Common use of Performance Securities Clause in Contracts

Performance Securities. Within 7 days of execution of this Contract, the Contractor shall, at its own expense, deliver to the following to the Employer (duly executed and enforceable): (a) the Performance Security for proper performance, in the amount and currencies stated in Attachment C to the Particular Conditions from the Contractor's Parent Company; and (b) the Advance Payment Bonds from the Contractor's Parent Company in the amount and currencies and at the times stated in Attachment C to the Particular Conditions. The Contractor shall ensure that: (c) the Performance Security is valid and enforceable for [to insert] years following the date of the final Taking-Over Certificate issued under the Contract in respect of the Works, or[to insert], whichever is the earlier; and (d) the Advance Payment Bonds remain valid and enforceable until the Engineer issues the final Taking-Over Certificate in respect of the Works in accordance with clause [to insert] whichever is the earlier. If the terms of the Performance Security or any of the Advance Payment Bonds specify its expiry date, and the Contractor has not become entitled to receive the Performance Security or the Advance Payment Bonds by the date 28 days prior to the expiry date of the Performance Security or the Advance Payment Bonds the Contractor shall extend the validity of the Performance Security until the Works have been completed and any defects have been remedied, or in the case of the Advance Payment Bonds, until the Engineer issues the final Taking-Over Certificate in respect of the Works in accordance with clause 10 [Employer's Taking Over]. The Employer shall not make a claim under the Performance Security or the Advance Payment Bonds except for amounts to which the Employer is entitled under the Contract in the event of: (e) failure by the Contractor to extend the validity of the Performance Security or any of the Advance Payment Bonds as described in the preceding paragraph, in which event the Employer may claim the full amount of the Performance Security, or the Advance Payment Bonds, as the case may be; (f) failure by the Contractor to pay the Employer an amount due, as either agreed by the Contractor, notified under sub-clause 2.5 [Employer's Claims] or determined under clause 20 [Claims Disputes and Arbitration], within 42 days after the agreement, notice or determination (as the case may be); (g) failure by the Contractor to remedy a default within 42 days after receiving the Employer’s notice requiring the default to be remedied; and/or (h) any of the circumstances which entitle the Employer to termination under sub- clause 15.2 [Termination by Employer], irrespective of whether notice of termination has been given. The Employer shall indemnify and hold the Contractor harmless against and from all damages, losses and expenses (including legal fees and expenses) resulting from a claim under either the Performance Security or the Advance Payment Bonds to the extent to which the Employer was not entitled to make the claim. The Employer shall return: (i) the Performance Security to the Contractor within 28 days after the expiry of a period of three years, such period commencing on date the Engineer issues the final Taking-Over Certificate in respect of the Works in accordance with clause 10 [Employer's Taking Over]; and (j) the Advance Payment Bonds upon the Engineer issuing the final Taking-Over Certificate in respect of the Works in accordance with clause 10 [Employer's Taking Over].