Common use of Security for Performance Clause in Contracts

Security for Performance. (a) On the earlier of the date falling 10 Business Days after the date of this Service Agreement and the date of commencement of Reference Services, <Service Provider> may request <User> to provide a bank guarantee from an Approved Bank in or substantially in the form set out at Annexure B, as security for the performance of <User>’s obligations under this Service Agreement. The bank guarantee must only be provided if at the time of the request: (i) <User> cannot demonstrate: (A) that it has an unqualified: 1. Standard & Poor’s credit rating of at least BBB-; or 2. ▇▇▇▇▇’▇ credit rating of at least Baa3; or 3. Fitch credit rating of at least BBB-, (an “acceptable credit rating”); or (B) that the performance of <User>’s payment obligations under clause 10 of this Service agreement are guaranteed (on terms acceptable to <Service Provider>) by another entity who has an Acceptable Credit Rating (“guarantor”); or (ii) within the previous 12 months, (or where the commencement of this Service agreement occurs within the previous 12 months, since the commencement of this Service agreement) <User> has failed to pay in full: (A) 5 invoices within the required time limit for payment; or (B) 3 consecutive invoices within the required time limit for payment; or (C) 1 invoice within 25 days of the due date; or (iii) any undisputed amounts owing by <User> to <Service Provider> in respect of the provision of Reference Services in the period prior to the commencement of this Service Agreement, are not paid in full within 30 days of the commencement of this Service Agreement; or (iv) <User> ceases to hold a Gas Trading Licence under the Energy ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ (WA); or (v) <User> ceases to be a member of or “user” for the purposes of the Retail Market Scheme; and subject to clause 16.2(A)(i) to (v) above and 16.2(b), the bank guarantee shall be for the amount in dollars, notified by <Service Provider> to <User> in writing, which is the greater of:

Security for Performance. (a) On the earlier of the date falling 10 Business Days after the date of this Service Agreement and the date of commencement of Reference Services, <Service Provider> may request <User> to provide a bank guarantee from an Approved Bank in or substantially in the form set out at Annexure B, as security for the performance of <User>’s obligations under this Service Agreement. The bank guarantee must only be provided if at the time of the request: (i) <User> cannot demonstrate: (A) that it has an unqualified: 1. Standard & Poor’s credit rating of at least BBB-; or 2. ▇▇▇▇▇’▇ credit rating of at least Baa3; or 3. Fitch credit rating of at least BBB-, (an “acceptable credit ratingAcceptable Credit Rating”); or (B) that the performance of <User>’s payment obligations under clause 10 of this Service agreement are guaranteed (on terms acceptable to <Service Provider>) by another entity who has an Acceptable Credit Rating (“guarantorGuarantor”); or (ii) within the previous 12 months, (or where the commencement of this Service agreement occurs within the previous 12 months, since the commencement of this Service agreement) <User> has failed to pay in full: (A) 5 invoices within the required time limit for payment; or (B) 3 consecutive invoices within the required time limit for payment; or (C) 1 invoice within 25 days of the due date; or (iii) any undisputed amounts owing by <User> to <Service Provider> in respect of the provision of Reference Services in the period prior to the commencement of this Service Agreement, are not paid in full within 30 days of the commencement of this Service Agreement; or (iv) <User> ceases to hold a Gas Trading Licence under the Energy ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ (WA); or (v) <User> ceases to be a member of or “user” for the purposes of the Retail Market Scheme; and subject andsubject to clause 16.2(A)(i16.2(a)(i) to (v) above and 16.2(b), the bank guarantee shall be for the amount in dollars, notified by <Service Provider> to <User> in writing, which is the greater of:to

