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HomeMy WebLinkAboutC-2195290 Had ..r Drive Starnii rd, C'I 06902 TIME WARNER CABLE VIA FEDERAL EXPRESS March 9, 2006 Ms. Lisa Mussenden Legal Coordinator City Attorney Office 240 W. Huntington Drive Arcadia, CA 91007 is Re: Time Warner — Assignment and Assumption Agreement Dear Ms. Mussenden As requested, enclosed please find original of Assignment and Assumption Agreement and Guarantee of Assignee's Obligations executed by all parties. Please send fully executed copy to my attention. Thank you. Very truly yours, Huma Khan Regulatory Paralegal Time Warner Cabk, a division of7ime Winer hweriainrrrem Company. LE RESOLUTION NO. 6505 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, CONDITIONALLY AUTHORIZING THE ASSIGNMENT AND CHANGE OF CONTROL OF A CABLE TELEVISION FRANCHISE BY CENTURY - TCI CALIFORNIA, L.P. TO CAC EXCHANGE II, LLC RECITALS: A. The City of Arcadia, California ( "Franchise Authority") has granted a cable television franchise for the construction, operation, and maintenance of a cable television system within the City (the "Franchise ") to Century-TCI California, L.P. ( "Franchisee "), which Franchisee is presently controlled by Adelphia Communications Corporation ( "Adelphia "), which is currently in Chapter 11 bankruptcy proceedings; and B. Pursuant to an asset purchase agreement dated April 20, 2005 between Adelphia and Comcast Corporation ( "Comcast "), an indirect wholly -owned subsidiary of Comcast will acquire Adelphia's interest in the Franchise (the "Adelphia Transaction "); and C. Pursuant to an exchange agreement between Time Warner Cable Inc. ( "Time Warner Cable ") and Comcast, dated as of April 20, 2005 ( "Exchange Agreement "), Comcast will conclude the asset purchase transaction, whereby Comcast will cause its indirect wholly -owned subsidiary, Comcast Cable Holdings, LLC, to assign the Franchise to CAC Exchange II, LLC (the "New Franchisee ") I and the New Franchisee will become an indirect subsidiary of, and will do business as, Time Warner Cable (which transaction shall hereinafter be referred to as the "Exchange "); and D. On June 16, 2005, the Franchise Authority received from Comcast Cable Holdings, LLC and Time Warner Cable Inc., an application for the assignment of the existing Franchise from Franchisee to the New Franchisee through the Adelphia Transaction and the Exchange. This application included FCC Form 394 titled "Application for Franchise Authority Consent to Assignment or Transfer of Control of Cable Television Franchise." Supplemental information was provided to the Franchise Authority by Comcast Cable Holdings, LLC and Time Warner Cable Inc.; and E. In accordance with Section 8 of City of Arcadia Ordinance No. 2206 (the "Telecommunications Ordinance "), the Franchise Authority has the right to review and to approve the financial, technical, and legal qualifications of a proposed transferee in connection with a proposed assignment of the Franchise; and F. The Franchise Authority has reviewed the documentation that accompanied FCC Form 394 and, based upon the representations set forth in that 2 documentation, has concluded that the proposed New Franchisee has the requisite financial, technical, and legal qualifications to adequately perform, or to ensure the performance of, all obligations required of Adelphia under the Franchise, and that the New Franchisee will be bound by all existing terms, conditions, and obligations of the Franchise as it currently exists or as it may be modified or superseded by the parties prior to the closing of the Adelphia Transaction and the Exchange. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS: SECTION 1. In accordance with Section 8 of the Telecommunications Ordinance, the Franchise Authority consents to and approves the proposed assignment and change of control of the Franchise by Century -TCI California, L.P., through Comcast Cable Holdings, LLC, to CAC Exchange II, LLC, which, upon the closing of the asset purchase transaction, will be an indirect wholly - owned subsidiary of Time Warner Cable Inc., and will be qualified to conduct business as a limited liability company in the State of California. SECTION 2. The authorization, consent and approval of the Franchise Authority to the proposed assignment is hereby expressly conditioned upon, and tj made contingent upon, compliance with the following requirements within sixty (60) days following the closing of both the Adelphia Transaction and Exchange: (a) Adelphia and the New Franchisee will execute and file in the office of the City Clerk an "Assignment and Assumption Agreement" in the form attached to this Resolution as Exhibit "A ", and incorporated by reference herein. The Mayor is authorized to execute that document and thereby evidence the written consent of the Franchise Authority to the assignment and assumption of all rights and obligations under the Franchise. (b) An original or conformed copy of the written instrument evidencing the closing of the Adelphia Transaction and the Exchange must be filed in the office of the City Clerk. (c) Provision of written report to the City Manager documenting the following: (i) Staffing and technical measures have been implemented to ensure adequate telephone call center performance, reporting capabilities, and transition programs to provide service as Time Warner Cable, including the capability to bring current call center performance into compliance with the Franchise terms; (ii) Staffing and technical measures have been implemented to ensure adequate public, educational, or governmental (PEG) Access channel allocation, staffing and service provision in accordance with the Franchise; n 9 0 (iii) All necessary insurance policies, endorsements or certificates, as required by the Franchise, including, without limitation, applicable "additional insured" language shall been provided to the City Manager or his designee; (iv) All necessary security (cash deposit, surety fund, construction bond, and/or any other security as approved by the City Manager or designee) provisions of the Franchise shall have been provided to the City Manager or his designee; (v) That the New Franchisee shall have established the location of franchise financial records and other cable system records pertaining to Franchise fee reviews as Time Warner Controller's Office, 959 South Coast Drive, Suite 300, Costa Mesa CA 92626, or that the New Franchisee shall make available all such records available for inspection and photocopying at Arcadia City Hall; and (vi) The New Franchisee's program for providing notice to subscribers of, and implementing, account transition, including, without limitation, e -mail account transitioning and domain name changes. (d) The New Franchisee shall have caused to be paid to the Franchise Authority all processing charges required by law for the review and consideration of the proposed transfer. SECTION 3. If the closing of the Adelphia Transaction and the Exchange shall not have occurred within one hundred eighty (180) days following the date of this Resolution (or such other date as may be agreed upon by the City Manager), or if any one or more of the conditions set forth above Section 2 of this Resolution is or are not satisfied within the period of time specified in that Section, then the authorization and consent of the Franchise Authority to the proposed 61 assignment as provided for in this Resolution shall be deemed of no force or effect, shall be treated as null and void without further action by the Franchise Authority, and the FCC Form 394 application will be deemed denied in all respects, as of the date of adoption of this Resolution. In such event, the City Manager is authorized and directed to give written notice to all affected parties of such effect, which will be deemed to be without prejudice to the right of any parties to submit a new FCC Form 394 to the Franchise Authority if required by the Franchise or local ordinance. SECTION 4. The City Clerk is directed to transmit a certified copy of this Resolution to the following persons: If to New Franchisee: Mr. Roger Keating, President Los Angeles Division Time Warner Cable Inc. 959 South Coast Drive, Suite 300 Costa Mesa, CA 92626 If to Adelphia: Brad M. Sonnenberg, Esq. Executive Vice President, General Counsel and Secretary Adelphia Communications Corporation 5619 DTC Parkway Denver, CO 80111 0 If to Comcast: Comcast Cable Holdings, LLC 1500 Market Street Philadelphia, PA 19102 SECTION 5. The City Clerk shall certify to the adoption of this Resolution. Passed, approved and adopted this 6th day of December , 2005. ISI JOHN wUO Mayor of the City of Arcadia ATTEST: IS/ JAMES H. BARROWS City Clerk APPROVED AS TO FORM: Stephen P. Deitsch City Attorney 7 STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES) SS: CITY OF ARCADIA ) I, JAMES H. BARROWS, City Clerk of the City of Arcadia, hereby certifies that the foregoing Resolution No. 6505 was passed and adopted by the City Council of the City of Arcadia, signed by the Mayor and attested to by the City Clerk at a regular meeting of said Council held on the 6th day of December, 2005 and that said Resolution was adopted by the following vote, to wit: AYES: Council Member Chandler, Kovacic, Marshall, Segal and Wuo NOES: None ABSENT: None li 1S/ JAMES H. BARROWS City Clerk of the City of Arcadia 0 0 P_10 lee- .,14 -05 10 =19A EXHIBIT A ASSIGNMENT AND ASSUMPTION AGREEMENT AND GUARANTEE OF ASSTGNEE'S OBLIGATIONS (CABLE TELEVISION FRANCHISE AGREEMENT) 1I118 ASSIGNMiNT AND ASSUMPTION AGREEMENT ( "Agreement ") is entered into this day of _rnG�G 0 �1___ —> 200, between Century -TCI California, L.P., a California limited partnership ( "Assignor "), CAC.' Exchange IT, LLC, a Delaware limited liability company ( "Assignee "), and the City of Arcadia, a California municipal corporation ( "Franchise Authority "). RECITAL S: A. Assignor is the authorized holder of a franchise that authorizes the construction, operation, and maintenance of a cable television system within the City of Arcadia, California. B. Subject to the prior consent of the Franchise Authority as set forth more fully in Resolution No. SD-F, adopted December 6, 2005 (the "Consent Resolution"), Assignor desires to assign to Assignee, and Assignee desires to assume, effective as of the closing of the asset purchase transaction described in the FCC Form 394 as filed with the Franchise Authority on June 14, 2005 (the "Closing "), all rights, duties, and obligations under the cable television fi•anchise agreement between the Franchise Authority and the Assignor ( "Franchise Agreement ") as it currently exists, or as it may be modified or superseded by the parties prior to the Closing. THE PARTIES AGREE AS FOLLOWS: 1. Effective as of the Closing, Assignor assigns and transfers to Assignee all of Assignor's rights, duties, and obligations under the Franchise Agreement. 2. Effective as of, and contingent upon, the occurrence of the Closing, Assignee covenants and agrees with Assignor and with the Franchise Authority to assume all rights and to assume and perform all duties and obligations of the Assignor under the Franchise Agreement. The Franchise Authority reserves any and all rights with respect to any non - compliance issues that may exist prior to A -1 P. 11 lee -14 -05 10:19A the Closing, and Assignee reserves any and all rights and defenses with respect to any such non- compliance issues. 3. Franchise Authority consents to the assignment and transfer by Assignor to Assignee of all rights, ditties, and obligations specified in the Franchise Agreement, contingent upon the execution by Time Warner Cable Inc., as guarantor, of the "Guarantee of Assignee's Obligations ", attached as Schedule 1 to this Agreement and incorporated by reference herein. 