1, Transnet shall withhold an amount of R79 000 000.00 (seventy nine million rands) due to the Service Provider from the mobilization costs for Transition as detailed in Attachment G2.Annexure I. 7.6 The amount in clause 7.5 shall be retained solely in lieu of the Financial Guarantee and will be released to the Service Provider within 30 (thirty) days from presentation of the Financial Guarantee by the Service Provider to Transnet.