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Home My WebLink About2144 CITY OF ARCADIA - FRANCHISE AGREEMENT ALTRIO COMMUNICATIONS C 179 C. 2144 CITY OF ARCADIA AND ALTRIO COMMUNICATIONS CABLE TELEVISION FRANCHISE AGREEMENT TABLE OF CONTENTS SECTION PAGE SECTION 1 - DEFINITIONS ......................................................................................................... 5 SECTION 2 - FRANCHISE GRANTED........................................................................................ 5 SECTION 3 - FRANCHISE TERM ............................................................................................... 6 SECTION 4 - CONDITIONAL FIVE- YEAR EXTENSION ......................................................... 6 SECTION 5 - TERMlNATION ...................................................................................................... 8 ' . SECTION 6. FRANCHISE RENEW AL.....................................................................................1O SECTION 7 - FRANCHISE FEE..................................................................................................10 SECTION 8 - INSURANCE.........................................................................................................14 SECTION 9 - BONDS'AND SECURITIES ............................................................................,....16 SECTION 10 - LlMITATIONS OF FRANCHISE....................................................................... 17 SECTION 11 - ASSIGNMENT OR TRANSF,ER OR SALE OF FRANCHISE .........................18 SECTION 12 - RIGHTS RESERVED TO THE CITy................................................................ 20 SECTION 13 - TECHNICAL PERFORMANCE AND EQUIPMENT STANDARDS .............. 21 SECTION 14 - OPERATION OF SERVICE ............................................................................... 21 SECTION 15 - SYSTEM DESIGN AND CAPACITy................................................................ 22 SECTION 16- CONSTRUCTION OF THE CABLE SYSTEM .............:................................... 25 SECTION 17 - STANDARD I NON-STANDARD INSTALLATIONS .....................................30 SECTION 18 - POSSESSORY INTEREST................................................................................. 30 SECTION 19 - CONTINillTY OF SERVICE.............................................................................. 30 SECTION 20 - COMPLAINT PROCEDURES............................................................................ 31 SECTION 21 - CUSTOMER SERVICE STANDARDS, BILLING, COMPLAINTS AND SUBSCRIBER RIGHTS ......................................................... ...... ......... ........................... ............33 SECTION 22 - REGULATION OF RATES AND SERVICE CHARGES .................................42 SECTION 23 - SERVICES AND PROGRAMMING ..................................................................43 SECTION 24 - GRANTEE SUPPORT FOR EDUCATION AND GOVERNMENT ACCESS PROGRAMMING ........................................................................................................................ 43 SECTION 25 - RECORDS ...........................................................................................................47 SECTION 26 - FISCAL, SYSTEM AND PERFORMANCE TESTING REPORTS ..................47 SECTION 27. LIQUIDATED DAMAGES AND OTHER REMEDIES ....................................48 SECTION 28 - COSTS TO BE BORNE BY GRANTEE ............................................................ 53 SECTION 29 - FORCE MAJEURE.....................................................................54 SECTION 30 - MISCELLANEOUS PROVISIONS ....................................................................56 SECTION 31 - EQUAL OPPORTUNITY EMPLOYMENT AND AFFIRMATIVE ACTION.. 57 SECTION 32 -INV ALlDITYIMODIFICATIONS ......................................................................58 EXHIBIT A - DEFINITIONS... .............. ................ .......................... ............... .59 EXHIBIT B - ALTRIO APPLICATION DATED DECEMBER 13,2000....................... 67 EXHIBIT C -CITY'S UNDERGROUND CONSTRUCTION REQUIREMENTS............,85 EXHIBIT D - CERTIFICATE OF CLOSING.................................... ............... .....89 2144 ORDINANCE NO. 2144 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, AWARDING ALTRIO CO'MMUN1CATIONS, INe. (ALTRIO) A TEN (10) YEAR NON-EXCLUSIVE FRANCmSE WITH A CONDITIONAL FIVE (5) YEAR EXTENSION TO CONSTRUCT, OWN, OPERATE AND MAll\'TAlN A CABLE SYSTEM WITIllN THE CITY OF ARCADIA, CALIFORNIA; SETTING FORTH CONDITIONS ACCOMPANYING THE GRANTING OF SAID FRANcmSE; PROVIDING FOR CITY REGULATION AND USE OF THE CITY'S PUBLIC RIGHTS OF WAY; PROVIDING FOR OTHER LAWFUL REGULATION OF THE CABLE SYSTEM; AND PRESCRlBING PROCEDURES AND LIQUIDATED DAMAGES FOR VIOLATION OF THE ORDINANCE WHEREAS, under applicable laws and its Charter, the City of Arcadia ("City") has the authority to regulate the use of Streets, public rights-of-way (public Rights-of-Way), and other municipal property, and to grant access thereto upon certain terms and conditions; and WHEREAS, the Public Rights-of-Way; (1) are critical to the travel of Persons and the transport of goods and other tangibles in the business and social life of the community by all citizens; are used by the City to provide critical services to its citizens, including electric services, services to protect public safety, water and other public utilities; and are used by the City to provide communications and other services' to itself and other government agencies; and (2) can be partially occupied by private utilities and other public service entities for facilities used in the delivery, conveyance, and transmission of utility and public services rendered for profit, to the enhancement of the health, welfare, and general economic well being of the City and its citizens; and (3) are a unique and physically-limited resource so that proper management by the City is necessary to maximize the efficiency and to minimize the costs to the taxpayers of the foregoing uses, to protect against foreclosure of future economic expansion because of premature exhaustion of the Public Rights-of-Way as an, economic resource, and to minimize the inconvenience to and negative effects upon the public from such facilities' Construction, emplacement, relocation, and maintenance in the Public Rights-of-Way; and (4) are intended for public uses and must be managed and controlled consistent with that intent; and 2144 WBEREAS, the City wishes to promote availability of high quality and diverse Cable Services to City residents, businesses, the City, and other public institutions; to promote the availability of diverse information resources to the community, including through the development of advanced Cable Systems that can support public, educational, and governmental programming; to promote competitive Cable Services and rates; to take advantage of technologies to provide for more open government; to enhance educational opportunities throughout the community and provide opportunities for building a stronger community; and to allow flexibility to respond to changes in technology, Subscriber interests, and competitive factors within the cable television industry that will positively affect the health, welfare, and well-being of the community; and WBEREAS, the right to place privately owned facilities and fixtures in such Public Rights-of-Way for the business of providing services for hire, affords the Grantee, as defined herein, an economic right to use a unique public resource that has been acquired and is maintained at great expense to the City and its taxpayers, the economic benefit of which should be shared with the taxpayers of the City; and WBEREAS, the City is authorized by state and local law to control the use of Public Rights~of-Way and to Franchise Operators of Cable Systems which use such Public Rights-of- Way; and WHEREAS, the City will manage access to the Public Rights-of-Way for Cable Services in a non-discriminatory, competitively-neutral and non-exclusive way to the extent required under applicable law and, to the extent allowed under applicable law, to receive fair compensation. The City will also manage access to its Public Rights-of-Way for video programming purposes in a non-discriminatory, competitively-neutral and non-exclusive way to the extent required by applicable law and, to the extent allowed by applicable law, to receive fair compensation; and WBEREAS, the public interest will be protected by collecting full, fair and lawful market compensation, associated fees, taxes, administrative costs, and Construction costs for use of the rights-of-way; and . WBEREAS, the City finds that it is in the interest of the public to Franchise and to establish standards for franchising such Cable Systems in a manner which (I) overall compensates the City for the fair market value of such property used and for ongoing costs associated with the use of that property insofar as possible; (2) encourages competition by establishing terms and conditions under which an Operator of a Cable System may use valuable public property to serve the public; (3) fully protects the public and the City from any harm that may flow from such private use of the Public Rights-of-Way; (4)' protects and carries out the regulatory authority of the City, in a manner consistent with federal and state law and recovers -2- 2144 regulatory costs; (5) protects the City's interests in using the Public Rights-of-Way for the provision of services to the public, other governmental agencies and itself; and (6) otherwise protects the public interests in the development and use of the City's infrastructure and in preserving and improving the aesthetics of the community; and ' WHEREAS, the City finds that it is appropriate for various Operators to obtain separate Franchises based on the type of service provided in order to conform to the requirements of the City's Charter, to protect Public Rights-of-Way throughout the Ciiy, provide for City control over the placement of facilities in the Public Rights-of-Way to ensure that similarly-situated Operators can be comparably treated and to avoid confusion as to regulatory authority applicable to each type of Franchise; and WHEREAS, the state Legislature, by Chapter 262, enacted Article 3.5 to the Government Code of the state of California commencing with Section 53054 entitled "Cable Television and Video Provider Customer Service Information Act" which was effective January 1, 1993; and WHEREAS, the state Legislature, by Chapter 1198, enacted Government Code of the state of California to add Article 4.5 entitled "The Video Customer Service Act," commencing with Section 53088 which became effective on September I, 1993; and WHEREAS, the federal Government enacted the "Cable Television Consumer Protection and Competition Act" in 1992 which directed the federal Communieations Commission to adopt rules and regulations related to standards for customer service (47 CFR Part 76.309), rate regulation (47 CFR Part 76.901) and other matters which apply to all cable television Operators (Cable Television Consumer Protection and Competition Act of 1992, approved October 5, 1992, 106 Stat 1460, 13.); and WHEREAS, the federal Government enacted the "Telecommunications Act of 1996" (47 D.S.C. 151 et seq.) in February 1996 which codifies a municipality's right to be compensated for use of its public rights-of-way and easements and also codifies a regulatory structure to enable competition between telecommunications providers in the delivery of cable television, telephony, and information services to the public; and WHEREAS, it is the intention of the City Council by this Ordinance to reaffirm and update the terms and provisions of this Franchise Agreement in conformity with these various state and federal laws; and WHEREAS the Grantee has read and fully understands and agrees to comply with the provisions of these state and federal laws, City Ordinance No. 2057 (Right-of-Way Encroachment) and other various provisions contained in this Ordinance; and WHEREAS, the City is authorized to grant, renew and deny Franchises for the -3- 2144 installation, operation and maintenance of Cable Systems within the City's boundaries by virtue of federal and state statutes, by the City's police powers, by its authority over its Public Rights- of-Way and by other lawful City powers and authority; and WHEREAS, Altrio Communications, Inc., applied for a Franchise on December 13, 2000, which application is attached at Exhibit B; and WHEREAS, Altrio has proposed constructing a statecof-the-art telecommunications system and providing advanced telecommunications services to the. City, its residents and Subscribers; and WHEREAS, the City has undertaken a review of Cable Service in the City, including but not limited to a review of Altrio's application, its proposed facilities design, the present and future cable-related community needs of the City, Altrio's ability to carry out its commitments, and its overall financial, legal and technical qualifications to hold a City Franchise; and WHEREAS, the City has complied with the California Environmental Quality Act (public Resources Code section 21000 et seq.) by duly noticing its intent to adopt and by preparing, considering and adopting a negative declaration in connection with the adoption of this Franchise Agreement; and WHEREAS, Publication of this proposed Agreement has been noticed pursuant to Section 6066 of the California Government Code; and WHEREAS, the City has conducted a public hearing pursuant to CaI. Gov. Code S 53066.3 and hereby finds that it would serve the public interest to grant the Franchise subject to the terms and conditions set forth herein and in the Municipal Code; and WHEREAS, the City has determined that there will be significant positive impacts on the community being served from the granting of this Franchise; and WHEREAS, the City has determined that there will not be an unreasonable adverse economic or aesthetic impact upon public or private property within the City from the granting of this Franchise; and WHEREAS, the City has determined that there will not be an unreasonable disruption or inconvenience to existing users, or any adverse effect on future use, of utility poles, public easements, and the public rights-of-way contrary to the iritent of Section 767.5 of the Public Utilities Code from the granting of this Franchise; and WHEREAS, the City has determined that the Franchise applicant has the technical and financial ability to perform its obligations under this Franchise; and -4~ 2144 WHEREAS, there is no impact on the City's interest in having universal cable service from the graining of this Franchise; and WHEREAS, the City has determined that societalinterests in providing two-way cable service to residents within the City will be met by the granting of this Franchise; and WHEREAS, the City has determined that the operation of an additional. cable television system in the community is economically feasible. ' NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA, CALlFORNIA, DOES HEREBY ORDAlN AS FOLLOWS: This Franchise Agreement (the "Franchise") is made and entered into by and between the Cityof Arcadia ("City"), and Altrio Communications, Inc. ("Grantee"). SECTION 1 . DEFIJ'.1TIONS For the purposes of this Franchise, the terms, phrases, words, abbreviations, and their derivations found in Exhibit A (attached and included herein) shall have the meaning given therein. When not inconsistent with the context, words used in the present tense shall include the future tense, words in the plural number include the singular number, and words in the singular number include the plural number., SECTION 2 . FRANCHISE GRANTED An Operator of a cable television system must obtain a Franchise prior to constructing a facility or providing services. Pursuant to Section 3 hereof, this Franchise shall not become effective without the Grantee signing an acceptance of the Franchise and returning of the same to the City. (a) Franchise Granted. A non-exclusive Franchise is hereby granted by the City ("Grantor" or "City") which authorize~ Grantee ( "Altrio" or "Grantee") to install, construct, operate, and maintain a Cable System in Public Rights-of-Way within the City subject to the terms and conditions contained herein. (b) Uses Permitted. This Franchise shall authorize and permit the Grantee to engage in the business of operating and providing Cable Service in the City, and for that purpose to erect, install, construct, repair, replace, reconstruct, maintain and retain in, on, over, under, upon, across and along any Street, such poles, wires, cable conductors, ducts, conduit, vaults, manholes, amplifiers, and appliances, attachments, and other property and accessory equipment that is part of the Cable System. -5- 2144 SECTION 3 - FRANCHISE TERM (a) Term. The term of this Franchise shall commence upon the Effective Date and shall remam (b) in effect for ten (10) years therefrom. The Effective Date shall be the date that the executed Certificate of Closing (described below) is signed by the City Attorney. Upon and following such signature, this Franchise will be a binding' agreement, with all rights and privileges vested in the Grantee as described herein. This Franchise Agreement will terminate on the tenth (lOth) anniversary date of the Effective Date, unless otherwise extended pursuant to Section 4 herein where terms for a conditional extension of five (5) years are described. (b) Certificate of Closing. A Certificate of Closing shall be signed by the City Attorney attesting that the following documents have been provided to the City, or acts completed by Grantee. Such Certificate of Closing shall be signed and delivered to Grantee promptly and in no case later than ten (10) days following receipt by the City of the information or appropriate documentation that the actions required have been completed: (I) A written acceptance to be bound by and comply with and to do all things required by this Franchise has been signed by Grantee in a form a~ached hereto at Exhibit D. (2) All bonds, letters of credit, security deposits, and insurance policies required by this Franchise have been filed with City. SECTION 4 - CONDITIONAL FIVE-YEAR EXTENSION A five (5) year extension shall be granted upon successful completion and compliance to the items described in Sections 15 (a) and (b) and Section 16 as determined by the City; provided such completion occurs by the fifth (5th) anniversary of the Effective Date of this Franchise. The request for a five (5) year extension shall come in the form of a letter from the Grantee no later than six months after completion of all of Grantee's obligations under Sections 15(a) and (b) and Section 16. Extension approval shall be by formal action of the City Council and shall not be unreasonably withheld. The Grantee shall not be required to submit an application or pay an application fee for this one-time extension. In addition to the City's right to extend the term of this Franchise as provided in this Section 4, City may require Grantee to upgrade Grantee's Cable System to incorporate State of the Art technology (the "State of the Art Option"). In order to exercise the State of the Art Option, City shall first review Grantee's then existing Cable System. There shall not be more than one (1) such review during the term of this Franchise. Such review may not commence prior to the -6- 2144 seventh (7th) or after the ninth (9th) anniversary of the Effective Date of this Franchise. Such review shall, at a minimum, take into account the following: (I) characteristics of the Grantee's then existing Cable System; (2) the State of the Art; (3) the additional benefits that may be provided to Subscribers by the State of the Art; (4) the marketplace demand for the State of the Art, taking into account any associated rate increase and any additional factors deemed relevant by City or GTantee; and (5) the needs of the community with respect to the support of Public, Educational, and Governmental access facilities and operations. In conducting such review, the City shall be entitled to use and rely upon any and reports required by this Franchise, including, without limitation, Subscriber Complaints, records of performance tests and the opinion survey report, and Grantee shall cooperate in undertaking such review by providing information that is reasonably requested by City of Grantee. In addition, the City may conduct assessments of need regarding support of PEG access facilities and operations through such appropriate methodologies of its choosing such as, but not limited to, community surveys, opinion polls, economic impact evaluations, and/or other research methods. If, after conducting such a review, City determines ,that the exercise of the State of the Art Option may be warranted, City shall hold a public hearing, which may be continued from time to time, to enable the general public and Grantee to comment and present evidence. Grantee shall be provided with notice of such hearing in order to be present and participate.. Sixty (60) days after receiving notice from the City, Grantee shall submit a report to City indicating the following: (i) , Information reasonably available to Grantee identifying Cable Services reported in cable industry trade joumals that are being commonly provided on an operational basis, excluding tests and demonstrations, to communities in the United States with comparable populations, that are not provided to City; (ii) Any specific plans for provision of such new services by the Grantee; and (iii) The need for and the tyPe and amount of additional PEG access support for facilities and operations beyond the level of support described herein at Section 24(b). If, following such hearing, the City determines that the exercise of the State of the Art Option is warranted, it may order the State of the Art be implemented ("the Order). The Order shall, at a minimum, address the following: -7- 2144 (i) Cable System performance and quality of service; an,d (ii) a listing of any cable services not then being provided to Subscribers within the City that are considered technically and economically feasible and for which there is a demonstrated need among the Grantee's Subscribers in relation to the cost thereof. The Order shall be in writing and shall set forth the basis for City's decision, including a reasonable period of time for Grantee to install and implement State of the Art technology and/or to implement any new services, and/or impose any new fees or surcharges. The installation and/or implementation of any such technology, services, or assessments shall not be required to be completed prior to the 10th anniversary of the Effective Date of this Franchise. The Order shall be delivered to Grantee within thirty (30) days of the hearing by the City. ' If any noncompliance with the Franchise is found during any review under this Section 4, or if the Order is not fully complied with by Grantee within the timeframe provided therein, City may direct Grantee to correct the noncompliance within a reasonable period of time in accordance with the provisions of this Franchise. Failure of Grantee, after reasonable notice and opportunity to cure as set forth in this Franchise, to correct the noncompliance shall be considered a breach of the Franchise, and City may, at its sole discretion, exercise any remedy within the scope of this Franchise. SECTION 5 - TERMINATION (a) Reservation of Rights. In addition to any rights contained elsewhere in this Franchise, the City reserves the right to terminate this Franchise, and all rights and privileges pertaining hereto in the event that: ' (1) The Grantee violates any material provision of this Franchise or any other material and lawful rule or regulation of the Councilor City Manager validly adopted pursuant to this Franchise; (2) The Grantee becomes insolvent, unable or unwilling to pay its debts, or is adjudged bankrupt; or (3) , The Grantee is found to have practiced any fraud or deceit upon the City (b) Termination Proceedings. The City Manager shall provide written notice to Grantee of City's intent to terminate this Franchise. Such notice shall state the reasons for termination, and whenever feasible, provide compliance demands stating what the Grantee must do to avoid termination. If cause for the termination cannot be or is not cured pursuant to the -8- 2144 notice of intent to tenninate, the City Manager shall transmit all material pertinent to the tennination to the City Council for final action. At least ten (10) days prior to the date of the scheduled City Council meeting, the City Manager shall serve Grantee with a written notice stating the intent to tenninate and the time and place of the City Council meeting. At least ten (10) days prior to such meeting, the City Clerk shall publish the time, date and place of the meeting in a newspaper of general circulation 'within the City. After considering the request of the City Manager and hearing the comments of any interested Persons, the City Council may (1) tenninate the Franchise or (2) allow it to continue subject to Grantee's compliance with conditions established by the City CounciL The City Council decision shall be reflected in a resolution prepared by the City Attorney. (c) Termination Appeal. Grantee may appeal a decision by the City Council to terminate the Franchise to an appropriate court. Such appeal to the appropriate court must be taken within sixty (60) days of the Grantee's receipt of the City's resolution to tennin"ate the Franchise. (d) Termination .Rights. Unless the City's action to tenninate the Franchise is stayed by an appropriate court, all rights of the Grantee as set forth in this Franchise shall be divested without further action upon the part of the City sixty (60) days following deliverance to the Grantee of the City's resolution to terminate the Franchise. Following that date, the Grantee shall, at the written request of the City, remove its structures and property from the Public Rights-of-Way and restore said Public Rights-of-Way and affected property, public or private, to the condition in which it existed prior to the erection or Construction of the Cable System, including any improvements made to such property subsequent to the Construction of the Cable System. Upon failure to restore said Public Rights-of-Way and property as required by the City, the City may perform the work and collect the costs thereof from the Grantee. The cost thereof shall be a lien upon all plant, property, or other assets of the Grantee wherever located and whenever acquired and may be collected, without limitation or resort to further process, including without limitation, Section 27 hereof, from any security held by the City. The tennination and forfeiture of the Franchise shall in no way affect any of the rights of the City under the Franchise or any provisions of the law. (e) Receivership. The City shall have cause to tenninate the Franchise one hundred and twenty "(120) days after