4, This Agreement will become operative and enforceable upon the closing of the asset purchase transaction described in the FCC. Fonn 394 as filed with the Franchise Authority on June 14, 2005. TO EFFECTUATE THIS AGREEMENT, "the parties have caused this Assignment and Assumption Agreement to be executed by their duly authorized representatives as of the date set forth below the authorized signature. A PROVED AS TO FORM: Legal Counsel "ASSIGNOR" Century-TCI California, L.P., a Delaware limited partnership, d/b /a Adelphia Cable Communications By: Century -TCI California Communications, L.P., a Delaware limited partnership, its General Partner, By: Century Exchange, L.L.C. a Delaware limited liability company, its General Partner, By: Century Cable Holding Corporation, a New York corporation, its Sole Member By: laQ Name,. L ef—; j � c (PRINT OR TYM Tide: ,Jtcrr- eF-C- (OEttw- oate: rz� [SIGNATURES CONTINUE ON NFx,r PAGE] A -2 0 APPROVED AS TO FORM- 1 Legal Counsel APPROVED AS TO FORM: g P. 46&e City Attorney a "ASSIGNEE" CAC EXCHANGE II, LLC, as the New Franchisee By: Time Warner Cable Inc., Its controlling parent upon closing of the Exchange Transaction (Authorized c Ic Title: &U P, � 3'WtS S Date: 'Sig ( D "FRANCHISE AUTHORITY" CITY OF ARCADIA or 0 a SCHEDULE 1 to ASSIGNMENT AND ASSUMPTION AGREEMENT m GUARANTEE OF ASSIGNEE'S OBLIGATIONS GUARANTEE GUARANTEE, dated as of Q C. J'+ , 2005, made by TIME WARNER CABLE INC., a Delaware corporation ( "Guarantor"), in favor of the City of Arcadia, California, (`Beneficiary"). For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and to induce Beneficiary to timely consent to the transfer of the cable television franchise issued by Beneficiary and currently held by Century-TCI California, L.P. (the "Franchise ") to CAC Exchange II, LLC ( "Transferee ") in accordance with the Federal Communications Commission Form 394 filed by Transferee, Guarantor agrees as follows: Interpretive Provisions. A. The words "hereof," "herein" and "hereunder" and words of similar import, when used in this Guarantee, shall refer to this Guarantee as a whole and not to any particular provision of this Guarantee, and section and paragraph references are to this Guarantee unless otherwise specified. B. The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. Guarantee. A. Effective upon the close of the Exchange Agreement, Guarantor unconditionally and irrevocably guarantees to Beneficiary the timely and complete performance of all Transferee obligations under the Franchise (the "Guaranteed Obligations "). The Guarantee is an irrevocable, absolute, continuing guarantee of payment and performance, and not a guarantee of collection. If Transferee fails to A -1 pay any of its monetary Guaranteed Obligations in full when due in accordance with the terms of the Franchise, Guarantor will promptly pay the same to Beneficiary or procure payment of same to Beneficiary. Anything herein to the contrary notwithstanding, Guarantor shall be entitled to assert as a defense hereunder any defense that is or would be available to Transferee under the Franchise or otherwise. B. This Guarantee shall remain in full force and effect until the earliest to occur of: (i) performance in full of all Guaranteed Obligations at a time when no additional Guaranteed Obligations remain outstanding or will accrue to Transferee under the Franchise; and (ii) subject to any required consent of the Beneficiary, any direct or indirect transfer of the Franchise from Transferee to (or direct or indirect acquisition of Transferee or any successor thereto by (whether pursuant to a sale of assets or stock or other equity interests, merger or otherwise)) any other person or entity a majority of whose equity and voting interests are not beneficially owned and controlled, directly or indirectly, by Guarantor. Upon termination of this Guarantee in accordance with this Section II(B), all contingent liability of Guarantor in respect hereof shall cease, and Guarantor shall remain liable solely for Guaranteed Obligations accrued prior to the date of such termination. Waiver. Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by Beneficiary upon this Guarantee or acceptance of this Guarantee. Guarantor waives diligence, presentment, protest and demand for payment to Transferee or Guarantor with respect to the Guaranteed Obligations; provided, however, that Guarantor shall be furnished with a copy of any notice of or relating to default under the Franchise to which Transferee is entitled or which is served upon Transferee at the same time such notice is sent to or served upon Transferee. Representations and Warranties. Each of Guarantor and Beneficiary represents and warrants that: (i) the execution, delivery and performance by it of this Guarantee are within its corporate, limited liability company or other powers, have been duly authorized by all necessary corporate, limited liability company or other action, and do not contravene any law, order, decree or other governmental restriction binding on or affecting it; and (ii) no authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by it of this Guarantee, except as may have been obtained or made, other than, in the case of clauses (i) and (ii), contraventions or lack of authorization, approval, notice, filing A -2 or other action that would not, individually or in the aggregate, impair or delay in any material respect such party's ability to perform its obligations hereunder. Binding Effect. This Guarantee, when executed and delivered by Beneficiary, will constitute a valid and legally binding obligation of Guarantor, enforceable against it in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency or other similar laws applicable to creditors' rights generally and by equitable principles (whether enforcement is sought in equity or at law). Notices. All notices, requests, demands, approvals, consents and other communications hereunder shall be in writing and shall be deemed to have been duly given and made if served by personal delivery upon the party for whom it is intended or delivered by registered or certified mail, return receipt requested, or if sent by Telecopier, provided that the telecopy is promptly confirmed by telephone confirmation thereof, to the party at the address set forth below, or such other address as may be designated in writing hereafter, in the same manner, by such party: To Guarantor and Transferee: To Beneficiary: Time Warner Cable Inc. 290 Harbor Drive Stamford, CT 06902 -6732 Telephone: (203) 328 -0631 Telecopy: (203) 328 -4094 Attention: General Counsel City of Arcadia 240 West Huntington Drive Arcadia, California 91006 Telephone: (626) 574 -5401 Telecopy: (626) 446 -5729 Attention: City Manager Integration. This Guarantee represents the agreement of Guarantor with respect to the subject matter hereof and there are no promises or representations by Guarantor or Beneficiary relative to the subject matter hereof other than those expressly set forth herein. Amendments in Writing. None of the terms or provisions of this Guarantee may be waived, amended, supplemented or otherwise modified except by a written instrument executed by Guarantor and Beneficiary, provided that any right, power I:W3 or privilege of Beneficiary arising under this Guarantee may be waived by Beneficiary in a letter or agreement executed by Beneficiary. Section Headings. The section headings used in this Guarantee are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. No Assignment or Benefit to Third Parties. This Agreement shall not be assigned by Guarantor, in whole or in part, whether voluntarily or otherwise, without the prior written consent of the Beneficiary. This Agreement shall not be assigned by Beneficiary, in whole or in part, whether voluntarily or otherwise, without the prior written consent of the Guarantor. This Agreement shall be binding upon and inure to the benefit of the parties hereto. Nothing in this Agreement, express or implied, is intended to confer upon anyone other than Guarantor and Beneficiary and their respective permitted assigns, any rights or remedies under or by reason of this Guarantee. Expenses. All costs and expenses incurred in connection with this Guarantee and the transactions contemplated hereby shall be borne by the party incurring such costs and expenses. Counterparts. This Guarantee may be executed by Guarantor and Beneficiary on separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Governing Law. This Guarantee shall be governed by and construed and interpreted in accordance with the laws of the state of California without regard to principles of conflicts of law. Any legal action or proceeding concerning this Guarantee shall be filed and prosecuted in the appropriate California court in the County of Los Angeles, California. Waiver of Jury Trial. Each party hereto hereby irrevocably and unconditionally waives trial by jury in any legal action or proceeding relating to this guarantee and for any counterclaim therein. XV. Attorneys Fees. In the event that any action or proceeding is commenced to regarding any term of this Guarantee, the prevailing party in such action or proceeding, in addition to all other relief to which it may be entitled, shall be entitled to recover from the other party the prevailing party's costs of suit and reasonable attorneys' fees. The prevailing party shall be as determined by the court in accordance with California Code of Civil Procedure Section 1032. The attorney's costs and expert fees recoverable pursuant to this section include, without limitation, attorney's costs and expert fees incurred on appeal and those incurred in enforcing any judgment rendered. Attorney's costs and fees may be 0 L7 recovered as an element of costs in the underlying action or proceeding or in a separate recovery action. TO EFFECTUATE THIS GUARANTEE, each of the undersigned has caused this Guarantee to be duly executed and delivered by its duly authorized officer on the date set forth below the authorized signature. "GUARANTOR" TIME WARNER CABLE INC. By: ",s Name: - Ad O�H�F1 Title:EV P , I vi Date: (3.- _� -- O �, "BENEFICIARY" CITY OF ARCADIA I1 �iesp,lp BILL OF SALE This Bill of Sale is entered into by and between Century-TCI California, L.P., a Delaware limited partnership, d/b /a Adelphia Cable Communications ( "Seller ") and the City of Arcadia, California ( "Buyer ") as of December JZ, 2005. WHEREAS, Seller is a debtor and debtor in possession pursuant to Chapter 1 I of Title 11 of the United States Code (the "Bankruptcy Code "), in the case entitled In Re Adelphia Communications Corporation, et al., Case No. 02 -41729 (REG) (the "Bankruptcy Case "), pending in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court "); and WHEREAS, Seller owns a certain Building (as defined herein) that is no longer necessary for Seller's business purposes and Seller is willing to sell the Building to Buyer; and WHEREAS, Buyer is not an insider or affiliate of Seller; and KNOW ALL MEN BY THESE PRESENTS: THAT, for good and valuable consideration, the receipt and sufficiency of which is acknowledged, and in payment of the sum of One Dollar ($1.00), Seller hereby sells and transfers to Buyer, and its successors and assigns, the personal property described as follows (collectively, the "Personal Property "): A standard cement block building, located in the center of Santa Anita Ridge, Chantry Flats Truck Trail, County of Los Angeles, State of California that is approximately 15 ft. long by 8 ft. wide, and includes the following: (i) two air conditioners on the roof; (ii) a 14 kW stand -by diesel generator next to the building supplied by a 300 - gallon tank (the "Tank ") that meets all local, state and federal requirements; (iii) several small communications towers of varying heights (approx.) 25 ft. attached to the building; (iv) an antenna support tower located in front of the building approx. 10 ft, roughly 20 ft. in height and made of 4 in. welded steel pipe, resting on 6 — 2 % ft. by 4 ft. deep, round cement pads. Seller warrants to Buyer that Seller has good title to the Personal Property, full authority to sell and transfer same, and that said Personal Property is free and clear of all liens, encumbrances, claims, liabilities and adverse claims of every nature and description. Seller further warrants to Buyer that Seller will fully defend, protect, indemnify and save harmless Buyer and its lawful successors and assigns from any and all adverse claims that may be made by any party against the Personal Property to the extent such claims pertain to the time period prior to the approval of the Bankruptcy Court referenced below. Buyer hereby acknowledges that the Personal Property is being sold and transferred in an "AS IS," condition and where presently located, with all faults, and Buyer is not relying upon any representation by Seller with respect to the Personal Property. EXCEPT AS EXPRESSLY RVPUBVSM704359.1 PROVIDED ABOVE, SELLER HEREBY DISCLAIMS ALL WARRANTIES OF ANY KIND OR NATURE WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PARTICULAR PURPOSE, THE SUITABILITY OF THE PERSONAL PROPERTY FOR BUYER'S INTENDED USE, OR THE PRESENCE ON OR BENEATH THE PERSONAL PROPERTY OF HAZARDOUS SUBSTANCES OR MATERIALS. BY ACCEPTANCE OF THIS BILL OF SALE, BUYER ACKNOWLEDGES THAT BUYER'S OPPORTUNITY FOR INSPECTION AND INVESTIGATION OF THE PERSONAL PROPERTY HAS BEEN ADEQUATE TO ENABLE BUYER TO MAKE ITS OWN DETERMINATION WITH RESPECT TO THE PERSONAL PROPERTY. To the extent required by law, Buyer shall be solely responsible to register the Tank with all appropriate federal, state and local agencies (collectively, "Governmental Agencies ") and for compliance with all federal, state and local laws, rules and regulations pertaining to above - ground or underground storage tanks, as the case may be (collectively, "Applicable Laws "). Buyer agrees to indemnify Seller and hold it harmless against any loss, liability, damage, cost, expense, fine and /or claim resulting from Buyer's failure: (a) to properly and timely register the Tank, if required, with all applicable Governmental Agencies, and/or (b) to maintain the Tank in accordance with all Applicable Laws. This Bill of Sale is expressly subject to, and conditioned upon, the approval of the Bankruptcy Court and shall not become effective unless and until such approval has been obtained. Seller shall use commercially reasonable efforts to submit this Bill of Sale, as promptly as practicable after the execution hereof, to the Bankruptcy Court seeking such approval. In the event the Bankruptcy Court does not approve this Bill of Sale, then the effectiveness of each party's signature to this Bill of Sale shall be immediately revoked and rescinded