PERFORMANCE BONDS; SECURITY DEPOSIT Sample Clauses
The 'Performance Bonds; Security Deposit' clause requires a party, typically a contractor or service provider, to provide a financial guarantee—such as a performance bond or a security deposit—to assure the other party that contractual obligations will be fulfilled. This may involve submitting a bond from a surety company or depositing a specified sum of money, which can be claimed if the party fails to perform as agreed. The core function of this clause is to protect the beneficiary from losses due to non-performance or default, thereby allocating risk and ensuring the reliability of contract execution.
PERFORMANCE BONDS; SECURITY DEPOSIT. 6.1 Contractor shall provide a security deposit in the amount of ($ ) (“Security Deposit”) simultaneously with Contractor’s execution of this Agreement.
6.2 The Security Deposit shall serve as security for the payment of all monies due to County and shall also secure the performance of all other obligations of Contractor pursuant to this Agreement. The Security Deposit shall be either in the form of an Irrevocable Letter of Credit (“Letter of Credit”), in form and substance satisfactory to the Aviation Department; or a Payment and Performance Bond (“Bond”), in form and substance satisfactory to the Aviation Department. In the event of any failure by Contractor to pay when due any fees or other charges, or upon any other failure to perform its obligations, or upon any other default of this Agreement, then in addition to any other rights and remedies available to Aviation Department at law or in equity, Aviation Department shall be entitled to draw down up to the full amount of the Security Deposit and apply same to all amounts owed by Contractor to County. Upon notice of any such draw, Contractor shall immediately replace the Security Deposit with a new Letter of Credit or Bond in the full amount of the Security De▇▇▇▇t required hereunder. The Aviation Department, upon fourteen (14) calendar days’ notice to Contractor, may require an increase in the amount of the Security Deposit to reflect any increases in the monies payable hereunder. In addition the Aviation Department, upon fourteen (14) calendar days’ notice to Contractor, may require an increase in the amount of the Security Deposit equal to up to four (4) additional months’ Privilege Fees because of increased obligations hereunder, or if upon a review of Contractor’s payment or performance history at the Airport, the Aviation Department determines an increase should be required.
6.2.1 The Security Deposit shall be kept in full force and effect throughout the term of this Agreement and for a period of three (3) months thereafter. Not less than ninety (90) calendar days prior to any expiration date of a Letter of Credit or Bond, Contractor shall submit evidence in form satisfactory to the Aviation Department that said security instrument has been renewed. A failure to renew a Letter of Credit or Bond, or to increase the amount of the Security Deposit, if required pursuant to this section, shall (i) entitle the Aviation Department to draw down the full amount of such Security Deposit, and (ii) be a defa...