the appointment of a receiver or trustee, and to take over and conduct the business of the Grantee, whether in receivership, reorganization, bankruptcy, or other action or proceeding, unless such receivership or trusteeship shall have been vacated prior to the expiration of said one hundred and twenty (120) days, or unless: -9- 2144 (1) Within one hundred and twenty (120) days after his election or appointment such receiver or trustee shall have fully complied with all of the provisions of the Franchise and remedied all defaults thereunder; and (2) Such receiver or trustee, within said one hundred and twenty (120) days, shall have executed an agreement, duly approved by the court having jurisdiction in the premises, whereby such receiver or trustee assumes and agrees to be bound by each and every provision of this Franchise. SECTION 6. FRANCHISE RENEWAL Certain exclusive methods for extending the length of this Franchise, pursuant to its own terms, , and for studying performance and community needs are provided for in Section 4 and Section 23 respectively. Upon extension of this Agreement, for years ten (10) through fifteen (15) pursuant to Section 4, or in the event that the Grantee declines its option to extend prior to the expiration date of this Agreement, the Franchise shall be renewed in the manner provided by 47 U.S.C. Section 546 as it may be amended or supplanted. SECTION 7 ~ FRANCHISE FEE (a) Frllnchise Fee Payment. Grantee shall pay the City during the term of this Franchise as compensation for Grantee's use of City's Public Rights-of-Way, a Franchise fee in an amount equal to five percent (5%) of Grantee's Gross Revenues unless a higher rate is allowed by federal law (up to a maximum of seven percent (7%) provided the decision to raise the Franchise fee is adopted by the City Council in its sole discretion following a public hearing). Grantee shall pay the Franchise fee to the City Manager's office within forty-five (45) days after the close of each calendar quarter. Each payment shall be accompanied by a report showing the mathematical calculations used to determine the amount owed the City. The payment for each calendar quarter must be accompanied by a report that contains the following information relating to that calendar quarter: (I) The total gross receipts collected by Grantee, and an itemization of the various categories of revenues collected monthly during that calendar quarter. (2) Total percentage of Subscribers within Arcadia compared to the total number of Subscribers served by Grantee's Headend, and such related information concerning those Subscribers as may be required by City to verify and validate Grantee's calculations as to the proration of revenues, such as those derived from advertising sales and home shopping commissions, among City and other local franchising authorities served by the Grantee. -10- 2144 (3) The methodology used by Grantee in determining any proration of revenues, such as those derived from advertising sales and home shopping commissions; among City and' other local franchising authorities that constitute the Regional Area. The City recognizes that Subscriber counts are critical and confidential data in a competitive telecommunications market and will not require their submission in support of these calculations; Altrio recognizes that the City must be able to review certain confidential records that do support these figures and will make such evidence available for inspection to City officials on a confidential basis. No acceptance of any payment by City may be construed as an accord that the amount is in fact the correct amount, nor may acceptance of payment be construed as a release of any claim the City may have against Grantee for any additional sums payable under the provisions of this Franchise. Payments pursuant to this section shall not be considered in the nature of a tax, but shall be in addition to any and all taxes'now or hereafter applicable to a Franchisee or licensee by law. Notwithstanding the foregoing,' in the event that the Grantee who is obligated to pay the Franchise fee ceases to provide Cable Service for any reason (including as a result of a Transfer), such Grantee shall make a final payment ,of any amounts owed to the City within ten (10) business days of the date its operations in the City cease, accompanied by a report showing the' . basis for the computation. (b) Franchise Fee Itemization. Franchise fees may be identified on Subscriber invoices in accordance with 47 D.S.C. g 542(c) et. seq. Grantee reserves all rights to identify Franchise fees in accordance with federal law. The Franchise fee, when itemized, shall be included in Gross Revenues. (c) Prorated Calculations. In computing Gross Revenues from sources other than Subscribers, including but not limited to revenue from the sale of advertising, lists of the names and addresses of Grantee's Subscribers, home shopping services, guides, or the lease of channel capacity over its Cable System, which revenue is attributable both to the operation of Grantee's Cable System inside the City and in areas outside the City, the aggregate revenue received by Grantee from such other sources shall first be multiplied by a fraction, the numerator of which shall be the number of Grantee's Subscribers in the City as of the last day of the relevant billing period and the denominator of which shall be the number of Subscribers within the Regional Area served by Grantee for that specific service as of the last day of such period, and then assessed for Franchise fees. For example, if Altrio has 50,000 Subscribers in the Los Angeles Regional Area, and Arcadia represents 5,000 of these, Altrio would be required to pay the City Franchise on proration of 5,000/50,000, or 10% of Gross Revenues from sources other than Subscribers. -11- 2144 (d) Exceptions. Nothing contained in this Franchise shall be construed to limit the right of the Grantee to voluntarily make payments or provide other types of assistance in support of the use of the Educational Access Programming and Government Access Programming. However, in no event shall any voluntary payment for staff support for Educational and Government Access Programming be considered in the calculation of Franchise fees payable to the City. Grantee hereby waives any rights to the contrary. Franchise fees required hereunder shall be in lieu of any business license, occupation tax, or similar levy imposed directly upon the Grantee. (e) Late Fee Penalty. If payments are late, Grantee shall pay interest to the City on the amount owed at the rate of one percent (1 %) per month oifraction thereof compounded monthly. (0 Audit. Not more often than every three (3) years, the City may, upon at least thirty (30) days advance written notice, inspect and audit any and all books and records reasonably necessary to the determination of whether Franchise fees have been accurately computed and paid. At maximum, the period of the audit shall be the lesser of the statute of limitations for contract payments under state law, or from the end date of the period of the previous audit. Grantee must provide access to the books and records or copies thereof to the City or pay in advance the costs of travel and per diem for an employee or employees of the City to inspect and copy such books and records at any location more than fifty (50) miles outside the City at which such books and records are kept in the course of business. If any independent audit of the Grantee's records directed by the City which shows a Franchise fee error in excess of five percent (5%) in the City's favor, the Grantee shall assume all reasonable costs for said audit. No acceptance of any payment shall be construed as a release or as an accord and satisfaction of any claim the City may have for further additional sums payable under this Section or for the performance of 'any other obligation hereunder. Access to the aforementioned records shall not be denied by the Grantee on the basis that said records contain "proprietary" information. (g) Access to Books. Upon 72 hours prior written notice, the City shaH have the right to inspect, during normal business hours, all books, receipts, plans, financial statements, contracts, service Complaint logs, performance test results, records of requests for service, codes, and other like materials in the possession or control of Grantee which may be directly relevant to the Grantee's compliance with the requirements and obligations imposed' upon it by this Franchise, or applicable law. The right of the City to inspect under this Section extends to the materials identified above that are in the possession or under the control of the Grantee, and of any other Person responsible for managing and administering the Cable System. Upon a request for confidentiality by the Grantee, information obtained by the City pursuant to this Section shall be made available only to Persons needing access to the materials in order to perform their responsibilities on behalf of or for the City and, as to all other Persons, shall be treated as, confidential to the extent permitted by law. City shall promptly notify Grantee whenever a third -12- 2144 party seeks access to Grantee's confidential information, including requests under the California Public Records Act or by subpoena. City shall promptly notify Grantee of such access requests to pennit Grantee to object to the release of the information requested or subpoenaed, and to file an action in an appropriate court to prevent the release of the record. Grantee shall indemnify, protect, hold haTInless, and defend the City, and its officers, boards, commissions, officials, agents and employees, from all costs and expenses related to preventing release of Grantee's records, including attorney's fees incurred by City or awarded to a third party. Grantee also maintains the right to require that the City execute a confidentiality and/or non-appropriation agreement prior to gaining access to any materials under this section. Nothing in this section shall be read to require Grantee or City to violate the privacy rights as set forth in 47 U.S.C. Section 551, or the California Public Records Act. (h) Bundled Services. In the event Grantee offers services through the Cable System that are not subject to the Franchise fee, the City recognizes that Grantee may allocate revenue between Cable Services (which are subject to the Franchise fee) and non-Cable Services (which are not subject to the Franchise fee but may be subject to other fees and/or taxes) when these two types of service are bundled together in a discounted package offered to Subscribers. Due to the ambiguities that exist at the time of this Franchise award, both in the business and regulatory environment on this issue, the City and the Grantee hereby reserve all rights, claims, defenses and remedies regarding the City's authority to impose or enforce requirements related to the revenue allocation methodology to be used when Cable Services and non-Cable Services are offered to Subscribers in a discounted package, for the purpose of calculating Franchise fee payments. During the term of this Franchise, if Grantee, or any of its Affiliates, bundles or combines the sale of some or all of its Cable Services with non-cable services, and it becomes necessary to separately compute the amount of Gross Revenue attributable to Cable Services in order to deiennine the amount of fees.or PEG access support fees that are payable to the Grantor, then the following methodology will be applied: (1) Grantee must calculate and report annual Gross Revenue, the fees thereon, and any applicable PEG access support fees, based upon proportionality, i.e., the amount of Gross Revenue to be attributed to each of such services must be in the same proportion that the price of each service, as detennined on a stand-alone basis, bears to the aggregate of the stand-alone prices for those services when purchased on an unbundled basis. (2) Grantee agrees that it shall not structure any bundled pricing so as to intentionally or unreasonably cause a reduction in Gross Revenue against which Franchise fees or other municipally-imposed and proportionally-derived, taxes, other fees, or surcharges may be imposed. -13- 2144 Further, in the event that the City believes that Grantee has unlawfully, unfairly, or in violation of this Franchise allocated revenue between Cable Services and non-Cable Services for the purpose of calculating Franchise fee payments, the City and the Grantee shall meet upon advance notice from the City to discuss the allocation methodology. If the City and the Grantee cannot agree on the matter within a reasonable period of time, the City and Grantee shall submit the matter to a mutually-agreeable third party for mediation. The cost of the mediation shall be shared equally between the City and the Grantee. If the mediation is unsuccessful or if the City and the Grantee are unable to mutually agree on a mediator, then either the City or the Grantee can bring the matter to a court of competent jurisdiction, or pursue any other reinedies available to them in this Franchise or by law. SECTION 8 . INSURANCE (a) Hold Harmless Agreement. Grantee shall indemnify, hold harmless, and defend the City, its officers, officials, boards, coh1missions, attorneys, consultants, agents and employees, against and from any and all, claims, demands, causes of actions, actions, suits, proceedings and damages, including but not limited to damages to City property and damages arising out of copyright infringements, or damages arising out of any failure by Grantee to secure consents from the owners, authorized distributors or licensees of programs to be delivered by Grantee's Cable System, costs or liabilities (including costs or liabilities of the City with respect to its employees), including but not limited to damages for injury or death or damage to Person or property, and regardless of the merit of any of the same, and against all liability to others, and against any loss, cost and expense resulting or arising out of any of the same, including any attorney fees arising out of or pertaining to the exercise or the enjoyment of the Franchise hereunder by Grantee, or the granting thereof by the City, and/or operation of the Cable System. The City may use for any public or municipal purpose, any poles or conduits maintained exclusively by or for the Grantee in any Street, provided such use by the City does not interfere with the current or future operations of the Grantee. The City shall indemnify, hold harmless, and defend the Grantee against and from any and all claims, demands, actions, suits, proceedings, damages, costs or liabilities arising out of the City's, its employees' or agent's negligence or willful misconduct in such use of the Grantee's poles and conduits. Further, such use by the City of the Grantee's poles and conduits is restricted to non-commercial municipal purposes, and the City shall not use the poles or conduits for any purpose that is in direct competition with the Grantee. The City shall also indemnify, hold harmless, and defend the Grantee against and from , any and all claims, demands, actions, suits, proceedings, damages, costs or liabilities arising from the Educational and Government Access Programming required by this Franchise. (b) Defense of Litigation; Payment of Judgments and Claims. Grantee shall at the sole risk and expense of Grantee, upon demand of the City, made by and through the City Attorney,aappear in and defend any and all suits, actions, or other legal proceedings, whether judicial, quasi-judicial, administrative, legislative or otherwise, brought or instituted by third Persons or duly constituted authorities against or affecting the City, its officials, officers, boards, -14- ' 2144 COIlllll1SSlOnS, agents or employees, and ansmg out of or pertaining to the exercise. or the enjoyment of this Franchise, the granting thereof by the City and/or the operation of the Cable System. Written notice of at least thirty (30) days will apply in cases of claims and litigation. Grantee shall pay and satisfy and shall cause to be paid and satisfied any judgment, decree, order, directive, or demand rendered, made or issued against Grantee, its officers, officials, boards, commissions, attorneys, consultants, agents or employees in any of these instances; and such indemnity shall exist and continue without reference to or limitation by the amount of any bond, policy of insurance, deposit, undertaking or other assurance required hereunder, or otherwise; provided, that the City shall neither make nor enter into any compromise or settlement of any claim, demand, cause of action, action, suit, or other proceeding, without first obtaining the written consent of Grantee, which consent shall not be reasonably withheld. Grantee's obligations under subsections of Sections 8(a) and (b) shall continue beyond the expiration or any other termination of this Franchise. (c) Insurance Required. Grantee shall at all times during the existence of this Franchise maintmn in full force and effect, at its own cost and expense: (1) a commercial general liability insurance policy written on an "occurrence" form, including but not limited to coverage for premises/operations, explosion, collapse, and underground hazards, contractual liability coverage, broad form property damage liability coverage, independent contractors and Personal injury, and (2) a comprehensive automobile liabi]ity policy, covering all owned, non-owned and hired vehicles. Both policies shall be underwritten by insurers authorized to do business in the state of California, and shall protect the City and aI] Persons against ]iability for Joss or damage for personal injury, death and property damage, occasioned by the operations of Grantee under this Franchise. The following limits are required: 1. COMMERCIAL GENERAL LIABILITY Combined single limit for bodily injury, property damage and personal injury: $1,000,000 each occurrence $3,000,000 annual aggregate 2. COMPREHENSIVE AUTOMOBILE LIABILITY Combined single limit for bodily injury and property damage: $1,000,000 each accident The City, its officers, officials, boards, COIlllll1SSlOnS, agents, attorneys, consultants, and employees, shall be named as additional insureds under the required insurance policies. Where such insurance is provided by a policy that also covers Grantee or any other entity or Persons, it shall contain the standard cross liability endorsement. Such policies shall contain a provision that a written notice of cancellation or reduction in coverage of said policy shall be delivered to the City Clerk thirty (30) days in advance of the Effective Date thereof. -15- 2144 Said insurance policy shall contain provisions stipulating that: (1) The naming of an additional insured as herein provided shall not affect any recovery to which such additional insured would be entitled under this policy if not named as such additional insured, and (2) The provisions of the policy will not be changed, suspended, canceled or otherwise terminated as to the interest of the additional insured named herein without first giving such additional insured thirty (30) days written notice to the City. (d) Workers' Compensation. Grantee shall also at all times during the existence of the Franchise granted hereunder, maintain in full force and effect, at its own cost and expense, a policy of workers' compensation insurance to comply with all statutory requirements. In the case of any work being subcontracted by Grantee, the Grantee shall require that all subcontractors similarly provide workers' compensation insurance for all the latter's employees unless such employees are covered by the protection afforded by the Grantee. . (e) Certificates of Insurance. Grantee shall maintain on file with the office of the City Clerk a Certificate or Certificates of Insurance on a standard Accord 25-S Form (or most recent insurance services office version thereof), representing that the insurance required by this Franchise is in full force and effect. Proof of insurance must be approved by the City Attorney. SECTION 9 - BONDS AND SECURITIES (a) Cash Surety. The City requires a cash deposit of five dollars for every Subscriber up to a maximum of ($30,000) to be kept by the City as surety for performance of the Grantee during the life of this Franchise: On January 1 of each year during the term of this Franchise, the Grantee shall submit a check in the amount equivalent to $5.00 for every new Subscriber gained in the preceding year. Once the total amount of deposits reach the sum of thirty thousand dollars ($30,000), said deposits shall cease. The City Manager shall have the unconditional right to withdraw sums for any due compensation, liquidated damages, penalties, or fees pursuant to Section 27 of this Franchise. No interest shall be paid to the Grantee on said sums. (b) Performance Bond. The second component is a Performance Bond as surety for performance of the Grantee during the life of this Franchise. The amount of said bond shal] be no Jess than five thousand dollars ($5,000) dollars and no more than eighty thousand dollars ($80,000). Within thirty (30) days after the execution of this Franchise, the Grantee shal] deposit with the City Treasurer such a Performance Bond in the amount of five thousand ($5,000) dollars. In subsequent years during the term of this Franchise, the amount of the bond shall be increased by the Grantee by an amount commensurate with number of Subscribers (the ratio of the amount of said Bond to total system Subscribers shall be $10.00 per Subscriber). Such bond -16- 2144 shall in such a form as to be acceptable to the City Treasurer and the City Attorney; provided; however, the bond shall give the City Manager the unconditional right to draw sums thereupon for the aforesaid payments pursuant to Section 27 of this Franchise. (c) Self-replenishing. Such bond shall remain in effect until the termination of this Franchise. In the event that, and every time that, the City shall draw on said bond, the Grantee shall replenish the amount thereof within ten (10) days thereafter so that the amount of such security fund remains at the amount prior to the draw-down or up the maximum eighty thousand ($80,000) dollars whichever is less for the term of this Franchise. (d) Interest. In the event of termination or forfeiture of this Franchise, such cash deposit or bond and all interest shall become the property of the City. (e) Construction Performance Bond. Before beginning any Construction work in or under the . City Public Rights-of-Way requiring a Street opening permit, Grantee shall furnish a performance bond to the City as is required for Street opening permits. The bond shall run to the City with good and sufficient surety approved by the City and shall be maintained in a sum equal to the anticipated cost of the work to be performed, but not to exceed two hundred thousand dollars ($200,000). The form of the bond and the identity of surety companies shall be subject to the reasonable approval of the City Attorney. The bond shall be conditioned that the Grantee shall well and truly observe, fulfill and perform each term and condition under Section 15, System Design and Capacity and Section 16, Construction of the Cable System. Grantee shall pay all premiums or costs associated with maintaining the bond, and shall keep the same in full force and effect at all times during the Construction work. The bond shall provide that it may be terminated upon final approval of Grantee's Construction work in or under the City Public Rights-of-Way by the City Engineer. Upon such approval, which shall not be unreasonably withheld, the City agrees to sign all documents necessary to release the bond in accordance with the terms of this Section. SECTION 10 - LIMITATIONS OF FRANCHISE (a) Time Requirements. Time shall be of the essence of this Franchise. The Grantee shall not be relieved of its obligation to promptly comply with any of the provisions of this Franchise because of any failure of the City to enforce prompt compliance. (b) Transfer of Duty. Any right or duty impressed upon any City official, officer, employee, agent, attorney, consultant, department, board, or commission shall be transferable by the City to any other City officer, official, employee, agent, attorney, consultant, department, board, or commission. City shall notify Grantee within a reasonable period after such delegation. (c) Provision Violations. Except to the extent that City, or any City official. officer, employee, agent, attorney, consultant, department, board, or commission violates the provisions of this -17- 2144 Franchise, the Grantee shall have no monetary recourse whatsoever against the City or any City official, officer, employee, agent, attorney, consultant, department, board, or commission for any loss, cost, expense or damage arising out of any provision or requirement of this Franchise. (d) Utility Pole Clearance. This Franchise shall not relieve the Grantee of any obligations involved in obtaining the necessary pole or conduit space easements and agreements from any department of the City or any appropriate utility company. (e) System Regulation.. All Cable System Construction, operation and maintenance in the City shall be deemed and construed in all instances and respects to be under and pursuant to this Franchise, and as such is not under or pursuant to any other right, privilege, power, immunity or authority whatsoever except applicable state and federal law regulating cable television. (f) General Regulation. Grantee shall be subject to all generally applicable and non- discriminatory provisions of the City Charter, ordinances, rules, regulations and specifications of the City heretofore or hereafter adopted including but not limited to those pertaining to works and activities in, on, over, under and about Public Rights-of-Way. In the event the terms of this Franchise are inconsistent with any other rule, regulation, or resolution of the City, the terms of this Franchise shall prevail. Any privilege claimed under this Franchise related to any Street or other public property shall be subordinate to any prior lawful occupancy of the Public Rights-of- Way or other public property. (g) Television Repair Services. Grantee shall be prohibited from directly or indirectly doing any of the following: (1) engaging in the business of selling, leasing, renting, repairing or servicing of television sets or radios except for the connection of Cable Service and the repair or service of Grantee-owned Converters; (2) soliciting, referring or assisting any Subscriber or resident to a Person engaged in the selling, leasing, renting, repairing or servicing television sets or radios except that when requested, Grantee may provide information on television or radio equipment which is not compatible with Grantee's Cable System. Grantee may also provide information related to the identification of individual television or radio equipment which is compatible with the Grantee's Cable System so long as the