and, as a result thereof, this Bill of Sale shall be deemed null and void, ab initio, without further liability to either of the parties. The City of Arcadia, a municipal corporation organized under the laws of the State of California ( "Buyer ") hereby acknowledges and agrees that, until the expiration of the notice period established in the Bankruptcy Court's Order Establishing Procedures for the Sale of Excess Assets, dated September 17, 2002 (the "Notice Period "), this Bill of Sale is subject to higher or otherwise better offers by any third party. In the event that, prior to the expiration of the Notice Period, Seller receives any additional expressions of interest or offers for the personal property described below (the "Property ") that Seller, in its sole discretion, determines to be higher, or otherwise better, Seller, in its sole discretion, may conduct an auction for the Property (the "Auction "). If, under the above - mentioned circumstances, Seller determines that an Auction is required, Seller may not be bound by this Bill of Sale and Buyer shall not be entitled to recover any costs and /or expenses related to this Bill of Sale. In the event the Bankruptcy Court does not approve this Bill of Sale for any reason whatsoever or Buyer is not the successful bidder at the Auction, all obligations of Buyer and Seller hereunder will terminate without any liability of any party to any other party under this Bill of Sale. IiV fill - II.7:lY IM47MI BUYER: CITY �O� F{AARCADIA, CA Name: w'R' kt" _tc'huAwr (PRINT OR TYPE) Date: WOO ATT City Clerk of the City of Arcadia APPROVED AS TO FORM: &' Stephen P. Deitsch City Attorney SELLER: Century-TCI California, L.P., a Delaware limited partnership, d/b /a Adelphia Cable Communications By: Century-TCI California Communications, L.P., a Delaware limited partnership, its General Partner, By: Century Exchange, L.L.C. a Delaware limited liability company, its General Partner, By: Century Cable Holding Corp. a New York corporation, its Sole Member By: 611V�k W�-� Uya_ Name: -T r1 0 M P S V C -,q R- L o t- (L (PRINT OR TYPE) Title: V.P. 1—Aw ),- Qyil "c- PuLtGy Date: 0 U [- t �-' 9--c; o a RVPUBVSB \704359.1 • ACKNOWLEDGEMENT (BUYER) STATE OF CALIFORNIA COUNTY OF LOS ANGELES ) C, On � day of _ O t V , 2005 before me, n Apersonally appeared. is personally known to me or proven to me on the basis of satisfactory evidence to lZ­4 person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity as &�w okb,n Rp(l (title position) on behalf of Buyer, and that by his signature on the instrument the pers or the entity upon whose behalf the person acted, executed the instrument. NAMBIA 6111A0tIWi _ MPutwft * 1410608 o iliasA g"Coumb Nrycc EtphefMoy9,2007 WWWOW.W (SEAL) WITNESS my hand and official seal. P41 Q"V NOTARY PUBLIC My Commission expires: On 9 day of 110 , 200_T ACKNOWLEDGEMENT (SELLER) STATE OF CALIFORNIA COUNTY OF 1.6�kJFzc.t `7 On 1'Z� day ofC>e Ft 2005 before me, Al iru,v+��('z- �tg44 personally appeared tkMk� i -?k to c is proven to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity as '� fee.- PR&9 t Rer'S'T- (title position) on behalf of Seller, and that by his signature on the instrument 4wTorxmrw the entity upon whose behalf the person acted, executed the instrument. N MC A Comm. #1318B VNOIAA A A NAVNA cw My Cmnm.Egf 9ep1.1fi,tU0B (SEAL) WITNESS my hand and official seal. NOTARY PUBLIC RVPUBVSB%704359.1 q • • FS-27404% P" OMB No. VAMO e2 USDA FOREST SERVICE HOLDER INITIATED REVOCATION OF EXISTING AUTHORIZATION REQUEST FOR A SPECIAL-USE PERMIT OR TERM SPECIAL-USE PERMIT authorizing me (us) to occupy and use National Forest System lands for,,.. have (Mark one box with "XJ ® conveyed all my (our) right, title, and Interest In and to the improvements located on the parcel covered by said permit to: ❑ entered into a contract for the sale of the Improvements located on the parcel covered by said permit but have rate Inod title to sold improvements until completion of paymerd under sold contract with: Now oww (t): CCly of Arnedla Aditm: �i Weet H� naEcn OAVa. Areodrg CA a�a07 (Pkaw PAM) Nmw Oww (2): Addrase: (Pin" PArm Phorwc (SM 674.6400 Accordingly, I (we) request that the speClai -use authorization Identified above be revoked, I (we) have Informed the now owner(s) that (1) the current authorization Is not transferable; (2) they must apply for and obtain a new authorizatton; (3) there are terms and conditions for the use of National Forest System lands; (4) and they must contact the Forest Service prior to acquisition of Improvements, The remaining balance of any fees previously paid should be credited to the new owner(s) named above, If an sulhodzstlon Is Issued. HQkW (5}: Adekhk CI.Orouo w1 (Fleeee PAM). Slanetun: -. (Pkeee PdrR Holde (2): (Plem PAM) slowum Delp: 2AA (rn Vd&WM Request is made for a spoClal use suthorlzahon to cover the same parcel of land or use covered by the authorization referred to above, and for the some purpose, subject, however, to such new conditions and stipulafto as the circumstances may warrasd. I (We) acknowledge that this is a request only, and that the use and occupancy of National Forest System lands Is not authorized until an authorization Is signed and Issued by an authorized officer. I Me) also understand that an administrative fee may be charged by the Forest Service to process this request for a now authorization to ties or occupy National Forest System lands. {Pkooa PAM1 I,d�0.,I' RaquwtK(2): (Pkaee part) spowue: Phone: (M) 674-54M F - Mall: a�aa•r6keduw.ra4Y� FAX: l* 40' (m Onto: — (mrowd"M 1. Does me current use And occupancy of National Forest System lands and facilities comply w h an federal, a and local laws, regulations, orders, and policies? If not, what must be done to make the use and occupancy MY" comply? — ❑ rib 2. Is the current use and occupancy of Naf(onal Forest System lands and facilities being conducted Ina mannerthat Is consistent with established standard$ and guidelines In the Forest Land and Resource Management Plan? If M Val not, can it be made to be conaistard? How? Amu in mw Kzw &rw rray rawrrwwdaeac MK MMULq xad ❑ No 3. What was the date of last inspection? What Lathe condition of the au odzed area sk iacilides? (Describe (] Yas undesirable or unacceptable condigons that need to be corrected.) AWMbw 2Cg! ❑ No A. Doer the requestar{sj owe any fees to the Forest Service from a prioror existing speaat -use authorization? If n Yes yea, Identity fees owed. _ ONO e reques'ter(aj qualified to ha d an it uthodzatlan for the iWfiTect use and occupancy? M Tot, why? 0 Ya ❑ No 8, Can the raquessWr(s) demonstrate technical and financial capability to undertake the proposed use and ayaa occupancy, and fully comply with all the terms and conditions of the authorization? __ CI Na 7, is there someone authorized by the requester(sj io slgri an authorizatton, and theta is someone wtfiing to accept 3 Yas the responsibility of the terms and conditions of the authorization? T 17 No Remarks: The City of Acadia is witting to take over the site ab is. 1 Signature of Administrator Itaae Manger: Rata: (rtm'i © this request ie issue an authorization to use or occupy National Forest System lands for the use(s) described In Pad I of this form. The request and the requester meet the orltetta identified In Part III of this form. Therefore, I approve this request to Q issue an authorization to use or occupy National Forest System lands forthe use(s) described in Pan I of this form. Signature: Tftla: Date: ,_fmrgM-- "yyL— Mimenh Ward 2000 vS- -ly -fig' CITY OF ARCADIA CABLE TELEVISION FRANCHISE AGREEMENT ORDINANCE NO. 2084 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, AWARDING TO CABLEVISION OF ARCADIA / SIERRA MADRE, INC. (DBA TCI CABLEVISION OF LOS ANGELES COUNTY) A SEVEN (7) YEAR NON - EXCLUSIVE FRANCHISE WITH A CONDITIONAL THREE (3) YEAR EXTENSION TO CONSTRUCT, OWN, OPERATE AND MAINTAIN A CABLE SYSTEM WITHIN THE CITY OF ARCADIA, CALIFORNIA; SETTING FORTH CONDITIONS ACCOMPANYING THE GRANTING OF SAID FRANCHISE; PROVIDING FOR CITY REGULATION AND USE OF THE CITY'S PUBLIC RIGHTS OF WAY; PROVIDING FOR OTHER LAWFUL REGULATION OF THE CABLE SYSTEM; AND PRESCRIBING PROCEDURES AND LIQUIDATED DAMAGES FOR VIOLATION OF THE ORDINANCE WITNESS 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 WHEREAS, 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 and high -speed access to the Internet; 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 WHEREAS, 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, a valuable 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 WHEREAS, 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 WHEREAS, 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 WHEREAS, 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 (1) 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 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 City, 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 City is authorized to grant, renew and deny Franchises for the 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, the Cablevision of Arcadia/Sierra Madre, Inc., doing business as TCI Cablevision of Los Angeles County ( "Grantee ") is currently maintaining and operating a Cable System on a month to month basis in the City pursuant to an expired Franchise Agreement dated July 5, 1985 and amended by City Ordinance 1814 on May 20, 1986, and extended thereafter on July 5, 1995 and July 1, 1997; and WHEREAS, the State Legislature, by Chapter 262, has added 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, has amended the 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 1, 1993; and WHEREAS, the Federal Government enacted the "Cable Television Consumer Protection and Competition Act" in 1992 which directed the Federal Communications 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 Star 1460, 13.); and WHEREAS, the Federal Government enacted the "Telecommunications Act of 1996" (47 U.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 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 4 WHEREAS, the Grantee has proposed a renewal of its nonexclusive Franchise, offering to upgrade system facilities and to provide improved 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 the Grantee, its record of service, its facilities, the present and future cable - related community needs of the City, the Grantee'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 conducted a public hearing and hereby finds that it would serve the public interest to renew the Franchise subject to the terms and conditions set forth herein and in the Municipal Code. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS: 5 I CITY OF ARCADIA CABLE TELEVISION FRANCHISE AGREEMENT TABLE OF CONTENTS SECTION PAGE 1. Definitions ................................................ ............................... 49 2. Franchise Granted .................................... ............................... 7 3. Franchise Term ....................................... ............................... 7 4. Conditional Five Year Extension ............ ............................... 8 5. Termination ............................................. ............................... 8 6. Franchise Renewal .................................. ............................... 10 7. Franchise Fee .......................................... ............................... 10 8. Insurance ................................................. ............................... 11 9. Bonds and Securities ............................... ............................... 13 10. Limitations of Franchise ......................... ............................... 14 H. Assignment or Transfer or Sale of Franchise ........................ 15 12. Rights Reserved to the City .................... ............................... 16 13. Technical Performance and Equipment Standards ................ 18 14. Operation of Service .............................. ............................... 18 15. System Design and Capacity .................. ............................... 19 16. System Extension .................................... ............................... 21 17. Standard / Non - Standard Installation ..... ............................... 25 18. Possessory Interest .................................. ............................... 25 19. Continuity of Service .............................. ............................... 25 20. Complaint Procedures ............................. ............................... 26 21. Customer Service Standards, Billing, Complaints and Subscriber Rights 28 22. Regulation of Rates and Service Charges .............................. 38 23. Services and Programming ...................... ............................... 39 24. Grantee Support For Community Programming .................... 39 25. Records ................................................... ............................... 41 26. Fiscal, System and Performance Testing Reports ................. 41 27. Liquidated Damages and Other Remedies ............................ 42 28. Costs to be Borne by Grantee .................. ............................... 46 29. Miscellaneous Provisions ........................ ............................... 