Security for System Removal Clause Samples
The 'Security for System Removal' clause establishes requirements for providing financial or other assurances to guarantee the proper removal of a system, such as equipment or installations, at the end of a contract or lease. Typically, this clause may require the party responsible for the system to post a bond, letter of credit, or other security to cover the costs of dismantling and restoring the site. Its core function is to protect the property owner or lessor by ensuring that funds or resources are available to address removal obligations, thereby preventing abandonment or incomplete removal that could result in additional costs or liabilities.
Security for System Removal. Twelve (12) months prior to the expiration of the Term, Licensee shall provide Trustees with an estimate of the cost to remove the System and restore the Site and Licensed Area in accordance with the Section 13.1. Licensee and Trustees shall then meet and confer within thirty (30) calendar days after such estimate is provided to resolve any concerns regarding such removal and the amount of the estimated cost, and a revised estimate taking those concerns into account shall then constitute the final restoration cost estimate. Licensee shall then either provide a performance bond covering such final restoration cost estimate or establish a cash escrow account with an acceptable financial institution subject to approval of Trustees of the escrow instructions for accessing the funds into which a portion of payments under the Agreement necessary to equal the estimate of the cost to remove the System and restore the Site and Licensed Area in accordance with the Section 13.1 during the remainder of the Term shall be deposited by Trustees for amounts otherwise due to Licensee for Electricity delivered to Trustees until the escrow reaches the final restoration cost estimate. The escrow account shall serve as the security for the restoration of the Site, and such funds shall be released to Licensee when the Site and Licensed Area restoration are accepted by Trustees. In event that Licensee fails to fulfill its obligations under Section 13.1, Trustees shall have the right to all the funds in the escrow account for purposes of removing the System and restoring the Licensed Area and Site. Interest on the escrow account shall be retained in the escrow account for the benefit of whichever Party is entitled to the funds in the escrow account
Security for System Removal. No less than three (3) years prior to the expiration of the Term, LICENSEE shall provide the DGS with the estimated cost to remove the System and restore the Licensed Area in accordance with Section
11.1. LICENSEE and the DGS and HOST shall then meet and confer within thirty
Security for System Removal. Three (3) years prior to the expiration of this SLA, LICENSEE shall provide UNIVERSITY a “System Removal Work Letter”, including an estimate of the cost to remove the System and restore the Facility at the end of the Term. LICENSEE and UNIVERSITY shall then meet and confer within ten (10) days after such estimate is provided to resolve any concerns regarding such estimated cost, and a revised estimate taking those concerns into account shall then constitute the final restoration cost estimate. LICENSEE shall then provide either (i) a performance bond covering such final restoration cost estimate, or (ii) an account established with a financial institution reasonably satisfactory to UNIVERSITY, requiring the signatures of both LICENSEE and UNIVERSITY for all withdrawals, into which payments under the SPPA shall be deposited by UNIVERSITY until the balance in such account reaches the final restoration cost estimate. Such account shall serve as the security for the restoration of the Facility, and such funds shall be released to LICENSEE when the Facility restoration is accepted by UNIVERSITY. In event of a default by LICENSEE, UNIVERSITY shall have the right to use all the funds in the escrow account for purposes of restoring the Facility. Interest on the escrow account shall be retained in the account for the benefit of whichever party is entitled to the funds in the account.