Common use of Penalties for Non-compliance to Service Level Agreement Clause in Contracts

Penalties for Non-compliance to Service Level Agreement. Where the Supplier/Service Provider fails to deliver the Goods/Services within the agreed and accepted milestone timelines and provided that the cause of the delay was not due to a fault of Transnet, penalties shall be imposed at …………………………………………………… . Delete these Notes Guidance Notes ⮚ The Penalty regime must be determined based on the nature of the Goods/Services. The penalty should be reasonable and not out of proportion to the potential prejudice that may be suffered. a) The Parties have agreed on the following milestone targets (“the Local Content Plan”): …………………………………………………… b) If for any reason the Supplier is unable to achieve any milestone target indicated in the Local Content Plan OR the local content undertaking [Delete alternative not applicable], the Supplier must approach the Department of Trade and Industry (“DTI”) to obtain exemption in order to supply the goods at a lower local content threshold. The Supplier is obliged to approach DTI for exemption within 10 (ten) days of determining that it is unable to achieve any milestone target or local content threshold. c) Should the DTI provide exemption, the Supplier shall be entitled to provide the goods at the lower local content threshold set by DTI. In such event, the Parties shall in good faith renegotiate the milestone targets or local content undertaking to ensure that the lowered local content thresholds are achieved. d) Should DTI not provide the necessary exemption, the Supplier shall be obliged to meet each milestone target as stated in the Local Content Plan or the local content undertaking. e) Should the Supplier fail to meet any milestone target or the local content undertaking, the following remedies shall apply without limiting any of Transnet’s other rights in law: i. Transnet shall afford the Supplier a period of thirty (30) days to remedy its non- compliance. ii. Should the Supplier fail to meet its obligations within the further 30 day period, the Supplier shall pay a Non-Compliance penalty (“Non-compliance Penalty”) to Transnet in respect of such Non-compliance as set out in clause iv below. The penalties shall be imposed per milestone measurement for non-delivery of committed values in the case of a Local Content Plan or shall be imposed against the non-delivery of committed values where local content undertakings must be met immediately. iii. To the extent that the Actual Local Content Spend1 is lower than the Required Local Content Spend2 (or the Adjusted Required Local Content Spend3, as the case may be), the Supplier shall be liable for Penalties which is the difference in value between the Actual Local Content Spend and the Required Local Content Spend (or the Adjusted Required Local Content Spend, as the case may be) plus an additional percentage of such difference. Such Non-compliance Penalties shall be calculated and levied at the relevant milestones as stipulated in the Local Content Plan or shall be imposed against 1 Actual Local Content Spend means the monetary value of local content initiatives actually delivered by the Supplier during the period under review. 2 Required Local Content Spend means the monetary value of local content obligations that the Supplier has agreed to deliver during the period under review.

Penalties for Non-compliance to Service Level Agreement. Where the Supplier/Service Provider fails to deliver the Goods/Services within the agreed and accepted milestone timelines and provided that the cause of the delay was not due to a fault of Transnet, penalties shall be imposed at …………………………………………………… . Delete these Notes Guidance Notes ⮚ The Penalty regime must be determined based on the nature of the Goods/Services. The penalty should be reasonable and not out of proportion to the potential prejudice that may be sufferedTBA. a) The Parties and shall have agreed on no further claim against Transnet for the following milestone targets (“the Local Content Plan”): ……………………………………………………repayment of such amount. Non-compliance Penalty Certificate: b) If for any reason Non-compliance Penalty arises, the Supplier Development Manager shall issue a Non- compliance Penalty Certificate on the last day of each month during such Non-compliance indicating the Non-compliance Penalties which have accrued during that period. c) A Non-compliance Penalty