(A) Performance bond. Not later than 45 days after the effective date of the franchise, the grantee shall obtain and maintain during the entire term of the franchise and any extensions and renewals thereof, at its cost and expense, and file with the town a corporate surety bond or letter of credit, in an amount specified in the franchise agreement, to guarantee the faithful performance of the grantee of all its obligations provided under this chapter and the franchise. Failure to timely obtain file and maintain the bond shall constitute a substantial violation of this chapter.
(B) Conditions. The performance bond shall provide the following conditions.
(1) There shall be recoverable by the town, jointly and severally from the principal and surety, any and all fines and penalties due to the town and any and all damages, losses, costs, and expenses suffered or incurred by the town resulting from the failure of the grantee to: faithfully comply with the provisions of this chapter and the franchise; comply with all applicable orders, permits, and directives of any town agency or body having jurisdiction over its acts or defaults; pay any claims, liens, or taxes due the town which arise by reason of the construction, operation, maintenance, or repair of the cable system.
(2) The total amount of the bond shall be forfeited in favor of the town in the event:
(a) The grantee abandons the cable system at any time during the term of the franchise or any extension thereto; and
(b) The grantee assigns the franchise without the express written consent of the town.
(C) Reduction of bond. Upon written application by the grantee, the town may, at its sole option, permit the amount of the bond to be reduced or waive the requirements for a performance bond subject to the conditions set forth below. Reductions granted or denied upon application by the grantee shall be without prejudice to the grantee’s subsequent applications or to the town’s right to require the full bond at any time thereafter. However, no application shall be made by the grantee within 90 days of any prior application.
(D) Use of performance bond. Prior to drawing upon the performance bond for the purposes described in this section, the town shall notify the grantee in writing that payment is due, and the grantee shall have ten days from the receipt of the written notice to make a full and complete payment of undisputed amounts. If the grantee does not make the payment within ten days, the town may withdraw the amount thereof from the performance bond.
(E) Notification. Within three days of a withdrawal from the performance bond, the town shall send to the grantee, by certified mail, return receipt requested, written notification of the amount, date, and purpose of the withdrawal.
(F) Replenishment of performance bond. No later than 30 days after receipt by the grantee of certified mail notification of a withdrawal pursuant to division (E) above, the grantee shall replenish the performance bond in an amount equal to the amount so withdrawn. Failure to make timely replenishment of the amount to the performance bond shall constitute a substantial violation of this chapter.
(G) Nonrenewal, alteration, or cancellation of performance bond. The performance bond required herein shall be in a form satisfactory to the town and shall require 30-days’ written notice of any nonrenewal, alteration, or cancellation to both the town and the grantee. The grantee shall, in the event of any such cancellation notice, obtain, pay all premium for, and file with the town, written evidence of the issuance of a replacement bond within 30 days following receipt by the town or the grantee of any notice of cancellation.
(Ord. passed 10-13-1998)