Retention Bond Clause Samples

Retention Bond. Contractor may reduce the amount of Retainage and/or Punch List Withholding required by this Agreement to the extent Contractor has delivered to Owner one or more irrevocable letters of credit or bank guarantees in a form reasonably acceptable to Owner, issued by a financial institution rated at least "A" by Standard & Poor's Corporation and at least "A2" by ▇▇▇▇▇'▇ Investors Service (the "Retention Bond") in an amount equal to the proposed reduction, unless a Parent Guarantee is in place covering the proposed reduction. The Retention Bond may be drawn upon by Owner in U.S. Dollars in the United States of America from time to time for Contractor's failure to perform any of its material obligations under this Agreement or at any time there is less than fourteen (14) days remaining prior to the expiration of such Retention Bond.

Retention Bond. The Contractor shall deposit with the Purchaser, not later than the date of achievement of the Final Performance Acceptance and in any case prior to the expiry of the Performance Bond, the Retention Bond which shall be furnished by the Contractor, at its own cost, to guarantee the due, faithful and complete performance of its obligations under this Contract during the Defects Liability Period. Notwithstanding any extension of the Defects Liability Period as stated elsewhere in this Contract, the Retention Bond shall remain valid and effective for the full sum of 5% (five per cent) of the Contract Price from the date of the last Final Performance Acceptance until the issuance of the Defects Liability Certificate ("Expiry Date"), provided that in the event of any extension of the Defects Liability Period beyond 12 (twelve) months from the date of last Final Performance Acceptance, the value of the Retention Bond during such extended period shall be reduced to take into account the value of the defective Works which have been replaced or repaired by the Contractor in accordance with Clause 36. Where the validity period of the Retention Bond delivered to the Purchaser pursuant to this Clause shall expire prior to the Expiry Date, the Contractor shall renew and/or extend the validity period of the Retention Bond as and when necessary to ensure that the Retention Bond remains valid and enforceable until the Expiry Date. Should the Contractor fail to provide the Retention Bond in accordance with any provisions of this Clause 29 or the Retention Bond cease to be in force or effect at any time prior to the Expiry Date, then, without prejudice to any other rights the Purchaser may possess, the Purchaser may deduct sums from any monies due or to become due to the Contractor under this Contract up to a total sum equivalent to the amount required to be guaranteed by the Retention Bond. The Purchaser may retain or withhold such sums until such time that a Retention Bond for the remaining period or requisite amount is provided or the Retention Bond is no longer required under the provisions of the Contract.

Retention Bond. 6.1 The Contractor has provided an on demand bond to the Authority (“Retention Bond”) for the Retention Amount. 6.2 The form of the Retention Bond is set out in schedule 7 of this Deed and shall form a new Schedule 35 to the Project Agreement. 6.3 There shall be added to the Project Agreement a new Clause 45.13 as follows

Retention Bond. (a) The Contractor shall, at the time when it submits its first invoice for payment, obtain (at its cost) and provide to t he Employer a Retention Bond, which shall b e in the form o f Annex-H and shall be in the form of an unconditional bank guarantee issued by a first class Pakistan scheduled bank acceptable to the Employer or first class foreign bank acceptable to the Employer. The Retention Bond amount shall be the sum equal to ten percent (10%) of the gross value of the Contractor’s f irst invoice as certified and approved by the Employer, and shall increase progressively to ten percent (10%) of the cumulative gross value of every subsequent invoice as certified and approved by the Employer. (b) Following t he r eceipt by t he C ontractor o f an authenticated copy of t he Taking-Over Certificate for the whole of the Works under Clause 10 of the Contract, the Retention Bond amount shall be reduced to five percent ( 5%) of the cumulative gross value of i nvoices certified and approved by the Employer. (c) The C ontractor s hall e nsure t hat the R etention B ond i s v alid and enforceable until the Contractor has executed and completed the Works (including all Works under Clause 11 (Defects Liability) or Clause 12 (Tests After Completion)), remedied any defects and the Defects Notification Period has expired. If the t erms of t he Retention Bond specify i ts expiry date, and the Contractor has not been entitled to receive the Performance Certificate by the date twenty-eight (28) days prior to the expiry date, the Contractor shall extend the validity of the Retention Bond until the Works as aforesaid have been completed and any defects have been remedied. (d) The Employer shall not make a claim under the Retention Bond, except for amounts to which the Employer is entitled under the Contract in the event of: (i) failure by the Contractor to extend the validity of the Retention Bond as described in paragraph (c) above by the date twenty-eight (28) days prior to the expiry date, in which event the Employer may claim the full amount of the Retention Bond; (ii) failure by the Contractor to pay the Employer an amount due, as either agreed by the Contractor or determined under Clause 2.4 (Employer’s Claims) or Clause 20 (Claims, Disputes a nd Arbitration), within ▇▇ ▇▇▇▇-eight ( 28) da ys after t his agreement or determination; (iii) failure by the Contractor to remedy a default within twenty-eight (28) days after receiving the Employer’s notice requiring the d...