(A) General. Rights of city pursuant to indemnification, insurance, bonds, and letters of credit pursuant to the franchise, are in addition to all other rights the city may have pursuant to the franchise or any other ordinance, rule, regulation or law.
(B) Indemnification.
(1) The grantee shall, throughout the term of this franchise, at its sole cost and expense, indemnify, defend and hold harmless the city, its officers, boards, agents and employees against all liability, damages, costs, claims including but not limited to expenses for legal charges and disbursements by the city in connection therewith, incurred by the city in connection with:
(a) Damage to persons or property, in any way arising out of or through the acts or omissions of grantee, its servants, agents or employees or to which grantee's negligence shall in any way contribute;
(b) Any claim for invasion of privacy, defamation of any person, firm or corporation, violation or infringement of any copyright, trademark, trade name, service mark or patent or of any other right of any person, firm, or corporation;
(c) Grantee's failure to comply with the provisions of any federal, state or local law, ordinance, statute or regulation applicable to grantee or the system.
(2) If suit is brought or threatened against the city, either independently or jointly with grantee, or with any other person or municipality, grantee, upon notice given by city, shall defend city at the sole cost of grantee, and if judgment is obtained against city, grantee shall indemnify city and pay such judgment with all costs and satisfy and discharge said judgment.
(3) City reserves the right to cooperate with grantee and participate in the defense of any litigation by its own counsel. Grantee shall pay upon receipt of written demand from city, all expenses incurred by city in defending itself with regard to any matters in this section. These expenses shall include, but not be limited to, attorney's fees, and the reasonable value, as determined by city, of services rendered by city or it's employees, agents or representatives.
(C) Insurance.
(1) By acceptance of the franchise, grantee specifically agrees that it will maintain throughout the term of the franchise, liability insurance issued by a company authorized to do business in this state covering its obligations of indemnification provided for in this franchise in the minimum amount of:
(a) $500,000 for property damage to any one person;
(b) $2,000,000 for property damage in any one act or occurrence;
(c) $1,000,000 for personal injury to any one person;
(d) $2,000,000 for personal injury in any one act or occurrence;
(e) $1,000,000 for damages resulting in claims for invasion of privacy, defamation, violation or infringement of any copyright, trademark, trade name, service mark or patent.
(2) Such insurance shall be with a company acceptable to city and shall otherwise be in form and substance acceptable to city. Such insurance policy with written evidence of payment of required premiums shall be filed and maintained with the City Manager during the term of the franchise. The above minimum amounts shall be changed from time to time by grantee as requested by city. Grantee shall immediately give notice to city of any threatened or pending litigation.
(3) Neither the provisions of this section nor any damages recovered by city shall be construed to, or shall, limit the liability of grantee.
(4) No recovery by city of any sum by reason of the letter of credit or bond required in the franchise shall be any limitation upon the liability of grantee to city under the terms of this section, except that the sum so received by city from such letter of credit or bond shall be deducted from a recovery under this section, if for the same act or occurrence.
(5) All insurance policies maintained pursuant to this franchise shall contain the following endorsement:
“It is hereby understood and agreed that this insurance policy may not be cancel led nor the intention not to renew be stated until 120 days after receipt by city, by registered mail, or written notice of such intention to cancel or not to renew.”
(D) Bonds.
(1) Grantee shall provide a faithful performance bond running to the city in the penal sum of $25,000 conditioned upon the faithful performance of the grantee of all the terms and conditions of the ordinance and upon the further condition that in the event the grantee shall fail to comply with any law, ordinance, rule or regulation governing the franchise, there shall be recoverable jointly and severally from the principal and surety of the bond any damages or loss suffered by the city as a result, including the full amount of any compensation, indemnification, or cost of removal or abandonment of property of the grantee plus costs and reasonable attorneys' fees up to the full amount of the bond.
(2) In addition to the bond requirement in subdivision (1) above, at such time as the grantee commences the rebuild and upgrade pursuant to § 11.120(A)(2) of the code, the grantee shall file with the city a labor and material bond in the sum of $250,000, guaranteeing payment by the grantee of claims, liens, and taxes due to the city which arise by reason of the rebuild and upgrade construction. At such time as grantee has accomplished the refurbishing pursuant to § 11.120(A)(2), grantee shall notify the city. Upon receipt of such notice, the city shall have 90 days to obtain and receive a written report from an independent engineer; provided, however, if the city fails to receive such a written report within 90 days, the construction shall be deemed complete. The grantee may extinguish the labor and material bond upon a determination by the city or under this section of the code that construction is complete.
(3) The rights reserved by the city with respect to the bonds are in addition to all other rights the city may have under this code or any other law.
(4) The bonds shall be subject to the approval of the city and shall be in full force and effect at all times until the grantee has liquidated all of its obligation with the city.
(5) The bonds shall contain the following endorsement:
“It is hereby understood and agreed that this bond may not be cancel led until 120 days after receipt by the City Manager, by certified mail, return receipt requested, of a written notice of intent to cancel or not to renew.”
(E) Letter of credit.
