Common use of CONTRACT PERFORMANCE GUARANTEE Clause in Contracts

CONTRACT PERFORMANCE GUARANTEE. 3.1 [The Purchaser has submitted to the Seller on or prior to signing of this Agreement, Contract Performance Guarantee (CPG) for an amount computed as per the following formula]7 /[On signing of this agreement, the Commitment Guarantee (CG) provided by the Purchaser prior to issue of Letter of Assurance (LOA) shall stand converted into the Contract Performance Guarantee (CPG) for an amount computed as per the following formula:8 3.2 Accordingly, a sum of Rs. [•] (Indian Rupees ) is deemed to have been deposited by the Purchaser towards the Contract Performance Guarantee amount. [In the event the Commitment Guarantee amount provided by Purchaser is more than the Contract Performance Guarantee amount as determined under this clause, Seller shall return such balance amount within 3 (three) months from the date of signing of this Agreement. In the event, the Contract Performance Guarantee amount as determined under this clause is more than the Commitment Guarantee amount, the Purchaser shall deposit such balance amount within 3 (three) months from the date of signing this agreement. Failure to submit the balance amount by the Purchaser within 3 (three) months from the date of signing of this agreement shall entitle the Seller to adjust the ACQ such that it is commensurate with the Contract Performance Guarantee required to be submitted by the Purchaser under Clause 3]9. 3.3 CPG may be provided in the form of non-interest-bearing security deposit or in the form of bank guarantee. In case the CPG is provided in the form of a bank guarantee, the same shall be provided in the format placed at SCHEDULE II. 3.4 The CPG shall remain valid till 4 (four) months from the date of expiry of the Term of this agreement. In case of extension of the Term of this agreement, the CPG shall be extended accordingly. The CPG shall be returned or refunded to the Purchaser at the end of its validity, subject to successful completion of the Term of this agreement and complete settlement of all claims of the Seller arising out of this Agreement. 3.5 The value of the CPG shall be suitably increased / decreased to match the changes in the Notified Price notified by the Seller from time to time. 3.5.1 In the event of any increase in the Notified Price, the Purchaser may: 3.5.1.1 provide a new bank guarantee issued by any Acceptable Bank for the revised value 7 To retain in case of direct FSA route 8 To retain in case of LOA route 9 To retain in case of LOA route computed as per Clause 3.1; or 3.5.1.2 provide an additional/ top up bank guarantee issued by any Acceptable Bank for an amount corresponding to the incremental value of the CPG computed as per Clause 3.1 Alternatively, the bank guarantee constituting the CPG may be suitably amended for the revised value computed as per Clause 3.1. The new/ revised/ amended/ top up bank guarantee shall be in the format set out in SCHEDULE II. In the event that the CPG has been provided in the form of a non-interest bearing security deposit, then, upon any increase in the Notified Price, the Purchaser shall deposit an additional amount towards the security deposit to cover for such increase. Any failure of the Purchaser to replenish the CPG in the manner specified herein above within 7 (seven) days of notification of change in the Notified Price, shall entitle the Seller to suspend the supply of Coal in accordance with Clause 15.1.4 without absolving the Purchaser of its obligations under this Agreement. Further, if the Purchaser fails to replenish the CPG within 30 (thirty) days of such suspension of Coal supplies, the Seller shall have the right to forfeit the deposited CPG. 3.5.2 In the event of any decrease in the Notified Price, the Purchaser may provide a new bank guarantee issued by an Acceptable Bank in the format specified in SCHEDULE II for the revised value computed as per Clause 3.1. The Seller shall, within 7 (seven) days of receipt of such new bank guarantee, return the original CPG to the Purchaser. In the event that the CPG has been provided in the form of a non-interest bearing security deposit, then, upon any decrease in the Notified Price, the Seller shall refund the excess value of the security deposit to the Purchaser. 3.5.3 The period of validity of any new bank guarantee, amended bank guarantee, top up/ additional bank guarantee furnished by the Purchaser and/ or any additional security deposit provides by the Purchaser pursuant to this clause, shall be the same as that of the initial CPG. 3.6 Invocation/ Forfeiture of Contract Performance Guarantee 3.6.1 The Seller shall be entitled to forfeit/invoke the whole or a part of the Contract Performance Guarantee in the following situations: (a) in the event that the Purchaser fails to submit the revised Contract Performance Guarantee to the Seller within the timeline stipulated in Clause 3.5.1 above; (b) in accordance with Clause 4.2, 4.7.4, 13, 15 (c) in the event that the Seller becomes entitled to exercise its right to terminate or actually exercises its right to terminate this Agreement for any of the reasons specified in Clause 18.2; (d) in the event the Purchaser fails to submit the coal utilization affidavit as per terms of Clause 4.2.3; and/or (e) in accordance with the provisions of this Agreement other than as specified above. In the event of any partial or complete invocation of the Contract Performance Guarantee under this Agreement, the Purchaser shall replenish the Contract Performance Guarantee within 30 (thirty) days of its invocation hereunder, failing which the Seller shall be entitled to terminate this Agreement. The period of validity of the replenished Contract Performance Guarantee furnished by the Purchaser pursuant to this Clause 3.6, shall be the same as that of the initial Contract Performance Guarantee. In the event that the Acceptable Bank issuing the Contract Performance Guarantee does not permit a partial invocation of the Contract Performance Guarantee, the Seller shall be entitled to invoke the whole Contract Performance Guarantee and recover thereunder, the amounts due to it and the balance amount, if any, shall be refunded immediately to the Purchaser within 1 (one) day of replenishment of the Contract Performance Guarantee to the Seller in the manner as stipulated above.