Grantee does not have any financial or material interests in the recommended equipment. SECTION 11 - ASSIGNMENT OR TRANSFER OR SALE OF FRANCHISE (a) There shall be no assignment of this Franchise, in whole or in part, or change in Control without the prior express written approval of the City. For purposes of this section, assignment shall mean "change of Control or composition of authority" or "change of Controlling Interest." (b) Any. Transfer or change in Control without such prior written consent shall constitute a default of the Franchise and will cause the Franchise to terminate. -18- 2144 (c) The Grantee shall promptly notify the City of any proposed Transfer or change in Control of the Grantee with respect to which the consent of the City is required. For the purpose of determining whether it will consent to such change, assignment, Transfer or acquisition of Control, the City may inquire into, among other things, the qualifications of the prospective Controlling party. The Grantee shall assist the City in any such inquiry. If necessary to assure compliance with the terms of this Franchise, the City may condition said Transfer upon the terms and conditions as reasonably determined by the City Council. (d) For the purposes of this Section, a presumptive change of Control will exist upon sale or transfer of twenty-five percent (25%) or more of the Grantee's ownership stock. , This shall include but not be limited to change in Control of any general partnership. (e) At least one hundred twenty (120) days before such a proposed assignment of the Franchise is scheduled to become effective, the Grantee shall petition in writing for the City's written consent for such a proposed assignment. It is specifically noted that the Grantee shall submit to the City Council (concurrently with submission of its written petition) an FCC 394 Form (or successor form) together with (1) any other information or documentation required by the state or federal govemment (including the FCC), (2) relevant purchase or transfer documents, and (3) information regarding the financial ability and stability of the proposed assignee with respect to . being able to perform all obligations of the existing Franchise. (f) The City Council shall not unreasonably withhold its consent to such an assignment. However, without limitation, in evaluating the petition for assignment, Transfer or sale, the City Council may, at its sole discretion, undertake a technical inspection and audit of the Cable System to determine whether the Cable System reasonably complies with all applicable technical and safety codes as well as this Franchise. Also, the technical inspection and audit is designed to determine the technical integrity and stability of the present Cable System. (g) Should the City determine as a result of the technical inspection and audit conducted pursuant to subdivision (f) above that the Cable System does not comply with federal, state or local standards, then the Grantee shall be provided with an opportunity to correct or cure the area of non-compliance or operational deficiency. In the -alternative and without obligation, the City . may work wjth both the current and proposed Grantee to cure the area of non-compliance or operational deficiency. (h) Before an assignment, Transfer or sale is approved by the City, the proposed assignee, transferee or buyer shall execute an affidavit ackriowledging thai it has read, understood and will abide by the Franchise, subject to applicable law. (i) In the event of any approved assignment, the assignee shall assume all obligations and liabilities of the former Grantee relating to the Franchise, unless specifically relieved by federal or state law, or unless specifically relieved by the City at the time the assignment is approved. -19- 2144 (j) Every such transfer as heretofore described, whether voluntary or involuntary, shall be deemed void and of no effect unless Grantee has filed such notices as is required, and until City. has gi ven written approval of such transfer. SECTION 12 . RIGHTS RESERVED TO THE CITY (a) Right to Acquire Property of Grantee. The City may in any lawful manner and upon just payment lawfully purchase, condemn, acquire, takeover and hold and the Cable System of the Grantee located in the Franchise Area. (b) Property Valuation. (1) If the renewal of this Franchise is denied and the City acquires ownership of the Cable. System or effects the transfer of ownership of the Cable System to another Person, any such acquisition or transfer shall be at Fair Market Value as determined on the basis of the Cable System valued as a going concern but with no value allocated to the Franchise itself. . (2) In the event that the City shall terminate for cause this Franchise, and the City acquires ownership of the Cable System or effects a transfer of ownership of the Cable System to another Person, any acquisition or transfer shall be at an equitable price. (c) Property Acquisition. In the event the City wishes to acquire part or all of the Cable System, the City shall notify the Grantee of its intentions to acquire the Cable System within one hundred twenty (120) days of the proposed acquisition date. Upon notification of the intent to acquire the Cable System, the City and the Grantee shall attempt to mutually agree upon the value of the Cable System in accordance with the provisions of this Section and 47 U.S.C. Section 547. If within a reasonable period of time no agreement is made regarding property valuation, then said valuation shall be similarly determined by a three-member Board of Appraisers, one selected by the City, one by the Grantee and one selected by the appraisers themselves. The cost of said appraisal shall be borne equally by the City arid the Grantee. (d) Equitable Price. To the extent allowed by then applicable law, for the purpose of this Franchise, equitable price shall be defined as in 47 U.S.C. Section 547. No value shall be assigned to either the Franchise itself, or any right, privilege or expectancy arising out of the privilege to transact business under the Franchise, nor shall any value be assigned to good will or as a going concern. Equitable price as defined above shall be determined in accordance with general accepted accounting principles, audited by an independent celtified public accounting firm selected by the City at the Grantee's expense. -20- 2144 (e) Other Rights.. There is hereby reserved to the City every lawful right and power which is required to be reserved or provided by any ordinance and City Charter provision of the City, and the Grantee, by its acceptance of this Franchise, understands and agrees that the City is not precluded from asserting such rights. (f) Removal of Facilities. Subject to the renewal rights of the Grantee under applicable law, upon the expiration of the term of this Franchise or upon its termination or cancellation as provided herein or in the Right-of-Way Ordinance, the City may require the Grantee to remove at its own expense, any visible portions of the Cable System from the Public Rights-of-Way within the City. If Grantee fails to remove its facilities, the City may do so, and to defray the costs of such removal, the City may immediately draw upon on the security fund as prescribed in Section 9, without resorting to the default process provided in" Section 27. (g) Granting of Other Franchises. The City reserves the right, at its discretion, to grant Franchises with any other Person(s) under the terms of the Right-of-Way Ordinance. SECTION 13 - TECHNICAL PERFORMANCE AND EQUIPMENT STANDARDS The Cable System shall be designed, installed, maintained and tested in accordance with applicable law, including, without limitation, the technical performance standards required by Subpart K of Section 76 of the FCC Rules and Regulation as they now exist or may be amended in the life of the Franchise. In addition, should the FCC or any state, federal or other authority having jurisdiction over the technical standards contained herein impose Cable System technical performance standards which require a higher level of technical performance than those contained herein, those new standards are hereby incorporated herein by reference. Should the FCC or any state, federal or other authority having jurisdiction over the technical standards contained herein develop Cable System technical performance standards which are less stringent than those contained herein, the more stringent standards herein shall remain in effect, unless otherwise prohibited by law. SECTION 14 - OPERATION OF SERVICE (a) Additional Usage. City shall have the absolute right to use any poles, conduits, or similar facilities erected, controlled or maintained exclusively by or for the Grantee in, on, over, or under any Street pursuant to good faith negotiations to determine the proper arrangements necessary for such usage. (b) Public Safety. The Grantee at its expense shall protect, support, temporarily disconnect, relocate or move any Property of the Grantee when given reasonable advance written notice by the City Manager that the same is required for reasons of urban renewal, or projects of the Arcadia Redevelopment Agency or any other public works project of the City or another -21- 2144 governmental agency or public utility. Upon the failure, refusal, or neglect of Grantee to cause . any work or other act required by this Franchise or applicable law to be properly completed in, on, over, or under any Street within any reasonable time prescribed by the City, the City Manager may cause such work or other act to be completed in whole or in part, and upon so doing shall submit to Grantee an itemized statement of the costs thereof. The Grantee shall, within thirty (30) days after receipt of such statement, pay to the City the entire amount thereof; (c) Property Removal. In the event that, (1) the use of any part of the Cable System of the Grantee is abandoned for any reason for a continuous period of one (1) year, without prior written notice to and approval by the City; or (2) any part of such Cable System has been installed in, on, over or under any Street or other area without complying with the requirements hereof; or (3) this Franchise is terminated, canceled, or shall expire, then the Grantee shall, at the option of the City, and at the expense of Grantee, within at least one hundred twenty (120) days from written notice by the City, restore the Public Rights-of- . Way or other area from which the property has been removed to the condition reasonably comparable to that which existed prior to the erection or Construction of the equipment, including any improvements made to such property subsequent to the Construction or installation of the Cable System as approved by the City Manager. (d) Abandonment. The City Council may, upon written request thereof by the Grantee, approve the abandonment or sale of any such property in place by the Grantee under such terms and conditions as the Council may propose. Upon abandonment of any such property, Grantee shall cause to be executed, acknowledged, and delivered to the City such instruments as the City Attorhey shall prescribe and approve, transferring and conveying the ownership of such property to the City. SECTION 15. SYSTEM DESIGN AND CAPACITY (a) Minimum Capacity. Subject to the Force Majeure provisions of this Franchise, Grantee shall construct a Cable System which strictly conforms, at a minimum, to that proposed by Grantee in its application dated December 13, 2000 including without liinitation one with a minimum upper operating frequency of Eight Hundred Sixty (860) MHz hybrid fiber coaxial (HFC) bi-directional cable distribution system, capable of delivering at least seventy-eight (78) analog cable channels, forty-seven (47) digital channels, and other services. -22- 2144 Grantee shall pass one hundred percent (100%) of all Dwelling Units and residential areas existing within the City upon system completion subject to the density factor described in Section 16(c). (b) Two-Way Services. Upon activation of the sysiem the Cable System shall have the activated capability throughout the entire Cable System to transmit Cable Services in two directions simultaneously with the installation of return modules. Grantee agrees to acti'vate Two.Way capacity in Construction phases as the Cable System is constructed. The City and the Grantee recognize the provision of Two-Way, communications capability is an important means to connect public, government and educational institutions and to functionally provide the equivalent of institutional network services in a cost-effective manner. Two-Way services shall be instituted when (1) it is consistent with federal and state laws, and (2) it is economically and technically feasible, provided, however that it shall be the Grantee's burden to demonstrate to the City's satisfaction that it is not economically or technically feasible to institute such service, should the City request such proof. (c) Subscriber Compatibility. Grantee shall make good faith efforts to eliminate Subscriber Complaints and confusion in attempting to integrate cable-ready television sets, VCRs and the Cable System Converters. (d) Parental Control Devices. Grantee shall provide Subscribers, upon request, with a parental control locking device or digital code that permits inhibiting the viewing of parentally-designated channels. (e) Standby Powering. (I) All standby powering equipment utilized by the Grantee shall be installed, activated, and maintained by the Grantee at its sole expense and shall be capable of powering the Cable System for a period of no less than one and a half (1 112) continuous hours during a commercial power interruption. . (2) Upon completion of the Construction, Grantee shall provide standby powering equipment to power its Headend equipment and fiber optic equipment transmitters and receivers, whether such fiber optic equipment is located at the Headend or in . the trunk or distribution system of the Grantee's plant. (3) When one or more commercial power outages exceed a cumulative total of twenty- four (24) or more hours during any twelve (12) month period in areas other than those where power is not available to residences, City and Grantee agree to meet and develop a plan to reduce outage time below twenty-four (24) hours. This may include the installation of additional standby power supplies, which shall be implemented by Grantee. -23- 2144 (4) The Grantee shall provide modulation and standby powering equipment on all portions of its Cable System providing Cable Service to or from the following locations: (a) City Hall, 240 W. Huntington Drive (b) Police Department Headquarters, 250 W. Huntington Dri ve (c) Fire Department Headquarters, 710 N. Santa Anita Avenue (d) Maintenanc~ Service Center, 11800 Goldring Road (e) Public Library, 20 W. Duarte Road In the event that such locations do not exist on, or are constructed after the Effecti ve Date of this Franchise, then such modulation and standby powering shall be activated withintbree (3) months after receipt of written notice from City to provide such additional standby powering equipment. (f) Emergency Override. (I) Grantee shall provide, install, activate, and maintain an emergency audio override system, which is not shared with any other jurisdiction, and which permits the City to deliver audio override programming on every channel of the Grantee's Cable System. City shall be able to activate, provide audio programming, and terminate such. emergency audio override on the City-designated channels via dial-up or dedicated telephone control from the City's emergency operations center. Grantee shall also provide an independent exclusive telephone line to the. City for use in emergency situations. (2) , If the Grantee provides its Subscribers with Converters that have the ability to remotely activate a Subscriber's television receiver upon receipt of a data command from the Headend, then the Grantee shall configure the emergency override system described in this section to send such a Signal upon an activation by the City of the emergency override system. If such data command is capable of controlling the audio volume control of the Converter, then Grantee shall configure the emergency override system described in this section to send such a data command to maximize the audio volume upon activation by the City of the emergency override system. Nothing in this subsection shall be construed as requiring the Grantee to purchase cable Converters with such features. . (3) The emergency override system shall also be designed so as to permit the. introduction of emergency information on the City government channel. (4) Grantee shall comply with all federal requirements for the Emergency Alert System, and will cooperate with local authorities to institute appropriate procedures for testing and activation of such EAS services on the system. -24- 2144 SECTION 16 - CONSTRUCTION OF THE CABLE SYSTEM (a) Mandatory Provision of Service. It is the established policy of the City that all citizens who reside in existing areas of the City plus all annexed areas shall possess the right to receive Cable Service as provided herein, subject to the ability of Grantee to secure the right to service citizens who reside in areas of private property, and the density requirements of subsection (c) below. Nothing herein shall require Grantee to provide Cable Service to residents who do not pay their bills in a timely manner per the requirements of the Grantee pursuant to this Franchise, or to residents who have a history of abusive behavior toward employees of the Grantee. Grantee shall construct the Cable System in a series of areas within the City (Construction Segment Areas or "CSA's"), to be completed in semi-annual increments. Each CSA shall be portioned as a percentage of total Cable System Construction and shall be no less than five percent (5%) of the total Cable System mileage. The City and Grantee, or representatives of each, shall meet and discuss on a semi-annual basis throughout the initial ten-year term of this Franchise in order to discuss the past, ongoing and future build-out of CSA's. The first such meeting shall occur before September 15, 2001 and shall cover the first CSA to be Constructed. Thereafter, each meeting shall occur prior to March 15 and September 15 of each following year during the first ten years of this Franchise (or until Cable System Construction has been deemed complete by the City as described below), and each such meeting shall cover at least one additional CSA within which the Cable System will be Constructed by Grantee. At each meeting, the Grantee shall present to the City a written goal for the covered CSA phase(s), which goal shall include information reasonably required by the City, including, but not limited to verification of the status of any permitting or other approval processes required for the build-out of such upcoming CSA(s), any anticipated delays that Grantee may expect to experience relating thereto, and the estimated date for completion of Construction of the Cable System within the covered CSA(s). The Cable System shall be completed within each CSA within one hundred eighty (180) calendar days from the meeting covering such CSA. Upon completion of Construction of the Cable System within each CSA, the City shall issue a written Notice of Completion. . Prior to issuance of such Notice of Completion, the City may require of Grantee documentation and evidence of testing that the City determines is necessary to verify Construction of the Cable System within such CSA. Notwithstanding any provision herein to the contrary, the Cable System shall be completed throughout City within ten (10) years from the Effective Date of the Franchise. Completion of Construction with respect to each CSA and with respect to the entire City shall be deemed to have occurred upon the issuance of a Notice of Completion by City for such CSA and all CSA's respectively and shall be defined as: (1) the ability to provide up to the aforesaid capacity to all Dwelling Units within the applicable CSA and throughout the City, respectively (excepting only those low-density exception areas as may hereafter be established by Grantee pursuant hereto to the satisfaction of City, or, to the extent prevented by the denial of access for Construction by -25- 2144 property owners); and (2) the complete restoration of the Streets, public and private property. Each failure by Grantee to complete a given CSA within the time specified herein shall be a separate event of default that shall, in addition to all other remedies, be separately subject to the liquidated damages provisions of this Franchise. In performing any Construction, Grantee shall also use equipment generally used in high-quality, reliable, modern systems of similar design, including but not limited to modulators, antennae, amplifiers and other electronics which permit and are capable of passing through the Signals received at the Headend without substantial alteration or deterioration. This obligation shall include the obligation to install equipmenuo retransmit in stereo satellite and local broadcast Signals provided in stereo. (b) Future Developments. With respect to all territories within the City which are in the process of being subdivided at the Effective Date of the Franchise, Grantee shall, if practical, install its Cable System at the time the public improvements for the subdivision are being installed, and shall, in any event, make Cable Service available to all dwelling units within such subdivisions not later than six (6) months after the Cable System is completed pursuant to Subsection 15 above. With respect to any subdivision that commences Construction after the Effective Date of the Franchise, the Grantee shall lnstaJl its Cable System at the time the public improvements for such subdivision are being installed, provided Grantee receives adequate written notice from the developer and/or utilities. (c) Density Requirements. The service area shall constitute the existing entirety of the City of Arcadia with a density of at least forty (40) Dwelling Units per square mile plus all areas annexed thereto with a density of at least forty (40) Dwelling Units per mile; provided, however, as to any area annexed to the City subsequent to the Effective Date of this Franchise, Grantee shall not be required to overbuild any lawful cable operation. Notwithstanding the foregoing sentence, Grantee is authorized but not obligated to Construct a Cable System and to provide Cable Service to non-residential areas of the City. City will adopt procedures to provide reasonable notice and access, if permissible under applicable law, to Grantee of open trenches available to jurisdictional utilities. No warranty of compliance or actual notice is given or implied. (d) System Installation. Grantee shall utilize existing poles, conduits, and other facilities whenever possible, and shall not construct or install any new, different or additional poles, conduits, or other facilities whether on public property or on privately-owned property unless and until first securing the necessary City building permits. (e) Underground Construction. Grantee shall not utilize existing poles, conduits, and other facilities or in those areas of the City where the existing conduits and transmission or distribution facilities of the respective public utilities providing telephone, communication, or electric -26- 2144 services are underground, or hereafter are placed underground, or whenever the City shall undertake a program designed to cause all conduits and other facilities to be located beneath the surface of the Public Rights-of-Way, the Grantee shall likewise construct, operate, and maintain all transmission and distribution facilities underground, with the exception of "active electronic equipment," which, upon design and location approval from the City Manager, may be placed above ground. Whenever any active electronic component is so located above the surface of the ground, all efforts will be undertaken by Grantee to ensure that such location does not physically detract from the surroundings and does not endanger the public safety or public welfare upon design and location approval from the City Manager. The method of underground Construction to be utilized by the Grantee, whether by trenching, boring, cutting, or other method, and the restoration of Streets, parkways alleys, and other City Public Rights-of-Way utilized for the placement of the Grantee's conduits and/or ancillary equipment, must first be submitted to the City Manager for approval. The Construction methods approved will be subject to the required permit fees and City inspection as may be required by other ordinances, rules, regulations and specifications of the City heretofore or hereafter adopted, including but not limited to those pertaining to works and activities in, on, over, under and about Public Rights-of-Way. (f) As Built Drawings. Grantee shall furnish the City Manager with current strand andlortrench maps of each Construction phase within one-hundred-twenty (120) days following completion of Construction. For Cable System upgrading, if such Construction involVes more than ten (10) miles of work, an updated map shall be submitted for each five (5) miles of Construction and every five (5) miles thereafter until the Construction is completed. Grantee shall not be required to identify specific electronic equipment in said maps. Grantee will provide complete as-built maps of the system within 180 days following completion of the entire Cable System Construction. (g) Underground Alert. The Grantee shall be a member of the Underground Alert service and utilize such services prior to the commencement of any underground activities. (h) Required Permits. Construction, operation, or repair ofa Cable System shall not commence until all required permits have been properly filed for and obtained from the proper City officials and all required permits and associated fees paid. In any permits so issued, the City may impose. as a condition of the granting of the permit such conditions and regulations as may be reasonable and necessary to the management of the Public Rights-of-Way, including, by way of example and not limitation, for the purpose of protecting any structures in the Public Rights-of-Way, for the proper restoration of such Public Rights-of-Way and structures, and for the protection of the City and the public and the continuity of pedestrian and vehicular traffic. -27- 2144 Grantee agrees to abide by all policies and requirements of the City's various regulatory departments (Public Works and Transportation Department, Developmental Services Depanment, Planning, etc.). A copy of the current Construction policies of the City's Public Works and Transportation Department is attached at Exhibit C. These and other Construction- related policies are subject to change at any time. City expects Grantee to keep abreast of Grantee's policies and copies of current Construction policies are kept on file at the office of the City Clerk and in the Public Works and Transportation Department. City further assures that these telecommunications Construction-related policies apply to all telecommunications providers and are enforced by the City on an equitable and non-discriminating basis. (i) Restoration of Property. Any and all Public Rights-of-Way, public property or private property that is disturbed or damaged during the Construction, operation or repair of the Cable System shall be promptly repaired by the Grantee that disturbed or damaged the Public Rights- of-Way, public property or private property. Public property and Streets must be restored to the satisfaction of the City or to a condition reasonably comparable or better than before the disturbance or damage occurred. (j) Tree Trimming. Tree trimming is not allowed without permission. No tree trimming shall be performed without the permission of the City and other affected authorities with the exception of circumstances involving public safety as defined by the City's. Public Works and Transportation Department, and any tree trimming must be performed in strict accordance with applicable law, including the City Municipal Code. (k) Graffiti Removal. Within forty-eight (48) hours after notice from the City, Grantee shall remove any graffiti on any part of its Cable System including by way of example and not limitation, equipment cabinets. If the Grantee fails to do so, the City may remove the graffiti and bill the Grantee for the cost thereof. 