(1) At the time of acceptance of this franchise, grantee shall deliver to the city an irrevocable and unconditional letter of credit, in form and substance acceptable to and subject to approval of the city, from a national or state bank approved by city, in the amount of $50,000.
(2) The letter of credit shall provide that funds will be paid to city, upon written demand of city, and in an amount solely determined by city in payment for penalties charged pursuant to subdivision (3) of this division, in payment for any monies owed by grantee pursuant to its obligations under the franchise, or in payment for any damage incurred as a result of any acts or omissions by grantee pursuant to the franchise.
(3) In addition to recovery of any monies owed by grantee to city or damages to city as a result of any acts or omission by grantee pursuant to the franchise, city in its sole discretion may charge to and collect from the letter of credit the following penalties:
(a) For failure to complete system construction in accordance with grantee's initial service area plan, unless city approves the delay, the penalty shall be $200 per day for each day, or part thereof, such failure occurs or continues.
(b) For failure to provide data, documents, reports, information or to cooperate with the city during an application process or system review, the penalty shall be $50 per day for each day, or part thereof, such failure occurs or continues.
(c) For failure to comply with any of the provisions of this franchise for which a penalty is not otherwise specifically provided pursuant to subdivision (E)(3), the penalty shall be $50 per day for each day, or part thereof, such failure occurs or continues.
(d) For failure to test, analyze and report on the performance of the system following a request by the city, the penalty shall be $50 per day for each day, or part thereof, that such failure occurs or continues.
(e) For failure by grantee to modify the system or to provide additional services within 45 days after required by city following a periodic review or renegotiation session the penalty shall be $200 per day for each day or part thereof that such failure occurs or continues.
(f) Forty-five days following notice from city of a failure of grantee to comply with construction, operation or maintenance standards, the penalty shall be $200 per day for each day, or part thereof, that such failure occurs or continues.
(g) For failure to provide the services grantee has proposed, including but not limited to the implementation and the utilization of the access channels and the making available for use of the equipment and other facilities to city, the penalty shall be $100 per day for each day or part thereof that such failure occurs or continues.
(h) For failure to replace or restore private property as required by § 11.120(L), the penalty shall be the actual cost of restoring or replacing the private property disturbed by grantee.
(i) Each violation of any provision of this franchise shall be considered a separate violation for which a separate penalty can be imposed.
(4) Whenever city finds that grantee has violated one or more terms, conditions, or provisions of this franchise, a written notice shall be given to grantee informing it of such violation. At any time after three days following notice, city may draw from the letter of credit all penalties and other monies due city.
(5) Whenever a penalty has been assessed, grantee may, within ten days of notice, notify city that there is a dispute as to whether a violation or failure has, in fact, occurred. Such notice by grantee to city shall specify with particularity the matters disputed by grantee.
(a) City shall hear grantee's dispute at the next regularly scheduled Council meeting. City shall supplement the Council decision with written findings of fact.
(b) Upon a determination by city that no violation has taken place, city shall refund to grantee without interest all monies drawn from the letter of credit by reason of the alleged violation, less all costs of grantee's appeal.
(6) If said letter of credit or any subsequent letter of credit delivered pursuant hereto, expires prior to 15 months after the expiration of the term of this franchise, it shall be renewed or replaced, during the term of this franchise to provide that it will not expire earlier than 15 months after the expiration of this franchise. The renewed or replaced letter of credit shall be on the same form and with a bank authorized herein and for the full amount stated in subdivision (1) of this division.
(7) If city draws upon the letter of credit, or any subsequent letter of credit delivered pursuant hereto, in whole or in part, grantee shall replace the same within ten business days and shall deliver to city a like replacement letter of credit for the full amount stated in subdivision (1) of this division as a substitution of the previous letter of credit.
(8) If any letter of credit is not so replaced, city may draw on said letter of credit for the whole amount thereof and hold the proceeds, without interest, and use the proceeds to pay costs incurred by city in performing and paying for any or all of the obligations, duties and responsibilities of grantee under the franchise that are not performed or paid for by grantee pursuant hereto, including attorneys' fees incurred by the city in so performing and paying. The failure to so replace any letter of credit may also, at the option of city, be deemed a default by grantee under the franchise. The drawing on the letter of credit by city, and use of the money so obtained for payment or performance of the obligations, duties and responsibilities of grantee which are in default, shall not be a waiver or release of such default.
(9) The collection by city of any damages, monies or penalties from the letter of credit shall not affect any other right or remedy available to city, nor shall any act, or failure to act, by city pursuant to the letter of credit, be deemed a waiver of any right of city pursuant to this franchise or otherwise.
(10) The letter of credit shall contain the following endorsement:
“It is hereby understood and agreed that this letter of credit shall not be cancelled by the financial institution, nor the intention not to renew be stated until 30 days after receipt by the City, by registered mail return receipt requested, of a written notice of such intention to cancel or not to renew.”
('77 Code, § 11.113) (Am. Ord. 982, passed 11-9-81; Am. Ord. 1125, passed 5-27-86; Am. Ord. 1202, passed 6-25-90)