Performance guarantee clause samples

Separately, GSP’s gas pipeline concession required GSP to deliver one or more performance guarantees to the Peruvian Ministry of Energy and Mines. As a result, the Company executed a master agreement for the issuance of letters of credit with Chubb Seguros Perú S.A. (formerly ACE Seguros S.A.) (“Chubb”), dated October30, 2015, in which (i)Chubb agreed to issue a performance guarantee for the benefit of GSP in the amount of US$52.5million related to the Company’s proportional share of GSP’s equity interests (as specified in the guarantee letter issued by Chubb on June18, 2016, the “Performance Guarantee”), and (ii)the Company undertook to reimburse Chubb any amounts paid by Chubb as a result of a drawdown by the Peruvian Ministry of Energy and Mines on the Performance Guarantee. Following the termination of the GSP concession, the Peruvian Ministry of Energy and Mines drew on the Performance Guarantee on January24, 2017, and Chubb made payment of the full guarantee amount on January27, 2017, upon which, pursuant to the Master Agreement, the reimbursement of the guaranteed amount, plus interest and expenses, became immediately due and payable by the Company to Chubb. On March30, 2017, the Company executed an agreement with Chubb that acknowledged the indebtedness and agreed a schedule of payment, the final installation of which was paid by the Company to Chubb on December6, 2018.

Sunrun currently offers four types of customer agreements: (1)a monthly PPA, (2)a prepaid PPA, (3)a monthly lease agreement, and (4)a prepaid lease agreement. Sunrun provided an example of each of these types of agreements for our review. In addition, Sunrun provided an example of the monthly PPA and lease for a Facility that includes battery storage. Each agreement type typically has a term of 20 or 25years from the in-service date and provides either a 95percent or 100percent performance guarantee (the “Performance Guarantee Percentage”). A small percentage of contracts have no performance guaranty. If the energy production over the term of the agreement does not meet the performance guarantee, Sunrun is to refund the difference to the Site Owner at the rate per kWh specified in the agreement. The majority of the agreements provided for our review calculate the guaranteed performance against the actual performance and calculate a refund if applicable every twoyears. The prepaid PPA provided for our review specified that this refund is calculated on an annual basis, and the monthly lease with battery storage contract did not include a performance guarantee. If the system produces more energy than the guaranteed output, then the extra energy is provided at no additional cost.

Sunrun currently offers four types of customer agreements: (1)a monthly PPA, (2)a prepaid PPA, (3)a monthly lease agreement, and (4)a prepaid lease agreement. Sunrun provided an example of each of these types of agreements for our review. In addition, Sunrun provided an example of the monthly PPA and lease for a Facility that includes battery storage. Each agreement type typically has a term of 20years from the in-service date and provides either a 95percent or 100percent performance guarantee. A small percentage of contracts have no performance guaranty. If the energy production over the term of the agreement does not meet the performance guarantee, Sunrun is to refund the difference to the Site Owner at the rate per kWh specified in the agreement. The majority of the agreements provided for our review calculate the guaranteed performance against the actual performance and calculate a refund if applicable every twoyears. The prepaid PPA provided for our review specified that this refund is calculated on an annual basis, and the monthly lease with battery storage contract did not include a performance guarantee. If the system produces more energy than the guaranteed output, then the extra energy is provided at no additional cost. The Xanadu Portfolio only includes monthly PPAs and monthly lease agreements.

As of the date of this Quarterly Report, the Company believes that its assets alone are not sufficient to satisfy the performance guarantee. The Company will need to rely on BOCO to maintain the performance guarantee (as further discussed below) and ultimately to raise capital through the issuance of equity and/or debt as the principal source of liquidity to satisfy the performance guarantee on its own. The Company’s prospects of raising capital now are greatly diminished due to several factors, including the recent substantial write down of Company assets (as described throughout the Notes above), the improbability of generating substantial revenue soon due to the cessation of operations at the TMC Project resulting from the September 2016 slough event (as described in this Footnote 10 above), and the Company’s current capital structure. If the Company fails to satisfy the performance guarantee as required by ADNR, the Company’s MLUP will likely be revoked and the Company will lose access to the TMC Project. In light of the circumstances, the Company is considering all avenues with regard to the performance guarantee and our loans and other outstanding obligations. Since our ability to raise additional capital will be affected by many factors, most of which are not within our control (including the “Risk Factors” set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2015, as filed with the SEC on February 16, 2016), no assurance can be given that the Company will in fact be able to raise the required capital in a timely manner or that the proposed terms of any such financing will be favorable or acceptable to the Company. If we are unsuccessful in obtaining or agreeing to financing, the Company may be forced to discontinue all operations and will fail, which will likely result in the Company’s shareholders losing their entire investment.

