Common use of RESPONSIBILITY BOND Clause in Contracts

RESPONSIBILITY BOND. Effective July 1, 2010, each contractor upon payment of his/her annual Shop Card/Bond Fee shall be automatically bonded for $25,000.00 by the LMCC Bond Fund which shall be funded from part of the Annual Shop Card Fees. Should the employer’s bond be utilized to pay wages or trust fund contributions, the employer shall be liable to the bond fund for the amount paid to said, or to the trust funds on its behalf, with interest to accrue at 10% per diem on amount paid. At the option of the LMCC, a signatory contractor, may because of past delinquencies, be required to post an additional bond, acceptable to the LMCC, over and above the bond provided by the LMCC Bond Fund. If an additional bond is required, it is hereby agreed that the primary bond shall always pay its full face value before the LMCC Bond Fund shall make any payments as a result of any deficiencies on the part of a signatory contractor listed above. In the event an employer's Shop Card is suspended for failure to pay wages, fringe benefits or assessments for a violation of this Agreement, or upon determination by the LMCC, the employer shall be required to post an additional responsibility bond, or cash bond (type of bond to be determined by the LMCC) in an amount to be determined by the LMCC. In all cases, the new bond shall be at least in the amount of $25,000.00. Each employee, other person, or entity, except the Trust Funds, having a claim against any contractor under the provisions of this Agreement shall notify the LMCC, in writing, of the facts and circumstances of such unpaid obligations. The LMCC, or its representative, shall, after verification of indebtedness, process a certification of default to the surety company for payment under the terms of the surety bond and remit the funds received from the surety company to the person or entity entitled thereto. In the event the employer has deposited cash or other security under these provisions, the LMCC, or its representative, shall after verification of the indebtedness, withdraw from said cash deposit or convert said security to cash and forward to the obligee, thereof, sufficient funds to discharge such obligations. Within twenty four (24) hours after notice to any employer of such payment by the LMCC out of that employers cash or other security deposit, the employer shall replenish his/her cash or security deposit to the original sum required or to such further sum as the LMCC shall determine as necessary to guarantee further deficiencies of such employer. Should the LMCC determine that the liability of any employer under this Agreement is greater than the sum established in this Agreement, they may immediately demand and cause the employer to increase their cash deposit or surety bond to an amount sufficient to cover any such liability.