(A) Within ten days after the award of this franchise, the grantee shall deposit with the Town a letter of credit from a financial institution in the amount of $5,000. The form and content of such letter of credit shall be approved by the Town Attorney. The letter of credit shall be used to insure the faithful performance by the grantee of all provisions of this franchise and compliance with all orders, permits and directions of any agency, commission, board, a department, division or office of the Town having jurisdiction over its acts or defaults under this franchise and the payment by the grantee 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The letter of credit shall be maintained at $5,000 during the entire term of this franchise, even if amounts have to be withdrawn pursuant to divisions (A) above and (C) below.
(C) If the grantee fails to pay to the Town any compensation within the time fixed herein; or fails after ten days’ notice to pay to the Town any taxes due and unpaid; or fails to repay the Town within ten days any damages, costs or expenses which the Town is compelled to pay by reason of any act or default of the grantee in connection with this franchise; or fails after three days’ notice of such failure by the Town to comply with any provision of this franchise which the Town reasonably determines can be remedied by demand on the letter of credit, the Town may immediately request payment of the amount thereof with interest and any penalties from the letter of credit. Upon such request for payment, the Town shall notify the grantee of the amount and date thereof.
(D) The rights reserved to the Town with respect to the letter of credit are in addition to all other rights of the Town, whether reserved by this franchise or authorized by law and no action, proceeding or exercise of a right with respect to such letter of credit 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 cancelled by the surety nor the intention not to renew be stated by the surety until sixty (60) days after receipt by the Town by registered mail of written notice of such intention to cancel or not to renew.”
(2005 Code, § 95.13)