Additionally, the Company must take steps to replace the BOCO CD within two years and protect against ADNR taking deductions from the CD. In the event ADNR does take a deduction from the CD, the Company will be required to immediately repay BOCO in full for the deduction and cause the release of the remaining amount of the CD from the performance guarantee. Finally, the Company, TGC, Fidelity Title Company, as Trustee, and BOCO also entered a Deed of Trust, Security Agreement, Assignment of Production, Rents and Leasehold Interests, Financing Statement and Fixture Filing dated January 31, 2017 (the “Deed of Trust”). The Deed of Trust secures the Company’s obligations under the Pledge Agreement in the full amount of the CD by providing to BOCO a general security interest over all assets of the Company, including all the Company’s rights related to the entire TMC project, including all related mining claims and leases, the Company’s after acquired property interests, and all gold, silver, and other ores and minerals extracted by the Company. In the event of the Company’s default of the Pledge Agreement, BOCO will have the right to foreclose on all the assets of the Company without the necessity of going to court.

4.1 Payment on lump sum. After Party B delivers the goods to designated place of Party A and the goods pass the inspection by Party A, Party A shall pay 95% of the total payment for the goods to Party B, which is RMB Seven Hundred and Six Thousand Eight Hundred Yuan in Total (in numbers): ¥706800. Party A temporarily withholds 5% of the total payment for the goods, which is RMB Thirty-Seven Thousand Two Hundred Yuan in Total (in numbers: ¥37200.00) as the performance guarantee. In the absence of any quality problems, the performance guarantee with the amount of RMB Thirty-Seven Thousand Two Hundred Yuan in Total (in numbers: ¥37200.00) will be refunded to Party B after one year.

In case the Seller fails to deliver goods within the time specified by this contract (unless otherwise caused by force majeure event), the Buyer may agree to extend the delivery schedule on the condition that the Seller agrees to pay the approved loss. The payment for the approved loss amount will be deducted from the pending payment or performance guarantee. The approved loss amount is 0.5% of the amount of goods delayed in delivery for each seven days delayed. The days less than seven days would be calculated as seven days. However, the payment of the approved loss should be no more than 5% of the contract amount of the goods with delay in delivery. In case the Seller still fails to deliver in time after reaching the maximum limit of the approved loss amount, the Buyer has the right to terminate this contract. In regardless of such delay in payment, the Seller shall still be liable for paying the amount of approved loss for the delay.

2.45. Performance Guarantee. Has the meaning set forth in Paragraph6.8 of this Lease.

The security granted includes the Phase I oil storage tanks and the administrative building, an assignment of rental income generated from our administrative building in Fujairah, an advance payment guarantee and a performance guarantee. The financiers are entitled to enforce their security if there is an event of default under the financing documents which is continuing. The facility contains customary covenants and events of default, including covenants that limit BPGIC’s ability to incur additional indebtedness and create liens, and covenants that limit BPGIC’s ability to consolidate, merge or dispose of all or substantially all of its assets and enter into transactions with affiliates.

The Project Owner requires the Contractor to provide the Contractor's performance guarantee. The Contractor's performance guarantee shall be 10% of the Contract Price, i.e. RMB (142419260.05). The Contractor shall, within 10 days after the conclusion of the contract, submit to the Project Owner the performance guarantee in the form specified in the exhibit to the contract or in any other forms approved by the Project Owner, which shall be unconditional, irrevocable and independent bank guarantee payable on demand.