(1) Grantee shall pay and by its acceptance of this franchise the grantee specifically agrees that it will pay and will indemnify the Town, its officers, agents, and employees against all damages and penalties which the Town may legally be required to pay as a result of granting this franchise. These damages or penalties shall include, but shall not be limited to, damages arising out of copyright infringements and all other damages arising out of the installation, operation or maintenance of the CATV system authorized herein, whether or not any act or omission complained of is authorized, allowed, or prohibited by this franchise.

(2) The grantee shall pay and by its acceptance of the franchise specifically agrees that it will pay all expenses incurred by the Town, its officers, agents and employees, themselves, with regard to all damages and penalties mentioned in subsection 1, above. These expenses shall include all out-of-pocket expenses, such as attorney fees, and shall also include the reasonable value of any services rendered by the Town Attorney or his assistants or employees of the Town.

(3) The grantee shall maintain, and by its acceptance of this franchise specifically agrees that it will maintain throughout the terms of this franchise liability insurance insuring the Town, its officers, agents, and employees, and the grantee with regard to all damages mentioned in Subsection 1, above, in the minimum amounts of $300,000 paid per occurrence with a $1,000,000 excess umbrella.

(4) The grantee shall maintain, and by its acceptance of this franchise, specifically agrees that it will maintain throughout the term of this franchise a faithful performance bond running to the Town, with at least two good and sufficient sureties or by a corporate surety qualified to do business in the State of Washington, in the penal sum of $5,000 conditioned that the grantee shall well and truly observe, fulfill, and perform each term and condition of this franchise.

(5) Grantee shall furnish proof of annual insurance by the 31st of January of every year.