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the city. However, should your city adopt such an ordinance, that ordinance will preempt <br />the franchise in Section 3, construction standards and permitting, and 8.5(c), mapping. In <br />all other situations, the cable franchise will prevail over conflicting ordinances, except for <br />those other situations where the city is involved in a lawful exercise of its police power. <br />9. Undergrounding. The company will have to put any new construction underground <br />where all other utility lines are underground, unless the City Council has required <br />otherwise. In other words, the city has complete authority to require whatever policy it <br />wishes in this area. Absent such an action, the general rule, above, will apply to the cable <br />company. <br />10. A performance bond of $500,000 will be maintained by the company, and the company <br />will be fully insured and agrees to defend, hold harmless and indemnify the City <br />regarding any action of Grantee related to the franchise and any action resulting from <br />City's administration or enforcement of the franchise. <br />11. The company must maintain a $25,000 Letter of Credit from which the city may draw <br />monies to enforce various penalties and fines delineated in the franchise. <br />12. The city retains the authority to review any qualifying transfer of ownership. City further <br />retains its right to purchase the system for the value of the consideration proposed in such <br />a transaction. <br />The other major provisions of the franchise are not substantively changed from the previous <br />franchise except to bring the document in compliance with current law. <br />The Commission Executive Director Cor Wilson will present a further summary of the <br />substantive points of the company proposal including system and channel capacity and <br />community programming commitments. <br />If you have any questions please feel free to contact me or Ms. Wilson. We are available to meet <br />with your city on an individual basis to further explain the proposed franchise. <br />When all of the exhibits are developed, we will formally transmit the final document to <br />your cities for recommended consideration and approval. Please do not adopt the enclosed <br />until you receive the final transmittal from my office. <br />c:\caecsNS000CWRAN SUM.Mwn <br />3 <br />Page 18 <br />