Certificate shall be prima facie proof of the matters to which it relates. If the Supplier disputes any of the amounts set out in a Non-compliance Penalty Certificate: • the dispute shall be resolved in accordance with the provisions of the Agreement; and • if pursuant to that referral, it is unable determined that the Supplier owes any amount to achieve any milestone target Transnet pursuant to the Non-compliance Penalty Certificate, then the Supplier shall pay such amount to Transnet within 10 (ten) Business Days of the determination made pursuant to such determination and an accompanying valid Tax Invoice. Payment of Non-compliance Penalties: d) Subject to Clause i) above, the Supplier shall pay the Non-compliance Penalty indicated in the Local Content Plan OR the local content undertaking [Delete alternative not applicable], Non-compliance Penalty Certificate within 10 (ten) Business Days of Transnet issuing a valid Tax Invoice to the Supplier must approach for the Department of Trade and Industry (“DTI”amount set out in that certificate. If Transnet does not issue a valid Tax Invoice to the Supplier for Non-compliance Penalties accrued during any relevant period, those Non-compliance Penalties shall be carried forward to the next period. e) to obtain exemption in order to supply the goods at a lower local content threshold. The Supplier is obliged to approach DTI for exemption shall pay the amount due within 10 (ten) days after receipt of determining that it is unable a valid Tax Invoice from Transnet, failing which Transnet shall, without prejudice to achieve any milestone target or local content thresholdother rights of Transnet under this Agreement, be entitled to call for payment which may be in any form Transnet deems reasonable and appropriate. cf) Should the DTI provide exemptionIt is agreed that Transnet, the Supplier DTI, the South African Bureau of Standards and/or any of their appointed agents shall be entitled to provide monitor, evaluate and audit the goods at Contractor’s compliance with its obligations under the lower local content threshold set by DTILocal Content Plan. In such eventTo this end, the Parties Contractor shall provide its full cooperation to the respective bodies referred to in good faith renegotiate the milestone targets or local content undertaking this clause to ensure that the lowered local content thresholds are achievedeffective monitoring, evaluation and auditing takes place. dg) Should DTI not provide The Non Compliance Penalties set forth in this Clause are stated exclusive of VAT. Any VAT payable on Non Compliance Penalties will be for the necessary exemption, account of the Supplier shall be obliged to meet each milestone target as stated in the Local Content Plan or the local content undertakingSupplier. e) Should the Supplier fail to meet any milestone target or the local content undertaking, the following remedies shall apply without limiting any of Transnet’s other rights in law: i. Transnet shall afford the Supplier a period of thirty (30) days to remedy its non- compliance. ii. Should the Supplier fail to meet its obligations within the further 30 day period, the Supplier shall pay a Non-Compliance penalty (“Non-compliance Penalty”) to Transnet in respect of such Non-compliance as set out in clause iv below. The penalties shall be imposed per milestone measurement for non-delivery of committed values in the case of a Local Content Plan or shall be imposed against the non-delivery of committed values where local content undertakings must be met immediately. iii. To the extent that the Actual Local Content Spend1 is lower than the Required Local Content Spend2 (or the Adjusted Required Local Content Spend3, as the case may be), the Supplier shall be liable for Penalties which is the difference in value between the Actual Local Content Spend and the Required Local Content Spend (or the Adjusted Required Local Content Spend, as the case may be) plus an additional percentage of such difference. Such Non-compliance Penalties shall be calculated and levied at the relevant milestones as stipulated in the Local Content Plan or shall be imposed against 1 Actual Local Content Spend means the monetary value of local content initiatives actually delivered by the Supplier during the period under review. 2 Required Local Content Spend means the monetary value of local content obligations that the Supplier has agreed to deliver during the period under review.