0) Identification Required. All Persons associated with the Grantee's Construction, including all subcontractors of the Grantee, shall wear at all times while on City Streets a badge which clearly identifies themselves as employees or subcontractors of the Grantee. (m) Right of Inspection of Construction. The City shall have the right to inspect all Construction or installation or other physical work performed by Grantee in connection with the Franchise, and to make such tests as it shall find necessary to ensure compliance with the terms of the Franchise and other pertinent provisions of law. City agrees to arrange for such tests as may be necessary only in coordination with Grantee to assure the minimization of interference to the operation of the system and inconvenience to Subscribers. (n) Construction Completion. Grantee shall provide a written certificate to the City Clerk within thirty (30) days of completing each Construction phase. The Grantee shall also notify the City in writing when 100% of the Construction is complete. Any Construction or schedule -28- 2144 required under this section shall be considered complete only upon written Notice of Completion from the City to the Grantee stating that the work has been completed in a manner satisfactory to the City as specified in this Franchise. No Construction requirement or schedule shall be considered as being complete until said Notice of Completion has been executed by the City. In the event City fails to respond to the Grantee's notification of Construction completion within one hundred and twenty (120) days of receipt thereof, the Construction of the Cable System shall be deemed complete. Said one hundred and twenty (120) days from the time required for City's approval or disapproval shall not be counted against the Grantee's Construction schedule. (0) Construction Extensions. In the event that the Grantee's failure to meet any Construction deadlines as specified in this section is due to an unforeseeable cause beyond the reasonable control of the Grantee, including failure to obtain utility pole attachment clearances that have been properly applied for by Grantee, the Grantee must notify the City Manager of the time and nature of the delay within ten (10) days after the delay occurs. In the event that, as a result of such delay, an extension to the Construction schedule as specified in this Franchise is requested by the Grantee, the extension must be requested from the City Manager in writing within fourteen (14) days of such notice of the delay. Such extension request must specify the exact reason for the extension and the total number of extension days requested. The City Manager shall prepare a report to the City Council regarding the extension request. The City Council shall consider the request as an agenda item and permit Grantee to be heard. The City Council may deny, approve, or modify the extension request. In considering the extension request, the City Council shall consider the good faith performance and efforts of Grantee towards substantial compliance with the Construction schedule as a factor supporting approval or modified approval. (p) Multiple Dwelling Units. All Construction schedules heretofore detailed in this Franchise agreement shall apply to multiple dwelling units ("MDU") as defined in the City Municipal Code except that, upon demonstration of good cause, which shall include Grantee's inability to obtain necessary building access if such effort was made by the Grantee in good faith, the City may extend the Construction schedules relative to such MDU only. The Grantee must state the reasons for the requested extension in writing to the City Manager prior to the scheduled deadline. Said request shall detail the amount of time estimated for the continuance and the completion of Construction. The City Manager may, in writing, authorize the appropriate time extensions. If access to an MDU is applied for and denied, Grantee shall not be required to service such MDU and such units shall not be included in Construction area. (q) Construction Damages. By acceptance of this Franchise Agreement, Grantee agrees that failure to comply with any time requirements referred to in Section 15(a), 15(b), Section 16 or any combination thereof, or within such time as may be extended by the City Council, shall be cause for City to draw one thousand dollars ($1,000) per day from the security fund and reduce the Franchise term four (4) days for each and every day's delay beyond the time prescribed, for completion of any of such acts required to be done. -29- 2144 SECTION 17 - STANDARD / NON-STANDARD INSTALLATIONS Subject to the limitations contained in Section 15, Grantee shall extend Cable Services to any existing or new Dwelling Unit located in imy residential area of the City including those Dwelling Units serviced by underground utilities, at a standard installation rate if the resident requests the service and if the service connection requires no more than a one hundred twenty- five foot (125) Drop line. For Drops in excess of one hundred twenty-five feet (125), Grantee shall provide service at the standard installation rate for the initial one hundred twenty-five (125) feet plus the Grantee's actual cost of all labor and inaterials for all portions of the service connection in excess of one hundred twenty-five (125) feet. SECTION 18 - POSSESSORY INTEREST By accepting this Franchise, Grantee acknowledges that notice is and was hereby given to Grantee pursuant to California Revenue and Taxation Code Section 107.6 that use or occupancy of any public property pursuant to the authorization herein set forth may create a possessory interest which may be subject to the payment of property taxes levied on such interest. Grantee shall be solely liable for, and shall pay and discharge prior to delinquency, any and all possessory interest taxes or other taxes levied against Grantee's right to possession, occupancy or use of any public property pursuant to any right of possession, occupancy or use created by this Franchise. SECTION 19 - CONTINUITY OF SERVICE (a) Uninterrupted Service. It shall be the right of all Subscribers to receive all available Cable Services insofar as their financial and other obligations to the Grantee are honored. During the period that the Grantee elects to construct, upgrade, modify or sell the Cable System, the Grantee shall ensure that all Subscribers receive continuous, uninterrupted service regardless of the circumstances. In the event of purchase by the City, or a change of Control of Grantee, the current Grantee shall cooperate with the City to operate the Cable System for a temporary period . and to maintain continuity of Cable Service to all Subscribers. (b) Operation During Take-Over. The City may, as required under provisions described in Section 5 or 12 herein and as necessary to maintain continuity of Cable Services, assume management and operation of the Cable System. During any take-over of operation of the Cable System by City, City shall attempt to cause as little disruption of operations as is consistent with the maintenance of continuing Cable Service to Subscribers. Notwithstanding the foregoing, City shall, as it may deem necessary, make any changes in any aspect of operations desirable, in City's sole judgment, for the preservation of quality of service and its continuity. City shall further, during any such take-over, maintain to the best of its ability the Cable System's records, physical plant, financial integrity and funds, and other details and activities normally involved in operations. -30- 2144 (c) Management During Take-Over. City may, upon taking over operation of the Cable System Franchised hereunder, appoint a manager to act for it in the overall management of the Cable System's affairs. Such manager shall have the authority delegated to him by City in its order of take-over and shall be solely responsible to City for management of the Cable System. If the Grante;e is required to continue operating the Cable System during a take-over period, the Operator will continue to manage and operate the Cable System at the then current level of service. In the event the Operator materially modifies the operation and fails to maintain continuity of Cable Service, the privileges extended by this section to said Operator will be removed. SECTION 20 - COMPLAINT PROCEDURES . (a) Complaints. The following procedure shall be adhered to in the event of Subscriber Complaints by City residents: (I) Any Complaint made by a Subscriber to the Grantee concerning billing, employee courtesy, service, safety or company policy will be handled immediately upon receipt of the Complaint and will normally be resolved within one (1) business day. (2) Service Complaints involving Cable System Construction, customer dissatisfaction with any installation, picture quality, reconnection or disconnection, loss of or interference to service or any Cable System leakage affecting amateur radio/TV Operators will be handled in the sequence that they are received. Immediately upon receiving such a Complaint, the Grantee's service representative will set an appointment with the Subscriber that will enable the Grantee's service technician to examine and resolve the Subscriber's Complaint. Assuming that the Subscriber is available for at least a four-hour service appointment, the Grantee shall be required to dispatch a service technician to the Subscriber's residence within one (1) business day after receiving the Complaint and must normally resolve all Complaints within forty-eight (48) hours after the initial inspection. In the event that the Subscriber is not available to allow the Grantee access to the property within the required time as specified above, Grantee shall set an appointment at the Subscriber's earliest convenience. In the event that the Subscriber is not available at any prearranged time, the Grantee shall conduct the following procedures: (i) The technician will check Signal levels outside the Subscriber's home. If a problem exists, the technician will identify, locate and resolve it. -31- 2144 (ii) If no problem is determined to exist or if the technician has repaired the problem, the technician will leave a door hanger stating the fact that the. technician has been there and requesting that, if there is still a problem, the Subscriber call the office for service. A service call work order indicating that the Subscriber was not home will be completed and returned to the office. (3) In the event that. any Subscriber IS not satisfied with any services as required by this Section, the Subscriber's Complaint will be referred to a management person who will normally resolve the Complaint within one (1) business day. Nothing shall prevent the Grantee's local management from extending credits or refunds as compensation for a Subscriber's poor, inadequate or interrupted service. (b) Complaint Log. Grantee shall maintain a written record, or "log," listing date of Subscriber Complaints arising within the City, ideIltifying the Subscriber, determining the nature of the Complaints and when and what action was taken by the Grantee in response thereto. Such record shall be kept at Grantee's local office, reflecting the operations for the past three (3) years, and shall be available for inspection upon thirty (30) days written notice from the City Manager. (c) System Testing. When there have been similar Complaints made or where there exists other evidence which in the reasonable judgment of the City Manager casts doubt on the reliability or quality of the entire or any portion of the Cable System, or the Grantee's ability to meet the technical standards herein adopted, the City Manager shall have the right and authority to require the Grantee to test, analyze, and report on the performance .of that part of the Cable System involved in the problem. Such test or tests shall be made and the report of such test or tests shall be delivered to the City no later than fourteen (14) days after receipt of written notice from the City. Such report shall include all the following infonnation: (1) the nature of the Complaint which precipitated the special test; (2) what Cable System component was tested; (3) the equipment used and procedures employed in such testing; (4) the names of the individuals performing and witnessing the testing; (5) the date, time, and location of testing; (6) the results of such test; and (7) the method in which such Complaints were resolved. -32- 2144 (d) Complaint Remedies. The Grantee shall issue one day's credit for each period of four (4) or more consecutive hours, occurring in a period of twenty-four (24) consecutive hours, when a service interruption occurs, computed from the time the Grantee receives notice of a service interruption from any Subscriber affected by a service interruption. Credit shall be provided on a prorated basis for the specific services affected by the service interruption. No credit shall be given for any service interruption caused by a Subscriber or his/her equipment. Further, a Subscriber requesting credit must afford the Grantee the opportunity to verify the service interruption and correct it, including allowing access to his/her premises as necessary. For the purpose of this section, service interruption shall mean any loss. of service or distortion of service so that the service does not comply with the performance standards as stated in this Franchise. (e) Complaint Resolution. The City Manager shall have the authority to resolve any and all Complaints and to require that the Grantee make any Cable System repairs needed to assure compliance with the technical standards of this Franchise. Said requirements shall be presented to the Grantee in writing and shall detail the schedule for completion. To the extent any of the terms and provisions of this Franchise are inconsistent with the California Cable Television and Video Provider Customer Service and Information Act (Government Code 53054, et seq.), the terms and provisions which provide the greater degree of Subscriber protection shall apply. Where the terms and provisions of this Franchise are inconsistent with the Video Customer Service Act, but provide additional protection, the terms and provisions of this Franchise shall apply unless not allowed by law. SECTION 21 - CUSTOMER SERVICE STANDARDS, BILLING, COMPLAINTS AND SUBSCRIBER RIGHTS (a) Grantee agrees as of the Effective Date of this Franchise to comply with the customer service standards contained in this Section. (b) For the purpose of this Section the following definitions shall apply: "Customer Service Representative" shall mean the representative of Grantee that is designated and trained to assist Subscribers and other City residents with all matters pertaining to the provision of Cable Service. "Normal Business Hours" shall mean those hours during which most similar businesses in the City are open to serve customers. In all cases, "normal business hours" must include some evening hours at least one night per week and/or some weekend hours. "Normal Operating Conditions" shall mean those service conditions which are within the control of the Grantee. Those conditions which are not in control of the Grantee include, but are not limited to, natural disasters, civil disturbances, power outages, telephone network outages, -33- 2144 and severe or unusual weather conditions. Those conditions which are ordinarily within the control of the Grantee include, but are not limited to, special promotions, pay-per-view events, rate increases, regular peak or seasonal demand periods, and maintenance or Construction of Cable System. (c) Grantee agrees to meet the following standards: (1) Upon achieving a sustaining Subscriber count of 5,000 customers, Grantee shall establish and maintain a customer service center within the City limits for the purpose of transacting Personal business with Subscribers, such as bill payment and equipment exchanges. The customer service center shall be conveniently located within the City, and open during all usual business hours, but in no case less than. forty (40) hours per week. Until such Subscribership is achieved, Grantee shall maintain a convenient customer service center in the region. (2) Operations and Maintenance. (a) Telephone availability (i) Grantee will maintain a local, tollcfree or collect call telephone access line, which will be available to Subscribers twenty-four (24) hours a day, seven (7) days a week. (ii) Trained, knowledgeable and qualified Customer Service Representatives will be available to respond to Subscriber telephone inquiries during normal business hours. (iii) After normal business hours, the access line may be answered by a service or an automated response system, including an answering machine. .Inquiries received after normal hours must be responded to by a Customer Service Representative on the next business day. (b) Under Normal Operating Conditions, telephone answer time by a Customer Service Representative, including waiting time, shall not exceed thirty (30) seconds when the connection is made. If the call needs to be transferred, transfer time shall not exceed thirty (30) seconds. These standards shall be met no less than ninety (90%) percent of the time under Normal Operating Conditions, measured on a quarterly basis. (c) The Operator will not be required to acquire equipment or perform surveys to measure compliance with the telephone answering standards above unless an historical record of Complaints indicates a clear failure to comply. -34- 2144 (d) Under Normal Operating Conditions, Subscribers will receive a busy signal less than three (3%) percent of the time measured on a quarterly basis. (d) Installations, outages and service calls. Under Normal Operating Conditions, the first three (3) standards below will be met no less than ninety five (95%) percent of the time measured on a quarterly basis: (1) Standard installations will be performed within seven (7) business days after an order has been placed. "Standard" installations are those that are located up to one hundred twenty five (125) feet from the existing distribution system. If the Grantee cannot perform the standard installation within seven (7) business days of request by a Subscriber, the Subscriber may request and is entitled to receive a ten dollar ($10.00) credit. If the Grantee fails to provide the ten dollar ($10.00) credit and the request was made by the Subscriber within forty-five (45) days of the installation request, the City may direct the Grantee to issue the credit. (2) Grantee shall respond to service calls and Complaints promptly and shall maintain a force of repair and service Personnel that under Normal Operating Conditions is capable of responding to Subscriber requests for service, including installations, disconnects, and service repairs, within the following time frames (unless a Subscriber requests a different, more convenient date that is beyond the following performance standards): (a) Within two (2) hours, including weekend days, of receiving Subscriber calls which, by number of calls, identify a Cable System outage of sound or picture of one (1) or more channels, affecting five (5%) percent or more of the Subscribers of the Cable System. (b) Within one (1) day of receiving any request for service by any single Subscriber identifying a complete outage in Cable Service. (c) Within two (2) business days, excluding weekend days and holidays, of receiving any request for service identifying a problem concerning picture quality or sound quality, Converters and disconnects. (3) The "appointment window" alternatives for installations, service calls, and other installation activities offered to a Subscriber will be either a specific time or, at a maximum, a four (4) hour time block during normal business hours. The Grantee may schedule service calls and other installation activities outside of normal -35- 2144 business hours or outside the parameters of response time outlined above for the express convenience of the Subscriber. (a) Grantee shall, in accordance with Section 1722 (b) of the California Civil Code, inform Subscribers of their right to service connection or repair within a four (4) hour period, if the presence of the Subscriber is required, by offering the four (4) hour period at the time the Subscriber calls for service connection or repair. Grantee also agrees to notify all Subscribers by mail of their rights under Section 1722(b) at least annually during each year of the Franchise. (b) If the service connection or repair is not commenced within the specified four-hour period, except for delays caused by unforeseen or unavoidable occurrences beyond the control of the Grantee, the Subscriber may bring an action in small claims court against the Grantee for lost wages, expenses actually incurred, or other actual damages, not exceeding a total of five hundred dollars ($500.00) in accordance to state law. (4) Grantee may not cancel an appointment with a Subscriber after the close of business on the business day prior to the scheduled appointment. (5) If a Grantee representative is running late for an appointment with a Subscriber and will not be able to keep the appointment as scheduled, the Subscriber will be contacted. The appointment will be rescheduled, as necessary, at a time which is convenient for the Subscriber. (6) Grantee will make every effort to not destroy or tamper with Customer Premises Equipment owned or deployed by a customer or hislher telecommunications carrier to originate, route, or terminate telecommunications within the Subscriber's home or property. (e) Communications between the Grantee and its Subscribers. (1) Notifications to Subscribers - (a) The Grantee shall provide written information on each of the following areas at the time of installation of service, at least annually to all Subscribers, and at any time upon request: (i) products and services offered; (ii) prices and options for programming services and conditions of subscription to programming and other services; -36- 2144 (iii) installation and service maintenance policies; (iv) . instructions on how to use Cable Service; (v) channel positions of programming carried on the Cable System; (vi) billing and Complaint procedures, including the address and telephone number of the City; (vii) charges, refunds and credits procedures; (viii) disconnection and termination of service procedures; (ix) customer service telephone number and office hours; and (x) service call response time scheduiing. (2) Subscribers will be notified of any changes in rates, programming services or channel positions as soon as possible through announcements on the Cable System and/or otherwise in writing. Notice must be given to Subscribers a minimum of thirty (30) days in advance of such changes if the change is within the control of the Grantee. In addition, the Grantee shall notify Subscribers thirty (30) days in advance of any significant changes in the other information required by the preceding paragraph. (3) After the customer service standards established have been in effect for one (1) year, the Grantee shall report annually on its performance in meeting the customer service standards if requested by the City in writing. (4) Grantee shall disconnect or terminate a Subscriber's Cable Service only for good cause. Good cause includes, but in not limited to, failure to pay, payment by check for which there are insufficient funds, theft of service, abuse of equipment or Grantee Personnel, or other similar Subscriber actions. In no event shall Grantee disconnect or terminate a Subscriber's service for nonpayment without providing the affected Subscriber with prior written notice at least seven days prior to such disconnection or termination. In no event shall such disconnection or termination for nonpayment occur less than thirty (30) days after a Subscriber's failure to pay a bill by the due date thereon. Where the Grantee has improperly disconnected and terminated Cable Service to any such Subscriber, Grantee shall provide free reconnection to the Cable System to such Subscriber. -37- 2144 (f) Billing. Billing procedures shall be as follows: (1) Bills will be clear, concise and understandable. Bills must be fully itemized, with itemizations including, but not limited to, basic and premium service charges and equipment charges. Bills will also clearly delineate all activity during the billing period, including: (a) A list of each service or package received for that billing period; (b) The rate or charge for each service or package received; (c) The period of time over which said services are billed; (d) The total charges due for the monthly period, separate from any previous balance due; (e) Credits posted during the month; (f) A specific date by which payment is required; and (g) The customer service phone number to which billing inquiries or Complaints can be directed. (2) The Grantee's first billing statement after a new, installation or service change shall be prorated as appropriate and shall reflect any securi ty deposit. (3) The Grantee's billing statement must show a specific payment due date, and no late payment fee may be imposed on a Subscriber earlier than thirty (30) calendar days from the due date on the billing statement. Any balance not received within thirty (30) calendar days of the due date may be assessed a late fee consistent with consumer protection and usury laws of the state of California. Any late fee . assessed must appear on the following month's billing statement. (4) The Grantee must