Satisfactory Financial Guarantee Clause Samples
A Satisfactory Financial Guarantee clause requires one party to provide a financial assurance, such as a letter of credit, performance bond, or guarantee, that meets the approval of the other party. In practice, this means the party must present documentation or evidence of financial backing that satisfies specific criteria set by the contract or the discretion of the beneficiary. This clause ensures that the party's financial obligations under the agreement are secured, thereby reducing the risk of non-payment or non-performance.
Satisfactory Financial Guarantee. 1. Before the start of construction, the Developer shall file with the Village Clerk or one of the following as a financial guarantee to the Village as assurance for the faithful performance of and payment for any and all work to be performed pursuant to this Agreement:
a. a bond in the form as attached as Exhibit “E”,
b. an irrevocable letter of credit, or
c. cash on deposit
2. Such financial guarantee shall be approved by the Village Attorney and shall be in the amount identified on the attached Exhibit "C" and described as “Total Funds Required for Financial Guarantee”. The amount shall be sufficient to fund all financial guarantees required under this Agreement.
3. If the Developer provides an irrevocable letter of credit, Developer shall maintain the letter of credit during the term of this Agreement and shall provide the Village with proof of renewal of the letter of credit at least sixty (60) days prior to the expiration date, if any, of the letter of credit. The failure to provide proof of renewal shall constitute a default under this Agreement.
4. The financial guarantee provided under this subsection may include the post- completion guarantee required under subsection (D) below.
Satisfactory Financial Guarantee. 1. The Developer shall file with the Village Clerk prior to the start of construction, an irrevocable letter of credit or other satisfactory financial guarantee payable to the Village as assurance for the faithful performance of and payment for any and all work to be performed pursuant to this Agreement. Such letter of credit, cash or other financial guarantee shall be approved by the Village Attorney and shall be in the amount identified on the attached Exhibit "D" and described as “Total Funds Required for Letter of Credit or other Financial Guarantee”. The amount shall be sufficient to fund all financial guarantees required under this Agreement.
2. If the Developer provides an irrevocable letter of credit, Developer shall maintain the letter of credit during the term of this Agreement and shall provide the Village with proof of renewal of the letter of credit at least sixty (60) days prior to the expiration date, if any, of the letter of credit. The failure to provide proof of renewal shall constitute a default under this Agreement.