Common use of Performance and Payment Security Clause in Contracts

Performance and Payment Security. On or before the Financial Closing Date, the Section Developer shall furnish, or cause the D&C Contractor to furnish, the following: a) a performance bond in the form to be set out in the Section P3 Agreement in an amount equal to 100% of the total value of D&C Work (the "Performance Bond"); and b) a payment bond in the form to be set out in the Section P3 Agreement in an amount equal to 100% of the total value of D&C Work (the "Payment Bond").7 Each of the Performance Bond and the Payment Bond must be issued by a surety or an insurance company authorized to issue bonds in the State that is rated in the top two categories by two of the three nationally recognized rating agencies or at least "A-" or better and "Class X" or better according to A.M. Best’s Financing Strength Rating and Financial Size Category. In addition any surety or insurance company issuing such bonds must be listed on the current U.S. Treasury Listing of Certified Companies and the limit of the bond written by such surety or insurance company on any one project must not exceed the approved Underwriting Limitation on the U.S. Treasury list. Each of the Performance Bond and the Payment Bond will name MDOT, MDTA, and the collateral agent as additional obligees, and further provide that each of the Performance Bond and the Payment Bond may be transferred by the Section Developer to MDOT, MDTA, or the collateral agent, as beneficiary, with rights to draw upon or exercise other remedies if MDOT, MDTA, or the collateral agent succeeds to the position of the Section Developer under the Section P3 Agreement. In all contracts with respect to the D&C Work entered into by the Section Developer, the Section Developer shall require its Contractors and suppliers to waive any right to seek a mechanic’s lien against the Section or the Site in consideration for the Section Developer’s provision of the Payment Bond. The Section Developer shall maintain, or cause the D&C Contractor to maintain, each of the Performance Bond and the Payment Bond until the expiry of the GP Defect Remedy Period (subject to step-downs as may be set forth in the Section P3 Agreement). If the Section Developer is required under the terms of the Finance Documents to provide or ensure that a Key