notify the Subscriber that he or she can remit payment in Person at the Grantee's office located in the City and inform the Subscriber of the address of that office. (5) Every Subscriber who pays his or her bill directly shall have at least fifteen (15) days from the date of the bill for services is mailed to pay the listed charges. Customer payments shall be posted promptly. The Grantee shall not terminate residential service for nonpayment ora delinquent account without fifteen (15) days prior written notice. Such notice shall not be mailed until after the sixteenth -38- 2144 (16th) day from the time the bill for services was mailed to the Subscriber. The Grantee may not assess a late charge earlier than the 22nd day from the time the bill for services has been mailed. (6) In case of a billing dispute, the Grantee must respond to a written Complaint from a Subscriber within thirty (30) days. (7) At the time of the initial Cornplaint, grantee shall provide written or verbal notice to Subscriber that in the event of a billing dispute, the Grantee, upon resolution of the dispute when Grantee is at fault, shall waive a late fee. (8) Subscribers shall not be charged a late fee or otherwise penalized for any failure by the Grantee, its employees, or contractors, including failure to timely or correctly bill the Subscriber, or failure to properly credit the Subscribers for a payment made in a timely manner. (9) Every notice of termination of service shall include: name and address of Subscriber whose account is delinquent; the amount of the delinquency; the date by which payment is required in order to avoid termination of service; the telephone number of the Grantee for additional information and/or to handle Complaints or initiate an investigation concerning service and charges in question. (10) Service may only be terminated on days and at times in which the Subscriber can reach a Customer Service Representative of the Grantee either in Person or by telephone. (11) The Grantee shall afford each Subscriber of the Cable System with a right to rescind the Subscriber's ordering of service within three (3) days after ordering, provided that such right of rescission shall end upon activation of the service ordered. (g) Refunds (1) Refund checks will be issued promptly, but no later than either: (a) the Subscriber's next billing cycle following resolution of the request or thirty (30) days, whichever is earlier, or (b) in cases involving the return of the equipment supplied by the Grantee if service is terminated for any reason, within thirty (30) days. (2) If the Grantee does not mail a check for a refund to any Subscriber disconnecting service with an outstanding credit within the next billing cycle or thirty days, -39- 2144 whichever is earlier, the Subscriber may request and is entitled to receive a ten dollar ($10.00) payment. In addition to the initial refund (and applicable interest) due, if the Grantee fails to provide the ten dollar ($10.00) payment and the request was made by the Subscriber within forty-five (45) days after failure to receive the refund, the City may direct the Grantee to provide the ten dollar ($10.00) payment as well as any outstanding refund (and applicable interest) due. (h) Credits. Credits for service will be issued no later than the Subscriber's next billing cycle following the determination that a credit is warranted. (i) Late Fees. Grantee's late fees must comply with applicable state and/or federal Law. (j) Equitable Rates and Discounts. Within twelve (12) months of the Effective Date of this Franchise, Grantee shall study and meet with City regarding a discount on Basic and Cable Programming Service Tiers for Persons with specific income and disability qualifications. (k) Deposits. Grantee will set rates for equipment deposits no higher than the actual replacement value of the equipment for which the deposit is applied. Equipment deposits shall be promptly returned to Subscribers upon the return in good working condition to the Grantee of the equipment for which said deposit was required. (I) A/B Switches. The Grantee shall offer Subscribers the option to receive an AIB switch (to receive broadcast television without cable hookup), at the time of initial Cable Service installation and shall provide Subscribers with written information as to how to use such a switch. . The Grantee may charge a reasonable price for said switch. Upon Subscriber request, the Grantee shall provide an AIB switch after the initial installation of Cable Service. If the Subscriber requests installation of such a switch the Grantee may charge reasonable fees for such installation and equipment. (m) Photo Identification Badges. All Personnel, agents and representatives of Grantee who have contact with Subscribers and/or the public, including subcontractors, shall wear photo" identification badges clearly identifying their affiliation with Grantee or such contractors. (n) Written or Oral Notice to Enter Property. Under Normal Operating Conditions, Grantee shall provide written or oral notice, in light of circumstances, prior to entry whenever desiring to enter any private property. (0) Notice Regarding Channel Scrambling. Subscribers will be given at least thirty (30) days notice of any scrambling of a channel, and any de-scrambling of a channel(s) containing R-rated or stronger programming. Subscribers do not need to be notified of "black out" periods required of the Grantee by programmers. AO- 2144 (P) Subscriber Rights. (1) Discriminatory Practices Prohibited. The Grantee shall not deny Cable Service or otherwise discriminate against Subscribers or others on the basis of race, color, religion, national origin, sex, age or sexual preference. The Grantee shall strictly adhere to the equal employment opportunity requirements of federal, state or local governments .and shall comply with all applicable laws and executive and administrative orders relating to non- discrimination. (2) Tapping and Monitoring. The Grantee shall not tap or monitor or permit any other Person Controlled by Grantee to tap or monitor any cable, line, Signal input device or Subscriber outlet or receiver for any purpose whatsoever without the express written consent of the Subscriber or a court order therefore; provided, however, that the Grantee shall be entitled to monitor customer service calls for quality control purposes and to conduct system-wide or individually addressed "sweeps" for the purpose of verifying Cable System integrity, controlling return path transmission, or checking for unauthorized connections to the Cable System or service levels or billing for pay services. (3) Data Collection. The Grantee's data collection and dissemination practices regarding Subscribers shall be in compliance with 47 U.S.C. Section 551 and this Franchise. (4) Revealing Subscriber Preferences. (a) Grantee shall not reveal individual Subscriber preferences, viewing habits, beliefs, philosophy, creeds or religious beliefs to any third Person, firm, agency, govemmental unit or investigating agency without court authority orprior written consent of the Subscriber. (b) Such written consent, if given, shall be limited to a period of time not to exceed one (1) year or a tenn agreed upon by the Grantee and Subscriber. (c) The Grantee shall not condition the delivery or receipt of Cable Services to any Subscriber on any such consent. -41- 2144 (d) Such a Subscriber may revoke without penalty or cost any consent previously made by delivering to the Grantee in writing a substantial indication of his intent to so revoke. (5) Revealing Subscriber Lists. . The Grantee shall not reveal, or sell, or permit the release or sale of its Subscriber list without the prior affirmative written consent of each Subscriber, provided that Grantee may use, its Subscriber list .as necessary for the Construction, rnarketing, and maintenance of the Grantee's services and facilities authorized by this Franchise, and the concomitant billing of Subscribers for said Cable Services; and further, provided that consistent with applicable law, City may use Grantee's Subscribers list for the purpose of communication with Subscribers in connection with matters relating to operation, management, and maintenance of the Cable System, except in 47 U.S.c. Section 551. (6) Other Persons Affected. The prohibitions contained in Subsections (1) - (5) inclusive of this Article shall extend and apply to all of the foregoing as well as to the Grantee: (a) Officers, directors, employees and agents of the Grantee; (b) General and limited partners of the Grantee; (c) Any Person or combination of Persons owning holding or Controlling five percent (5%) or more of any corporate stock or other ownership interest of . the Grantee; (d) Any affiliated or subsidiary entity owned or Controlled by Grantee, or in which any officer, director, stockholder, general or limited partner or Person or group of Persons owning, holding or Controlling any ownership interest in the Grantee, shall 'own, hold or Control five percent (5%) or more of any corporate stock or other ownership interest; and (e) Any Person, firm or corporation acting or serving in the capacity of holding or Controlling company of the Grantee. SECTION 22 - REGULATION OF RATES AND SERVICE CHARGES The City may, without further action of the parties, regulate Grantee's rates, charges, and prices to the maximum extent permitted by law now or at a future time. The City and Grantee agree -42- 2144 that at the time of the Effective Date of the Franchise, such potential rate regulatory authority of the City does not apply given the Grantee's competitive status. (a) Filing of Rates and Charges. Throughout the term of this Franchise, Grantee shall maintain on file with the City a complete schedule of all rates and charges related to providing Cable Services under this Franchise, In a form satisfactory to the City. (b) Changes in Rates and Charges. Grantee shall provide written notice to the City and Subscribers at least thirty (30) days in advance of any proposed changes in rates and charges within the Control of Grantee. (c) Regulation of Equipment for Hearing Impaired. To the extent authorized by law, the City reserves the right to require and regulate the installation or rental of equipment that facilitates the reception of Basic Cable Service by hearing impaired individuals. SECTION 23 - SERVICES AND PROGRAMMING (a) Grantee shall provide, at a minimum, the following broad categories of programming: general entertainment; sports; local broadcast stations; cultural programming; news; classic, foreign, and special interest films; contemporary movies; documentaries and information programming; government programming; children's programming; and foreign language programming. (b) If any listed broad category of programming shall become unavailable, or cannot be provided under existing FCC regulations, Grantee shall provide substitute programming of the same category if possible. (c) At least once every three years, the Grantee at its expense shall survey its Subscribers to evaluate their programming interests and quality of Grantee's services and operations and report the results to the City. Such survey shall be prepared and performed by professionally qualified independent survey specialists who. are not affiliated with the Grantee. The City shall be permitted to review the qualifications of the survey specialists and shall also be consulted as to the questions to be asked in the survey and for any other suggestions that might assure the quality, objectivity and statistical validity of the surVey. Grantee shall provide the City with a copy of each survey and supporting documentation within thirty (30) days of receipt of the survey results or report from the survey specialists by the Grantee. SECTION 24 - GRAJ\'TEE SUPPORT FOR EDUCATIONAL AND GOVERNMENT ACCESSPROGRA~NG Grantee shall provide the following support for the purpose of development and implementing public benefit uses of the Cable System. The provision of the support items listed herein shall be considered as contractual commitments of the Grantee within the terms of this Franchise, and if -43- 2144 not provided, shall subject the Grantee to applicable remedies and penalties for violations of the Franchise. . (a) Access Channels. (1) The Grantee shall dedicate at no charge to the City or Subscribers up to a maximum of four (4) downstream video channels on the Cable System for the provision of Educational and/or Government Access Programming. (2) The Grantee shall electronically interconnect with the City's local cable prograrTImers who current use the incumbent cable television provider distribution system (Arcadia Unified School District and the City of Arcadia) at a point to be determined by the City and Grantee which may include the programmers' point of origination. These primary origination points are: a. City Hall, 240 W. Huntington Drive b. School District Headquarters, 234 Campus Drive (3) The Grantee may not, except as provided under the Cable Act, exercise any editorial control over the use of channels set aside for Educational' and . Government Access Programming. (4) The Grantee shall provide all Educational and Govemment Access Programming channels to all Subscribers as part of the lowest Tier or level of Basic Service Tier. (5) Grantee agrees to allow PEG programming on channel designations that are negotiated in good faith with the City taking into consideration the current community needs and practices (including the channel of the City's channels on the incumbent's Cable System as of the Effective Date of this Franchise). City . shall consider all reasonable circumstances, including contractual obligations that may prevent Grantee from relocating PEG channels to meet or alter the City's desired channel designations. As long as these circumstances are clearly presented to the City in writing prior to the 180th day from a request to relocate, or activate a new PEG channel, City shall waive the requirement that the Grantee cablecast PEG programming on the same channels as the City's incumbent cable Operator. . (6) The City shall have sole responsibility for the programming of the PEG channel(s) provided by the Grantee, including without limitation, the carriage of noncommercial programming on the channel(s) and the establishment and administration of all rules, regulations and procedures pertaining to the use and scheduling of the programming presented over the channel(s). . As part of -44- 2144 noncommercial programming, the City may permit commercial endorsements to acknowledge funding sources. (7) Grantee agrees to make reasonable and good faith efforts not to relocate the City's two primary PEG channels from their existing channel locations for the life of the Franchise. If relocation becomes necessary at the discretion of Grantee, Grantee agrees to provide at least 60 days notice regarding channel repositioning and will provide promotional support to advise Subscribers of the new location. Any request from the Grantee to use any fallow capacity designated for PEG Access must be submitted in writing to the City Council. The City Council shall approve the petition from the Grantee to use fallow channel capacity if it finds that: (i) the utilization of the channel is as represented; and (ii) the Grantee has not acied in violation of any of the provisions of the Franchise regarding utilization of the channel. After approval, the Grantee may continue to utilize the channel for any other purposes it so chooses, consistent with the Franchise, until it is required to be designated for PEG purposes pursuant to the provisions hereof. Grantee must relinquish its use of either or both of the City's two reserved channels within 90 days after receipt of written notice from the City that the access channel capacity will be used for additional public, educational, or governmental programming. (b) Capital Grants. Grantee shall pay City $30,000 on the first anniversary of the Effective Date of this Franchise; and on each anniversary of the Effective Date thereafter, an amount equal to $.55 (55 cents) per month per Subscriber based on actual collections with a total payment not to exceed $393,000 during the life of the Franchise. Should Grantee not make payments totaling $393,000 by the tenth (10th) anniversary date of the Effective Date of this Franchise, Grantee agrees to pay the balance remaining in a lump sum payment on such tenth (lOth) anniversary date. Grantee reserves all rights to identify and itemize such capital grants on Subscriber bills, consistent with federal law. During the first ten years of the Franchise term, a second payment in the amount of thirty thousand dollars ($30,000) shall be payable to or for the benefit of the City upon the City's submitting to Grantee a certification of need for the use of the replacement capital. Based solely on City's certification, Grantee shall provide the thirty thousand dollars ($30,000) payment upon the following quarterly franchise fee payment due date. Grantee may comment upon City's certification of need and provide recommendations to improve its effectiveness, but may not withhold the payment based on such comments or recommendations. Subsequent grants beyond the tenth year shall be subject to the State of the Art provisions for extension of payments described herein in Section 4. -45, 2144 (c) Free Cable Drops to City and School Buildings. (1) Grantee shall provide one standard installation Drop and free access to Basic Service and the Cable Programming Services Tier, for the life of the Franchise, to the Fire Stations, Police Station, Maintenance Services Department, Library and City Hall and all public school buildings within active services areas, upon written request. The value of the Cable Services provided shall not be deemed non- capital payments requiring or allowing offset against the Franchise fee. (2) In the event that City or any public school desires to have additional connections to the Cable System within such buildings installed by Grantee, Grantee shall make such connections or installations charging to the City or public school the actual cost to Grantee of such connections or installations. Grantee shall reserve the right to subcontract such installations or connections when deemed necessary. Installation of all additional connections to public buildings shall be completed within sixty (60) days of receipt of a written request for such connections from such facilities within active service areas. (d) Change In Technology. In the event Grantee makes any change in the Cable System and related equipment and facilities or in Grantee's Signal delivery technology, which directly or indirectly affects the Signal quality or transmission of Cable services or programming, Grantee shall at its own expense take necessary technical steps or provide necessary technical assistance, including the acquisition of all necessary equipment and full training of Cable Personnel, to ensure that the capabilities of Cable services are not diminished or adversely affected by such change. For example, this provision shall apply if the Cable System is converted from an analog to a digital format, such that the Cable Channels must also be converted to digital in order to be received by Subscribers. (e) PEG Interconnections. Grantee acknowledges that it is the City's goal to further the community's needs and interests by providing for interconnection of PEG Channels between the City and surrounding communities as may be developed among participating entities in the region. Therefore, when the Downstream. PEG Channels, described in Section 24(a), are activated, Grantee agrees to participate iri such PEG Channel interconnection that may be in place as of the Effective Date or which may be developed, that will facilitate the sharing of PEG programming between and among participating members. In addition, the City shall have the right to use any PEG Channel for PEG programming provided to it through an interconnect. (0 Institutional Network (I-Net). In lieu of a separate I-Net that City might otherwise require, Grantee shall provide the City, in the form of in-kind support to be determined by the Grantee, an amount of telecommunications services totaling up $55,000 over the life of the Franchise for the purpose of fostering the City's information technology and telecommunications needs. A plan -46- 2144 for the allocation of such services shall be developed in good faith between the City and the Grantee by the first anniversary date of the Effective Date of the Franchise. (g) Capital Grants Not Offset Against Franchise Fee. In the event any capital funds in support of Educational and/or Govemment Programming required by this Franchise are deemed by a legislative body, administrative body, or court of competent jurisdiction to constitute a payment which must be offset against the Franchise fee, City hereby reserves the right, but is not required, to terminate said program and/or requirement so as to provide the maximum allowable Franchise fee. Grantee shall not offset any charge, of any kind, against a Franchise fee or other payment due City without prior written notification to City. Upon notification thereof, City may direct Grantee not to incur the proposed offset expenditUre. To the extent that Grantee makes said expenditure in contradiction of City's direction, any right of offset shall be waived by Grantee. Nothing in this Franchise is intended, and shall be so construed, to confer any third party beneficiary rights on any party(s), and no rights are created by this Franchise other than rights of the City ~d Grantee. SECTION 25 - RECORDS (a) Within (30) days of receiving a written request from the City, Grantee shall provide a report of the following: The annual Gross Revenues of the Cable System in the City broken down by category (e.g. Basic, Premium, Pay per View, equipment rental, install receipts, late charges/miscellaneous, advertising, home shopping commissions, local origination, and other income). SECTION 26 - FISCAL, SYSTEM AND PERFORMANCE TESTING REPORTS (a) Open Books. The City shall have the right to inspect at any time during normal business hours such non-confidential books, records, maps, plans, financial statements, service Complaint logs, performance test results and any other records or Property of the Grantee which relate to the operation of the Cable System and are relevant to the enforcement of conditions contained within this Franchise, and to request copies of said non-confidential documents, which shall be provided at the Grantee's sole cost and expense. Any Grantee records as set forth herein shall, within thirty (30) days of receipt of the City's written request be made available for City's inspection. In the event the City receives a request to disclose such information that it has obtained from the Grantee which the Grantee has claimed is proprietary and/or confidential, the City shall notify the -47- 2144 Grantee prior to the releasing such information, so that the Grantee can seek such legal protection as necessary, provided, however, the City shall be under no obligation to participate or defend said action. (b) Reports of Financial, Operating Activity and Performance Standards. (1) Annual Operations Report. No later than ninety (90) days after the close of the Grantee's fiscal year, Grantee shall present a written report to the City that shall include: (a) A statement of Gross Revenues, certified by a certified public accountant (CPA), describing what revenues were included and excluded in the Franchise fee calculation, and any adjustments made to Gross Revenues; and (b) A summary of the previous year's activities, including but not limited to Subscriber totals and new services, and including any items specified by City. (2) Semi-Annual Performance Test Report. Upon request, Grantee shall provide the City with a copy of the semi-annual performance test results required by Subpart K of Section 76 of the FCC Rules and Regulations. Such copies shall be provided within thirty (30) days of receiving a written request from the City. (c) City Inspection. A representative of the City shall be permitted to accompany the Grantee during any FCC performance testing. The Grantee shall note any system adjustments made during the performance testing on the test data form. (d) Special Reports Upon Request. The Grantee shall prepare and furnish to the City Manager upon written request such reports with respect to its operations, affairs, transactions or property as may be reasonably necessary or appropriate to the performance of any of the rights, functions or duties of the City or any of its officers in connection with the Franchise. . The City Manager shall consult with Grantee as to the form, detail, and due dates of the reports requested, and may accept copies of reports generated by Grantee in the normal course of business whenever possible. (e) All reports required in this Section shall be provided at no cost to the City whatsoever. SECTION 27. LIQUIDATED DAMAGES AND OTHER REMEDIES (a) THE GRANTEE UNDERSTANDS AND AGREES THAT ITS FAILURE TO COMPLY WITH CERTAIN MATERIAL REQUIREMENTS OR OBUGATlONS IMl'OSED ON IT BY TIllS FRANCHISE OR THE RIGlIT OF WAY ORDINANCE (ORDINANCE NO. 2057) -48- 2144 WIll RESULT IN DAMAGE TO THE CITY, AND THAT THE ACTUAL AMOUNT OF SUCH DAMAGE IS IMPRACTICAL TO DETERMTh'E. THE PARTIES THEREFORE AGREE TO THE UQUlDATED DAMAGES SPECIFIED BELOW. SUCH DAMlI.GES MAYBE COllECTED BY THE CITY FROM DRAW DOWN OF THE SECURITY FUND(S) REQUIRED BY SECTION 9 HEREOF OR BY ANY OTHER MEANS AVAILABLE AT LAW OR EQUITY. THE FOLLOWING AMOUNTS MAY BE CHARGEABLE TO THE SECURITY FUND(S) FOR THE FOLLOWING CONCERNS: 1. DAMAGES FOR DELA YS IN CONSTRUCTION SCHEDULE. SUBJECT TO THE PROCEDURES HEREIN, CITY, AT ITS OPTION, MAY APPLY ONE OR MORE OF THE FOLLOWING DAMAGES IN AN ADDITIVE MANNER IF GRANTEE FAlLS TO PERFORM AND/OR OFFER SERVICES WITHIN THE TIME OR TIMES SET FORTH IN TInS FRANCIDSE: (a) GRANTEE SHALL CONSTRUCTION ITS CABLE TELEVISION SYSTEM IN ACCORDANCE WITH THE CONSTRUCTION SCHEDULES SET FORTH IN SECTIONS 15 AND 16 OF TInS FRA.N"CIDSE. GRANTEE SHALL SUBMIT SWEEP RESULTS AT A TEST LOCATION AT THE EJ'..'D OF EACH TRUNK RUN TO CONFIRM SIGNAL CAPABILITY AT THE HIGHEST FREQUENCY. IF GRANTEE IS UNSUCCESSFUL IN DEMONSTRATING CARRIAGE AT EACH TEST LOCATION, GRANTEE SHALL HlI.VE A MAXIMUM THIRTY (30) DAYS FROM TESTING TO CORRECT ANY DEFICIENCIES AND REPEAT THE TEST. CITY MAY IMPOSE LIQUIDATED DAMAGES OF ONE THOUSAND DOLLARS ($1,000) PER DAY FOR EACH DAY FOLLOWING THE DATE UPON WHICH ONE HUNDRED PERCENT (100%) OF THE SYSTEM IS REQUIRED TO BE COMPLETED AS REQUIRED BY THIS FRANCHISE; PROVIDED, HOWEVER, NO PENALTIES MAY BE IMPOSED IF GRM'TEE SUCCESSFULLY DEMONSTRATES CARRIAGE AT ALL TEST LOCATIONS PRiOR TO THE THIRTIETH (30) DAY FOLLOWING THE SCHEDULED COMPLETION DATE FOR THAT MILESTONE. IF GRANTEE FAILS TO DEMONSTRATE ONE HUNDRED PERCENT (100%) CARRIAGE AT ALL TEST POINTS WITHIN THIRTY (30) DAYS OF THE SCHEDULED COMPLETION DATE, SAID UQUIDATED DAMAGES IMPOSED BY CITY SHALL RELATE BACK TO THE SCHEDULED COMPLETION DATE. -49- 2144. (b) FOR EACH MONTH OF DELAY EXCEEDING THREE (3) MONTHS FROM THE DATE THAT ONE HUNDRED PERCENT (100%) SYSTEM COMPLETION IS REQUIRED BY THIS FRANCHISE, CITY MAY REDUCE THE TERM OF THE FRANCHISE UP TO FOUR (4) MONTHS. 