Performance Bond Template

This Performance Bond Agreement ("Agreement") is made and entered into this __________ day of ________________, 20_____, by and between China Bank, a banking institution organized under the laws of the People's Republic of China, with its principal office located at ____________________________________ ("Bank"), and _______________________ [Legal Entity or Individual].

WHEREAS, _______________________ [Legal Entity or Individual] ("Principal") has executed a contract with _______________________ [Counterparty Name] ("Obligee"), dated _________________, 20______, (the "Contract") for the performance of certain obligations.

NOW, THEREFORE, in consideration of the above premises, Bank hereby agrees to issue a Performance Bond (hereinafter referred to as "Bond") in favor of Obligee, subject to the terms and conditions set forth herein:

1. Performance Bond Amount
The Bond shall be issued in the face amount of ________ [Amount in Words] (USD _______________)

2. Term and Validity
The Bond shall be valid from the effective date of the Contract until ________________ [expiry date], unless terminated earlier in accordance with this Agreement.

3. Conditions of Claim
The Obligee shall be entitled to make a claim under the Bond if Principal fails to perform any obligation as specified in the Contract. The maximum liability of the Bank under the Bond shall be limited to the face amount of the Bond mentioned in Paragraph 1.

4. Claim Procedure
(a) In the event of any default by Principal, the Obligee shall notify the Bank in writing within _______ [number of days] after the default occurs.
(b) The Bank shall perform an initial verification of the claim made by the Obligee within ______ [number of days] after receiving the notice of default.
(c) If the Bank finds the claim to be valid, it shall make the payment to the Obligee within _______ [number of days] from the date of receipt of the claim notification.

5. Indemnity and Reimbursement
Principal agrees to indemnify and hold the Bank harmless from any loss, cost, or liability incurred due to the issuance of this Bond, including attorney's fees, expenses, and costs related to any claim made under the Bond.

6. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the People's Republic of China.

7. Termination
Either party may terminate this Agreement by giving written notice to the other party at least _______ [number of days] prior to the desired termination date. Notwithstanding such termination, the Bank shall remain liable for any valid claims made under the Bond before the termination becomes effective.

8. Entire Agreement
This Agreement constitutes the entire understanding and agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, understandings, or agreements, whether oral or written.

9. Counterparts
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Performance Bond Agreement as of the day and year first above written.

For China Bank:

______________________________
[Authorized Signatory]

For Principal:

______________________________
[Authorized Signatory]