46 30. Equal Opportunity Employment and Affirmative Action...... 47 31. Invalidity/ Modifications .......................... ............................... 47 Exhibit A - Definitions .............................. Exhibit B - Construction Schedule Exhibit C - Technical Standards Exhibit D - Certificate of Acceptance 11 49 i • This Franchise Agreement (the "Franchise ") is made and entered into by and between the City of Arcadia ( "City "), and Cablevision of Arcadia/Sierra Madre, Inc., doing business as TCI Cablevision of Los Angeles County ( "Grantee "). SECTION 1 - DEFINITIONS 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. This Franchise shall not become effective without the Grantee signing an acceptance of the Franchise. (a) Franchise Granted. A non - exclusive Franchise is hereby granted by the City which authorizes 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 which is part of the Cable System. SECTION 3 - FRANCHISE TERM (a) Term. The term of this Franchise shall commence upon the Effective Date and shall remain in effect for seven (7) years therefrom. The Effective Date shall be the date the Certificate of Closing (described below) is issued by the City Attorney. Upon and following, this Franchise Agreement will be a binding agreement, with all rights and privileges vested in the Grantee as described herein. This Franchise Agreement will terminate on the seventh (7th) anniversary date of the Effective Date, unless otherwise extended pursuant to Section 4 herein. (b) A Certificate of Closing shall be issued 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 issued 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. (1) A written acceptance to be bound by and comply with and to do all things required by this Franchise in a form attached as Exhibit D. (2) All bonds, letters of credit, security deposits, and insurance policies required by this Franchise have been filed. SECTION 4. CONDITIONAL THREE YEAR EXTENSION A three (3) year extension shall be granted upon successful completion and activation of the items described in Sections 15 (a) and (b) as determined by the City provided, however, a failure to complete and activate the items described in Sections 15 (a) and (b) within the times specified herein shall constitute a material breach of this Agreement. Extension approval shall be by formal action of the City Council. The request for a three (3) year extension shall come in the form of a letter from one party to the other and must be received at least six (6) months prior to the expiration of the original seven (7) year agreement. The Grantee shall not be required to submit an application or pay an application fee for this one -time extension. SECTION 5. TERMINATION (a) 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 Council or City Manager validly adopted pursuant to this Franchise. (2) The Grantee becomes insolvent, unable or unwilling to pay its debts, or is adjudged bankrupt. (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 cured pursuant to the notice of intent to terminate, the City Manager shall transmit all material pertinent to the termination to the City Council for their 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 terminate 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) terminate 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 revoke 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 revoke the Franchise. (d) Termination (Rights). Unless the City's action to revoke 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 revoke 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 may be collected, without limitation, from any security held by the City. The termination 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 revoke 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: (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 28 respectively. Upon extension of this Agreement, for years seven (7) through ten (10) 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 Section 626 [47 USC Section 546] of the Cable Act as it exists as of the effective date of this Agreement. SECTION 7 - FRANCHISE FEE (a) Franchise 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. 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 Education 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. 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. Late Fee Penalty If payments are late, Grantee shall pay interest to the City on the amount owed at the rate of one percent (I%) per month or fraction thereof compounded monthly. c. 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 Ru 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. SECTION 8 - INSURANCE (a) Hold Harmless Agreement. Grantee shall indemnify, hold harmless, and defend the City, its officers, boards, commissions, 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, and 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 Education and Government Access Programming required by this Franchise. I1 0 0 (b) Defense of Litigation; Payment of Judgments and Claims. Grantee shall at the sole risk and expense of Grantee, upon demands of the City, made by and through the City Attorney, appear 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 officers, boards, commissions, agents or employees, and arising out of or pertaining to the exercise or the enjoyment of such 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 litigations. 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, the City, its officers, boards, commissions, 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 neither Grantee nor City shall make or 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 the other which shall not be reasonably withheld. (c) Insurance Required. Grantee shall at all times during the existence of this Franchise maintain 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 liability 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 all Persons against liability for loss 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, boards, commissions and employees, shall be named as additional insureds under the required insurance policies. Where such insurance is provided by a policy which 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. 12 0 L7 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. (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 -5 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 (1) The former cash deposit of thirty thousand dollars ($30,000) kept by the Grantor as required under the previous agreement and originally submitted by Grantee's successor Grantee (Group W) will remain in effect as surety against performance of the Grantee during the life of this agreement. The City Manager shall have the unconditional rights to withdraw sums for any due compensation, liquidated damages, penalties, or fees thirty (30) days after a notice of default and intention to make such a withdrawal has been given by the City to the Grantee and the Grantee has failed to cure such default as reasonably determined by the City Manager pursuant to Section 27 of this Agreement. No interest shall be paid to the Grantee on said sum of thirty thousand dollars ($30,000). (2) The second component of the surety fund is an irrevocable letter of credit secured with unemcumbered assets of said Grantee. Within thirty (30) days after the execution of this Franchise, the Grantee shall deposit with the City Treasurer an irrevocable letter of credit in the amount of eighty thousand ($80,000) dollars. Such letter of credit shall be deposited in a bank acceptable to the City Treasurer and be in a form acceptable to the City Attorney; provided; however, the letter of credit shall give the City Manager the unconditional right to draw sums thereupon for the aforesaid payments (i) immediately upon Notice of Termination or Expiration of the Letter of Credit and (ii) thirty (30) days after notice of default and intention to make such a draw has been given by the City to the Grantee and the Grantee had failed to assure such default as reasonably determined by the City Manager. (3) Such letter of credit shall remain in effect until the termination of this Franchise. 13 (4) In the event that, and every time that, the City shall draw on said letter of credit, the Grantee shall replenish the amount thereof within ten (10) days thereafter so that the amount of such security fund remains at eighty thousand ($80,000) dollars for the life of this Franchise. (5) In the event of forfeiture of any franchise, such cash deposit or letter of credit and all interest shall become the property of the City. (6) 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. 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 officer, employee, department or City Board/Commission shall be transferable by the City to any other City officer, employee, department or Board/Commission. City shall notify Grantee within a reasonable period prior /after such delegation. (c) Provision Violations. Except to the extent that City violates the provisions of this Franchise, the Grantee shall have no monetary recourse whatsoever against the City 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. 14 0 0 (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 their 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 a 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 which will cause the Franchise to terminate. (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 government 15 0 0 (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) 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 with both the current and proposed Grantee to cure the area of non - compliance or operational deficiency. (h) Before an assignment is approved by the City, the proposed assignee, transferee or buyer shall execute an affidavit acknowledging that 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. 0) 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 given 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 ascertain, purchase, condemn, acquire, take over and hold the property and system of the Grantee located in the Franchise Area in accordance with Section 1302 of the Arcadia City Charter. To the extent allowed by then applicable law, the purchase price shall not include any sum for the value of the Franchise, or for any of the rights or privileges granted by this Franchise. (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 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. 16 (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 in accordance with (a) and (b) above, the City shall notify the Grantee of its intentions to acquire said property within one hundred twenty (120) days of the proposed acquisition date. Upon notification of the intent to acquire said property, the City and the Grantee shall attempt to mutually agree upon the value of the system in accordance with the provisions of this Section and Section 627 of the Cable Act. 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 and 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 Section 627 of the Cable Act. 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 certified public accounting firm selected by the City at the Grantee's expense. (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 of 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 make a claim on the security fund as prescribed in Section 9. (g) Granting of Other Franchises. The City reserves the right, at its discretion, to grant Franchises with other entities under the terms of the Right -of -Way Ordinance. 17 9 0 SECTION 13 - TECHNICAL PERFORMANCE AND EQUIPMENT STANDARDS The Cable System shall be designed, installed, maintained and tested in accordance with the technical performance standards required by Subpart K of Section 76 of the FCC Rules and Regulation (Exhibit Q. 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 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 18 • 61 • •slauuugo paluuStsap juluazud jo SutmatA alp Sutltgtgut sltuuad lull apoa IultStP 10 catnap Suplool Iozluoo luluajud u gplm `lsanbai uodn `szaquosgnS aptnoid Bugs aalusl1D •saatnPa 104UOD luluaiud (p) •sialuanuoD ulals,CS olquD oql PUB s2IDA `s;as uotstnalal Xpua.z -olqua olu 2alut of Sutlduuauu ut uotsnduoo puu slutuldwoo iagtzosgnS aluutuuga of slzojja g;tu3 pool axuuz hugs aalusiD •,CltitgtluduuoD iagjzosgnS (o) •ostgomi3 sill ql!m oouepuoaat, ut panutlum aq Iltm SutunuuzSoid ssaaay 3uauuauanotJ pee luuotluanpg ag; 3o uoddns ut astgaut,a3 stq) JO a1eQ antlaadja aql uo aoualstxa ut satlgtqudua muansdn ;utp poo ;siapun st ll 3oozd fans lsanbai fltD all pinols `aatntas fans alnitlsut of algtst,aj xlluatuloal .io djlualuiouoaa lou st lt;ugl notlau3stlus sA!D aqp of alu4suomp of uapmq spoluuuJ all oq dugs ut pull ianamoq `paptnoid `algtsua3 dllt,an T4oal pue ,iljuatuiouoaa st 11 (Z) pure `smul alulS puu jujapa3 1ptm lualstsuoo st 1! 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(1) 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 %) continuous hours during a commercial power interruption. (2) Upon completion of the upgrade, 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. (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 Drive (c) Fire Department Headquarters, 710 N. Santa Anita Avenue (d) Maintenance 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 effective date of this franchise, then such modulation and standby powering shall be activated within three (3) months after receipt of written notice from Grantor to provide such additional standby powering equipment. (f) Emergency Override. (1) 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. 