The Township finds that the streets and public rights-of-way to be used by a franchisee for the operation of a cable system within the boundaries of the franchise area granted by the Township's issuance of a franchise are valuable public property acquired and maintained by the county, state and Township at great expense to the taxpayers on behalf of all residents. The Township further finds that the grant of a franchise to use such streets and public rights-of-way is a valuable property right without which a franchisee would be required to invest substantial capital.
The administration of this chapter and the franchise imposes upon the Township substantial and additional regulatory responsibilities and expense. Accordingly, each franchisee receiving the approval of the Board for the grant of a franchise shall pay to the Township a franchise fee in the amount designated by the Board in the franchise agreement, which amount shall in no event be less than 5% of its gross annual revenues. In the event that federal law is amended to authorize a franchise fee higher than 5%, the Township may, at its discretion, direct the franchisee to pay the higher franchise fee as authorized by law. The franchisee shall then comply upon 60 days' written notice.
The franchise fee is in addition to taxes and payments that the franchisee may be required to pay under any federal, state or local law and to any tax, fee or assessment imposed by utilities and cable operators for the use of their services, facilities and equipment.
Payment of the franchise fee made by franchisee to the Township is not and shall not be considered in the nature of a tax.
Acceptance by the Township. No acceptance of any payment by the Township shall be construed as a release or an accord and satisfaction of any claim the Township may have for further or additional sums payable as a franchise fee under this chapter or for the performance of any other obligation of the franchisee.
Failure to make required payment. In the event that any franchise payment or recomputation amount is not made on or before the date specified herein, the Township shall notify the franchisee in writing. The Township may collect interest on the delinquent franchise fee payment in the amount of 6% annually.
Payments to be made quarterly. The franchise fee shall be paid quarterly to the Township and shall commence as of the effective date of the franchise, unless otherwise agreed in the franchise agreement. The Township shall be furnished at the time of each payment with a statement verified by a representative of the franchisee showing the calculation of franchise fees in accordance with GAAP and based on Gross Revenues received from the operation of the cable system to provide cable service in the Township. Quarterly payments shall be made to the Township no later than 45 days following March 30, June 30, September 30 and within 90 days of December 31. Quarterly computation dates are the last days of March, June, September and December.
The Township's right of inspection. The Township shall have the right to inspect and copy, exclusive of proprietary information, the franchisee's records and the right to audit and to recompute any amounts determined to be payable pursuant to this chapter for a period of four years from the date of payment. Audits shall be at the expense of the Township unless the audit discloses an underpayment in excess of 5%, in which case the costs of the audit shall be borne by the franchisee as a cost incidental to the enforcement of the franchise agreement. Upon the completion of any such audit by the Township, the Township shall provide to the franchisee a final report setting forth the Township's findings in detail, including any and all substantiating documentation. In the event of an alleged underpayment, the franchisee shall have 30 days from the receipt of the report to provide the Township with a written response agreeing to or refusing the results of the audit, including any substantiating documentation. Based on these reports and responses, the parties shall agree on a "final settlement amount." For the purposes of this Section, the term "final settlement amount(s)" shall mean the agreed upon underpayment, if any, to the Township by the franchisee as a result of such audit. If the parties cannot agree on a final settlement amount, the parties shall submit the dispute to a mutually agreed upon mediator within 60 days of reaching an impasse. In the event an agreement is not reached at mediation, either party may bring an action to have the disputed amount determined by a court of law.
Any final settlement amount(s) due to the Township as a result of such audit shall be paid to the Township by the franchisee within 30 days from the date the parties agree upon the final settlement amount. Once the parties agree upon a final settlement amount and such amount is paid by the franchisee, the Township shall have no further rights to audit or challenge the payment for that period.
Township not liable. The Township and the Board shall not be liable for any injury, damage or costs, either direct or consequential, to any person or property arising from the use, operation, condition or maintenance of the franchisee's cable system, whether arising from the operation of the cable system itself or its location within any street or public rights-of-way.