2. DAMAGES FOR VIOLATION OF TECHNICAL STANDARDS AND CUSTOMER SERVICE STAl\'DARDS. (a) TECHNICAL STANDARDS VIOLATIONS. (i) THE CITY MAY IMPOSE UQUlDATED DAMAGES NOT TO EXCEED TWO HUNDRED AND FIFTY DOLLARS ($250) PER DAY, AS MEASURED FROM THE DATE OF THE FAILED TEST UNTIL THE STANDARDS CONTAINED IN SECTION 13 OR 20 OF THIS FRANCHISE ARE MET; PROVIDED THAT, NO PENALTIES MAYBE IMPOSED IF GRANTEE SUCCESSFULLY MEETS SUCH STANDARDS WITHIN THIRTY (30) DAYS OF THE FAILED TEST. (ii) GRAt'i!TEE SHALL BE ENTITLED TO THE APPEAL RIGlITS PROVIDED IN SUBSECTION (3)(b) BELOW. . (b) CUSTOMER SERVICE VIOLATIONS. (i) IF GRANTEE VIOLATES, IN ANY MATERIAL WAY, ANY OF THE CUSTOMER SERVICE STANDARDS SPECIFIED IN SECTION 21 OF THIS FRANCHISE, THE CITY MAY IMPOSE UQUIDATED DAMAGES IN THE AMOUNT OF TWO HUNDRED FIFTY DOLLARS ($250) PER DAY; PROVIDED, HOWEVER, NO UQUlDATED DAMAGES SHAll BE IMPOSED UNTIL GRANTEE HAS BEEN GIVEN ACTUAL NOTICE OF SAID VIOLATION AND FAILED TO CURE SAID VIOLATION WITHIN THE REQUIRED RESPONSE TIME WITH THE EXCEPTION OF PROVISIONS MEASURED QUARTERLY WHEREBY A TEN (10) DAY CURE PERIOD WILL BE AFFORDED. IN THE EVENT THAT GRANTEE DOES NOT CORRECT SAID VIOLATION WITHIN THE APPUCABLE CURE PERIOD, SAID UQUIDATED DAMAGES MAY BE IMPOSED FROM THE DATE OF ORIGINAL VIOLATION. -50- . 2144 (c) REPORTING VIOLATIONS. (i) FOR FAILURE TO PROVIDE, UPON WRITIEN REQUEST, ANY DATA, DOCUMENTS, REPORTS OR INFORMATION, REQUIRED BY TIllS FRANCHISE OR THE RIGHT-OF-WAY ORDINANCE (ORDINANCE NO. 2057), THE GRANTEE SHALL PAY FIFTY DOLLARS ($50.00) PER DAY FOR EACH DAY, OR PART THEREOF, THAT EACH VIOLATION OCCURS OR CONTINUES; (ii) FOR FAILURE TO . SUB:MIT A REPORT ON THE PERFORMANCE OF THE SYSTEM AS REQUIRED HEREIN AND IN THE RIGHT -OF- WAY ORDINANCE, THE GRANTEE SHALL PAY ONE HUNDRED DOLLARS ($100.00) PER VIOLATION PER DAY FOR EACH DAY, OR PART THEREOF, THAT SUCH NONCOMPLIANCE CONTINUES; 3. PAYMENT OF DAMAGES. (a) CURE. IN THE EVENT THAT CITY HAS REASON TO BELIEVE THAT GRANTEE HAS FAILED TO COMPLY WITH ANY MATERIAL PROVISION OF TIllS FRANCHISE AND THEREFORE DESIRES TO IMPOSE DAMAGES ON GRA.NTEE AS STIPULATED HEREIN, CITY SHALL NOTIFY GRANTEE IN WRITING OF THE PROVISION OR PROVISIONS WHICH THE CITY BELIEVES MAYBE IN DEFAULT AS WELL AS THE APPUCABI:.E CURE PERIOD, SUCH PERIOD TO BE NO LESS THAN THIRTY (30) DAYS FROM GRANTEE'S RECEIPT OF THE NOTICE. . GRANTEE SHALL UPON RECEIPT OF SAID NOTICE: (i) CURE THE ALLEGED VIOLATION WITHIN THE CURE PERIOD; OR (ii) RESPOND TO THE CITY IN WRITING DURING THE CURE PERIOD CONTESTING THE CITY'S ASSERTION OF VIOLATION AND PROVIDING SUCH INFORMATION OR DOCUMENTATION AS MAYBE NECESSARY TO SUPPORT GRANTEE'S POSITION AND/OR REQUEST AN EXTENSION OF THE CURE PERIOD. -51- 2144 (b) APPEAL AND PAYMENT. IN THE EVENT GRANTEE FAILS TO RESPOND TO SAID NOTICE OF VIOLATION WITH AN EXPLANATION FOR FAILURE TO CURE ACCEPTABLE TO CITY, OR TO CURE THE VIOLATION WITHIN THE APPliCABLE CURE PERIOD, AND THE CITY CHOOSES NOT TO EXTEND THE APPliCABLE CURE PERIOD, CITY OR ITS DESIGNEE SHALL SCHEDULE A HEARING TO BE HELD NO SOONER THAN TEN (10) DAYS AFTER WRITTEN NOTICE TO GRANTEE OF THE EXPIRATION OF THE CURE PERIOD AND THE SCHEDULING OF SAID HEARING. GRA1\TTEE SHALL BE PROVIDED AN OPPORTUNITY TO BE HEARD AT SUCH HEARING, INCLUDING THE RIGHT TO PRESENT EVIDENCE, CROSS-EXAMINE WITNESSES, AND BE REPRESENTED BY COUNSEL. WITHIN TillRTY (30) DAYS AFTER SAID HEARING, . THE CITY SHALL DETERMINE WHETHER OR NOT GRANTEE IS IN VIOLATIONMlD SUBMIT WRITTEN FINDINGS OF FACTS SUPPORTING SUCH DETERMINATION. THE HEARING DESCRIBED ABOVE MAY BE CONDUCTED, AT CITY'S SELECTION, EITHER BEFORE THE CITY COUNCIL OR BEFORE A HEARING OFFICER OR COMMISSION SELECTED BY THE CITY COUNCIL. IN THE EVENT THAT SAID HEARING IS NOT HELD BEFORE THE CITY COUNCIL, GRANTEE SHALL POSSESS THE RIGHT TO APPEAL SAID DETERMINATION TO THE CITY COUNCIL WITHIN TEN (10) DAYS OF ISSUANCE OF THE STATE.Mal'[ OF DECISION AND FINDINGS OF FACT. ALL liQUIDATED DAMAGES ARE DUE AND OWING SIXTY (60) DAYS AFTER A FINAL DECISION BY EITHER THE CITY COUNCIL OR THE HEARING OFFICER IN THE EVENT OF NO APPEAL TO THE CITY COUNCIL. THE AFORESAID ASSESSME1\l'[ MAYBE LEVIED DIRECTLY AGAINST THE PERFORMANCE BOND OR CASH DEPOSIT, OR BOTH MlD COLLECTED BY CITY IMMEDIATELY UPON SUCH DATE SAID DAMAGES ARE DUE AND OWING. SUCH ASSESSMENT SHALL NOT CONSTITUTE A WAIVER BY THE CITY OF M'Y OTHER RIGHT OR REMEDY IT MAY HAVE UNDER THE FRANCmSE OR illmER APPliCABLE LAW INCLUDING, WITHOUT LIMITATION, ITS RIGHT TO RECOVER FROM GRANTEE SUCH ADDmONAL DAMAGES, LOSSES, COSTS AND EXPENSES, INCLUDING REASONABLE ATIORNEY'S FEES, AS MAY HAVE BEEN SUFFERED OR INCURRED BY CITY BY REASON OF OR ARISING OUT OF SUCH BREACH OF THE FRANCmSE. NOTHING IN TmS SECTION IS -52- 2144 INTENDED TO WAIVE, MODIFY OR OTHERWISE AFFECT GRANTEE'S RIGHTS UNDER THIS FRANCHISE, OR ANY APPLICABLE LAW, INCLUDING WITHOUT LIMITATION THE RIGHT TO JUDICIAL REVIEW OF THE LEGAL RIGHTS AND OBLIGATIONS OF THE PARTIES WITH RESPECT TO EACH OTHER, THE GRM1'ffiE'S RIGHT TO CHALLENGE THE DECISION OF THE CITY UNDER APPLICABLE LEGAL STANDARDS, AND ANY ISSUE OF PERFORMANCE OR BREACH BY EITHER PARTY TO THIS FRANCHISE. 4. VALIDITY OF LIQUIDATED DAMAGES. A.NY IMPOSITION OF LIQUIDATED DAMAGES MAY BE COLLECTED AND RETAINED BY CITY AS LIQUIDATED DAMAGES WITHOUT ANY REDUCTION, OFFSET, OR RECOUPMENT WHATEVER. THE COLLECTION OF LIQUIDATED DAMAGES SHAll NOT BE DEEMED AN EXCLUSIVE REMEDY. CITY AND GRANTEE AGREE THAT IT WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT TO FIX ACTUAL DAMAGES IN THE CASE OF GRANTEE'S DEFAULT, AND THAT THE AMO OF DAMAGES SPECIFIED ABOVE IS A REASONABLE AND C ESTIMATE OF CITY'S DAMAGES. Initial es Initial of Parties SECTION 28 . COSTS TO BE BORNE BY GRANTEE In addition to those costs listed in this Franchise, the Grantee shall assume the following reasonable costs associated with this Franchise: (a) Costs of publication of this Franchise as such publication is required by law; (b) All fees related to Construction of the Cable System facilities, including, but not limited to, City excavation permit fees, Construction inspection fees, and other City costs related to Cable System installation and Construction; and (c) Any and all "reasonable costs" associated with the City's administrative review and approval of Transfer or assignment of ownership, up to an amount of ten thousand dollars ($10,000). The City and Grantee reserve the right to increase this amount by mutual consent. The Grantee agrees and hereby waives any contrary claim that any such payment by the Grantee shall be within the exclusion of the "Franchise Fee" as defined in 47 U.S.C; Section 542(g)(2). Payments -53- 2144 made pursuant to this Section shall neither be deemed to be a part of the Franchise Fee, nor offset against the Franchise Fee. SECTION 29 - FORCE MAJEURE Notwithstanding any other provision of this Franchise, the Grantee shall not be liable for delay in performance of, or failure to perform, in whole or in part, its obligations pursuant to this Franchise to the extent due to strike, war or act of war (whether an actual declaration of war is made or not), insurrection~ riot, act of public enemy, accident, fire, flood or other act of God, technical failure, sabotage or other events, where the Grantee has exercised all due care in the prevention thereof, to the extent that such causes or other events are beyond the control of the Grantee and such causes or events are without the fault or negligence of the Grantee. In the event that any such delay in performance or failure to perform affects only part of the Grantee's capacity to perform, the Grantee shall perform to the maximum extent it is able to do so and shall take all steps within its power to correct such cause(s). The Grantee agrees that in correcting such cause(s), it shall take all reasonable steps to do so in as expeditious a manner as possible. The. Grantee shall notify the City in writing of the occurrence of an event covered by this Section 29 within five (5) business days of the date upon which the Grantee learns of its occurrence. In the event Grantee's performance of any of the tenus, conditions or obligations required by this Franchise or a Franchise granted hereunder is prevented by a unforeseeable cause or event not within Grantee's reasonable control, such inability to perform shall be deemed excused for the period of such inability and no penalties or sanctions shall be imposed as a result thereof provided Grantee has notified City in writing within ten (10) days of its discovery of the occurrence of such an event. For the purpose of this Section, the following are examples of acts or omissions by Grantee or circumstances which shall be deemed not to be beyond the control of Grantee and which shall not constitute excuses or justifications for violations: (1) The failure at any time by Grantee or its officers, agents or employees to exercise diligence in planning, organizing, arranging for or prosecuting the work of Construction and installation, or in taking any other action necessary to permit or facilitate the work of Construction and installation; (2) Unanticipated cost increases or insufficiency of capital with which to take actions necessary to comply or facilitate compliance with any of the terms, provisions and conditions of this Franchise; (3) Considerations relating. to economy or cost efficiency, as respects acts or omissions by Grantee; -54- 2144 (4) Delays occasioned by the failure of Grantee to diligently apply for and prosecute any request for a required certificate, approval or consent from the FCC; (5) Delays occasioned by seasonal changes in weather or climatic conditions, such as rain (exclusive of catastrophic conditions in the nature of "Acts of God"). (Rain delay shall not constitute an excuse or justification for violation except with respect to measurable precipitation occurring on more than fifty-nine (59) days during any period commencing July I and ending the next following June 30; and only if such is the proximate cause of the violation.); (6) Delays occasioned by the customary and usual time required to obtain approval to attach lines to poles owned by private or public utilities or in the attaching of cable to the poles; provided that if Grantee submits all plans and documentation required by private or public utility in connection with the approval to attach lines to poles, any time consumed by such approval process which is longer than ninety (90) calendar days following the submission of all necessary plans and documentation shall be deemed to excuse Grantee from any violations which are proximately caused by such delay in excess of ninety (90) calendar days; (7) Delays occasioned by the customary and usual time required to process and secure approvals under zoning ordinances of City for the location of components of the Cable System and other installations associated therewith, given the nature of the approval required and magnitude of the project; provided that if Grantee submits specific sites and plans for all headends, towers and transmitters to City and requests City to perform.a single environmental analysis upon all such facilities as the lead agency, any time consumed by such environmental analysis which is longer than sixty (60) calendar days during a period subsequent to the filing of the certificate of acceptance of the Franchise shall be deemed to excuse Grantee from any violations which are proximately caused by such delay in excess of sixty (60) calendar days. The Grantee shall not be excused from any violation of the tenus, provisions and conditions of this Franchise, except for causes which are beyond the control of Grantee, and except with respect to violations which have not been contributed to or aggravated by acts or omissions by Grantee. Except as otherwise provided above, violations caused exclusively by acts or omissions by City or its officers, agents or employees shall constitute an excuse and justification for failure of an Grantee to comply with the terms, provisions and conditions of this Franchise, precluding a determination that Grantee is in breach. However, violations as a result of such exclusive causes shall not be deemed to excuse Grantee from other unrelated.violations, shield Grantee from a determination that it is in breach for such other unrelated violations, or bar any relief for damages or otherwise as a result of such other unrelated breach. -55- 2144 Examples of circumstances beyond the control of an Grantee which will excuse an Grantee from violation and being in breach of the terms, provisions and conditions of this Franchise, when such violations are caused thereby, include but are not limited to the following: strikes, acts of public enemies; orders by military authority; insurrections; riots; epidemics; landslides; lightning; earthquakes; fires; floods; civil disturbances; explosions; partial or entire failure of utilities; delays in obtaining inspection by City inspectors of more than one (1) business day (provided that the request for such inspection shall. have been given by Grantee in a commercially reasonable manner within regular business hours. of City) and Acts of God, being defined for this purpose as an .act occasioned by the direct, immediate, and exclusive operation of the forces of nature, uncontrolled and uninfluenced by the power of man, and without human intervention, and is of such a character that it could not have been prevented or escaped by any amount of foresight or prudence, or by any reasonable degree of care or diligence, or by the aid of any appliances which the situation of the party might reasonably require him to use. SECTION 30 - MISCELLANEOUS PROVISIONS (a) Solicitation. This Franchise shall authorize and permit the Grantee to solicit, subject to the City's Solicitation Ordinance, sell, distribute, and make a charge to Subscribers within the City for connection to the Cable System of Grantee, and shall also authorize and permit the Grantee to traverse any portion of the City excluding private property in order to provide service outside the City. (b) Franchise Value. This Franchise shall never be given any value by any Court or other authority, public or private, in any proceeding of any nature of character, wherein or whereby the City shall be a party of affected therein or thereby, pursuant to applicable law. (c) Filing Contact. When not otherwise prescribed herein, all matters herein required to be filed with the City shall be filed with the City Clerk. (d) Review of Issues. If during the term of this Franchise or any extension thereof, the City grants a Franchise consent or right to another Operator which in the opinion of Grantee (Altrio Communications), contains a term or terms more favorable or less burdensome that those granted to the Grantee in this Franchise, Grantee shall notice City of the specific terms involved and City shall meet and confer with Grantee concerning these issues. Nothing herein, or any implied covenant of good faith and fair dealing relating thereto, shall require the City to modify the Franchise pursuant to the agreed upon meet and confer process or to take or refrain from taking any action. City agrees to comply with Section 53066.3(d) of the Califomia.Government Code in the event the City grants additional Franchises. . (e) Binding Effect. This Franchise shall be binding upon the parties hereto, and their permitted successors and assigns. -56- 2144 (f) Jurisdiction. Venue for any judicial dispute between the City and Grantee arising under or out of this Franchise shall be in Arcadia, California. . (g) Guarantee. The performance of the Grantee shall be guaranteed in all respects by Altrio Communications. A signed guarantee, in a form acceptable to the City, shall be filed with the City contemporaneous with the Effective Date established herein. Any substitute guarantor is subject to approval by the City, such approval not to be unreasonably withheld. (h) No Joint Venture. Nothing herein shall be deemed to create a joint venture or principal- agent relationship between the parties, and neither party is authorized to, nor shall either party act toward third Persons or the public in any manner that would indicate any such relationship with the other. (I) Waiver. The failure of the City at any time to require performance by the Grantee of any provision hereof shall in no way affect the right of the City hereafter to enforce the same. Nor shall the waiver by the City of any breach of any provision hereof be taken or held to be a waiver of any succeeding breach of such provision, or as a waiver of the provision itself or any other provlSlon. U) No Recourse Against City. Grantee shall have no recourse whatsoever against City or its officials, officers, boards, commissions, agents, attorneys, consultants or employees for any losses, costs, expenses, or damages arising out of any provision or requirement of the Franchise or because of the enforcement of the Franchise. (k) Reasonableness of Consent or Approval. Whenever under this Franchise "reasonableness" is the standard for the granting .or denial of the consent or approval of either party hereto, such party shall be entitled to consider public and governmental policy, moral and ethical standards as well as business and economic considerations. (I) Entire Agreement. This Franchise and all Exhibits represent the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and supersede all prior oral negotiations between the parties. SECTION 31 - EQUAL OPPORTUNITY EMPLOY1VlENT AND AFFIRMATIVE ACTION In the carrying out of the Construction, maintenance and operation of the Cable System, the Grantee shall not discriminate against any employee or applicant for employment because of race, creed, color, sex, or national origin. Grantee shall comply with all applicable equal opportunity employment and affirmative action requirements of the state and federal . governments. -57- 2144 SECTION 32 - INVALIDITYIMODlFICATIONS If any of the provisions of this Franchise are held invalid or unenforceable by a competent court having jurisdiction, such invalidity shall not affect other provisions of this Franchise which can be given effect without the invalid provision. To this end the provisions of this Franchise are declared severable. The invalidity of any portion of this shall not abate, reduce, or otherwise affect any consideration or obligations required of the Grantee pursuant to this Franchise. IN WITNESS WHEREOF, the parties hereto have caused this Franchise to be executed by their respective officers duly authorized in their behalf. "Grantee ~en Dated: 7 / I / { I . ,2001 CITY OF ARCADIA A Municipal Corporation "City" Ma1!~ k~ <6 l,D /07 I / .' Dated: ,2001 ATTEST: , ~:~'~ ~ APPROVED AS TO FORM: < ~p~ -58- 2144 EXHmIT A - DEFTh'ITIONS Generally, for the purposes of this Franchise, the following terns, phrases, words, and abbreviations shall have the meanings given herein, unless otherwise expressly stated. When not inconsistent with the context, words used in the present tense include the future tense; words in the plural number include. the singular number; and words in the singular number include the plural number; and the masculine gender includes the feminine gender. The words "shall" and "will" are mandatory, and "may" is permissive. Unless otherwise expressly stated, words not defined in this Title shall be construed consistent with Title 47 of the United states Code, and, if not defined therein, their common and ordinary meaning. References to governmental entities (whether Persons or entities) refer to those entities or their successors in authority. If specific provisions of law referred to herein are renumbered, then the reference shall be read to refer to the renumbered provision. References to laws, ordinances or regulations shall be interpreted broadly to cover government actions, however nominated, and include laws, ordinances and regulations now in force or hereinafter enacted or amended. "Affiliated Person" or "Affiliates" means each Person who falls into one or more of the following categories: (i) each Person having, directly or indirectly, a Controlling Interest in Grantee; (ii) each Person in which Grantee has, directly or indirectly, a Controlling Interest; (iii) each officer, director, general partner, limited partner holding an interest of five percent (5%) or more, joint venturer or joint venture partner, of Grantee; and (iv) each Person, directly or indirectly, Controlling, Controlled by, or under common Control with Grantee; provided that "Affiliated Person" shall in no event mean the City, any limited partner holding an interest of less than five percent (5%) of Grantee, or any creditor of Grantee solely by virtue of its status as a creditor and which is not otherwise an Affiliated Person by reason of owning a Controlling Interest in, being owned by, or being under common ownership, common management, or common Control with Grantee. "Administrative Officer" means the City Manager or his/her designee. "Basic Service" or "Basic Cable Service" or "Basic Service Tier" means the lowest service tier, which includes, at minimum, the retransmission of local television broadcast Signals along with any public, educational, and government access channels. "Cable Act" means the Communications Act of 1934, as amended by Cable Communications Policy Act of 1984, the Cable Television Consumer Protection and Competition Act of 1992, the Telecommunications Act of 1996, and as may be further amended from time to time. "Cable Programming Services Tier" means any tier(s) that include all video programming distributed over the Cable System that is not on the basic service tier and for which the Operator does not charge on a per channel or per program basis. -59- .2144 "Cable Service" means (A) the one-way transmission to Subscribers of (i) video programming, or (ii) other programming service, and (B) Subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service. "Cable System" means a facility, consisting of a set of closed transmission paths and associated Signal generation, reception, and control equipment that is designed to provide Cable Service within the City which includes video programming and which is provided to multiple . Subscribers within a community for the purpose of, but such term does not include: (A) a facility that serves only to retransmit the television Signals of one or more television broadcast stations; (B) a facility that serves Subscribers without using any public Right-of-Way; (C) a facility of a common carrier which is subject, in whole or in part, to the provisions of Title II' (Common Carriers) of the Communications Act as amended, except that such facility shall be considered a Cable System to the extent such facility is used in the transmission of video programming directly to Subscribers, unless the extent of such use is solely to provide interactive on demand services; (D) any facilities of any electric utility used solely for operating its electric utility systems; or (E) an open video system that is certified by the FCC. "Channel" means a portion of the electromagnetic frequency spectrum which is used in a Cable System and which is capable of delivering a television channel (as television channel is defined by the Commission by regulation). "City" shall mean the City of Arcadia, a municipal corporation of the state of California, in its present incorporated form or in any later reorganized, consolidated, enlarged or re- incorporated form. (a) "City Council" shall mean the present governing body of the City of Arcadia or any future board constituting the legislative body of the City. (b) "City Manager" shall mean the City's chief administrative officer, or any designee thereof. (c) "City Attorney" shall mean the City Attorney of Arcadia. -60- 2144 "Complaint" means a billing dispute or service call in which a Subscriber is notifying Grantee of an outage and/or degradation in picture, sound or other source quality. "Communications system" refers to a telecommunications system, cable system, or open video system. "Construction, operation or repair" and similar formulations of that term rneans the named actions interpreted broadly, encompassing, among other things, installation, extension, maintenance, replacement of components, relocation, undergrounding, grading, site preparation, adjusting, testing, make-ready, and excavation. "Control" or "Controlling Interest" means actual working control in whatever manner exerclsed, including, without limitation, working control through ownership, management, debt instruments, or negative control, as the case may be, of the Cable System, the Franchise or Grantee. A rebuttable presumption of the existence of Control or a Controlling Interest shall arise from the beneficial ownership, directly or indirectly, by any Person or group of Persons acting in concert (other than underwriters during the period in which they are offering securities to the public) of twenty-five (25%) or more of any Person (which Person or group of Persons is hereinafter referred to as "Controlling Person") or being a party to a management contract. "Control" or "Controlling Interest" as used herein may be held simultaneously by more than one Person or group of Persons. "Converter" means a device which converts Signals from one frequency to another or otherwise processes Signals for use by Subscribers. "Customer Premises .Equipment" means equipment employed on the premises of a Person (other than a carrier) to originate, route, or terminate telecommunications. . "Drop" means the cable and related equipment connecting the Cable System's plant to equipment at the Subscriber's premises. "Educational Access Programming" means any programming channel where non-profit educational institutions are the primary designated programmers. "Fair Market Value" means the price for the Cable System valued as a going concern but with no value allocated to the Franchise itself, if permitted by the then applicable law. "FCC" shall mean the Federal Communications Commission or its designated representati ve( s). -61- 2144 "Franchise" refers to the authorization granted by the City to the Grantee giving the Grantee the non-exclusive right to occupy the space, or use facilities upon, across, beneath, or over any Public Right-of-Way in the City, to provide Cable Service within the City. Such Franchise shall not include or be a substitute for: (i) any other permit or authorization required for the privilege of transacting and carrying on a business within the City required by the ordinances and laws of the City; (ii) any permit, agreement or authorization required in connection with operations on or in Public Rights-of-Way or public property, including by way of example and not limitation, Street cut permits; (iii) any permits or agreements for occupying any other property. of the City or private