20 0 0 (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) This system shall also be designed so as to permit the introduction of emergency information on the City Government channel. SECTION 16 - EXTENSION 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. (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 homes within such subdivisions not later than six (6) months after the Cable System is completed pursuant to Subsection 16(a) above. With respect to all subdivisions which commence construction after the Effective Date of the Franchise, the Grantee shall install its Cable System at the time the public improvements for the subdivisions 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) homes per mile plus all areas annexed thereto with a density of at least forty (40) homes 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. 21 (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, and electric 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 of his 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 term "underground" shall include a partial underground system. 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 and/or trench maps of the entire Cable System within sixty (60) days after completion of any changes to the Cable System. 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. (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. 22 (h) Required Permits. Construction, operation, or repair of a 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 permit so issued, the City may impose as a condition of the granting of the permit such conditions and regulations as may be reasonable 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. (i) Restoration of City 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 damages the Public Rights -of- Way, public property or private property. Public property and Street must be restored to the satisfaction of the City or to a condition reasonably comparable or better than before the disturbance or damage occurred. 0) 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 Maintenance Services Department, and any tree trimming must be performed in strict accordance with the City 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. (1) 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) Duty To Report. Commencing at the beginning of the third (3rd) month following filing of the certificate of acceptance of a franchise, and continuing until the date the upgrade is completed, the Grantee shall, by the tenth day of each month third month of each quarter, file with the Grantor a written statement identifying the number of miles rebuilt and left to be rebuilt. (n) Right of Inspection of Construction. The Grantor 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. 23 0 (o) Construction Completion. The Grantee shall notify the Grantor in writing when the construction requirements of this section are complete. Any construction or schedule required under this section shall be considered complete only upon written notice from the Grantor to the Grantee stating that the work has been completed in a manner satisfactory to the Grantor as specified in this franchise. No construction requirement or schedule shall be considered as being complete until said letter has been executed by the Grantor. In the event Grantor 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 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. (p) 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 utility pole attachment clearances which 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. (q) Multiple Dwelling Units. All construction schedules heretofore detailed in this franchise agreement shall apply to multiple dwelling units as defined in the Arcadia 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 Grantor may extend the construction schedules relative to multiple dwelling units 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. (r) Construction Damages. By acceptance of this Franchise Agreement, Grantee agrees that failure to comply with any time requirements referred to in Section 15(a), or as may be extended by Council, shall be cause for Grantor 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 the acts required to be done by this Section and as extended by the City Council. M.I SECTION 17 - STANDARD / NON - STANDARD INSTALLATIONS Subject to the limitations contained in Section 15(a), Grantee shall extend Cable Services to any existing or new residence located in any residential area of the City including those residences 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 materials for all portions of the service connection in excess of one hundred twenty-five (125) feet. Alternatively, at Grantee's sole discretion, Grantee may utilize the Hourly Service Rate prescribed by federal rate regulations to determine the cost of installations in excess of one hundred twenty-five (125) feet. Prior to installing any service connection in excess of one hundred twenty-five (125) feet, Grantee must present the prospective subscriber with a detailed itemized statement of costs for the service connection. 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. In the event that the Grantee elects to overbuild, 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 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, if necessary to maintain continuity of services, assume management and operating 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. 25 (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 referred by the City, identifying 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 the following information: (i) the nature of the complaint which precipitated the special test (ii) what Cable System component was tested (iii) the equipment used and procedures employed in such testing (iv) the names of the individuals performing and witnessing the testing (v) the date, time, and location of testing (vi) the results of such test (vii) the method in which such complaints were resolved (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. 27 (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 Grantee is required to continue operating the system during a take -over period, the operator will continue to manage and operate the system at the then current level of service. In the event the operator materially modifies the operation and fails to maintain continuity of 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: (1) 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 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 complaintor'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 its 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. (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. 26 0 0 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. (f) System Failures. In the event that the Cable System fails to meet any of the performance standards as contained in this Franchise and as determined by the regular performance test reports required in this Franchise, or other test as contained in this Franchise, City shall give written notice to the Grantee and Grantee shall have fourteen (14) days from receipt to correct said deficiency(s). Grantee will notify the City when such correction(s) has been made. 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 community 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. 28 "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, and severe or unusual weather conditions. Those conditions which erg 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 upgrade of Cable System. (c) Grantee agrees to meet the following standards: (1) Customer Service Center Grantee is to 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, and open during all usual business hours, but in no case less than forty (40) hours per week. (2) Operations and Maintenance. (A) Telephone availability (i) Grantee will maintain a local, toll -free or collect call telephone access line which will be available to its 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 customer 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. V7161 (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): (i) 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. (ii) Within one (1) day of receiving any request for service by any single Subscriber identifying a complete outage in Cable Service. (iii) 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. iffil (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 business hours or outside the parameters of response time outlined above for the express convenience of the Subscriber. (i) 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. (ii) 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. (e) Communications between the Grantee and its Subscribers (1) Notifications to Subscribers - (i) 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: (A) products and services offered; 31 0 (B) prices and options for programming services and conditions of subscription to programming and other services; (C) installation and service maintenance policies; (D) instructions on how to use Cable Service; (E) channel positions of programming carried on the Cable System; (F) billing and complaint procedures, including the address and telephone number of the City; (G) charges, refunds and credits procedures; (H) disconnection and termination of service procedures; (I) customer service telephone number and office hours; (J) service call response time scheduling. (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 and just 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 32 IM 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. 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: i. A list of each service or package received for that billing period; ii. The rate or charge for each service or package received; iii. The period of time over which said services are billed; iv. The total charges due for the monthly period, separate from any previous balance due; V. Credits posted during the month; vi. A specific date by which payment is required; and vii. 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 security 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. 33 (4) The Grantee must notify the Subscriber that he or she can remit payment in person at the Grantee's office located in or near the City and inform the subscriber of the address of that office. (5) Every customer 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 of a delinquent account without fifteen (15) days prior written notice. Such notice shall not be mailed until after the sixteenth (16th) day from the time the bill for services was mailed to the customer. 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 complaint, grantee shall provide written or verbal notice to customer 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. 34 (g) Refunds L7 (1) Refund checks will be issued promptly, but no later than either: (i) the Subscriber's next billing cycle following resolution of the request or thirty (30) days, whichever is earlier, or (ii) in cases involving the return of the equipment supplied by the Grantee if service is terminated for any reason, by the Subscriber's next billing cycle following resolution of the request or thirty (30) days, whichever is earlier. (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, 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. 0) Equitable Rates and Discounts Within twelve (12) months of the date of this-Agreement, Grantee shall study and meet with Grantor regarding a discount on basic and cable programming 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. 35 9 0 (1) A/B Switches The Grantee shall offer Subscribers the option to receive an A/B switch 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 A/B switch after the initial installation of Cable Service. If the Subscriber requests installation of such a switch (to receive broadcast television without cable hookup), 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. (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. (o) 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. (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. 