Penalties for Non-compliance to Service Level Agreement. Where the Supplier/Service Provider fails to deliver the Goods/Services within the agreed and accepted milestone timelines and provided that the cause of the delay was not due to a fault of Transnet, penalties shall be imposed at …………………………………………………… . Delete these Notes Guidance Notes ⮚ The Penalty regime must be determined based on the nature Payment of the Goods/Services. The penalty should be reasonable and not out of proportion to the potential prejudice that may be suffered.Non-compliance Penalties: a) The Parties have agreed on Subject to Clause i) above, the following milestone targets Supplier shall pay the Non-compliance Penalty indicated in the Non-compliance Penalty Certificate within 10 (“ten) Business Days of Transnet issuing a valid Tax Invoice to the Local Content Plan”): ……………………………………………………Supplier for the amount set out in that certificate. If Transnet does not issue a valid Tax Invoice to the Supplier for Non-compliance Penalties accrued during any relevant period, those Non-compliance Penalties shall be carried forward to the next period. b) If for any reason the Supplier is unable to achieve any milestone target indicated in the Local Content Plan OR the local content undertaking [Delete alternative not applicable], the Supplier must approach the Department of Trade and Industry (“DTI”) to obtain exemption in order to supply the goods at a lower local content threshold. The Supplier is obliged to approach DTI for exemption shall pay the amount due within 10 (ten) days after receipt of determining that it is unable a valid Tax Invoice from Transnet, failing which Transnet shall, without prejudice to achieve any milestone target or local content thresholdother rights of Transnet under this Agreement, be entitled to call for payment which may be in any form Transnet deems reasonable and appropriate. c) Should the DTI provide exemptionIt is agreed that Transnet, the Supplier DTI, the South African Bureau of Standards and/or any of their appointed agents shall be entitled to provide monitor, evaluate and audit the goods at Contractor’s compliance with its obligations under the lower local content threshold set by DTILocal Content Plan. In such eventTo this end, the Parties Contractor shall provide its full cooperation to the respective bodies referred to in good faith renegotiate the milestone targets or local content undertaking this clause to ensure that the lowered local content thresholds are achievedeffective monitoring, evaluation and auditing takes place. d) Should DTI not provide The Non Compliance Penalties set forth in this Clause are stated exclusive of VAT. Any VAT payable on Non Compliance Penalties will be for the necessary exemption, account of the Supplier shall be obliged to meet each milestone target as stated in the Local Content Plan or the local content undertakingSupplier. e) Should the Supplier fail to meet any milestone target or the local content undertaking, the following remedies shall apply without limiting any of Transnet’s other rights in law: i. Transnet shall afford the Supplier a period of thirty (30) days to remedy its non- compliance. ii. Should the Supplier fail to meet its obligations within the further 30 day period, the Supplier shall pay a Non-Compliance penalty (“Non-compliance Penalty”) to Transnet in respect of such Non-compliance as set out in clause iv below. The penalties shall be imposed per milestone measurement for non-delivery of committed values in the case of a Local Content Plan or shall be imposed against the non-delivery of committed values where local content undertakings must be met immediately. iii. To the extent that the Actual Local Content Spend1 is lower than the Required Local Content Spend2 (or the Adjusted Required Local Content Spend3, as the case may be), the Supplier shall be liable for Penalties which is the difference in value between the Actual Local Content Spend and the Required Local Content Spend (or the Adjusted Required Local Content Spend, as the case may be) plus an additional percentage of such difference. Such Non-compliance Penalties shall be calculated and levied at the relevant milestones as stipulated in the Local Content Plan or shall be imposed against 1 Actual Local Content Spend means the monetary value of local content initiatives actually delivered by the Supplier during the period under review. 2 Required Local Content Spend means the monetary value of local content obligations that the Supplier has agreed to deliver during the period under review.

