Common use of CONTRACT GUARANTEES Clause in Contracts

CONTRACT GUARANTEES. If BGL, at PGR's request, provides or has provided at any time, a financial guarantee in favor of a third party in respect of the payment by PGR of any financial obligation under any contract with a third party, BGL shall be entitled to charge a fee for each year or any portion thereof (on a pro rata basis) that the guarantee remains in effect calculated at the rate of 3% per annum on the aggregate maximum amount of the financial obligation in each year. For the purposes of this provision a year means each consecutive 12-month period during which a financial obligation is guaranteed commencing on the day that BGL's guarantee becomes effective.