Common use of Additional Performance Security Clause in Contracts

Additional Performance Security. 5.5.1 The Purchaser has submitted or shall submit the Additional Performance Security, as applicable corresponding to the value as per the following formula: Additional Performance Security (APS) = APS% as per table below of [(Modulated Price x (1+Winning Premium)] x ACQ (2 MTPA), Such Additional Performance Security shall be provided in accordance with the following scenarios: Scenario 1 Initial declaration More than 0 upto 1 year 0% Extension sought Each additional year of extension upto 42 months, as the case may be. 1% of ACQ for each year (1-365 days). Maximum 3 % of ACQ if extension requested for maximum tenure of 42 months. Entire 1% APS shall be applicable for part Period i.e. from 36 months to 42 months. Scenario 2 Initial declaration More than 1 upto 2 years 0% Scenario Declaration Time required for commissioning of Blast Furnace Units Additional Performance security Extension sought Each additional year of extension upto 42 months 1% of ACQ for each year (1-365 days). Maximum 2 % of ACQ if extension requested for maximum tenure of 42 months. Entire 1% APS shall be applicable for part Period i.e. from 36 months to 42 months. Scenario 3 Initial declaration More than 2 upto 3 years 0% Extension sought Each additional year of extension upto 42 months 1% of ACQ for each year (1-365 days). Maximum 1 % of ACQ if extension requested for maximum tenure of 42 months. Entire 1% APS shall be applicable for part Period i.e. from 36 months to 42 months. Scenario 4 Initial declaration More than 3 years upto 42 months 1% In the event of any adjustment in the Annual Contracted Quantity in accordance with Clause 6.2, the amount of Additional Performance Security shall not be revised. 5.5.2 The Additional Performance Security shall remain valid till three (3) months from the Effective Date. The Additional Performance Security shall be returned or refunded to the Purchaser at the end of its validity, subject to successful completion of the obligations of the Purchaser and complete settlement of all claims of the Seller arising out of this Agreement. 5.5.3 The amount of Additional Performance Security shall be suitably revised as follows, in case of any change in the Modulated Price in accordance with Clause 12 and such revised Additional Performance Security shall be deposited within thirty (30) days of such revision: 5.5.3.1 In the event of any increase in the Modulated Price pursuant to Clause 12, the Purchaser may: a. provide a new bank guarantee issued by any Acceptable Bank for the revised value computed as per Clause 5.5.1; or b. provide an additional/top up bank guarantee issued by any Acceptable Bank for an amount corresponding to the incremental value of the Additional Performance Security computed as per Clause 5.5.1; or c. Alternatively, the bank guarantee constituting the Additional Performance Security may be suitably amended for the revised value computed as per Clause 5.5.1. 5.5.3.2 The new/ revised/ amended/ top up bank guarantee shall be in the format set out in ANNEXURE I. In the event that the Additional Performance Security has been provided in the form of a non-interest bearing security deposit, then, upon any increase in the Modulated Price pursuant to Clause 12, the Purchaser shall deposit an additional amount towards the security deposit to cover for such increase. 5.5.3.3 Any failure of the Purchaser to replenish the Additional Performance Security in the manner specified herein above within thirty (30) days of notification of change in the Modulated Price under Clause 12, shall entitle the Seller to suspend the supply of the Contracted Grade of Coal in accordance with Clause 15.3 without absolving the Purchaser of its obligations under this Agreement. Further, if the Purchaser fails to replenish the Additional Performance Security within thirty (30) days of such suspension of Coal supplies, the Agreement shall unless otherwise agreed in writing by the Parties, stand automatically terminated without any further act on the part of the Seller and the Seller shall also have the right to invoke the existing Performance Security. 5.5.3.4 In the event of any decrease in the Modulated Price pursuant to Clause 12, the Purchaser may provide a new bank guarantee issued by an Acceptable Bank in the format specified in ANNEXURE I for the revised value computed as per Clause 5.5.1. The Seller shall, within thirty (30) days of receipt of such new bank guarantee, return the original Additional Performance Security to the Purchaser. In the event that the Additional Performance Security has been provided in the form of a non-interest bearing security deposit, then, upon any decrease in the Modulated Price pursuant to Clause 12, the Seller shall refund the excess value of the security deposit to the Purchaser. 5.5.3.5 The period of validity of any new bank guarantee, amended bank guarantee and/or top up/additional bank guarantee furnished by the Purchaser and/or any additional security deposit provided by the Purchaser pursuant to this Clause 5.5.3, shall be the same as that of the initial Performance Security.