36 0 0 (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 therefor; 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 Section 631 of the Cable Act and this Franchise. (4) Revealing Subscriber Preferences. (a) Company shall not reveal individual subscriber preferences, viewing habits, beliefs, philosophy, creeds or religious beliefs to any third person, firm, agency, governmental unit or investigating agency without court authority or prior 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 term agreed upon by the Company and subscriber. (c) The Company shall not condition the delivery or receipt of Cable Services to any Subscriber on any such consent. (d) Such a Subscriber may revoke without penalty or cost any consent previously made by delivering to the Company in writing a substantial indication of his intent to so revoke. (5) Revealing Subscriber Lists. The Company 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 Company may use its subscriber list as necessary for the construction, marketing, and maintenance of the Company's services and facilities authorized by this Agreement, and the concomitant billing of subscribers for said Cable Services; and further, provided that consistent with applicable law, City may use Company's 37 0 0 subscribers list for the purpose of communication with subscribers in connection with matters relating to operation, management, and maintenance of the System, except in accordance with Section 631 of the Cable Act. (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 Company: (a) Officers, directors, employees and agents of the Company; (b) General and limited partners of the Company; (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 Company; (d) Any affiliated or subsidiary entity owned or controlled by Company, 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 Company, 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 Company. 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. (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 changed 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 which facilitates the reception of Standard Cable Service by hearing impaired individuals. 38 0 0 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 - GRANTEE SUPPORT FOR EDUCATION AND GOVERNMENT ACCESS PROGRAMMING 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 not provided, shall subject the Grantee to applicable remedies and penalties for violations of the Franchise. (a) Capacity Requirements. (1) The Grantee shall dedicate initially, at no charge to the City or City's dedicated users, the greater of two (2) video channels or twelve (12) megahertz of fully activated downstream channel bandwidth for Education and/or Government access programming. Upon activation of the additional video programming services described in Section 15 (a) of this Franchise, the Grantee shall provide up to a maximum of four (4) downstream video channels on the Cable System for the provision of Education and/or Government programming. (2) The Grantee may not, except as provided under the Cable Act, exercise any editorial control over the use of channels set aside for Education and Government access use. (3) The Grantee shall provide all Education and Government Access channels to all Subscribers as part of the lowest tier or level of basic service. 39 0 0 (b) Capital. In the event any capital funds in support of Education and Government 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 do so, 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 and Grantee. (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, 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. (d) Capital Grants. (1) In order to assist the City in acquiring and upgrading its video production and cable casting equipment, the Grantee agrees, upon acceptance of this Franchise to provide an initial payment of three hundred and ninety three thousand ($393,000) dollars to be used for capital in support of Education and Government Access Programming. If the City requests, Grantee will reasonably assist the City (including technical assistance and buying power) in acquiring equipment and will charge the City it's actual discounted cost for said equipment. (2) 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 no later than sixty (60) days after receipt by Grantee of City's certification of need. Grantee may comment upon City's certification of need and provide :G, recommendations to improve its effectiveness, but may not withhold the payment based on such comments or recommendations. SECTION 25 - RECORDS (a) Within (30) days of receiving a written request from the City, Grantee shall provide the following reports: (1) 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). (2) A list including but not limited to the total number of Subscribers receiving Cable Services and a listing of the total numbers of Subscribers receiving various types of Cable Services including but not limited to basic service, premium services and other types of Cable Services which are provided by the Grantee. 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 all books, records, maps, plans, income tax returns, 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 receive copies of said documents. 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 which the Grantee has claimed is proprietary and/or confidential, the City shall notify the 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 which shall include: (i) 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. (ii) 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. 41 • • (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) 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 OBLIGATIONS IMPOSED ON IT BY THIS FRANCHISE OR THE RIGHT OF WAY ORDINANCE (ORDINANCE NO. 2057) WILL RESULT IN DAMAGE TO THE CITY, AND THAT THE ACTUAL AMOUNT OF SUCH DAMAGE IS IMPRACTICAL TO DETERMINE. THE PARTIES THEREFORE AGREE TO THE LIQUIDATED DAMAGES SPECIFIED BELOW. SUCH DAMAGES MAY BE COLLECTED BY THE CITY FROM DRAW DOWN OF THE SECURITY FUND 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 FOR THE FOLLOWING CONCERNS: 1. DAMAGES FOR DELAYS IN UPGRADE. SUBJECT TO THE PROCEDURES HEREIN, GRANTOR, AT ITS OPTION, MAY APPLY ONE OR MORE OF THE FOLLOWING DAMAGES IN AN ADDITIVE MANNER IF GRANTEE FAILS TO PERFORM AND /OR OFFER SERVICES WITHIN THE TIME OR TIMES SET FORTH IN THIS FRANCHISE AGREEMENT: (a) GRANTEE SHALL UPGRADE ITS CABLE TELEVISION SYSTEM IN ACCORDANCE WITH THE CONSTRUCTION SCHEDULES SET FORTH IN SECTION 15 OF THIS AGREEMENT. GRANTEE SHALL SUBMIT SWEEP RESULTS AT A TEST LOCATION AT THE END 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 HAVE A MAXIMUM THIRTY (30) DAYS FROM 42 • • TESTING TO CORRECT ANY DEFICIENCIES AND REPEAT THE TEST. GRANTOR 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 AGREEMENT; PROVIDED, HOWEVER, NO PENALTIES MAY BE IMPOSED IF GRANTEE 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 LIQUIDATED DAMAGES IMPOSED BY GRANTOR SHALL RELATE BACK TO THE SCHEDULED COMPLETION DATE. (b) FOR EACH MONTH OF DELAY EXCEEDING THREE (3) MONTHS FROM THE DATE THAT ONE HUNDRED PERCENT (100 %) SYSTEM COMPLETION IS REQUIRED BY THIS AGREEMENT, GRANTOR MAY REDUCE THE TERM OF THE FRANCHISE UP TO FOUR (4) MONTHS. 2. DAMAGES FOR VIOLATION OF TECHNICAL STANDARDS AND CUSTOMER SERVICE STANDARDS. (a) TECHNICAL STANDARDS VIOLATIONS. (1) THE CITY MAY IMPOSE LIQUIDATED 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 12 OF THIS FRANCHISE ARE MET; PROVIDED THAT, NO PENALTIES MAY BE IMPOSED IF GRANTEE SUCCESSFULLY MEETS SUCH STANDARDS WITHIN THIRTY (30) DAYS OF THE FAILED TEST. (2) GRANTEE SHALL BE ENTITLED TO THE APPEAL RIGHTS PROVIDED IN SUBSECTION (3)(b) BELOW. (b) CUSTOMER SERVICE VIOLATIONS. (1) IF GRANTEE VIOLATES, IN ANY MATERIAL WAY, ANY OF THE CUSTOMER SERVICE STANDARDS SPECIFIED IN SECTION 21 OF THIS FRANCHISE, THE CITY MAY IMPOSE LIQUIDATED DAMAGES IN THE AMOUNT OF TWO HUNDRED FIFTY DOLLARS ($250) PER DAY; PROVIDED, HOWEVER, NO LIQUIDATED DAMAGES SHALL BE IMPOSED UNTIL GRANTEE HAS BEEN GIVEN ACTUAL NOTICE OF SAID VIOLATION AND 43 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 APPLICABLE CURE PERIOD, SAID LIQUIDATED DAMAGES MAY BE IMPOSED FROM THE DATE OF ORIGINAL VIOLATION. (c) REPORTING VIOLATIONS. (I) FOR FAILURE TO PROVIDE, UPON WRITTEN REQUEST, ANY DATA, DOCUMENTS, REPORTS OR INFORMATION, REQUIRED BY THIS 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; (2) FOR FAILURE TO SUBMIT 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 THIS FRANCHISE AND THEREFORE DESIRES TO IMPOSE DAMAGES ON GRANTEE AS STIPULATED HEREIN, CITY SHALL NOTIFY GRANTEE IN WRITING OF THE PROVISION OR PROVISIONS WHICH THE CITY BELIEVES MAY BE IN DEFAULT AS WELL AS THE APPLICABLE CURE PERIOD, SUCH EPRIOD 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 MAY BE NECESSARY TO SUPPORT GRANTEE'S POSITION AND /OR REQUEST AN EXTENSION OF THE CURE PERIOD. 44 (b) 0 0 APPEAL AND PAYMENT. IN THE EVENT GRANTEE FAILS TO RESPOND TO SAID NOTICE OF VIOLATION, OR TO CURE THE VIOLATION WITHIN THE APPLICABLE CURE PERIOD, OR PROVIDE AN EXPLANATION FOR FAILURE TO CURE ACCEPTABLE TO CITY, CITY OR ITS DESIGNEE SHALL SCHEDULE A HEARING NO SOONER THAN TEN (10) DAYS AFTER WRITTEN NOTICE TO GRANTEE OF THE EXPIRATION OF THE CURE PERIOD AND THE SCHEDULING OF SAID HEARING. GRANTEE 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 THIRTY (30) DAYS AFTER SAID HEARING, THE CITY SHALL DETERMINE WHETHER OR NOT GRANTEE IS IN VIOLATION AND 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 STATEMENT OF DECISION AND FINDINGS OF FACT. ALL LIQUIDATED DAMAGES ARE DUE AND OWING THIRTY (30) 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 ASSESSMENT MAY BE LEVIED DIRECTLY AGAINST THE LETTER OF CREDIT AND COLLECTED BY CITY TWENTY (20) DAYS FROM DATE SAID DAMAGES ARE DUE AND OWING. SUCH ASSESSMENT SHALL NOT CONSTITUTE A WAIVER BY THE CITY OF ANY OTHER RIGHT OR REMEDY IT MAY HAVE UNDER THE FRANCHISE OR UNDER APPLICABLE LAW INCLUDING, WITHOUT LIMITATION, ITS RIGHT TO RECOVER FROM GRANTEE SUCH ADDITIONAL DAMAGES, LOSSES, COSTS AND EXPENSES, INCLUDING REASONABLE ATTORNEY'S FEES, AS MAY HAVE BEEN SUFFERED OR INCURRED BY CITY BY REASON OF OR ARISING OUT OF SUCH BREACH OF THE FRANCHISE. NOTHING IN THIS SECTION IS 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 GRANTEE'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. 45 4. VALIDITY OF LIQUIDATED DAMAGES. ANY 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 AMOUNT OF DAMAGES SPECIFIED ABOVE IS A REASONABLE AND COMPLETE ESTIMATE OF CITY'S DAMAGES. Initial of Parties 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. (c) The Grantee shall reimburse the City for any and all "reasonable cost" 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). Grantor 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 Section 622(g)(2)(D) of the Cable Act, 47 U.S.C. 542(g)(2)(D). Payments made pursuant to this section shall neither be deemed to be a part of the Franchise Fee, nor offsetted against the Franchise Fee. SECTION 29 - 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. 46 (c) 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 Agreement or any extension thereof, the Franchising Authority grants a franchise consent or right to another operator which in the opinion of Grantee (TCI Cablevision), contains a term or terms more favorable or less burdensome that those granted to the Grantee in this Franchise Agreement, Grantee shall notice Grantor (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 Agreement pursuant to the agreed upon meet and confer process or to take or refrain from taking any action. Grantor agrees to comply with Section 53066.3(d) of the California Government Code in the event the City grants a second franchise. SECTION 30 - EQUAL OPPORTUNITY EMPLOYMENT 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. SECTION 31 - INVALIDITY/MODIFICATIONS 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. 47 IN WITNESS WHEREOF, the parties hereto have caused this Franchise to be executed by their respective officers duly authorized in their behalf. ATTEST: City Clerk APPROVED AS TO FORM: City Attorney CITY OF ARCADIA A Municipal Corporation "City" Mayor Dated: 1998 CABLEVISION OF ARCADIA/SIERRA MADRE, INC. "Grantee" Dated: 48 EXHIBIT A - DEFINITIONS Generally. For the purposes of this Franchise, the following terms, 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) which include all video programming distributed over the 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. "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. 49 "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 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 Commision 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. "Complaint" means a billing dispute or service call in which a Subscriber is notifying Grantee of an outage and/or degradation in picture quality. "Communications facility" means a device which alone or as part of an aggregation of devices is capable of transmitting signals from place to place, 50 4. 0 "Communications system" refers to a telecommunications system, cable system, or open video system. "Construction, operation or repair" and similar formulations of that term means 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 exercised, including, without limitation, working control through ownership, management, debt instruments, or negative control, as the case may be, of the System, the Franchise or Company. 