Los Gatos Municipal Code Art. IV General Financial and Insurance Provisions

(a) Prior to the commencement of any construction work by the grantee, the grantee shall file with the grantor a construction and performance bond in the amount specified in the franchise agreement, in favor of the grantor and any other person who may claim damages as a result of the breach of any duty by the grantee assured by such bond.

(b) The bond contemplated herein shall be in the form approved by the Town Attorney and shall among other matters cover the cost of removal of any properties installed by the grantee in the event the grantee shall default in the performance of its construction obligation.

(c) In no event shall the amount of such bond be construed to limit the liability of the grantee for damages.

(Code 1968, § 9.50.010)

(a) Within thirty (30) days after the effective date of the franchise, the grantee shall deposit into a bank account, established by the grantor, and maintain on deposit through the term of this franchise, the sum specified in the franchise agreement, as security for the faithful performance by it of all the provisions of this franchise, and compliance with all orders, permits and directions of any agency of the grantor having jurisdiction over its acts or defaults under the franchise, and the payment by the grantee of any claims, liens and taxes due the grantor which arise by reason of the construction, operation or maintenance of the system. The security fund may be assessed by the grantor for purposes including, but not limited to, the following:

(1) Failure of grantee to pay grantor sums due under the terms of the franchise;

(2) Reimbursement of costs borne by the grantor to correct franchise violations not corrected by grantee, after due notice;

(3) Monetary penalties assessed against grantee due to default or violation of franchise requirements.

(b) Within thirty (30) days after notice to it that any amount has been withdrawn by the grantor from the security fund pursuant to subsection (a) of this section, the grantee shall deposit a sum of money sufficient to restore such security fund to the original amount.

(c) If the grantee fails, after ten (10) days' notice to pay to the grantor any franchise fee or taxes due and unpaid; or, fails to pay the grantor within such ten (10) days, any damages, costs, expenses, or penalties which the grantor shall be compelled to pay by reason of any act or default of the company in connection with this chapter or the franchise agreement; or fails, after thirty (30) days' notice of such failure by the grantor to comply with any provision of the franchise which the grantor reasonably determines can be remedied by an expenditure of the security, the grantor may immediately withdraw the amount thereof, with interest and any penalties, from the security fund. Upon such withdrawal, the grantor shall notify the grantee of the amount and date thereof.

(d) The security fund deposited pursuant to this section shall become the property of the grantor in the event that the franchise is cancelled by reason of the default of the grantee or revoked for cause in accordance with the procedures of section 7.20.050. The grantee, however, shall be entitled to the return of such security fund, or portion thereof, as remains on deposit at the expiration of the term of the franchise, or upon termination of the franchise at an earlier date, provided that there is then no outstanding default on the part of the grantee.

(e) The rights reserved to the grantor with respect to the security fund are in addition to all other rights of the grantor whether reserved by this chapter or authorized by law, and no action, proceeding or exercise of a right with respect to such security fund shall affect any other right the grantor may have.

(Code 1968, § 9.50.015)

The grantee, by acceptance of the franchise, agrees to indemnify, defend, and hold harmless the Town, its officers, board, commissions, agents, and employees, against and from any and all claims, demands, causes of action, actions, suits, proceedings, damages (including but not limited to damages to Town property and damages arising out of copyright infringement, and damages arising out of failure by grantee to secure consents from owners, authorized distributors or licensees of programs to be delivered by grantee's cable system), costs or liabilities (including costs or liabilities of the Town with respect to its employees), of every kind and nature whatsoever, including any attorneys' fees, account fees, expert witness or consulting fees, court costs, per diem expenses, travelling and transportation expense, or other costs and expenses arising out of or pertaining to the exercise or enjoyment of any franchise hereunder granted by franchisee; provided, however, that the foregoing indemnity shall expressly exclude liability arising solely out of any claim, demand, cause of action or proceeding resulting from the negligence or wilful misconduct of the Town, the Town Council, each member thereof, or officers, agents, employees or members of boards and commissions of the Town.

(Code 1968, § 9.50.020)

(a) The grantee shall maintain, throughout the term of its franchise and shall specifically name therein the Town, its officers, employees, and agents, as additional insured, liability insurance expressly insuring both the grantee and grantor with respect to all loss contingencies mentioned in section 7.40.020, in the minimum amount specified herein.

(b) Prior to the effective day of the franchise, the grantee shall furnish proof to the grantor that a satisfactory insurance policy is in force. Such insurance policy shall be approved by the grantor, and, along with written evidence of payment of required premiums, certification of such policy shall be filed and maintained with the grantor. Where such insurance is provided by a policy which also covers grantee or any other entity or person, it shall contain the standard cross-liability endorsement. By resolution the grantor may, from time to time, increase the required face amount of such insurance in reasonable amounts not to exceed the amount of insurance carried by the grantor for the applicable type of coverage.

(c) All insurance policies shall provide that coverage will not be cancelled, reduced or changed without at least thirty (30) days' prior written notice to grantor. At least thirty (30) days prior to the expiration of any such policy, a certificate showing that such insurance coverage has been renewed shall be filed with grantor. If for any reason grantee fails to obtain or keep any of such insurance in force, grantor may (but shall not be required to) obtain such insurance, in which event grantee shall promptly reimburse grantor its premium costs therefor plus twenty (20) percent interest thereon until paid.

(d) The insurance coverages provided by the grantor shall be in minimum sums as follows:

(1) Workers' compensation, statutory amounts.

(2) General comprehensive liability (including bodily injury and property damage), two million dollars ($2,000,000.00).

(3) Broadcaster general liability, two million dollars ($2,000,000.00).

(4) Vehicle liability (including bodily injury and property damage), two million dollars ($2,000,000.00).

(Code 1968, § 9.50.025)