Penalties for Non-compliance to Service Level Agreement. Where the Supplier/Service Provider fails to deliver the Goods/Services within the agreed and accepted milestone timelines and provided that the cause of the delay was not due to a fault of Transnet, penalties shall be imposed at …………………………………………………… . Delete these Notes Guidance Notes ⮚ The Non-compliance Penalty regime must be determined based on the nature of the Goods/Services. The penalty should be reasonable and not out of proportion to the potential prejudice that may be suffered.Certificate: a) The Parties have agreed If any Non-compliance Penalty arises, the Supplier Development Manager shall issue a Non-compliance Penalty Certificate on the following milestone targets (“last day of each month during such Non- compliance indicating the Local Content Plan”): ……………………………………………………Non-compliance Penalties which have accrued during that period. b) A Non-compliance Penalty Certificate shall be prima facie proof of the matters to which it relates. If for any reason the Supplier disputes any of the amounts set out in a Non-compliance Penalty Certificate:  the dispute shall be resolved in accordance with the provisions of the Agreement; and  if pursuant to that referral, it is unable determined that the Supplier owes any amount to achieve any milestone target Transnet pursuant to the Non-compliance Penalty Certificate, then the Supplier shall pay such amount to Transnet within 10 (ten) Business Days of the determination made pursuant to such determination and an accompanying valid Tax Invoice. Payment of Non-compliance Penalties: c) Subject to Clause i) above, the Supplier shall pay the Non-compliance Penalty indicated in the Local Content Plan OR the local content undertaking [Delete alternative not applicable], Non-compliance Penalty Certificate within 10 (ten) Business Days of Transnet issuing a valid Tax Invoice to the Supplier must approach for the Department of Trade and Industry (“DTI”amount set out in that certificate. If Transnet does not issue a valid Tax Invoice to the Supplier for Non-compliance Penalties accrued during any relevant period, those Non-compliance Penalties shall be carried forward to the next period. d) to obtain exemption in order to supply the goods at a lower local content threshold. The Supplier is obliged to approach DTI for exemption shall pay the amount due within 10 (ten) days after receipt of determining that it is unable a valid Tax Invoice from Transnet, failing which Transnet shall, without prejudice to achieve any milestone target or local content thresholdother rights of Transnet under this Agreement, be entitled to call for payment which may be in any form Transnet deems reasonable and appropriate. ce) Should the DTI provide exemptionIt is agreed that Transnet, the Supplier DTI, the South African Bureau of Standards and/or any of their appointed agents shall be entitled to provide monitor, evaluate and audit the goods at Contractor’s compliance with its obligations under the lower local content threshold set by DTILocal Content Plan. In such eventTo this end, the Parties Contractor shall provide its full cooperation to the respective bodies referred to in good faith renegotiate the milestone targets or local content undertaking this clause to ensure that the lowered local content thresholds are achievedeffective monitoring, evaluation and auditing takes place. df) Should DTI not provide The Non Compliance Penalties set forth in this Clause are stated exclusive of VAT. Any VAT payable on Non Compliance Penalties will be for the necessary exemption, account of the Supplier shall be obliged to meet each milestone target as stated in the Local Content Plan or the local content undertakingSupplier. e) Should the Supplier fail to meet any milestone target or the local content undertaking, the following remedies shall apply without limiting any of Transnet’s other rights in law: i. Transnet shall afford the Supplier a period of thirty (30) days to remedy its non- compliance. ii. Should the Supplier fail to meet its obligations within the further 30 day period, the Supplier shall pay a Non-Compliance penalty (“Non-compliance Penalty”) to Transnet in respect of such Non-compliance as set out in clause iv below. The penalties shall be imposed per milestone measurement for non-delivery of committed values in the case of a Local Content Plan or shall be imposed against the non-delivery of committed values where local content undertakings must be met immediately. iii. To the extent that the Actual Local Content Spend1 is lower than the Required Local Content Spend2 (or the Adjusted Required Local Content Spend3, as the case may be), the Supplier shall be liable for Penalties which is the difference in value between the Actual Local Content Spend and the Required Local Content Spend (or the Adjusted Required Local Content Spend, as the case may be) plus an additional percentage of such difference. Such Non-compliance Penalties shall be calculated and levied at the relevant milestones as stipulated in the Local Content Plan or shall be imposed against 1 Actual Local Content Spend means the monetary value of local content initiatives actually delivered by the Supplier during the period under review. 2 Required Local Content Spend means the monetary value of local content obligations that the Supplier has agreed to deliver during the period under review.

