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<br />'; <br /> <br />. <br /> <br />) <br /> <br />which may be in the form of an irrevocable letter of credit <br />on a form as approved by Grantor's City Attorney. If Grantee <br />is not in default at the expiration of the franchise, Grantor <br />shall return the security deposit to Grantee. Grantor's <br />obligations with respect to the security deposit are those <br />of a debtor and not a trustee. Grantor can maintain the <br />security deposit separate and apart from Grantor's general <br />funds or can commingle the security deposit with Grantor's <br />general and other funds. Grantor shall not be required to <br />pay Grantee interest on the security deposit. <br /> <br />3.6 Faithful Performance Bond. Upon the effective <br />date of the franchise, Grantee shall file with the Clerk of <br />the Council a faithful performance bond on a form satis- <br />factory to Grantor's attorney executed by a surety company <br />authorized to do business in the State of California, in the <br />penal sum of $50,000.00. The faithful performance bond <br />shall be maintained by the Grantee throughout the term of <br />the franchise, provided, however, the amount may be reduced <br />to 50% of the hereinabove required amount at the end of the <br />first three (3) years of the franchise if Grantee is not <br />otherwise in default of its performance hereunder. <br /> <br />3.7 Insurance. Grantee shall obtain at its sole cost <br />and file with Grantor's Clerk of the Council, prior to exer- <br />cising any right or performing any obligation pursuant to <br />the franchise, and maintain for the term of the franchise, a <br />policy of insurance or a certificate of such insurance, <br />satisfactory to Grantor's attorney, naming Grantor, its <br />officers, agents and employees as insured or additional <br />insured, which provides coverage not less than that provided <br />in the form of a comprehensive general liability insurance <br />policy for any and all claims and suits for damage or in- <br />juries to persons or property resulting from or arising out <br />of operations of Grantee, its officers, agents or employees. <br />Said policy or policies of insurance shall provide coverage <br />for both bodily injury and property damage in not less than <br />the following minimum amounts: Two Million Five Hundred <br />Thousand Dollars ($2,500,000.00) combined single limit, or <br />its equivalent. Grantee shall furnish to Grantor's Clerk of <br />the Council an insurance certificate that Grantee carries <br />Worker's Compensation insurance as required by law. Said <br />policy or policies of insurance required hereunder shall <br />contain a provision that no termination, cancellation or <br />change of coverage or of insured or additional insured shall <br />be effective until after thirty (30) days notice thereof has <br />been given in writing to Grantor. Grantee shall give to <br />Grantor prompt and timely notice of claim made or suit in- <br />stituted arising out of Grantee's operations hereunder. <br />Grantee shall procure and maintain, at its own cost and <br /> <br />-9- <br />