CONTRACT PERFORMANCE GUARANTEE. 3.1 [The Purchaser has submitted to the Seller on or prior to signing of this Agreement, Contract Performance Guarantee (CPG) for an amount computed as per the following formula]7 /[On On signing of this agreement, the Commitment Guarantee (CG) provided by the Purchaser prior to issue of Letter of Assurance (LOA) shall stand converted into the Contract Performance Guarantee (CPG) for an amount computed as per the following formula:8formula: 3.2 Accordingly, a sum of Rs. [•] (Indian Rupees ) is deemed to have been deposited by the Purchaser towards the Contract Performance Guarantee amount. [In the event the Commitment Guarantee amount provided by Purchaser is more than the Contract Performance Guarantee amount as determined under this clause, Seller shall return such balance amount within 3 (three) months from the date of signing of this Agreement. In the event, the Contract Performance Guarantee amount as determined under this clause is more than the Commitment Guarantee amount, the Purchaser shall deposit such balance amount within 3 (three) months from the date of signing this agreement. Failure to submit the balance amount by the Purchaser within 3 (three) months from the date of signing of this agreement shall entitle the Seller to adjust the ACQ such that it is commensurate with the Contract Performance Guarantee required to be submitted by the Purchaser under Clause 3]93. 3.3 CPG may be provided in the form of non-interest-interest bearing security deposit or in the form of bank guarantee. In case the CPG is provided in the form of a bank guarantee, the same shall be provided in the format placed at SCHEDULE II. 3.4 The CPG shall remain valid till 4 (four) months from the date of expiry of the Term of this agreement. In case of extension of the Term of this agreement, the CPG shall be extended accordingly. The CPG shall be returned or refunded to the Purchaser at the end of its validity, subject to successful completion of the Term of this agreement and complete settlement of all claims of the Seller arising out of this Agreement. 3.5 The value of the CPG shall be suitably increased / decreased to match the changes in the Notified Price notified by the Seller from time to time. 3.5.1 . In the event of any increase in the Notified Price, the Purchaser may: 3.5.1.1 provide a new bank guarantee issued by any Acceptable Bank for the revised value 7 To retain in case of direct FSA route 8 To retain in case of LOA route 9 To retain in case of LOA route computed as per Clause 3.1; or 3.5.1.2 provide an additional/ top up bank guarantee issued by any Acceptable Bank for an amount corresponding to the incremental value of the CPG computed as per Clause 3.1 Alternatively, the bank guarantee constituting the CPG may be suitably amended for the revised value computed as per Clause 3.1. The new/ revised/ amended/ top up bank guarantee shall be in the format set out in SCHEDULE II. In the event that the CPG has been provided in the form of a non-interest bearing security deposit, then, upon any increase in the Notified Price, the Purchaser shall deposit an additional amount towards the security deposit to cover for such increase. Any failure of the Purchaser to replenish the CPG in the manner specified herein above within 7 (seven) days of notification of change in the Notified Price, shall entitle the Seller to suspend the supply of Coal in accordance with Clause 15.1.4 without absolving the Purchaser of its obligations under this Agreement. Further, if the Purchaser fails to replenish the CPG within 30 (thirty) days of such suspension of Coal supplies, the Seller shall have the right to forfeit the deposited CPG. 3.5.2 In the event of any decrease in the Notified Price, the Purchaser may provide a new bank guarantee issued by an Acceptable Bank in the format specified in SCHEDULE II for the revised value computed as per Clause 3.1. The Seller shall, within 7 (seven) days of receipt of such new bank guarantee, return the original CPG to the Purchaser. In the event that the CPG has been provided in the form of a non-interest bearing security deposit, then, upon any decrease in the Notified Price, the Seller shall refund the excess value of the security deposit to the Purchaser. 3.5.3 The period of validity of any new bank guarantee, amended bank guarantee, top up/ additional bank guarantee furnished by the Purchaser and/ or any additional security deposit provides by the Purchaser pursuant to this clause, shall be the same as that of the initial CPG. 3.6 Invocation/ Forfeiture of Contract Performance Guarantee 3.6.1 The Seller shall be entitled to forfeit/invoke the whole or a part of the Contract Performance Guarantee in the following situations: (a) in the event that the Purchaser fails to submit the revised Contract Performance Guarantee to the Seller within the timeline stipulated in Clause 3.5.1 above; (b) in accordance with Clause 4.2, 4.7.4, 13, 15 (c) in the event that the Seller becomes entitled to exercise its right to terminate or actually exercises its right to terminate this Agreement for any of the reasons specified in Clause 18.2; (d) in the event the Purchaser fails to submit the coal utilization affidavit as per terms of Clause 4.2.3; and/or (e) in accordance with the provisions of this Agreement other than as specified above. In the event of any partial or complete invocation of the Contract Performance Guarantee under this Agreement, the Purchaser shall replenish the Contract Performance Guarantee within 30 (thirty) days of its invocation hereunder, failing which the Seller shall be entitled to terminate this Agreement. The period of validity of the replenished Contract Performance Guarantee furnished by the Purchaser pursuant to this Clause 3.6, shall be the same as that of the initial Contract Performance Guarantee. In the event that the Acceptable Bank issuing the Contract Performance Guarantee does not permit a partial invocation of the Contract Performance Guarantee, the Seller shall be entitled to invoke the whole Contract Performance Guarantee and recover thereunder, the amounts due to it and the balance amount, if any, shall be refunded immediately to the Purchaser within 1 (one) day of replenishment of the Contract Performance Guarantee to the Seller in the manner as stipulated above.