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 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 representative(s). "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; 51 0 0 (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 Maintenance Service Department, or a private 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 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 Cablevision of Arcadia/Sierra Madre, 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 Affiliated 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 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 or programming to Grantee to the extent that said revenue is also included in Gross Revenue of 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, which portion 4 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 Company; (v) advertising commissions 52 deducted by advertising agencies before advertising revenues are paid over to City; and (vii) to the extent consistent with generally accepted accounting principles, consistently applied, bad debt write - offs. "Headend" means that central portion(s) of the System where signals are introduced into and received from the balance of the System. "Information Service" means the offering of a capability for generating, acquiring, 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 Grantor 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 said signal, whether the signal is observed or received by visual, electronic, or any other means whatsoever. "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 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 for purposes of this Title. "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). 53 "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. "Public Rights -of -Way" mean the public streets and easements which, under the City Charter, the Municipal Code, City ordinances, and applicable laws, the City has authority to grant Franchises, permits, or Licenses for use thereof or has regulatory authority thereover, and as may be more specifically defined in the Franchise, License, or permit granting any right to or use thereof, excluding railroad rights -of -way, airport, and harbor areas. 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 Grantor, 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 Subscriber" means a Subscriber who receives a service in a dwelling unit, and whose Cable Service is not utilized in a business, trade or profession. "Service Outage" means a substantial or complete disruption in Cable Service. "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 Company other than per channel or per event programming or legitimate packages of per channel or per event programming. "School" means any public educational institution. "Senior Citizen" any head of household of the age of 65 years or older. "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 lawfully receiving Cable Service provided by Grantee. "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 Licensee; or 54 (iii) the rights and/or obligations held by the Franchisee or Licensee under the Franchise or License 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). In succeeding provisions of this Title, all these activities are referred to as Franchise transfers. "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. 55 0 0 EXHIBIT C TECHNICAL OPERATION AND MAINTENANCE STANDARDS AND REQUIREMENTS 1. Technical and Safety Standards. Grantee will maintain its system using applicable City codes and the following safety codes and construction standards: NEC - NATIONAL ELECTRICAL CODE; NESC - NATIONAL ELECTRICAL SAFETY CODE; OSHA - OCCUPATIONAL SAFETY AND HEALTH ACT. 2. Network Monitoring and Renair. Grantee shall monitor all power supplies and fiber nodes, utilizing the latest in status monitoring techniques and will effect repairs within a 24 hour time period as required by applicable FCC Rules and Regulations. 3. Routine Maintenance and Performance Testing. The Grantee will maintain the Cable System by providing routine maintenance and performance testing to meet the requirements of FCC Rules and Regulations; Part 76, including bi- annual proof of performance tests. See full teal of Part 76.601 below. 4. Snare . The Grantee shall have immediately available a sufficient supply of spare parts to effect repairs in accordance with the requirements of this Franchise. Subpart K- Technical Standards §76.601 Performance tests. (a) The operator of each cable television system shall be responsible for insuring that each such system is designed, installed, and operated in a manner that fully complies with the provisions of this subpart. Each system operator shall be prepared to show, on request by an authorized representative of the Commission or the local franchiser, that the system does, in fact, comply with the rules. (b) The operator of each cable television system shall maintain at its local office a current listing of the cable television channels which that system delivers to its subscribers. (c) The operator of each cable television system shall conduct complete performance tests of that system at least twice each calendar year (at intervals not to exceed seven months), unless otherwise noted below, and shall maintain the resulting test data on file at the operator's local business office for at least five (5) years. The test data shall be made available for inspection by the Commission or the local franchiser, upon request. The performance tests shall be directed at determining the extent to which the system complies with all the technical standards set forth in §76.605f and shall be as follows: (1) For cable television systems with 1,000 or more subscribers but with 12,500 or less subscribers, proof -of- performance tests conducted pursuant to this section shall include measurements taken at six (6) widely separated points. However, within each cable system, one additional test point shall be added for every additional 12,500 subscribers or fraction thereof (e.g., 7 test points if 12,501 to 25,000 subscribers; 8 test points if 25,001 to 37,500 subscribers, etc.). In addition, for technically integrated portions of cable systems that are not mechanically continuous (i.e., employing microwave connections), at least one test point will be required for each portion of the cable system served by a technically integrated microwave hub. The proof -of- performance test points chosen shall be balanced to represent all geographic areas served by the cable system. At least one -third of the test points shall be representative of subscriber terminals most distant from the system input and from each microwave receiver (if microwave transmissions are employed), in terms of cable length. The measurements may be taken at convenient monitoring points in the cable network: provided, that data shall be included to relate the measured performance of the system as would be viewed from a nearby subscriber terminal. An identification of the instruments, including the makes, model numbers, and the most recent date of calibration, a description of the procedures utilized, and a statement of the qualifications of the person performing the tests shall also be included. (2) Proof-of- performance tests to determine the extent to which a cable television system complies with the standards set forth in §76.605(a)(3), (3), and M shall be made on each of the NTSC or similar video channels of that system. Unless otherwise as noted, proof -of- performance tests for all other standards in 676.605fa1 shall be Exhibit C - Page 1 made on a minimum of four (4) channels plus one additional channel forever), 100 MHz, or fraction thereof, of cable distribution system upper frequency limit (e.g., 5 channels for cable television systems with a cable distribution system upper frequency limit of 101 to 216 Ml-Iz; 6 channels for cable television systems with a cable distribution system upper frequency limit of 217 -300 MHz; 7 channels for cable television systems with a cable distribution upper frequency limit of 300 to 400 MHz, etc.). The channels selected for testing must be representative of all the channels within the cable television system. (3) The operator of each cable television system shall conduct semi- annual proof -of- performance tests of that system, to determine the extent to which the system complies with the technical standards set forth in 176.6056k)(4) as follows. The visual signal level on each channel shall be measured and recorded, along with the date and time of the measurement, once every six hours (at intervals of not less than five hours or no more than seven hours after the previous measurement), to include the warmest and the coldest times, during a 24 -hour period in January or February and in July or August. (4) The operator of each cable television system shall conduct triennial proof-of-performance tests of its system to determine the extent to which the system complies with the technical standards set forth in §76.605(a)(11). (d) Successful completion of the performance tests required by paragraph jsyof this section does not relieve the system of the obligation to comply with all pertinent technical standards at all subscriber terminals. Additional tests, repeat tests, or tests involving specified subscriber terminals may be required by the Commission or the local franchiser to secure compliance with the technical standards. (e) The provisions of paragraphs (d and Ldp of this section shall not apply to any, cable television system having fewer than 1,000 subscribers: provided, however, that any cable television system using any frequency spectrum other than that allocated to over -the -air television and FM broadcasting (as described in §73.603 and §73.210) is required to conduct all tests, measurements and monitoring of signal leakage that are required by this subpart. A cable television system operator complying with the monitoring, logging and the leakage repair requirements of §76.614, shall be considered to have met the requirements of this paragraph. However, the leakage log shall be retained for five years rather than the two years prescribed in 676.614. NOTE: Prior to requiring any additional testing pursuant to §76.601(d), the local franchising authority shall notify the cable operator who will be allowed thirty days to come into compliance with any perceived signal quality problems which need to be corrected. The Commission may request cable operators to test their systems at any time. Historical Note [Section amended and subsection (f) added by order in Docket No. 20561, effective May 16, 1977, 42 FR 19329. For Report see 40 RR 2d 571.] [Subsection (b) amended effective March 12, 1976, 41 FR 10066.1 [Subsections (b), (c) and (d) amended, (e) deleted, and NOTE amended by order in Docket No. 20765, effective June 6, 1977, 42 FR 21779, 42689. For Report see 40 RR 2d 853.1 [Subsection (b) amended and (c), (d) and (e) deleted by order in Docket No. 85 -38, effective January 23, 1986, 50 FR 52462. For Report see 59 RR 2d 569.1 [Subsection (e) amended by order in Docket No. 19659, effective November 23, 1973, 38 FR 29083. For Report see 28 RR 2d 860.] [Subsection (e) deleted and (f) redesignated (e) by order (Mimeo 6079) released August 2, 1985 and effective August 12, 1985, 50 FR 32414.1 [Subsection (t) amended to change "500' to "1000" by order in Docket No. 20561, effective June 12, 1978, 43 FR 20226. For Report see 42 RR 2d 1623.] Section (formerly "Signal leakage measurements ") retitled and revised by order in Docket Nos. 91 -169 and 85 -38, effective June 30, 1992, 57 FR 11000. For Report see 70 RR 2d 679. The bracketed HISTORICAL NOTES above refer to the Exhibit C - Page 2 ' I rule prior to this revision. Subparagraphs (c)(1), (c)(2) and (c)(4) amended and NOTE at end of section added by order in Docket Nos. 91 -169 and 85 -38, effective December 30, 1992, 57 FR 61009. For Memorandum Opinion see 71 RR 2d 816. §76.605 Technical standards. (a) As of December 30, 1992, unless otherwise noted, the following requirements apply to the performance of a cable television system as measured at any subscriber terminal with a matched impedance at the termination point or at the output of the modulating or processing equipment (generally the headend) of the cable television system or otherwise as noted. The requirements are applicable to each NTSC or similar video downstream cable television channel in the system: (1)(i) The cable television channels delivered to the subscriber's terminal shall be capable of being received and displayed by TV broadcast receivers used for off - the -air reception of TV broadcast signals, as authorized under Part 73 of this chapter; and (ii) Cable television systems shall transmit signals to subscriber premises equipment on frequencies in accordance with the channel allocation plan set forth in the Electronics Industries Association's "Cable Television Channel Identification Plan, EIA IS -132, May 1994" (EIA IS -132). This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 USC 522(a) and 1 CFR Part 51. Cable systems are required to use this channel allocation plan for signals transmitted in the frequency range 54 MHz to 1002 MHz. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 USC 522(x) and 1 CFR Part 51. Copies of EIA IS -132 maybe obtained from: Global Engineering Documents, 2805 McGraw Ave., Irvine CA 92714. Copies of EIA IS -132 maybe inspected during normal business hours at the following locations: Federal Communications Commission, 1919 M Street, NW, Dockets Branch (Room 239), Washington, DC, or the Office of the Federal Register, 800 North Capitol Street, NW., suite 700, Washington, DC. This requirement is applicable on May 31, 1995, for new and re -built cable systems, and on .tune 30, 1997, for all cable systems. (2) The aural center frequency of the aural carver must be 4.5 MHz f5 kHz above the frequency of the visual carrier at the output of the modulating or processing equipment of a cable television system, and at the subscriber terminal. (3) The visual signal level, across a terminating impedance which correctly matches the internal impedance of the cable system as viewed from the subscriber terminal, shall not be less than I millivolt across an internal impedance of 75 ohms (0 dBmV). Additionally, as measured at the end of a 30 meter (100 foot) cable drop that is connected to the subscriber tap, it shall not be less than 1.41 millivolts across an internal impedance of 75 ohms ( +3 dBmV). (At other impedance values, the minimum visual signal level, as viewed from the subscriber terminal, shall be the square root of 0.0133(Z) millivolts and, as measured at the end of a 30 meter (100 foot) cable drop that is connected to the subscriber tap, shall be 2 times the square root of 0.00662(Z) millivolts, where Z is the appropriate impedance value.) (4) The visual signal level on each channel, as measured at the end of a 30 meter cable drop that is connected to the subscriber tap, shall not vary more than 8 decibels within any six -month interval which must include four tests performed in six -hour increments during a 24 -hour period in July or August and during a 24 -hour period in January or February, and shall be maintained within: (i) 3 decibels (dB) of the visual signal level of any visual carrier within a 6 MHz nominal frequency separation; (ii) 10 dB of the visual signal level on any other channel on a cable television system of up to 300 MHz of cable distribution system upper frequency limit, with a I dB increase for each additional 100 MI Iz of cable distribution system upper frequency limit (e.g., 11 dB for a system at 301 -400 MHz; 12 dB for a system at 401 -500 MHz, etc.); and (iii) A maximum level such that signal degradation due to overload in the subscriber's receiver or terminal does not occur. (5) The rants voltage of the aural signal shall be maintained between 10 and 17 decibels below the associated visual signal level. This requirement must be met both at the subscriber terminal and at the output of the modulating and processing equipment (generally the headend). For subscriber terminals that use equipment which modulate and Exhibit C - Page 3 remodulate the signal (e.g., bascband converters), the mts voltage of the aural signal shall be maintained between 6.5 and 17 decibels below the associated visual signal level at the subscriber terminal. (6) The amplitude characteristic shall be within a range of t2 decibels from 0.75 MHz to 5.0 MHz above the lower boundary frequency of the cable television channel, referenced to the average of the highest and lowest amplitudes within these frequency boundaries. (i) Prior to December 30, 1999, the amplitude characteristic may be measured after a subscriber tap and before a converter that is provided and maintained by the cable operator. (ii) As of December 30, 1999, the amplitude characteristic shall be measured at the subscriber terminal. (7) The ratio of RF visual signal level to system noise shall be as follows: (i) From .Tune 30, 1992, to June 30, 1993, shall not be less than 36 decibels. (ii) From June 30, 1993, to .tune 30, 1995, shall not be less than 40 decibels. (iii) As of June 30, 1995, shall not be less than 43 decibels. (iv) For Class I cable television channels, the requirements of paragraphs (a)(7)(i), (a)(7)(ii) and (a)(7)(iii) of this section are applicable only to: (A) Each signal which is delivered by a cable television system to subscribers within the predicted Grade B contour for that signal; (B) Each signal which is first picked up within its predicted Grade B contour; (C) Each signal that is first received by the cable television system by direct feed from a TV broadcast station, a low power TV station, or a TV translator station. (8) The ratio of visual level to the rms amplitude of any coherent disturbances such as intetmodulation products, second and third order distortions or discrete - frequency interfering signals not operating on proper offset assignments shall be as follows: (i) The ratio of visual signal level to coherent disturbances shall not be less than 51 decibels for noncohereni channel cable television systems, when measured with modulated carriers and time averaged; and (ii) The ratio of visual signal level to coherent disturbances which are frequency- coincident with the visual carrier shall not be less than 47 decibels for coherent channel cable systems, when measured with modulated carriers and time averaged. (9) The terminal isolation provided to each subscriber terminal: (i) Shall not be less than 18 decibels. In lieu of periodic testing, the cable operator may use specifications provided by the manufacturer for the terminal isolation equipment to meet this standard; and (ii) Shall be sufficient to prevent reflections caused by open - circuited or short- circuited terminals from producing visible picture impairments at any other subscriber terminal. (10) The peak -to -peak variation in visual signal level caused by undesired low frequency disturbances (hum or repetitive transients) generated within the system, or by inadequate low frequency response, shall not exceed 3 percent of the visual signal level. Measurements made on a single channel using a single unmodulated carrier may be used to demonstrate compliance with this parameter at each test location. (11) As of June 30, 1995, the following requirements apply to the performance of the cable television system as measured at the output of the modulating or processing equipment (generally the headend) of the system: (i) The chrominance- luminance delay inequality (or chrome delay), which is the change in delay time of the chrominanre component of the signal relative to the luminance component, shall be within 170 nanoseconds. (ii) The differential gain for the color subccrber of the television signal, which is measured as the difference in amplitude between the largest and smallest segments of the chrominance signal (divided by the largest and expressed in percent), shall not exceed t20 %. (iii) The differential phase for the color subcarrier of the television signal which is measured as the largest phase difference in degrees between each segment of the chrominance signal and reference segment (the segment at the blanking level of 0 IRE), shall not exceed ±10 degrees. (12) As an exception to the general provision requiring measurements to be made at subscriber terminals, and without regard to the type of signals carried by the cable television system, signal leakage from a cable television system shall be measured in accordance with the procedures outlined in 976.609(h) and shall be limited as follows: Exhibit C - Page 4 Signal Leakage Limit Distance in Frequencies (Microvolts /meters) meters (m) Less than and including 54 MHz, and over 216 MHz 15 30 Over 54 up to and including 216 MHz 20 3 (b) Cable television systems distributing signals by using methods such as nonconventional coaxial cable techniques, noncoaxial copper cable techniques, specialized coaxial cable and fiber optical cable hybridization techniques or specialized compression techniques or specialized receiving devices, and which, because of their basic design, cannot comply with one or more of the technical standards set forth in paragraph jg)_of this section, may be permitted to operate: provided, that an adequate showing is made pursuant to -IM which establishes that the public interest is benefited. In such instances, the Commission may prescribe special technical requirements to ensure that subscribers to such systems are provided with an equivalent level of good quality service. NOTE 1: Local franchising authorities of systems serving fewer than 1000 subscribers may adopt standards less stringent than those in 876.605(a). Any such agreement shall be reduced to writing and be associated with the system's proof- of-performance records. NOTE 2 For systems serving rural areas as defined in 876.5, the system may negotiate with its local franchising authority for standards less stringent than those in §76.605(a)(3), §76.605(a)(7), 976.605(a)(8), §76.605(a)(10), and §76.605(a)(11). Any such agreement shall be reduced to writing and be associated with the system's proof -of- performance records. NOTE 3: The requirements of this section shall not apply to devices subject to the provisions of §§15.601-15-626. NOTE 4: Should subscriber complaints arise from a system failing to meet 676.605(a)(6) prior to December 30, 1999, the cable operator will be required to provide a converter that will allow the system to meet the standard immediately at the complaining subscriber's terminal. Further, should the problem be found to be system -wide, the Commission may order all converters on the system be changed to meet the standard. NOTE 5: Should subscriber complaints arise from a system failing to meet 676.605(a)(10), the cable operator will be required to remedy the complaint and perform test measurements on 676.605(x)(10) containing the full number of channels as indicated in §76.601(c)(2) at the complaining subscriber's terminal. Further, should the problem be found to be system -wide, the Commission may order the full number of channels as indicated in §76.601(c)(2) be tested at all required locations for future proof -of- performance tests. NOTE 6: No State or franchising authority may prohibit, condition, or restrict a cable system's use of any type of subscriber equipment or any transmission technology. Historical Note Subparagraphs (a)(2)- (a)(12) redesignated (a)(3)- (a)(13) and a new (a)(2) added by order in Docket No. 93 -7, effective June 15, 1994, 59 FR 25339. For First Report see 75 RR 2d 152. Subparagraph (a)(2) deleted, (a)(3)- (a)(13) redesignated (a)(2)- (a)(12) and (a)(1) amended by order in Docket No. 93 -7, effective May 28, 1996, 61 FR 18508. For Memorandum Opinion see 2 CR 1179. Subparagraphs (a)(3), (a)(4) and (a)(8) amended by order effective January 22, 1975, 40 FR 2690. Subparagraph (9)(3) amended, (a)(6) deleted, (a)(7)-(a)(12) redesignated (a)(6)- (a)(11) and NOTE added by order in Docket No. 85 -38, effective January 23, 1986, 50 FR 52462. For Report see 59 RR 2d 569. NOTE 6 amended by order in Docket No. 96 -85, effective April 30, 1996, 61 FR 18968. For Order see 2 CR 1147. Subparagraphs (a)(3) {a)(6), (a)(10- (a)(12) and NOTE 2 amended and NOTES 4-6 added by order in Docket Nos. 91 -169 and 85 -38, effective December 30, 1992, 57 FR 61009. For Memorandum Opinion see 71 RR 2d 816. Exhibit C - Page 5 0 Subparagraphs (a)(5) and (a)('12) amended by order in Docket No. 18397 et al., effective July 14, 1972, 37 FR 13848. For Report see 25 RR 2d 150 1. Subparagraph (a)(8) amended effective December 7, 1976,41 FR 53027. For Order see 39 RR 2d 100. Subdivision (a)(9)(iii) amended by order in Docket No. 78 -253, effective June 17, 1982, 47 FR 21468. For Report see 51 RR 2d 476. NOTE at end of section added by order in Docket No. 85 -301, effective July 20, 1987, 52 FR 22459. For Report see 63 RR 2d 137. Section amended by order in Docket No. 20561, effective May 16, 1977, 42 FR 19329. For Report see 40 RR 2d 571. Section amended by order in Docket No. 20765, effective June 6, 1977, 42 FR 21779. For Report see 40 RR 2d 853. Section revised by order in Docket Nos. 91 -169 and 85 -38, effective June 30, 1992, 57 F R I 1000. For Report see 70 RR 2d 679. §76.606 Closed captioning. (a) The requirements for closed captioning are as follows: (1) As of June 30, 1992, the operator of each cable television system shall not take any action to remove or alter closed captioning data contained on line 21 of the vertical blanking interval; and (2) As of July 1, 1993, the operator of each cable television system shall deliver intact closed captioning data contained on line 21 of the vertical blanking interval, as it arrives at the headend or from another origination source, to subscriber terminals and (when so delivered to the cable system) in a format that can be recovered and displayed by decoders meeting g 15.119 of the Rules. Historical Note Section added by order in Docket Nos. 91 -169 and 85 -38, effective June 30, 1992, 57 FR 11000. For Report see 70 RR 2d 679. §76.607 Resolution of complaints. - Cable system operators shall establish a process for resolving complaints from subscribers about the quality of the television signal delivered. These records shall be maintained for at least a one -year period. Aggregate data based upon these complaints shall be made available for inspection by the Commission and franchising authorities, upon request Subscribers shall be advised, at least once each calendar year, of the procedures for resolution of complaints by the cable system operator, including the address of the responsible officer of the local Ganchising authority. NOTE: Prior to being referred to the Commission, complaints from subscribers about the quality of the television signal delivered must be referred to the local franchising authority and the cable system operator. Exhibit C - Page 6