Penalties for Non-compliance to Service Level Agreement. Where the Supplier/Service Provider fails to deliver the Goods/Services within the agreed and accepted milestone timelines and provided that the cause of the delay was not due to a fault of Transnet, penalties shall be imposed at …………………………………………………… . Delete these Notes Guidance Notes ⮚ The Penalty regime must be determined based on the nature of the Goods/Services. The penalty should be reasonable and not out of proportion to the potential prejudice that may be suffered. a) The Parties have agreed If any Non-compliance Penalty arises, the Supplier Development Manager shall issue a Non-compliance Penalty Certificate on the following milestone targets (“last day of each month during such Non- compliance indicating the Local Content Plan”): ……………………………………………………Non-compliance Penalties which have accrued during that period. b) A Non-compliance Penalty Certificate shall be prima facie proof of the matters to which it relates. If for any reason the Supplier disputes any of the amounts set out in a Non-compliance Penalty Certificate:  the dispute shall be resolved in accordance with the provisions of the Agreement; and  if pursuant to that referral, it is unable determined that the Supplier owes any amount to achieve any milestone target Transnet pursuant to the Non-compliance Penalty Certificate, then the Supplier shall pay such amount to Transnet within 10 (ten) Business Days of the determination made pursuant to such determination and an accompanying valid Tax Invoice. Payment of Non-compliance Penalties: c) Subject to Clause i) above, the Supplier shall pay the Non-compliance Penalty indicated in the Local Content Plan OR the local content undertaking [Delete alternative not applicable], Non-compliance Penalty Certificate within 10 (ten) Business Days of Transnet issuing a valid Tax Invoice to the Supplier must approach for the Department of Trade and Industry (“DTI”amount set out in that certificate. If Transnet does not issue a valid Tax Invoice to the Supplier for Non-compliance Penalties accrued during any relevant period, those Non-compliance Penalties shall be carried forward to the next period. d) to obtain exemption in order to supply the goods at a lower local content threshold. The Supplier is obliged to approach DTI for exemption shall pay the amount due within 10 (ten) days after receipt of determining that it is unable a valid Tax Invoice from Transnet, failing which Transnet shall, without prejudice to achieve any milestone target or local content thresholdother rights of Transnet under this Agreement, be entitled to call for payment which may be in any form Transnet deems reasonable and appropriate. ce) Should the DTI provide exemptionIt is agreed that Transnet, the Supplier DTI, the South African Bureau of Standards and/or any of their appointed agents shall be entitled to provide monitor, evaluate and audit the goods at Contractor’s compliance with its obligations under the lower local content threshold set by DTILocal Content Plan. In such eventTo this end, the Parties Contractor shall provide its full cooperation to the respective bodies referred to in good faith renegotiate the milestone targets or local content undertaking this clause to ensure that the lowered local content thresholds are achievedeffective monitoring, evaluation and auditing takes place. df) Should DTI not provide The Non Compliance Penalties set forth in this Clause are stated exclusive of VAT. Any VAT payable on Non Compliance Penalties will be for the necessary exemption, account of the Supplier shall be obliged to meet each milestone target as stated in the Local Content Plan or the local content undertakingSupplier. e) Should the Supplier fail to meet any milestone target or the local content undertaking, the following remedies shall apply without limiting any of Transnet’s other rights in law: i. Transnet shall afford the Supplier a period of thirty (30) days to remedy its non- compliance. ii. Should the Supplier fail to meet its obligations within the further 30 day period, the Supplier shall pay a Non-Compliance penalty (“Non-compliance Penalty”) to Transnet in respect of such Non-compliance as set out in clause iv below. The penalties shall be imposed per milestone measurement for non-delivery of committed values in the case of a Local Content Plan or shall be imposed against the non-delivery of committed values where local content undertakings must be met immediately. iii. To the extent that the Actual Local Content Spend1 is lower than the Required Local Content Spend2 (or the Adjusted Required Local Content Spend3, as the case may be), the Supplier shall be liable for Penalties which is the difference in value between the Actual Local Content Spend and the Required Local Content Spend (or the Adjusted Required Local Content Spend, as the case may be) plus an additional percentage of such difference. Such Non-compliance Penalties shall be calculated and levied at the relevant milestones as stipulated in the Local Content Plan or shall be imposed against 1 Actual Local Content Spend means the monetary value of local content initiatives actually delivered by the Supplier during the period under review. 2 Required Local Content Spend means the monetary value of local content obligations that the Supplier has agreed to deliver during the period under review.

