A. Performance Bond:
1. At the time the franchise becomes effective and at all times thereafter, the city reserves the right to impose on grantee an obligation to file with the commission, on behalf of all member cities, a bond in the amount of one hundred thousand dollars ($100,000.00) in a form and with such sureties as are reasonably acceptable to the commission. This bond will be conditioned upon the faithful performance by the grantee of its franchise obligations and upon the further condition that in the event grantee shall fail to comply with any law, ordinance 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 any property of grantee, plus a reasonable allowance for attorney fees and costs, up to the full amount of the bond, and further guaranteeing payment by the grantee of claims, liens and taxes due the city which arise by reason of the construction, operation, or maintenance of the system. The rights reserved by the city with respect to the bond are in addition to all other rights the city may have under the franchise or any other law. The city may, from year to year, in its sole discretion, reduce the amount of the bond.
2. The time for grantee to correct any violation or liability shall be extended by the city if the necessary action to correct such violation or liability is, in the sole determination of the city, of such a nature or character as to require more than thirty (30) days within which to perform, provided grantee provides written notice that it requires more than thirty (30) days to correct such violations or liability, commences the corrective action within the thirty (30) day period and thereafter uses reasonable diligence to correct the violation or liability.
3. In the event this franchise is revoked by reason of default of grantee, the city shall be entitled to collect from the performance bond that amount which is attributable to any damages sustained by the city as a result of said default or revocation.
4. Grantee shall be entitled to the return of the performance bond, or portion thereof, as remains sixty (60) days after the expiration of the term of the franchise or revocation for default thereof, provided the city has not notified grantee of any actual or potential damages incurred as a result of grantee's operations pursuant to the franchise or as a result of said default.
5. The rights reserved to the city with respect to the performance bond are in addition to all other rights of the city whether reserved by this franchise or authorized by law, and no action, proceeding or exercise of a right with respect to the performance bond shall affect any other right the city may have.
B. Security Fund:
1. At the time this franchise becomes effective, grantee shall deposit into a bank account, established by the commission on behalf of all member cities, and maintain on deposit throughout the term of this franchise, the sum of fifty thousand dollars ($50,000.00) as a common security fund for the faithful performance by it of all the provisions of this franchise and all other franchises which combine to make up the system (hereinafter "security fund") in compliance with all orders, permits and directions, of any member city or the commission and the payment by grantee of any claim, liens and taxes due the city which arise by reason of the construction, operation or maintenance of the system. Interest accrued on this deposit shall be paid to grantee on a quarterly basis; provided, that all requirements of this section have been complied with by grantee. Provisions shall be made to permit the commission to withdraw funds from the security fund. Grantee shall not use the security fund for other purposes and shall not assign, pledge, or otherwise use the security fund as security for any purpose.
2. In addition to recovery of any monies owed by grantee to the city or any person or damages to the city or any person as a result of any acts or omissions by grantee pursuant to the franchise, the city in its sole discretion may charge to and collect from the security fund the following penalties:
a. For failure to timely complete system upgrades as provided in this franchise, unless the city approves the delay, the penalty shall be five hundred dollars ($500.00) per day for each day, or part thereof, such failure occurs or continues.
b. For failure to provide data, documents, reports or information or to cooperate with the city during an application process or system review or as otherwise provided herein, the penalty shall be two hundred fifty dollars ($250.00) per day for each day, or part thereof, such failure occurs or continues.
c. Fifteen (15) days following notice from the city of a failure of grantee to comply with construction, operation or maintenance standards, the penalty shall be five hundred dollars ($500.00) per day for each day, or part thereof, such failure occurs or continues.
d. For failure to provide the services grantee has proposed, including, but not limited to, the implementation and the utilization of the PEG access channels and the maintenance and/or replacement of the equipment and other facilities, the penalty shall be five hundred dollars ($500.00) per day for each day, or part thereof, such failure occurs or continues.
e. For grantee's breach of any written contract or agreement with or to the city or its designee, the penalty shall be five hundred dollars ($500.00) per day for each day, or part thereof, such breach occurs or continues.
f. For failure to comply with any of the provisions of this franchise, or other applicable laws for which a penalty is not otherwise specifically provided pursuant to this subsection B2, the penalty shall be two hundred fifty dollars ($250.00) per day for each day, or part thereof, such failure occurs or continues.
3. Each violation of any provision of this franchise shall be considered a separate violation for which a separate penalty can be imposed.
4. Whenever the city finds that grantee has violated one or more terms, conditions or provisions of this franchise, or for any other violation contemplated in subsection B2 of this section, a written notice shall be given to grantee informing it of such violation. At any time after thirty (30) days (or such longer reasonable time which, in the sole determination of the city, is necessary to cure the alleged violation) following local receipt of notice, provided grantee remains in violation of one or more terms, conditions or provisions of this franchise, in the sole opinion of the city, the city may draw from the security fund all penalties and other monies due the city from the date of the local receipt of notice.
