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� � <br /> hereunder and the Grantor shall eooperate fully therein, provided, that the <br /> Grantor shall have the right to accept or reject any proposed settlement. <br /> 3.7 Security Fund <br /> (a) Upon the effective date of this Agreement, Grantee <br /> shall establish and provide to Grantor a security fund, as security for the faithful <br /> perFormance by Grantee of all material provisions of this Agreement. The <br /> security fund shall consist of two (2) parts. The first part shall consist of a <br /> perFormance bond of Two Hundred Fifty Thousand Dollars ($250,000) to cover <br /> the Cable System construction, as required herein. <br /> The bond shall be in a form acceptable to the Grantor's City Attorney. <br /> The second part of the Security Fund shall be in the amount of at least <br /> Fifty Thousand Dollars ($50,000) and shall be in the form of an irrevocable letter <br /> of cred it. <br /> (b) The security shall be maintained as follows: <br /> (1) The Two Hundred Fifty Thousand Dollar ($250,000) <br /> bond shall be maintained until the completion of the System construction as <br /> provided for in Section 5.1 and Exhibit "B" herein at which time the bond shall be <br /> released, provided there are then no outstanding material violations of this <br /> Agreement. <br /> (2) The letter of credit portion of the security fund shall <br /> be maintained at the Fifty Thousand Dollar ($50,000) level throughout the term <br /> of this Agreement, provided that at intervals no more often than each three (3) <br /> years, Grantor shall have the right to require that this amount be increased to <br /> reflect changes in the San Francisco Metropolitan Area Consumer Price Index <br /> during the prior three (3) year period. <br /> 17 <br /> sh/RWC/Council <br /> AGMT-382 <br /> FXS/fs <br /> 08/02/00 <br />