§ 6.08.130. Performance guarantees and remedies.

A.

Security Fund.

1.

Prior to a franchise's becoming effective, Metropolitan Nashville may require the franchisee to post with Metropolitan Nashville a cash security deposit to be used as a security fund to ensure the franchisee's faithful performance of and compliance with all provisions of this chapter, the franchise agreement, and other applicable law, and compliance with all orders, permits, and directions of Metropolitan Nashville, and the payment by the franchisee of any claims, liens, fees, or taxes due Metropolitan Nashville which arise by reason of the construction, operation, or maintenance of the system. The amount of the security fund shall be specified in the franchise agreement, but may not exceed five percent of the franchisee's projected annual average gross revenues.

2.

In lieu of a cash security fund, a franchisee may file and maintain with Metropolitan Nashville an irrevocable letter of credit or a corporate surety bond with an acceptable surety in the amount specified in its franchise agreement to serve the same purposes as the cash security fund. Said letter of credit or bond shall remain in effect for the full term of the franchise plus an additional six months thereafter. The franchisee and its surety shall be jointly and severally liable under the terms of the letter of credit or bond for the franchisee's failure to ensure its faithful performance of and compliance with all provisions of this chapter, the franchise agreement, and other applicable law, and compliance with all orders, permits, and directions of Metropolitan Nashville, and the payment by the franchisee of any claims, liens, fees, or taxes due Metropolitan Nashville which arise by reason of the construction, operation, or maintenance of the system. The letter of credit or bond shall provide for thirty days' prior written notice to Metropolitan Nashville of any intention on the part of the franchisee to cancel, fail to renew, or otherwise materially alter its terms. Neither the filing of a letter of credit or bond with Metropolitan Nashville, nor the receipt of any damages recovered by Metropolitan Nashville thereunder, shall be construed to excuse faithful performance by the franchisee or limit the liability of the franchisee under the terms of its franchise for damages, either to the full amount of the letter of credit or bond, or otherwise.

3.

The rights reserved to Metropolitan Nashville with respect to the security fund are in addition to all other rights of Metropolitan Nashville, whether reserved by this chapter or authorized by other law or a franchise agreement, and no action, proceeding, or exercise of a right with respect to such security fund or letter of credit will affect any other right Metropolitan Nashville may have.

4.

The following procedures shall apply to drawing on the security fund and letter of credit:

a.

If the franchisee fails to make timely payment to Metropolitan Nashville of any amount due as a result of a franchise, fails to make timely payment to Metropolitan Nashville of any amounts due under a franchise agreement or applicable law, fails to make timely payment to Metropolitan Nashville of any taxes due, or fails to compensate Metropolitan Nashville within ten days of written notification that such compensation is due, for any damages, costs, or expenses Metropolitan Nashville suffers or incurs by reason of any act or omission of the franchisee in connection with its franchise agreement or the enforcement of its franchise agreement after ten days' notice to comply with any provision of the franchise or franchise agreement that Metropolitan Nashville determines can be remedied by an expenditure of the security, Metropolitan Nashville may withdraw the amount thereof, with interest and any penalties, from the security fund or from funds available under the letter of credit or bond.

b.

Within three days of a withdrawal from the security fund or under the letter of credit or bond, Metropolitan Nashville shall mail, by certified mail, return receipt requested, written notification of the amount, date, and purpose of such withdrawal to the franchisee.

c.

If at the time of a withdrawal from the security fund or under the letter of credit or bond by Metropolitan Nashville, the amounts available are insufficient to provide the total payment towards which the withdrawal is directed, the balance of such payment shall continue as the obligation of the franchisee to Metropolitan Nashville until it is paid.

d.

No later than thirty days after mailing of notification to the franchisee by certified mail, return receipt requested, of a withdrawal under the security fund, letter of credit or bond, the franchisee shall deliver to Metropolitan Nashville for deposit in the security fund an amount equal to the amount so withdrawn and shall restore the letter of credit or bond. Failure to make timely delivery of such amount to Metropolitan Nashville or to restore the letter of credit or bond shall constitute a material violation of the franchise.

e.