5. Grantee may, within seven (7) days of receipt of such written notice, notify the city in writing that there is a dispute as to whether a violation or failure has in fact occurred. Such written notice by grantee to the city shall specify with particularity the matters disputed by grantee. The city shall hear grantee's dispute within sixty (60) days and render a final decision within sixty (60) days thereafter. If grantee does not dispute the alleged violation or upon the determination of the city that a violation has taken place, subject to grantee's right to seek any applicable judicial review, the city may draw from the security fund an amount to cover any failure of grantee to pay penalties accrued but unpaid after seven (7) days' written notice of such final determination.
6. If said security fund or any subsequent security fund delivered pursuant thereto expires prior to thirty (30) 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 thirty (30) months after the expiration of this franchise. The renewed or replaced security fund shall be of the same form and with a bank authorized herein and for the full amount stated in subsection B1 of this section.
7. If the city draws upon the security fund or any subsequent security fund delivered pursuant hereto, in whole or in part, grantee shall replace or replenish to its full amount the same within ten (10) days and shall deliver to the city a like replacement security fund or certification of replenishment for the full amount stated in subsection B1 of this section as a substitution of the previous security fund. This shall be a continuing obligation for any draws upon the security fund.
8. If any security fund is not so replaced or replenished, the city may draw on said security fund for the whole amount thereof and use the proceeds as the city determines in its sole discretion. The failure to replace or replenish any security fund may also, at the option of the city and/or commission, be deemed a default by grantee under this franchise. The drawing on the security fund by the 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 the city of any damages, monies or penalties from the security fund shall not affect any other right or remedy available to the city, nor shall any act, or failure to act, by the city pursuant to the security fund, be deemed a waiver of any right of the city pursuant to this franchise or otherwise.
C. Liability Insurance:
1. Insurance Required; Amount:
a. Upon the effective date of this franchise, grantee shall, at its sole expense, take out and maintain during the term of this franchise public liability insurance with a company licensed to do business in the state of Minnesota with a rating by A.M. Best & Co. of not less than "A" that shall protect grantee, the commission, the city and the commission's and the city's officials, officers, directors, employees and agents from claims which may arise from operations under this franchise, whether such operations be by grantee, its officials, officers, directors, employees and agents or any subcontractors of grantee. This liability insurance shall include, but shall not be limited to, protection against claims arising from bodily and personal injury and damage to property resulting from grantee's vehicles, products and operations. The amount of insurance for single limit coverage applying to bodily and personal injury and property damage shall not be less than two million dollars ($2,000,000.00). The following shall be included in the certificate:
(1) The policy shall provide coverage on an occurrence basis.
(2) The policy shall cover personal injury as well as bodily injury.
(3) Broad form property damage liability shall be afforded.
b. The following endorsements shall be attached to the liability policy:
(1) The city shall be listed as an additional insured on the policy.
(2) An endorsement shall be provided which states that the coverage is primary insurance subject to the indemnification clause, and that no other insurance maintained by the grantor will be called upon to contribute to a loss under this coverage.
(3) Standard form of cross liability shall be afforded.
(4) An endorsement stating that the policy shall not be canceled without thirty (30) days' notice of such cancellation given to the city.
2. Proof Of Insurance: Grantee shall submit to the city documentation of the required insurance, including a certificate of insurance signed by the insurance agent and companies named, as well as all properly executed endorsements.
D. Indemnification:
1. Grantee shall indemnify, defend and hold the city and commission, its officers, boards, commissions, agents and employees (collectively the "indemnified parties") harmless from and against any and all lawsuits, claims, causes or action, actions, liabilities, demands, damages, judgments, settlements, disability, losses, expenses (including attorney fees and disbursements of counsel) and costs of any nature that any of the indemnified parties may at any time suffer, sustain or incur arising out of, based upon or in any way connected with the grantee's operations, the exercise of the franchise, the breach of grantee of its obligations under this franchise and/or the activities of grantee, its subcontractors, employees and agents hereunder. Grantee shall be solely responsible for and shall indemnify, defend and hold the indemnified parties harmless from and against any and all matters relative to payment of grantee's employees, including compliance with social security and withholdings.
2. The indemnification obligations of grantee set forth in this franchise are not limited in any way by the amount or type of damages or compensation payable by or for grantee under workers' compensation, disability or other employee benefit acts, acceptance of insurance certificates required under this franchise or the terms, applicability or limitations of any insurance held by grantee.
3. The city and/or commission does not, and shall not, waive any rights against grantee which it may have by reason of the indemnification provided for in this franchise because of the acceptance by the city, or the deposit with the city by grantee, of any of the insurance policies described in this franchise.
4. The indemnification of the city and commission by grantee provided for in this franchise shall apply to all damages and claims for damages of any kind suffered by reason of any of grantee's operations referred to in this franchise, regardless of whether or not such insurance policies shall have been determined to be applicable to any such damages or claims for damages.
5. Grantee shall not be required to indemnify the city and commission for negligence or misconduct on the part of the city and the commission or its officials, boards, commissions, agents, or employees, including any loss claims related to public access channels in which the city and/or commission participate, subject to applicable state and federal statutory limitations.
E. Grantee's Insurance: Grantee shall not commence any cable system reconstruction work or permit any subcontractor to commence work until all insurance required under this franchise has been obtained. Said insurance shall be maintained in full force and effect until the expiration of this franchise. (Ord. 353, 2-15-2000)