(A) Within 15 days after the award of a franchise, a company shall deposit with the Town either a letter of credit from a federally insured financial institution or a security deposit in such an institution in immediately available funds in the amount of $50,000. The sole condition of the letter of credit shall be written notice by the Town to the issuer that a company is in default under the franchise. The security deposit must be available for draw by the Town without condition. The form, issuer and content of such letter of credit or security deposit shall be approved by the Town. These instruments shall be used to assure the faithful performance of a company of all provisions of its franchise, compliance with all orders, permits and directions of any agency, commission, board, department, division or office of the Town having jurisdiction over its acts or defaults under its franchise and the payment by a company of any claims, liens and taxes due the Town which arise by reason of the construction, operation or maintenance of the system.
(B) The letter of credit or security deposit shall be maintained at the amount of $50,000 for the entire term of a franchise even if sums are withdrawn therefrom pursuant to divisions (A) or (C) of this section.
(C) If a company fails to pay to the Town any sum due under its franchise within the time required; or fails after 15 days notice to pay to the Town any taxes due and unpaid; or fails to repay the Town within 15 days, any damages, costs or expenses which the Town is compelled to pay by reason of any act or default of a company in connection with its franchise; or fails, after ten days notice of such default to comply with any provision of its franchise which the Town reasonably determines can be remedied, the Town may immediately demand payment of the amount thereof, with interest and any penalties, from the issuer of the letter of credit or the holder of the security deposit. Upon such demand for payment, the Town shall notify the company of the amount and date thereof.
(D) The rights reserved to the Town with respect to the letter of credit and security deposit are in addition to all other rights of the Town, and no action, proceeding or exercise of a right with respect to such letter of credit or security deposit shall affect any other right the Town may have.
(E) The letter of credit shall contain the following endorsement: “It is hereby understood and agreed that this letter of credit may not be canceled or not renewed until 30 days after receipt by the Town, by certified mail, of a written notice of such intention to cancel or not to renew.”
(F) Upon receipt of the 30 day notice, such shall be construed as a default granting the Town the right to call for payment of either the security deposit or letter of credit.
(`83 Code, § 13-513)