Penalties for Non-compliance to Service Level Agreement. Where the Supplier/Service Provider fails to deliver the Goods/Services within the agreed and accepted milestone timelines and provided that the cause of the delay was not due to a fault of Transnet, penalties shall be imposed at …………………………………………………… 1.5% [one and a half per cent] rebate on quarterly sales payable in the next quarter. Delete these Notes Guidance Notes ⮚ The Non-compliance Penalty regime must be determined based on the nature of the Goods/Services. The penalty should be reasonable and not out of proportion to the potential prejudice that may be suffered.Certificate: a) The Parties have agreed If any Non-compliance Penalty arises, the Supplier Development Manager shall issue a Non- compliance Penalty Certificate on the following milestone targets (“last day of each month during such Non-compliance indicating the Local Content Plan”): ……………………………………………………Non-compliance Penalties which have accrued during that period. b) A Non-compliance Penalty Certificate shall be prima facie proof of the matters to which it relates. If for any reason the Supplier disputes any of the amounts set out in a Non-compliance Penalty Certificate: • the dispute shall be resolved in accordance with the provisions of the Agreement; and • if pursuant to that referral, it is unable determined that the Supplier owes any amount to achieve any milestone target Transnet pursuant to the Non-compliance Penalty Certificate, then the Supplier shall pay such amount to Transnet within 10 (ten) Business Days of the determination made pursuant to such determination and an accompanying valid Tax Invoice. Payment of Non-compliance Penalties: c) Subject to Clause i) above, the Supplier shall pay the Non-compliance Penalty indicated in the Local Content Plan OR the local content undertaking [Delete alternative not applicable], Non-compliance Penalty Certificate within 10 (ten) Business Days of Transnet issuing a valid Tax Invoice to the Supplier must approach for the Department of Trade and Industry (“DTI”amount set out in that certificate. If Transnet does not issue a valid Tax Invoice to the Supplier for Non-compliance Penalties accrued during any relevant period, those Non-compliance Penalties shall be carried forward to the next period. d) to obtain exemption in order to supply the goods at a lower local content threshold. The Supplier is obliged to approach DTI for exemption shall pay the amount due within 10 (ten) days after receipt of determining that it is unable a valid Tax Invoice from Transnet, failing which Transnet shall, without prejudice to achieve any milestone target or local content thresholdother rights of Transnet under this Agreement, be entitled to call for payment which may be in any form Transnet deems reasonable and appropriate. ce) Should the DTI provide exemptionIt is agreed that Transnet, the Supplier DTI, the South African Bureau of Standards and/or any of their appointed agents shall be entitled to provide monitor, evaluate and audit the goods at Contractor’s compliance with its obligations under the lower local content threshold set by DTILocal Content Plan. In such eventTo this end, the Parties Contractor shall provide its full cooperation to the respective bodies referred to in good faith renegotiate the milestone targets or local content undertaking this clause to ensure that the lowered local content thresholds are achievedeffective monitoring, evaluation and auditing takes place. df) Should DTI not provide The Non Compliance Penalties set forth in this Clause are stated exclusive of VAT. Any VAT payable on Non Compliance Penalties will be for the necessary exemption, account of the Supplier shall be obliged to meet each milestone target as stated in the Local Content Plan or the local content undertakingSupplier. e) Should the Supplier fail to meet any milestone target or the local content undertaking, the following remedies shall apply without limiting any of Transnet’s other rights in law: i. Transnet shall afford the Supplier a period of thirty (30) days to remedy its non- compliance. ii. Should the Supplier fail to meet its obligations within the further 30 day period, the Supplier shall pay a Non-Compliance penalty (“Non-compliance Penalty”) to Transnet in respect of such Non-compliance as set out in clause iv below. The penalties shall be imposed per milestone measurement for non-delivery of committed values in the case of a Local Content Plan or shall be imposed against the non-delivery of committed values where local content undertakings must be met immediately. iii. To the extent that the Actual Local Content Spend1 is lower than the Required Local Content Spend2 (or the Adjusted Required Local Content Spend3, as the case may be), the Supplier shall be liable for Penalties which is the difference in value between the Actual Local Content Spend and the Required Local Content Spend (or the Adjusted Required Local Content Spend, as the case may be) plus an additional percentage of such difference. Such Non-compliance Penalties shall be calculated and levied at the relevant milestones as stipulated in the Local Content Plan or shall be imposed against 1 Actual Local Content Spend means the monetary value of local content initiatives actually delivered by the Supplier during the period under review. 2 Required Local Content Spend means the monetary value of local content obligations that the Supplier has agreed to deliver during the period under review.