Security for Performance. (a) On <Service Provider> may, by written notice, from time to time require <User> to provideOn the earlier of the date falling 10 Business Days after the date of this Service Agreement H aulage Contract and the date of commencement of Reference Haulage Services, <User> must provide to <Service Provider> may request <User> to provide a bank guarantee from an Approved Bank in or substantially in the form set out at Annexure B, as security for the performance of <its< User>’s obligations under this Service AgreementHaulage Contract and (without limiting any other remedies which may be available to it). The bank guarantee must only be provided if at the time of the request: (i) <User> cannot demonstrate: (A) that it has an unqualified: 1. Standard & Poor’s credit rating of at least BBB-; or 2. ▇▇▇▇▇’▇ credit rating of at least Baa3; or 3. Fitch credit rating of at least BBB-, (an “acceptable credit rating”); or (B) that the performance of <User>’s payment obligations under clause 10 of this Service agreement are guaranteed (on terms acceptable to <Service Provider>) by another entity who has an Acceptable Credit Rating (“guarantor”); or (ii) within the previous 12 months, (or where the commencement of this Service agreement occurs within the previous 12 months, since the commencement of this Service agreement) <User> has failed to pay in full: (A) 5 invoices within the required time limit for payment; or (B) 3 consecutive invoices within the required time limit for payment; or (C) 1 invoice within 25 days of the due date; or (iii) any undisputed amounts owing by <User> to must: <Service Provider> in respect of the provision of Reference Services in the period prior may wholly or partly Curtail Gas deliveries to the commencement of this Service Agreement, are not paid in full within 30 days of the commencement of this Service Agreement; or (iv) <User> ceases to hold a Gas Trading Licence under the Energy ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ (WA); orat a (v( i) <User> ceases to be a member of or “user” for the purposes of the Retail Market Scheme; and subject to clause 16.2(A)(i) to (v) above and 16.2(b), the bank guarantee shall be for the amount in dollars, notified by <Service Provider> to <User> in writing, which is the greater of: ( A) <Service Provider>'s reasonable estimate of all Haulage <User> under this Haulage Contract in the 3 months following t he date of estimation; and ( B) an amount that is necessary, in <Service Provider>'s r easonable opinion, to protect <Service Provider>'s legitimate b usiness interests; and ( ii) commence immediately and continue for an unlimited period or, if ( A) the end of this Haulage Contract; and ( B) the time required for <User> to satisfy its obligations under this Haulage Contract as determined by <Service Provider>, acting reasonably.

Security for Performance. (a) On the earlier of the date falling 10 Business Days after the date of this Service Agreement Haulage Contract and the date of commencement of Reference Haulage Services, <User> must provide to <Service Provider> may request <User> to provide a bank guarantee from an Approved Bank in or substantially in the form set out at Annexure B, as security for the performance of <User>’s obligations under this Service Agreement. The bank guarantee must only be provided if at the time of the request:of (i) <User> cannot demonstrate: (A) that it has an unqualified: 1. Standard & Poor’s credit rating of at least BBB-; or 2. ▇▇▇▇▇’▇ credit rating of at least Baa3; or 3. Fitch credit rating of at least BBB-, (an “acceptable credit rating”); or (B) that the performance of <User>’s payment obligations under clause 10 of this Service agreement are guaranteed (on terms acceptable to <Service Provider>) by another entity who has an Acceptable Credit Rating (“guarantor”); or (ii) within the previous 12 months, (or where the commencement of this Service agreement occurs within the previous 12 months, since the commencement of this Service agreement) <User> has failed to pay in full: (A) 5 invoices within the required time limit for payment; or (B) 3 consecutive invoices within the required time limit for payment; or (C) 1 invoice within 25 days of the due date; or (iii) any undisputed amounts owing by <User> to <Service Provider> in respect of the provision of Reference Services in the period prior to the commencement of this Service Agreement, are not paid in full within 30 days of the commencement of this Service Agreement; or (iv) <User> ceases to hold a Gas Trading Licence under the Energy ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ (WA); or (v) <User> ceases to be a member of or “user” for the purposes of the Retail Market Scheme; and subject to clause 16.2(A)(i) to (v) above and 16.2(b), the bank guarantee shall be for the amount in dollars, notified by <Service Provider> to <User> in writing, which is the greater of: (A) <Service Provider>'s reasonable estimate of all Haulage Charges and other amounts payable that will be incurred by (B) an amount that is necessary, in <Service Provider>'s reasonable opinion, to protect <Service Provider>'s legitimate business interests; and (ii) commence immediately and continue for an unlimited period or, if limited, for a period which ends not less than 20 Business Days after the later of: (A) the end of this Haulage Contract; and (B) the time required for <User> to satisfy its obligations under this Haulage Contract as determined by <Service Provider>, acting reasonably. (b) The Parties acknowledge that any amount determined under clause 16.2(a)(i) is based on a forward estimate of the Haulage Services to be provided under this Haulage Contract. If, in <Service Provider>'s reasonable opinion, the amount of the bank guarantee required under clause 16.2(a)(i) has increased since the date of <Service Provider>'s most recent notice under that clause 16.2(a)(i), <Service Provider> may, not more frequently than monthly, give <User> a further notice under clause 16.2(a)(i) specifying a revised amount required to be the subject of a bank guarantee under this Haulage Contract, and <User> must provide an additional or replacement guarantee such that this revised amount is guaranteed. (c) The Parties: (i) acknowledge that the Tariffs applicable to Haulage Services are increased annually based on a CPI escalation formula agreed by the Parties under the Access Arrangement; and (ii) agree that, other than for the first Variation Period, for each Variation Period: (A) the total amount required to be guaranteed under this clause 16.2 for the prior Variation Period will be increased for CPI in accordance with the same formula; and (B) accordingly, <User> must provide, in addition to the existing guaranteed amount or amounts, an additional or replacement bank guarantee such that the amount of this CPI increase is guaranteed, at least 5 Business Days prior to the commencement of the Variation Period. (d) If, in the opinion of <Service Provider>, <User> has defaulted under this Haulage Contract, <Service Provider> may call on any bank guarantee without notice to <User> and, in <Service Provider>’s sole discretion, apply the proceeds towards remedying the default and/or compensating <Service Provider> for any loss or damage caused by the default. (e) If <Service Provider> calls on all or part of any bank guarantee, <User> must give <Service Provider> an additional or a replacement guarantee within 5 Business Days of being given notice to do so by <Service Provider>, so that the amount referred to in the latest notice issued for the purposes of clause 16.2(a)(i) (as escalated in accordance with clause 16.2(c)) is guaranteed. (f) If <Service Provider> has called on the bank guarantee and, after <User>'s default has been remedied and/or <Service Provider> has been compensated for any loss or damage caused by the default, there are surplus funds held by <Service Provider>, <Service Provider> may hold that surplus as security for the prompt performance of <User>'s obligations under this Haulage Contract until <User> replaces the bank guarantee. Upon receipt of a replacement guarantee which complies with the requirements of this clause 16.2, <Service Provider> will, within 5 Business Days, return those surplus funds to <User> or (at <Service Provider>’s option), apply those funds in or towards any payment due from <User> to <Service Provider> which has not been paid when due. (g) Subject to clause 15.9(d), <Service Provider> will return the bank guarantee to <User> on the later of: (i) the expiration or termination of this Haulage Contract; and (ii) completion of all of <User>'s duties and obligations under this Haulage Contract (including payment to <Service Provider> of any damages arising from any breach of this Haulage Contract by <User>) to the satisfaction of <Service Provider>. (h) Any failure by <User> to comply with one or more of its obligations under this clause 16.2 constitutes a default under clause 15.1, with any failure by <User> to provide a guarantee or increase the amount which may be claimed under any bank guarantee treated as a failure by <User> to pay <Service Provider> an amount equivalent to the face value of that guarantee or the increased amount required (whichever is applicable). (i) Without limiting any other remedies which may be available to it, <Service Provider> may wholly or partly refuse to accept delivery of Gas at a Receipt Point, Curtail Gas deliveries to <User> at a Delivery Point or reduce or suspend any other Pipeline Service or other service to <User> unless and until <User> has provided each bank guarantee in the form and for the amount determined under this clause 16.2.