Upon termination of the franchise under conditions other than those stipulating forfeiture of the security fund, the balance then remaining in the security fund, together with any interest then accrued, shall be withdrawn by Metropolitan Nashville and paid to the franchisee within ninety days of such termination, provided that there is then no outstanding default on the part of the franchisee.

B.

Performance Bond.

1.

Prior to any cable system construction, upgrade, or other work in the public rights-of-way, a franchisee shall establish in Metropolitan Nashville's favor a performance bond in an amount specified in the franchise agreement or other authorization as necessary to ensure the franchisee's faithful performance of the construction, upgrade, or other work. The amount of such performance bond shall be equal to ten percent of the total cost of the work, but shall not exceed three hundred thousand dollars.

2.

In the event a franchisee subject to such a performance bond fails to complete the cable system construction, upgrade, or other work in the public rights-of-way in a safe, timely, and competent manner in accord with the provisions of a franchise agreement, there shall be recoverable, jointly and severally from the principal and surety of the bond, any damages or loss suffered by Metropolitan Nashville as a result, including the full amount of any compensation, indemnification, or cost of removal or abandonment of any property of the franchisee, or the cost of completing or repairing the system construction, upgrade, or other work in the public rights-of-way, plus a reasonable allowance for attorneys' fees, up to the full amount of the bond. Metropolitan Nashville may also recover against the bond any amount recoverable against the security fund where such amount exceeds that available under the security fund.

3.

Upon completion of the system construction, upgrade, or other work in the public rights-of-way and payment of all construction obligations of the cable system to the satisfaction of Metropolitan Nashville, Metropolitan Nashville shall eliminate the bond or reduce its amount after a time appropriate to determine whether the work performed was satisfactory, which time shall be established considering the nature of the work performed. Metropolitan Nashville may subsequently require a new bond or an increase in the bond amount for any subsequent construction, upgrade, or other work in the public rights-of-way. In any event, the total amount of the bond shall equal ten percent of the cost of the work, but shall not exceed three hundred thousand dollars.

4.

The performance bond shall be issued by a surety with an A-1 or better rating of insurance in Best's Key Rating Guide, Property/Casualty Edition; shall be subject to the approval of Metropolitan Nashville; and shall contain the following endorsement:

  This bond may not be canceled, or allowed to lapse, until sixty (60) days after receipt by Metropolitan Nashville, by certified mail, return receipt requested, of a written notice from the issuer of the bond of intent to cancel or not to renew.

C.

Failure Constitutes Material Violation. Failure to maintain the security fund, letter of credit, or performance bond shall constitute a material violation of a franchise.

D.

Remedies. In addition to any other remedies available at law or equity, Metropolitan Nashville may pursue the following remedies in the event a franchisee violates this chapter, its franchise agreement, other applicable ordinances, or applicable state or federal law:

1.

Revoke the franchise pursuant to the procedures specified in this chapter;

2.

Impose any penalties available under applicable state and local laws for violation of city ordinances;

3.

Seek legal or equitable relief from any court of competent jurisdiction;

4.

Apply any remedy provided for in a franchise agreement, including liquidated damages, if any.

E.

Reserved.

F.

Obligation of Compliance. Metropolitan Nashville's exercise of a remedy or franchisee's payment of liquidated damages or penalties relieve a franchisee of its obligations to comply with its franchise. In addition, Metropolitan Nashville may exercise any rights it has at law or equity.

G.

Relation to Insurance and Indemnity Requirements. Recovery by Metropolitan Nashville of any amounts under insurance, the performance bond, the security fund or letter of credit, or otherwise does not limit a franchisee's duty to indemnify Metropolitan Nashville in any way; nor shall such recovery relieve a franchisee of its obligations under a franchise, limit the amounts owed to Metropolitan Nashville, or in any respect prevent Metropolitan Nashville from exercising any other right or remedy it may have.

(Ord. BL2013-396 § 9, 2013; Ord. 95-1368 § 2 (part), 1995)