Common use of Performance Security and Advance Payment Bonds Clause in Contracts

Performance Security and Advance Payment Bonds. The Contractor shall have delivered to the Employer as a Condition Precedent the duly executed Performance Security and the Advance Payment Bond (the latter in relation to the first payment only in accordance with Attachment C). Notwithstanding any other provision of the Contract, compliance with this Sub-Clause 4.2 is a condition precedent to the Contractor's entitlement to receive any payment from the Employer under the Contract (including the Advance Payment) and no payment shall be due or payable until this condition is satisfied. In particular, the Contractor shall deliver to the Employer Advance Payments Bonds in relation to all subsequent payments to be made by the Employer in accordance with Attachment C as a condition precedent to receive such payments. Each of the Performance Security and the Advance Payment Bond shall be: (a) duly executed and enforceable; (b) in the amount and currency stated in respect of the relevant bond in Attachment C to the Particular Conditions; and (c) issued by an international bank acceptable to the Employer and whose long-term debt has the following minimum rating from at least two (2) of the three (3) listed rating agencies: (i) [A from Standard & Poor's; (ii) A2 from Xxxxx'x; and/or (iii) A from Fitch]1. If, in accordance with the Contract, the Contract Price is: (d) adjusted in aggregate so that it is greater than the Accepted Contract Amount by an amount which exceeds five per cent (5%) of the Accepted Contract Amount; or (e) (if an increased Performance Security has previously been provided under this Sub-Clause) increased from time to time in aggregate by more than five per cent (5%) of the Contract Price by reference to which the face value of the previously adjusted Performance Security was calculated, then the Contractor shall deliver to the Employer a duly executed Performance Security for the amount of ten per cent (10%) of the Contract Price as so adjusted or increased, and otherwise satisfying the requirements of this Sub-Clause. On receiving the replacement Performance Security, the Employer shall return the previously provided security to the Contractor within 14 days. Upon the issue of the final Taking-Over Certificate the face value of the Performance Security shall (save in relation to demands delivered before such date) be adjusted to an amount equal to five per cent 5% of the Contract Price as at the date of issuance of such certificate. The Contractor shall ensure that: (f) the Performance Security remains valid and enforceable until the Contractor has become entitled to receive the Performance Certificate plus additional 15 days; and (g) the Advance Payment Bond remains valid and enforceable until the amount of the Advance Payment Bond has reduced to zero in accordance with its terms by reason of the repayment of the Advance Payments to the Employer.