entities to which access is not specifically granted by the Franchise including, without limitation, permits and agreements for placing devices on or in poles, conduits, other structures, or railroad easements, whether owned by the City, including the Public Works. Services Department, or a pri vate entity; or "Franchise Agreement" means a signed and notarized statement on the part of both grantor and grantee in accordance with the provisions of the Right of Way Ordinance accepting and agreeing to all of the provisions of the Franchise herein, granted, including referenced specifications, Franchise applications, and other related material that sets forth the terms and condition under which the Franchise will operate. "Franchise Area" means the territory within the City throughout which Grantee shall be authorized to construct, maintain and operate its Cable System and shall include any enlargements thereof and additions thereto. "franchisee" refers to a Person holding a Franchise granted by City ordinance. "Government Access Programming" means any programming where local government agencies are the primary designated programmers. and programming is non-commercial informational programming regarding government/community activities and programs. "Grantee" means Altrio Communications, Inc., and the lawful successor, transferee or assignee thereof. "Gross Revenue" shall mean all revenue, as determined in accordance with generally accepted accounting principles, which is received directly or indirectly, by Grantee and by each Afftliated Person from the distribution of any Cable Service on the Cable System or the provision of any Cable Service Related Activity in connection with the Cable System. Gross Revenue shall also specifically include any revenue received by any other Person which is intended to have the effect of avoiding the payment of compensation that would otherwise be paid to the City -62- 2144 for the Franchise granted herein. Gross Revenue shall include all advertising revenue which is received by Grantee, any Affiliated Person or any other Person from or in connection with the distribution of any Cable Service over the Cable System, or the provision of any Cable Service- related activity in connection with the Cable System. Gross Revenue shall not include: (i) the revenue of any Person, including, without limitation, a supplier of programming to Grantee, (ii) the revenue of Grantee or any other Person which is received directly from the sale of any merchandise through any service distributed over the Cable System (other than that portion of such revenue which represents or can be attributed to a Subscriber fee or a payment for the use of the Cable System for the sale of such merchandise, that portion shall be included in Gross Revenue; (iii) taxes imposed by law on Subscribers which Grantee is obligated to collect; (iv) any investment income earned by Grantee; (v) advertising commissions deducted by advertising agencies before advertising revenues are paid over to City; and (vi) to the extent consistent with generally accepted accounting principles, consistently applied, bad debt write-offs. "Headend" means that central portiones) of the System where Signals are introduced into . and received from the balance of the System. "Hub" shall mean a secondary signal processing location where the signals generated at the primary Headend are combined with locally generated signals for distribution to Subscribers in the community. "Information Service" means the offering of a capability for generating, acqumng, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing, but does not include any use of any such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service. "Lease Channel" means any channel where someone other than City or Grantee is sold the rights to air programming. "Local Origination Channel" means any channel where the Grantee is the primary designated programmer. "Monitoring" or "Tapping" means observing or receiving a Signal, or the absence of a Signal, where the observer is neither the sending nor receiving party and is not authorized by the sending and/or receiving party to observe saicl Signal, whether the Signal is observed or received by visual, electronic, or any other means whatsoever. "Node" shall mean a location in a hybrid fiber optic/coaxial Cable System where light signals are converted into electrical signals in the downstream direction, and electrical signals are converted into light signals in the upstream direction. -63- 2144 "Normal Operating Conditions" shall mean service conditions that are within the control of Grantee. Those conditions that are ordinarily within the control of Grantee include, but are not limited to, special promotions, rate increases, regular peak or seasonal demand periods, and scheduled maintenance or Construction of the Cable System. Those conditions that are not in control of Grantee include, but are not limited to, natural disasters, civil disturbances, power outages, telephone network outages, and severe or unusual weather conditions. "Open Video System" or "OVS" refers to a facility consisting of a set of transmission paths and associated Signal generation, reception, and control equipment that is designed to provide Cable Service, which includes video programming, which is provided to multiple. Subscribers within a community, and which the federal Communications Commission or its successor has certified as compliant with Part 76 of its rules, 47 C.F.R., Part 76, as amended from time-to-time. "Operator" when used with reference to a Cable system, refers to a Grantee (a) who provides service over a Communications System and directly or through one or more Affiliates owns a significant interest in such facility; or (b) who otherwise Controls or is responsible for, through any arrangement, the. management and operation of such a facility. A Grantee that operates under agreement a Telecommunications System or a specific portion of a Telecommunications System to provide Telecommunications Services shall be treated as an Operator. "Outage" means a substantial or complete disruption in a service. . "Overhead Facilities" refers to electric utility and communications facilities located above the surface of the ground; including the underground supports and foundations for such facilities. "Pay Cable" or "Pay Service," "Premium- Services" means programming for which there is a fee or charge to Subscribers over and above the charge for Basic Service and the Cable Programming Service Tier(s). "PEG" includes any programming where local government agencies are the primary designated programmers and programming is non-commercial informational programming regarding government/community activities and programs, and any programming channel where non-profit educational institutions are the primary designated programmers. "Person" shall mean any natural Person and all domestic and foreign corporations, associations, syndicates, joint stock corporations, partnerships of every kind, club, business, or common law trusts and societies. "Pole Attachment Agreement" or "Attachment Agreement" shall mean any agreement with the City, with any other governmental entity, or with any public utility, relating to the Grantee's use of utility poles, ducts, or conduits. -64- 2144 "Property of Grantee" shall mean all property owned or leased by Grantee within the Franchise Area in the conduct of its Cable System business under a Fnmchise. "Public ChanneJ," or "Public Access Channel," shall mean a single channel obtained by Grantee or its designee serving the City of Arcadia for which members of the public or community organizations may provide non-advertiser-supported and non-commercial programming. "Public Property" shall mean any real property owned by City other than a Street. "Public Right-of-Way" shall mean the surface, air space above the surface, and the area below any public Street, road, highway, freeway, lane, path, public way, alley, court, sidewalk, boulevard, parkway, drive, bridge, tunnel, park, parkway, waterway, easement or right-of-way now or hereafter held by City, dedicated for use by the City, dedicated for use by the general public, or dedicated for use with Cable System operations. Public Rights-of-Way for the purpose of this Ordinance do not include buildings, parks, poles, or similar facilities or property owned by or leased to the City, including, by way of example and not limitation, structures in the Public Rights-of-Way such as utility poles and light poles. "Resident" means any Person residing in the City. "Residential Dwelling Unit" or "Dwelling Unit" shall mean a home, mobile home, condominium, apartment, cooperative unit, and any other individual dwelling unit. "Regional Area" shall mean Grantee's entire Subscriber population served by the Grantee or as is defined by Grantee's various ad sales and home shopping entities as it pertains to Franchise fee calculations. "School" means any public educational institution. "Senior Citizen" any head of household of the age of 65 years or older. "Service Related Activity" shall mean any activity or function for which Grantee receives revenue from any user or Person other than a Subscriber and which is associated with the provision of cable service over the Cable System. Service Related Activity includes, but is not limited to, gross revenues from advertising sales, home shopping commissions, the sales of products or services, program guide payments, payments from the lessees or purchasers of leased access channel capacity, payments for studio and other facilities or equipment rentals, billing services, audience promotions, and the installation, lease, rental or sale of equipment. . -65- 2144 "Service Tier" or "Tier" means a category of Cable Service or other Services provided by the Company and for which a separate rate is charged by the Grantee other than per channel or per event programming or legitimate packages of per channel or per event programming. "Signal" shall mean any transmission of radio frequency energy or optical information. "State of the Art" shall mean that level of transmission facilities, technical performance, capacity, equipment, components, and service equal to that which has been developed and demonstrated to be more modern than generally accepted and used in the cable communications industry for comparable areas of equivalent population and market conditions, provided that it is economically feasible in the service area at any given time throughout the term of a Franchise. "Streets" shall mean any Street, road, highway, freeway, lane, path, alley, court, sidewalk, parkway, public utility easements, or drive which is owned by a public entity or as to which a public entity has an easement for Street purposes, and with respect to which, and to the extent that, City has a right to grant the use of the surface of, and space above and below in connection with, this Franchise for a Cable System. "Subscriber" shall mean any Person who pays for cable serVice provided by Grantee by means of the Cable System. "Transfer" means any transaction in which: (i) all or a portion of the Communications System is sold or assigned (except a sale or assignment that results in removal of a particular portion of the facility from the Public Rights-of-Way); (ii) there is any change, acquisition, or direct or indirect transfer of control of the Franchisee; or (iii) the rights and/or obligations held by the Franchisee under the Franchise are transferred, sold, assigned, or leased, in whole or in part, directly or indirectly, to another party. It will be presumed that any transfer or cumulative transfer of voting interest of 10 percent or more is transfer of Control within the meaning of (ii). "Two-Way Capability" shall means the ability to receive and transmit Signals of any- type from a Subscriber's Converter back to the Grantee's Headend or other facility. "Upstream Channel" means a channel through which television Signals emanating from a Subscriber's location or the location of any other entity except the main transmitting facility of the Grantee is transmitted via the Cable System to the Headend or other appropriate point.. -66- 2144 A~ COM M U N I CAT ION & INC. fu 1+ If~rr c3 13 December 2000 William Kelly City Manager, City of Arcadia 240 W. Huntington Drive Arcadia, CA 91007 Dear Mr. Kelly: I am writing to introduce you to Altrio Communications, Inc., a new company led by experienced telecommunications executives that would like to offer advanced telecommunications services to the residents of Arcadia. Altrio is focusing exclusively on the Southern California market. We plan to build an advanced fiber optic and coaxial cable infrastructure to deliver a full complement of voice, video, and hi- speed data services to Arcadia families. Altrio will provide competitive local and long distance telephone service, both analog and digital multichannel video services, and very reliable, high- speed internet access. Altrio has closed its initial capital equity funding in the amount of $125 Million. On November 8, the Federal Communications Commission granted our application to serve as an open video systems (OYS) provider. The California Public Utilities Commission is processing our application to operate as a Competitive Local Exchange Carrier (CLEC). The company has hired its senior engineering and management staff and has already taken delivery of its first shipment of fiber optic cable. Our investors are large private equity funds and are experienced in the telecommunications area. 'They are: the Frontenac Company, the Bessemer Trust, the Soros Private Equity Fund, the Salomon Smith Barney Private Equity Fund, Bank of America Capital Partners, Royal Banks of Canada Capital Partners and Grove Street Advisors (which invests for CalPERS). 1 have enclosed a proposal for Altrio to provide services as an Open Video Services ("OYS") provider that I hope you will favorably consider. This information is based on an application that we have already filed with the City of Pasadena, and we believe it will assist you in analyzing our legal, technical and financial qualifications. Of course, we expect that you will have additional requirements and information needs - we are anxious to work with you to develop the appropriate operating agreement and regulatory structure that will enable Altrio to bring your residents the benefits of com etitive, full-service telecommunications. We look forward to working with you and you this exciting new venture. id G. Roz.zelle President and Chief Executive Officer ., Cindy Rowe, Management Services Officer 801 N. Brand Blvd., Suite 400 Glendale CA 91203 2144 -{, 1- Alt~ . eOIrllMUNICATIONS INC. Application . to the City of Arcadia for Altrio Communications Inc. to provide . Open Video Services o 801 N. Brand Blvd" Suite 400 Glendale CA 91203 2144 -Co r-- . 1. The identity. of the applicant, including all affiliates of the applicant. The applicant is "Altrio Communications, Inc." ("Altrio"), a Delaware domestic corporation with headquarters at 801 N. Brand Boulevard, Suite 400, Glendale, CA 91203. Altrio Communications, Inc. is privately held by Altrio Communications, LLC and does not have any affiliates at this time. 2. Copies of FCC Form 1275, all "Notices of.lntent" filed under 47 CFR 76.1503(b)(1), and the Order of the FCC, all of which relate to certification of the applicant to operate an open video system in accordance with Section 653(a)(1) of the Communications Act and the FCC's rules. Please see the following attachments: Attachment 2.1: FCC Form 1275 frorn Altrio Communications, Inc.; including the "Notice ofIntent" filed under 47 CFR 76.1503(b)(1) anda list of all communities that were served. Attachment 2.2: A copy of the Order of the FCC of November 8, 2000 certifying Altrio to operate as an Open Video Systems provider. 3. The area or areas of the City that the applicant desires to serve. Altrio plans to serve residential areas of the City of Arcadia _ (,,'1 - Allrlo Communications. Inc. Proposal to the City of Arcadia Page 1z 144 4. A description of the open video system services that will be offered by the applicant over its existing or proposed facilities. The advanced telecommunications network that Altrio plans to construct to serve Arcadia residents is a new design that is unlike the existing telephone and cable television networks in several key areas: . . The network v\'ill serve primarily residential. customers with services priced and designed to be consumed by individuals and families - not businesses. · Unlike the existing telephone network, Altrio will continuously monitor the telephone service availability at the customer's house, and thus will repair most problems before they affect a customer. . The plant will offer hundreds of video choices - including analog and digital channels, PEG Access channels from the City of Arcadia, and video-on-demand services. In addition, Altrio will offer a full range of telephone services and Internet access at speeds ranging from those offered by existing telephone companies (such as "DSL"), to higher rates that are only available to large businesses today. .. · Altrio's network will be "open" so that a customer can choose a non-affiliated Internet Service Provider, or an ISP service offered by Altrio. . The plant will be designed to evolve to a fiber-to-the-home network when the. consumer equipment is available to support the architecture and customer demand exceeds initial capacity. . Residential customers will be offered virtually all telephone, video, and data services available in the market today from one. provider. Altrio will provide "one-stop shopping" convenience for its customers. Moreover, consumers that have chosen not to participate in the new information age because of a lack of experience with data services will be Altrio's specialty. The company will promote "information equality" among all of Arcadia's residents. 5. A description of the transmission medium that will be used by the applicant to deliver the open video system services. Altrio plans to construct an HFC (Hybrid Fiber Coax) network, capable of expansion to a fiber-to-the-home design as the network and market evolves. The network is primarily optical, meaning that signals floWing between Altrio's central processing facility and individual customers are carried over optical fibers, with the exception of the final mile or so, where they are carried over coaxial cables. Ultimately, all information carried by the network will be transmitted solely on optical fiber. Very high reliability is required for primary telephone service - it is essential to our customers that their telep~one work even when the power is out. As a result, our video and data customers, because they are to be served over the same network, will experience reliability far in excess of that offered by typical cable television systems. This highly-reliable service availability is assured through a variety of means. First, the central processing facility is equipped with a totally-redundant power system. Most of AUrio Communications. Inc. Proposal \0 the CIty of Arcadia Poge ~144 . -76- the signal processing equipment is also redundant, with automatic switching and alarm reporting to a state-of-the-art Network Operations Center that is staffed continuously. Information. to and from regions within Altrio's service area is passed through strategically-located "hubs." From hubs, the signals are transported to "nodes" within each neighborhood, where the information is converted to transport Llu'ougJ:i short coaxial cables to its customers. Reliability in the distribution network is assured by fully-redundant optical transport between the headend and the hubs and between hubs and individual nodes. That is, physically diverse paths are used in each case, with the surviving path selected should a fiber cable be cut or equipment fail. Further, because of the low signal loss inherent in optical fibers, no amplification is required between facilities. Both the hub equipment and power system are fully redundant. . Each node, the coaxial equipment between the node and customers' premises, and the network termination equipment at homes will all be powered by a "hardened" backup power system located near the node. All of these levels of redundancy are supported by a network status monitoring system that will continuously monitor the status of hubs, nodes, power supplies and Altrio- furnished terminal equipment; so that any operating discrepancies can be promptly addressed by field personnel. Altrio will carry two broad classes of signals on its network: those carried in common to all, or large groups, of homes, and those carried to and from individual customers. Examples of the first are broadcast television channels and public, educational and govemmental access channels (PEG). Examples of the second are telephone conversations and subscriber interactions in purchasing individual on-demand movies. Altrio's total information capacity, among the highest in the broadband industry, will be . divided between these two categories, allowing a rich menu of the most popular video programming to be combined with many individualized, interactive services. A1trio offers exceptional, effective information capacity by use of a high level of digital transmission technology, combined with the ability to multiply its overall information throughput by dividing its subscriber base into ever-smaller groups as the demand for information grows across the network. -71- Altrio Communications. Inc. Proposal to the City of Arcadia poge ~ 1 44 6. Information in sufficient detail to. establish the applicant's technical qualifications, experience, and expertise regarding the ownership and operation of the open video system described in the application. The executive management team of Altrio Communications consists of Dave Rozzelle, Chief Executive Officer; Ted Liebst, Chief Financial Officer; and Dave Large, Chief Technical Officer. Messrs. Rozzelle, Liebst, and Large are the former principals of Media Connections Group (MCG), a telecommunications consulting firm that has done extensive work with cities in Southern California and with the industry both domestically and internationally. Prior to MCG, they held similar executive positions at Interrnedia Partners, a cable television multiple-system operator (MSO) that provided services to over 750,000 customers in eleven states. While at MCG and InterMedia, Large, Liebst, and Roz.zelle oversaw the construction,.maintenance and operation of thousands of miles of broadband plant. At MCG, they designed and provided project management support for a number of municipal fiber networks. Between them, the founders of Altrio have over 75 years of experience in the telecommunications industry. Specifically, and prior to the establishment ofMCG, each of Altrio's founding principals have acquired substantial experience and outstanding expertise in the course of their careers: . David G. RozzeJle-Executive Vice President Chief Executive Officer Mr. RozzeJle was a partner and chief operating officer of a major cable operator, and a partner in a noted Washington DC communications law firm. His background provides an exceptional foundation for operation of an advanced broadband network. As Chief Executive Officer, Cable Operations for InterMedia Partners, he supervised many divisions, including engineering, marketing, programming, human resources and legal affairs. In his experience as a partner v,~th Fletcher, Heald & Hildreth (FH&H), he practiced before the FCC and specialized in litigation of a wide range of technical issues, arguing cases before the US Court of Appeals and the US Supreme Court. Rozzelle is experienced in copyright and music licensing, has been active in various industry groups, and is a frequent speaker at industry seminars and conferences. . Edward G: Liebst-Executive Vice President Chief Financial Officer Mr. Liebst has been active in the telecommunications business since 1976. In addition to his role as chief fmancial officer at InterMedia Partners, he served as a vice president of a major bank's media lending area, and as an officer and partner in a venture capital fund dedicated to media and telecommunications investments. With a career both in cable television operations and investment and commercial banking, Liebst developed the acquisition and financing analysis and capital structures for multiple partnerships, and haS supervised all levels of corporate fmancial matters including treasury, capital acquisition, accounting, budgeting, billing and insurance management. As an officer in both investrlient and commercial banks, he has performed the analysis, due diligence, structure and documentation of many media and telecommunications investments. Altrio Communications. Inc. Proposal 10 the City of Arcadia Page 2144 -72 - · David J. Large-Executive Vice President and Chief Technical Officer Mr. Large has 37 years of experience in engineering and its management, with a specialty in broadband networks. A Caltech graduate, Large is equally experienced in product design, evaluation, and operating aspects of telecommunications businesses. For 15 years, he served as chief technical officer . for various cable television companies ranging from the most sophisticated metropolitan market to small stand-alone, rural systems. He has also developed specifications for video portions of "fiber to the curb" products, and has designed microwave and CATV measurement instrumentation, holding three patents. Large is an active leader in various industry engineering associations and standards setting organizations, and is the noted co-author of the definitive textbook "Modern Cable Television Technology." In addition, Altrio has a cadre of very experienced senior managers, including: . Stephen R. Ross, Senior Vice President and General Counsel, is the former Chief of the Cable Television Branch atthe FCC with over 31 years of experience in the field. Mr. Ross was the Chief of the FCC's Cable Television Branch, responsible for regulation of all of the cable television industry. Most recently he was the managing partner for Ross and Hardies, a leading telecommunications law firm, representing cable television operators, programmers, investors and technology interests. Mr. Ross has vast experience in all facets of the domestic and international telecoinmunications industry. He has been a featured panelist and speaker at many domestic and international conferences and is recognized as one of the most knowledgeable, experienced individuals in his field. . Brenda J. Trainor, Vice President, Public Policy, is a former municipal telecommunications official in Austin, TX, Los Angeles, CA and Clark County, NV; and a former Director of the Board of the National Association of Telecommunications Officers and Advisors (NATOA); and a consultant to cities, counties, economic development authorities and state agencies. A noted writer and lecturer, she has designed and taught workshops and authored numerous chapters and articles about telecommunications