Performance Bond Canada | Performance Bond Requirements

   

		

			
      
11-4.20 Performance bond or letter of credit.

(a) Grantee shall file with the City Clerk at the time it files acceptance of a franchise granted under this chapter a corporate surety bond running to City and approved by the City Council, in a sum as set forth in the resolution of intention to grant the franchise. The bond shall be conditioned that grantee shall well and truly observe, fulfill and perform each term and condition of the franchise, and that in case of any breach of condition of the bond the amount of the penal sum therein shall be recoverable. Grantee shall file such bond within ten (10) days after the adoption of the ordinance codified in this chapter. If the bond is not so filed, or is not approved by the City Council, the franchise may be refused or forfeited and any money paid to City in connection therewith shall be retained by City.

(b) Grantee shall maintain the bond in full force and effect throughout the term of a franchise at Grantee’s sole expense. The bond shall be issued by an admitted surety insurer and comply with the requirements of the Bond and Undertaking Law, codified in Code of Civil Procedure Sections 995.010 et seq. A franchise shall be considered a “license or permit” within the meaning of the Bond and Undertaking Law, solely for purposes of application of such law to the bonding requirements of this section.

(c) Grantee may at its sole election provide an irrevocable standby letter of credit, in a form acceptable to the City Attorney, securing all or a portion of the amount otherwise required to be secured by the performance bond. The letter of credit shall be issued by an issuing bank with offices in California, or shall authorize an advising bank with offices in California to pay the beneficiary thereunder. The letter of credit shall authorize City to draw upon its proceeds in the event that grantee fails to well and truly observe, fulfill and perform each term and condition of the franchise, and that in case of any breach of the franchise City may draw against the letter of credit up to the total amount set forth therein. If grantee determines to file a letter of credit, grantee shall file such letter of credit within five (5) days after the adoption of the ordinance codified in this chapter. ( 1, Ord. 3037 c.s., eff. July 16, 2009)

 


View the mobile version.