§ 6.0. SECURITY FOR PERFORMANCE AND PAYMENT  


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  • As security for the performance of this Contract, Contractor shall furnish at execution of this Contract (a) a corporate guaranty from its parent company in the form and amount attached as Exhibit "D" (the "Corporate Guaranty"), and (b) a performance and payment bond in an amount equal to four (4) months of the value of this Contract in the form attached hereto as Exhibit "E" (the "Bond").

    Beginning after the first six (6) months from the commencement of Automated Collection and every three (3) months thereafter, each time the Average Monthly Service Effectiveness Rate as calculated in Exhibit "D" of this Contract, falls below 99.75%, the Contractor shall pay seventy-five thousand ($75,000) dollars to LCG. All payments made pursuant to the Corporate Guaranty shall be made within sixty (60) days of receipt by Contractor of written demand from LCG.

    The Bond will be issued to secure the full, faithful performance of the entire Contract and the payment of all obligations arising thereunder, including obligations to pay all laborers, mechanics, material men, and Subcontractors, and all other persons who supply such persons with provisions and supplies for the performance of such work. Both the Corporate Guaranty and the Bond shall remain in effect for the entire term of the Contract. Attorneys-in-fact who sign performance bonds or contract bonds must file with each bond a certified and effectively dated copy of their power of attorney.

    The surety company issuing the Bond shall provide a bond with an A.M. Best Key rating Guide rating of B+ minimum, class 6 minimum, and listed on the U.S. Department of Treasury financial Management Service List of approved bonding companies, which is published annually in the Federal Register Circular No. 570 showing an underwriting limitation sufficient to cover 100 percent of the bond amount. The surety company furnishing the Bond shall also have an agent or representative with a permanent office in the State of Louisiana, upon whom notices referred to in this Contract may be served. A certificate from the surety showing that the bond premium is paid in full shall accompany the Bond. LCG agrees that, in the event of a default by Contractor which, under the terms of this Contract, would give rise to a right by LCG to make a claim under the Bond and an obligation by Contractor to make a payment pursuant to the Corporate Guaranty, LCG will present a written demand upon Contractor's parent corporation for payment pursuant to the Corporate Guaranty at least sixty (60) days prior to making any claim under the Bond, and further agrees that it shall make demand under the Bond only in the event that (a) Contractor's parent corporation fails to make said payment pursuant to the Corporate Guaranty or (b) the amount of the payment made pursuant to the Corporate Guaranty is insufficient to compensate LCG for the losses it is claiming as a direct result of Contractor's default.

(Ord. No. O-216-2008, Exh., 11-4-08)