and public policy. · Bill Kostka, Vice President of Engineering, most recently managed the cable modem certification program at CableLabs. He has also designed digital video settop boxed and cable modems for Hewlett Packard and has experience 'with several cable television operating companies. · Eric Hart, Vice President of Outside Plant, is an engineer with over twenty years experience in broadband plant construction, maintenance and technical operations. He has previously worked for Cable One, Charter Communications, lnterMedia Partners and various other cable companies. · Ron Kirkeeng, Senior Vice President of Operations, is a 25-year veteran of the cable television industry, including service as a system general manager and a regional operations manager; most recently he was CEO of the Cable Communications Cooperative of Palo Alto, Inc. He held various positions at -73- Allrio Communications. Inc. Proposal to the City of Arcadia PageZ144 InterMedia Partners, including Regional Director of the Georgia/Carolinas Region and Regional Manager for the Midwest Region. . Richard Jennings, Senior Vice President of Human Resources is the former executive director of Hollywood Supports, the entertainment -based nonprofit organization founded by Barry Diller and Sid Sheinberg. Jennings was a practicing attorney for 14 years, including positions at Paramount Pictures and O'Melveny & Myers. He has served as a mediator for workplace and business disputes, and has been a settlement officer for the California Court of Appeals, Second Appellate District. A graduate of Stanford University and Columbia University School of Law, Jennings has served as a consultant on executive recruiting, employee relations and training programs, and has delivered hundreds of seminars to entertainment industry personnel, law enforcement officials, and federal agency employees. . Wescott Guarino, Controller, is a Certified Public Accountant with significant experience in managing accounting systems and financial operations. His career includes financial management related to media and software companies. His experiences include preparation of business and financial plans, development of accounting policies and procedures; budgeting and implementation, financial reporting, auditing and taxation. Altrio Communications, Inc. is extremely proud of its founders, employees and investors who represent some of the industry's most outstanding leaders. -7'1- ARllo Communications. Inc. Proposal to the City of Arcadia Page~144 7. Financial statements. prepared in accordance with generally accepted accounting principles that demonstrate the applicant's financial ability to: a) Construct, operate, maintain and remove any new physical plant that is proposed to be constructed in the City. b) Comply with the City's public, educational, and governmental access requirements. c) Comply with the City's requirement for payment of fees as may be required. Unlike some other alternative telecommunication service, or broadband, providers, Altrio has focused its business plan on the Los Angeles area market, including the City of Arcadia. Altrio has raised $125 Million in initial capital, dedicated to the construction of its network in this geographic area. Altrio's investors include Frontenac Company; Bessemer Trust; Soros Private Equity Partners; Salomon Smith Barney Capital Partners; Royal Bank of Canada Capital Partners; Bank of America Capital Partners; and Grove Street Advisors (CalPERS). The amount of equity already raised will take the company to operating break-even without supplemental debt or equity under its business plan. This plan includes the construction of distribution plant at an average rate of one mile per working day, and for service to be offered to the first residential customer in May 2001. Altrio will complete construction of its network in Arcadia within ten years. If competitive conditions permit, Altrio intends to pass every residential home in Arcadia. Altrio is committed to be in full compliance with the City's regulations, including those for PEG Access and in payment of franchise fees. Additional information can be found attached: Attachment 7.1: Financial statements Attachment 7.2: An organization chart describing ownership of the company Attachment 7. 3: A list of equity investors with addresses ~7~- Allrio Communications. Inc. Proposal to the City of Arcadia Page 21 44 8. An accurate map showing the location of any existing telecommunications facilities in the City that the applicant intends to use, to purchase, or to lease. Altrio has not yet entered into any agreements with respect to the purchase or lease of facilities within the City, however it intends to make arrangements for the acquisition or use of facilities, conduit, and real estate as required for execution of its business plan. 9. If the applicant's operation of the open video system will require the construction of new physical plant in the City, the following additional information must be provided: a) A preliminary construction schedule and completion dates. Altrio has not yet prepared a detailed schedule of construction, but will submit plans in compliance with the City's permitting and regulatory requirements. b) Preliminary engineering plans, specifications, and a network map of any new facilities to be constructed in the City in sufficient detail to identify: (i) The location and route requested for the applicant's proposed facilities. (ii) The locations, if any, for interconnection with the facilities of other telecommunications service providers. (iii) The specific structure, improvement, facilities, and obstructions, if any, that the applicant proposes to remove or . relocate on a temporary or permanent basis. A sample design map is attached for your infonnation. This sample provides the level of detail. that we will submit to Arcadia, though this sample is not of an Arcadia. neighborhood. Attachment 9.1: Sample design map c) The applicant's statement that, in constructing any new physical plant, the applicant will comply with all applicable ordinances, rules, and regulations of the City, including the payment of all required permit and processing fees. Altrio's network is designed to be constructed within existing public utility rights-of-way, with the possible exception of hubs that may sometimes be built in leased or purchased facilities. The physical distribution network will variously consist of multi-strand fiber- -7"'- Allrio Communications. Inc. Proposal to the City of Arcadia page2"144 optic cables, coaxial cables, or both which will be either installed in below-ground ducts or lashed to supporting steel wires ("strand") between overhead utility poles. In California, overhead construction is governed by California Public Utility Commission General Order 95 ("G095"), while its companion 00128 governs underground construction. Wiring on and in homes is governed by the requirements of the National Electrical Code and/or local wiring codes. The FCC, in Code of Federal Regulations 47, Part 76, specifies the final electrical' performance requirements. Altrio will be fully. compliant with or exceed these requirements and all those of the City of Arcadia's applicable ordinances, rules, and regulations. In general, G095 requires that telecommunications ciuTiers be placed at least 12 inches apart and a specified minimum distance above the ground and below high-voltage transmission lines to assure safety. Occasionally, existing wires need to be rnoved to accommodate a new carrier on a pole, a process knoWn as "make-ready." This may consist of moving other wires slightly higher or lower or, more rarely, by adding a cross- arm. Altrio will cooperate with all other carriers in this process. Active electronic equipment in the overhead plant - nodes and coaxial amplifiers - are enclosed in boxes whose sizes vary from that of a small lunch box to a bread box. Passive devices, mostly subscriber taps, are a few inches on each side. All of these devices are hung from the supporting strand along with the cable. Underground cables may be constructed in existing ducts, to the extent they are reasonably available, or in ducts installed by Altrio. The founders of Altrio have long advised cities in telecommunications matters and are serisitive to concerns surrounding the construction of underground facilities, ranging from damage to streets to disruption of traffic during construction. Altrio will fully cooperate with local authorities to mitigate the impact of construction of its network. Electronic equipment associated with underground plant will generally be placed in pedestals,. similar to those now used by cable television operators and telephone companies. . Altrio will work closely with property owners to select locations that have the least visual impact. Hardened node power supplies for both overhead and underground plant will consist of utility-powered electrical supplies backed up by a combination of batteries and natural- gas-powered emergency generators (which operate only to power the network during utility power outages). These devices, which are the size of a typical telephone ""ire cabinet, will be placed in pedestals near nodes, where they are unlikely to be damaged and where there is reasonable access to natural gas utility lines. Generator pedestals are available in a variety of physical configurations and Altrio will work with local authorities and nearby homeowners to select the most acceptable types and locations. When operating, either for occasional testing or during a power outage, the noise from these units is sirnilar in level to a modem home vacuum cleaner and is often masked by ambient street-side noises from other sources. -71- Allrlo Communications. Inc. Proposal 10 the Ciiy of Jo.rcodia Page ~144 In summary, A1tria will construct a network with superior information capacity and reliability. Through this network, we will offer fully competitive voice, data and video services, as well as services that are not currently offered by any incumbent. The network will be constructed completely within existing .public utility rights-of-way, in full compliance with national, state and local standards and regulations, and in such a way as to minimize disruption to the community and its citizens during its construction and operation. 10. The information and documentation that will be provided to customers and that describes customer service policies. Altrio will comply with all customer service requirements of the FCC, the State of California, and the City of Arcadia as are described in its ordinances. These requirements and standards will be incorporated into Altrio's policies, customer materials, and employee training materials upon publication. 11. Such additional information as may be requested by the City Manager. Altrio stands ready to respond to any additional information requests of the City Manager. -78'- Allrio Communications. Inc. Proposal 10 the City of Arcadia Page J2l144 S & R COpy . OPEN VIDEO . SYSTEM CERTIFICATION APPLICATION ATTENTION: CABLE SERVICES BUREAU OCOll~ni'.1 -7q - 2144 GARDNER, CARTON & DOUGLAS r301 fit STIH:ET, N,W. SUITE: 900. E:AST TOwER WAI'TER'$ DIRECT Ot"L NrJw8ER WASHINGTON. O.C. 2000' CHIC.AGO. 1w..INOIS TIlOMAS J. OOUCm:R'ry.1R.. ('102) 401- 7164 t<!o,ghmy@(od.eoUl (202) 40e.".00 . '"x.: (2.02.) 2.88~lS04 tl'\lTEA ~ET: gedlawdC09.C'cLeom ...;:....~" wo,c L... w ("io~ "C.LO....L NETWOJb( 0'" INOr.,.. CNOEIIlT "IRllII8I..CC...TmlH 30 ~OlJHTJU!1j Ocrober 30, 2000 AECE!VE:tJ OCT 2 a zaoo Via Hand Delivery I8DIu. CCIIIUll:o.l1!l'O --Iltl... lRll< "" lie &:::mul' Ms. Magalie Roman Salas Secretary F edera1 Communications Commission The Portals 445 12th Street, S.W. Washington, D,C. 20554 .Re: CABLE SERVICES BUREAU ALTRlO COMMUNICATIONS, INC. FCC FORM 1275 - OPEN VIDEO SYSTEM CERTIFICATION OF COM1'LlANCE Dear Ms. Salas: Transmitted herewith in duplicare, on behalf of Altrio Communications, Inc., is an application on FCC Fonn 1275 certifying its compliance with the Commission's rules concerning the proposed construction and operation of lID open video system to provide setvice to communities in all or portions of Los Angeles, Orange and Ventura Counties, California. . Also transmitted with this application is an roM-formatted diskette whicb contains 1h.e above-referenced application, and all exhibits thereto, in Microsoft Excel and Microsoft Word formats. A complete copy of this application was setved via Uoiu:d States first class mail, pos~e prepaid, on all communities identified on the certificate of service attached to this application. Please dale-stamp the enclosed "S&R" copy of this filing and rerum it to the courier OCQ1/J4,.2'1.1 -~- 2144 GA.RONER. CA.RTON ~ DOUGl..AS Ms. Magalie Roman Salas October 30, 2000 Page 2 delivering this package. Should any questions arise with regard to this filing, please con~t the undersigned. Respec~l!l}brqi~ /~1 .4!J rJ?/; nhi:tf~ ,1ft> Counsel to Altrio Communications, Inc. Enclosures cc: Bureau Chief, Cable Services Bureau (w/enclosures and diskette filing) Federal Communications Commi~sion The Ponals, 445 Twelfth Street, S.W. Room 3-C830 Washington, D.C. 20554 DCD1.!H72,l.1 2 - ZI- 2144 ~era] Communications CclmmisSlcn Washington. C.c. 205S<! ~ try OMS 3060-0700 FCC FORM 1275 CERTIFICATION FOR OPEN VIDEO SYSTEMS .-..-..- J\r~~yq)1.V:riDlQmi"jijo'O_Rif~'f~~~~g~r~~~~;;...~re7:alir:i)t.~--Wi.S~";: ~_;:~~~~;mmm~imrn~~~-;T"i.~~~~ Company Name: Altrio Communications, Inc. Contact Person: Stephen Ross < Mailing Address: 801 N. Brand Blvd. 5uite40D Oty: State: Zip Code: Glendale CA 91203 Phone Number: Fax Numller: 818-552-4258 818-54E -7578 -_.;._- \:a~~1Att.iitb3~~Sti\:~mertti.ijf~&H"Eers:mP$~~n'C'~in9iall~"a~entit1es;;!~'~~ ;~~~;#I?;i.';'~~!,~~~;i}ik~~~:f~~~~~r~A~~~;~t~~~ :c.m:niniillm;;ai:1oreDiii~a "---. .- ')~se:iitatioi\s:;;~~jf:'~~f{~~~-tJ.~:i1:"':;;;-:?:::ii,.~1.~';':-~,~~:.=i.6jr~::~~~~~~~~ Yes No N/A 1. If you are a cable operator applying for certification within your t:llble mnchis, area, X are you qualified to perate an .open video system under 47 C.F.R. S 76.150t? 2. Do you agree to comply and to remain In compliance w~h each of the CDmmi: sian's X I regulations in 47 C-F.R. !is 76.1503, 76.1504, 76.1506(m), 76.1508, 76.1509, an< 76.1513? 3. Do you agree to comply with the Commission's notice and enrollment requirenents: X I for unaffiliated video programming providers? 4. If applicable, do you agree to file changes to your cost allocation manual at le:!st X 60 days before the commencement of service' o~~ St:em'rlnforma'tio-h"'H~~:'4~~~~:-':'1~~~~~~~~~~lt~~~~~~;[4:;J~~~~t~~u~-4~:t~~ ;Jf~15~:E!~~7~-Lt!f~~~~~]~~~~tiJ~~~~,"~J~f~~~~lti}i~ 1. Provide a general description of the antidpared communities or areas to be Sl:l\Ied upon completion of the system: See Exhibit n 2. Anticipated Digital Capacity: 4. If Switched Digital; Aritidpateo''' Number of Channei Input Ports: See Exhibit III See Exhibit m 'e'WI.Ernfica6oi1;stateme'n~~:~Hf;.fa~~~~~~~~tEi:~$"~5~~:~E.j~~~~~~E~J;~~~t15:S~~~~~';~~~:-~.f&.t~ WILLFUL FALSE STATEMEtITS MADE ON nus FORM ARE PUNISHABLE BY FINE ,\ND/OR iM?RI50NMEIIT U.S. CODE TITLE 18, SECTION 1001 , AND/OR FORFEJ11JRE U.S. CODE TITLE 47 SECTION 503 To the best of my knowledge and belief, the representations made herein are aaurate according to the most recent information available. . Signature: f\. ~ "J Date: 10 ( ., }OO !.- C/ FCC Form >275 _~2..-- AL TRIO COMMUNICATIONS, INC. FCC FORM 1275 OVS CERTIFICATION FOR GREATER LOS ANGELES OCTOBER 2000 EXHIBIT I STATEMENT OF QUALIFICATIONS AND mVNERSHIP Altrio Communications, Inc. ("Altrio") is a domestic corporation having a headquarters at 801 N. Brand Street, Suite 400, Glendale, CA 91203. 1. Statement of Qualifications. Altrio qualifies under Rule 76.1501 as an OVS operator in the communities listed in this application because Altrio is not presently a cable operator in any of the communities covered by this certification. II. Statement of Ownership and Affiliated Parties. The ov,nership of Altrio is distributed among the following persons and entities in the percentages indicated: Owner Percentage . Frontenac Company 22.8 Bessemer Holdings 22.8 BancAmerica Capital Investors SBIC II, L.P. 6.5 RBC Equity Invesrments, Inc. 6.5 SFM Domestic Investments LLC 12.9 Quantum Industrial Partners LDC 0.1 SSB Capital Partners (Master Fund) 1, LP 6.5 Grove Street Advisors 3.3 David G. Rozzelle - ? ).- David J. Large 5.2 DCOI/346972.1 -~3-- 2144 Edward G. Liebst, Jr. Various unrelated entities The following are officers and/or directors of Altrio. Officers and Directors David G. Rozzelle David 1. Large Edward G. Liebst, Jr. Walter Florence James Crawford, III Edward Park Adam Godfrey Colin Raymond DCOl/346972.1 -rtf - 5.2 3.0 Position(s) CEO, President, Director Executive Vice Pr.esident, ChiefTecbnical Officer, Director Executive Vice President, Chieffinancial Officer Director Director Director Director Director Director 2144 EXHIBIT C CITY'S UNDERGROUND CONSTRUCTION REQUIREMENTS 1. INSTALLATIONS IN PARKWAYS A. All conduit installations in parkways must have a minimum cover of 18 inches below the finish grade. B. All existing improvements in parkways, including landscaping and sprinklers, must be protected from damage, or, if damaged, restored to pre-Construction conditions. All repairs and replacements must be made in-kind. C. . All service boxes and vaults must be set to finish grade on six inches of one- inch crushed rock. D. No access to service boxes or vaults may be located within the sidewalk, wheelchair ramps, or drive apron areas unless authorized by the City Engineer. E. All service boxes installed on hillsides in the Public Right-of-Way are required to be installed on a level concrete pad with a retaining wall constructed around the hillsides of the service box. All retaining walls shall be approved by the City Engineer. II. INST AliA TI0NS IN ROADWAYS A. Conduit may be installed at locations shown on plans submitted by Grantee after approval by the City Engineer. If a location is available, the preferred alignment is two feet from the outer edge of an existing gutter. Where it cannot be located on the preferred alignment, the location must be approved by the City Engineer. Removal and replacement of all damaged pavement between the trench and the edge of existing roadway pavement is required on all Streets. The edge of the trench must be a minimum of one foot from the edge of the gutter. Exceptions to this requirement must be approved by the City Engineer. B. Concrete pavement serving as bus pads, spandrels, cross gutters, or local depressions may not be cut. At these locations, the conduit must be bored or jacked. C. It is mandatory to maintain a straight alignment. Routing of conduit at bus pads, and any other protrusions beyond the gutter edge, must be approved by the City Engineer. Some installations may require locations in the parkway. Locations directly above or in conflict with existing utilities are not permitted, unless approved by an agreement with the affected utility. -85- 2144 D. Open-cut transverse trenches are not allowed within Streets except at intersections, unless otherwise provided. To serve customers on the other side of a Street, a parallel line on the opposite side of the Street must be installed. An alternative to this procedure is mid-block crossings installed by jacking conduit under the Street. If the conduit is to be jacked under the Street, Grantee must abide by the following guidelines unless otherwise directed by the City Engineer: 1. Crossings must be at least 150 feet apart. 2. Jacking pits must be in the parkway adjacent to the main cable trench. E. Conduit must be installed at a consistent depth throughout a block with a minimum cover (below the established edge of the gutter) of 30 inches in all Streets and alleys. ill. ABOVE-GROUND SERVICE BOXES OR VAULTS A. Above-ground service boxes or vaults are not permitted in the public rights-of- way without prior consideration of the need, which consideration will include industry technical standards and the safety and aesthetics of the placement. B. Above-ground service boxes or vaults may not be installed without the prior approval of the Public Works Services Department. Landscaping and irrigation requirements may be imposed by the Public Works Services Department. C. Above-ground service boxes or vaults must be properly maintained for safety and aesthetics reasons in accordance with the following procedures: I. Safety repairs must be completed within 24 hours after discovery of the need for such repairs by the Grantee's Personnel or notification from the City Engineer or other designated representative of the City. ? Grantee must provide routine maintenance (e.g., pamtmg, leveling, service box replacement, fastening to base) within.10 working days after the discovery of the need for such maintenance. by Grantee's Personnel or notification from a resident, the City Engineer, or other designated representative of the City. 3. Grantee must patrol all areas of the Franchise service area having above-ground service boxes or vaults on a regular basis, at intervals not in excess of three months, to inspect for damage and to determine the need for any required maintenance. "86- 2144 D. City and Grantee will meet periodically to discuss potential locations where existing above-ground service boxes or vaults can be eliminated, or converted to f1ush- mounted enclosures, without compromising the technical operation and reliability of the Cable System. IV. PERMITS A. All work within the public rights-of-way must be conducted under proper permits from City. B. An excavation permit must be obtained for each increment of work, and inspection must be requested at least 24 hours prior to any excavation. All inspection costs will be charged directly to the Grantee. C. Plans for all work must be submitted to and approved by Public Works Services Department prior to any excavations. D. Above-ground power pedestals must be clearly delineated on the plans at the time they are submitted for review. Review and permitting for power pedestals will be conducted simultaneously by Public Works Services and by the Southern California Edison Company in order to avoid conflicts. . V. PRE-CONSTRUCTION A. A pre-job meeting must be scheduled prior to start of work at each permitted location as determined by the City Inspector. Representatives of the Grantee, including its contractors, and Public Works Services must be included in these pre-job meetings. Grantee must call for inspection at least 24 hours before starting any work. B. Telephonic notices must be provided to the Underground Service Alert (USA) at least two working days prior to starting work on any permitted project. Grantee must have an approved permit from Public Works Services before contacting USA. C. All utility services must be marked prior to excavation using chalk-based paint (such as "AERVOE" brand available from Surveyor's Services at (714) 546-0606)) with a visibility life not to exceed three weeks. D. Where practicable, affected residents must be notified by the Grantee in writing not Jess than 48 hours prior to excavation on their Streets and in the Public Right-of-Way. -87- 2144 VI. CONSTRUCTION. A. Compliance is required at all times with all provisions of the latest edition of the Work" Area Traffic Control Handbook (WATCH) and the latest edition of the "Standard Specification for Public Works Construction - Green Book," including any supplements. B. Except in the event of an emergency, no excavations may be made by Grantee between December 26 and April 16 and between September 23 and November 6 within Street rights-of-way in those areas of the City highlighted on the Racing Day Schedule on file in the office of the City Engineer. C. Open-trench protection, and noise and dust curtailment methods, acceptable to the City Inspector, must be provided. D. Pavement cuts and restoration must conform to City's standard plans for asphalt pavement restoration and concrete pavement restoration. E. All trenching activity that is commenced each day (?) in the Street must be backfilled to a depth specified by the City Inspector at the end of the day (?); final resurfacing must be completed within five working days on all Streets and alleys. Final roadway clean-up must be completed within five days following resurfacing. Pinal clean- up of vault installations and other work behind the curb must be completed within 10 days following roadway resurfacing. F. Grantee, or its contractor, must designate a project superintendent to handle field operations. G. If utility services must be exposed, the trench must be hand-excavated to the service line after saw-cutting pavement. H. Residents must be notified iminediately of any damage affecting their property, and repairs must be promptly made. Where practicable, same-day repair of damaged utility services is mandatory. VII. MISCEllANEOUS A. Where field conditions are such that these Underground Construction Requirements are conflicting or apparently prevent progress, all work will cease until modified specifications are approved in writing by the City Engineer. B. Grantee is to deliver a CD ROM with as-built drawings of installations in AUTO CAD on City Base Parcel Map to fit existing GIS System. The delivery of as- builts shall be updated every six (6) months. -~g- 2144 CERTIFICATE OF CLOSING This Certificate of Closing is issued pursuant to Section 3(a) of that certain Franchise Agreement (Franchise) dated June 19, 2001 by and between the City of Arcadia and Altrio Communications, Inc. This Certificate of Closing is issued to certify that the documents listed below have been delivered or acts performed as represented or made known to the undersigned. This Certificate of Closing shall not be deemed to be a representation or warranty as to the truth of the facts stated within such documents or the authenticity thereof, and this Certificate of Closing shall not be effective to the extent based on fraud, misrepresentation, or other wrongful conduct. A signed, written acceptance by Altrio Communications Inc., to be bound by and comply with and to do all things required by the Franchise B Section 3(b) of the Franchise Bonds n Section 9(b) of the Franchise Certificates of Insurance n Section 15(c) of the Franchise (Standard Accord 25-S Form ) 1. COMMERCIAL GENERAL LIABILITY . Combined single limit for bodily injury, property damage and personal injury: $1,000,000 each occurrence $3,000,000 annual aggregate 2. COMPREHENSIVE AUTOMOBILE LIABILITY Combined single limit for bodily injury and property damage: $1,000,000 each accident This Certificate of Closing is executed this _ day of ,2001. ~p~ Stephen P. Deitsch City Attorney City of Arcadia RVPUB\JSB\614096 - ~7- 2144 ACCEPTANCE TO BE BOUND Altrio Communications, Inc., does hereby agree to be bound by that certain Franchise Agreement by and between the City of Arcadia, a municipal corporation and charter city and Altrio Communications, Inc., dated the ~ day of ~, 2001. By: David KO"l-r.e.lle... (print) Its: '?re:~)'lo.ent Dated:..JuIy 4' , 2001 RVPUB\ISB'OI4096 -1 '0- 2144