Additional Performance Security. 5.5.1 The Purchaser has submitted or shall submit the Additional Performance Security, as applicable corresponding to the value as per the following formula: Additional Performance Security (APS) = APS% as per table below of [(Modulated Price x (1+Winning Premium)] x ACQ (2 MTPA), Such Additional Performance Security shall be provided in accordance with the following scenarios: Scenario 1 Initial declaration at the time of execution of FSA More than 0 upto 1 year 0% Extension sought Each additional year of extension upto 42 months, as the case may be. 1% of ACQ for each year (1-1- 365 days). Maximum 3 % of ACQ if extension requested for maximum tenure of 42 months. Entire 1% APS shall be applicable for part Period i.e. from 36 months to 42 months. Scenario 2 Initial declaration at the time of execution of FSA More than 1 upto 2 years 0% Scenario Declaration Time required for commissioning of Blast Furnace Units Additional Performance security Extension sought Each additional year of extension upto 42 months 1% of ACQ for each year (1-1- 365 days). Maximum 2 % of ACQ if extension requested for maximum tenure of 42 months. Entire 1% APS shall be applicable for part Period i.e. from 36 months to 42 Scenario Declaration Time required for commissioning of Blast Furnace Units Additional Performance security months. Scenario 3 Initial declaration at the time of execution of FSA More than 2 upto 3 years 0% Extension sought Each additional year of extension upto 42 months 1% of ACQ for each year (1-1- 365 days). Maximum 1 % of ACQ if extension requested for maximum tenure of 42 months. Entire 1% APS shall be applicable for part Period i.e. from 36 months to 42 months. Scenario 4 Initial declaration at the time of execution of FSA More than 3 years upto 42 months 1% In the event of any adjustment in the Annual Contracted Quantity in accordance with Clause 6.2, the amount of Additional Performance Security shall not be revised. 5.5.2 The Additional Performance Security shall remain valid till three (3) months from the Effective Date. The Additional Performance Security shall be returned or refunded to the Purchaser at the end of its validity, subject to successful completion of the obligations of the Purchaser and complete settlement of all claims of the Seller arising out of this Agreement. 5.5.3 The amount of Additional Performance Security shall be suitably revised as follows, in case of any change in the Modulated Price in accordance with Clause 12 and such revised Additional Performance Security shall be deposited within thirty (30) days of such revision: 5.5.3.1 In the event of any increase in the Modulated Price pursuant to Clause 12, the Purchaser may: a. a) provide a new bank guarantee issued by any Acceptable Bank for the revised value computed as per Clause 5.5.1; or b. b) provide an additional/top up bank guarantee issued by any Acceptable Bank for an amount corresponding to the incremental value of the Additional Performance Security computed as per Clause 5.5.1; or c. c) Alternatively, the bank guarantee constituting the Additional Performance Security may be suitably amended for the revised value computed as per Clause 5.5.1. 5.5.3.2 The new/ revised/ amended/ top up bank guarantee shall be in the format set out in ANNEXURE I. I . In the event that the Additional Performance Security has been provided in the form of a non-interest bearing security deposit, then, upon any increase in the Modulated Price pursuant to Clause 12, the Purchaser shall deposit an additional amount towards the security deposit to cover for such increase. 5.5.3.3 Any failure of the Purchaser to replenish the Additional Performance Security in the manner specified herein above within thirty (30) days of notification of change in the Modulated Price under Clause 12, shall entitle the Seller to suspend the supply of the Contracted Grade of Coal in accordance with Clause 15.3 without absolving the Purchaser of its obligations under this Agreement. Further, if the Purchaser fails to replenish the Additional Performance Security within thirty (30) days of such suspension of Coal supplies, the Agreement shall unless otherwise agreed in writing by the Parties, stand automatically terminated without any further act on the part of the Seller and the Seller shall also have the right to invoke the existing Performance Security. 5.5.3.4 In the event of any decrease in the Modulated Price pursuant to Clause 12, the Purchaser may provide a new bank guarantee issued by an Acceptable Bank in the format specified in ANNEXURE I for the revised value computed as per Clause 5.5.1. The Seller shall, within thirty (30) days of receipt of such new bank guarantee, return the original Additional Performance Security to the Purchaser. In the event that the Additional Performance Security has been provided in the form of a non-interest bearing security deposit, then, upon any decrease in the Modulated Price pursuant to Clause 12, the Seller shall refund the excess value of the security deposit to the Purchaser. 5.5.3.5 The period of validity of any new bank guarantee, amended bank guarantee and/or top up/additional bank guarantee furnished by the Purchaser and/or any additional security deposit provided by the Purchaser pursuant to this Clause 5.5.3, shall be the same as that of the initial Performance Security.