Franchisee's indemnification of Township. The franchisee shall, at its sole cost and expense, indemnify, hold harmless and defend the Township, the Board, and the Township's other officials, boards, commissions, agents and employees against any and all claims, suits, causes of action, proceedings and judgments for damages to persons or to property or equitable relief arising out of the construction, maintenance or operation of its cable system, the conduct of franchisee's business in the Township, or any claim, cause of action, proceeding, suit or judgment arising out of the franchisee's enjoyment or exercise of a franchise granted hereunder, regardless of whether the act or omission complained of is authorized, allowed or prohibited by this chapter or a franchise Agreement, provided that the Township shall first give the franchisee written notice of its obligation to indemnify and defend the Township within 10 business days of receipt of a claim or action pursuant to this section. This provision includes, but is not limited to, the Township's reasonable attorneys' fees incurred in defending against any such claim, suit or proceeding and claims arising out of copyright infringements or a failure by the franchisee to secure consents from the owners, authorized distributors or franchisees of programs to be delivered by the cable system.
Notice of claim. The Township shall promptly give the franchisee written notice of any claim, suit or demand requiring the franchisee's indemnification of the Township under the foregoing subsections. The Township shall have the right, but not the obligation, to participate through its attorney in any such claim, suit or proceeding falling within the subject matter of the indemnification provisions of this chapter. If the Township determines that it is necessary for it to employ separate counsel, the costs for such separate counsel shall be the sole responsibility of the Township.
A franchisee shall maintain, and by its acceptance of a franchise issued pursuant to this chapter specifically agrees that it will maintain, throughout the entire term of the franchise period, at least the following insurance coverages insuring the Township and the franchisee: workers' compensation and employer liability insurance to meet all requirements of the Pennsylvania Workers Compensation Act and comprehensive general liability insurance covering the construction, operation and maintenance of the cable system and the conduct of the franchisee's business in the Township in the minimum amounts of:
One million dollars for property damage resulting from any one accident or incident.
One million dollars for bodily injury or death to any one person.
Two million dollars for bodily injury or death resulting from any one accident or incident.
Two million dollars for all other types of liability.
Qualifications of insurers. All insurance policies shall be issued by companies qualified to do business in the Commonwealth of Pennsylvania. All insurance policies shall be available for review by the Township.
At the time of acceptance of a franchise, the franchisee shall furnish to the Township a certificate of insurance evidencing compliance with the foregoing requirements and that such coverages are in full force and effect. Renewal certificates shall be delivered to the Township prior to the expiration of any periods of coverage.
Limit of liability. Neither the provisions of this section nor any damages recovered by the Township shall be construed to limit the liability of the franchisee for damages under any franchise issued hereunder.
In addition to the other rights, powers and remedies retained by the Township under this chapter or pursuant to the terms of a franchise agreement, the Township reserves the separate and distinct right to revoke this franchise if:
The franchisee practices any fraud or deceit upon the Township in its operation of its cable system or any other activities pursuant to this chapter;
The franchisee seeks, or an involuntary case is brought against the franchisee seeking, liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law or seeking the appointment of a trustee, receiver, custodian or other similar official of a substantial part of the franchisee's property and such proceeding shall remain undismissed for a period of 60 days;
The franchisee transfers, assigns or changes the control of the franchise, the cable system or any significant portion thereof, or more than 25% of the equitable ownership of the cable system without the consent of the Township;
The franchisee repeatedly fails, after notice and opportunity to cure, to maintain signal quality pursuant to the standards provided for by the FCC and imposed on the franchisee as technical requirements in this chapter;
The franchisee repeatedly violates, after notice and opportunity to cure, one or more of the material terms or conditions of the franchise Agreement.
Upon execution of a franchise agreement executed pursuant to this chapter, the franchisee shall post a performance bond in an amount determined in the franchise agreement but in no event less than $25,000 as surety for the faithful performance and discharge by the franchisee of all obligations imposed by the franchise agreement. The performance bond shall remain in force and effect throughout the term of the franchise agreement and shall be issued by a surety licensed to do business in the Commonwealth of Pennsylvania. The performance bond shall provide that the Township may recover from the principal and surety any and all damages incurred by the Township for the franchisee's violation of the franchise agreement and the provisions of this chapter.