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2636u u u ORDINANCE NO.2636 ANORDINANCE GRANTING AFRANCHISETO NORTHLAND CABLE TELEVISION, INC.TO OPERATE AND MAINTAIN A CABLE SYSTEM IN THE CITYOF MOSES LAKE AND SETTING FORTH CONDITIONS ACCOMPANYING THE GRANT OF FRANCHISE. THECITY COUNCIL OFTHECITY OFMOSES LAKE,WASHINGTON ORDAINS AS FOLLOWS: Section1.Findings:Northland CableTelevision,Inc.,DBA Northland CableTelevision ("Northland" or "Grantee")desires to operate a cable system in the rights-of-way ofthe City of Moses Lake ("City"or "Grantor").Negotiations between Northland and theCity have been completed and the franchise process followed in accordance with theguidelines established by applicable law.As a condition of receiving this franchise,Grantee has agreed to abide by the City's current and future lawful policies,ordinances and regulations regarding infrastructure usage,and street-cuts and rights-of-way. Section 2.Adoption:This ordinance shall be known as the Northland Cable Television,Inc.2012 Franchise (this "Franchise") and shall provide as follows. TABLE OF CONTENTS SECTION 1.DEFINITIONS SECTION 2.GRANT OF FRANCHISE 2.1 Grant 2.2 Use of Public Streets and Ways 2.3 Term 2.4 Effective Date 2.5 Franchise Nonexclusive 2.6 Grant of Other Franchises 2.7 Police Powers 2.8 Relations to Other Provisions of Law 2.9 Effect of Acceptance SECTION 3.FRANCHISE FEE AND FINANCIAL CONTROLS 3.1 Franchise Fee 3.2 Payments 3.3 Acceptance of Payment and Recomputation 3.4 Monthly Reports 3.5 Annual Reports 3.6 Audits 3.7 Interest on Late Payments 3.8 Alternative Remedies 3.9 Additional Commitments Not Franchise Fees 3.10 Costs of Publication 3.11 Tax Liability 3.12 Payment on Termination SECTION 4.ADMINISTRATION AND REGULATION 4.1 Authority 4.2 Rates and Charges 4.3 Rate Discrimination ORDINANCE NO.2636 PAGE2 December 13,2011 4.4 Filingof Rates and Charges 4.5 Time Limits Strictly Construe 4.6 Performance Evaluation Sessions 4.5 Time Limits Strictly Construed /*-v SECTION 5.FINANCIAL AND INSURANCE REQUIREMENTS 5.1 Insurance Requirements 5.2 Indemnification 5.3 Workman's Compensation Waiver 5.4 Performance Bond SECTION 6.CUSTOMER SERVICE 6.1 Customer Service Standards 6.2 Subscriber Privacy 6.3 Local Office 6.4 Emergency Broadcast SECTION 7.REPORTS AND RECORDS 7.1 Open Records 7.2 Confidentiality 7.3 Copies of Federal and State Documents 7.4 Complaint File and Reports 7.5 Inspection of Facilities 7.6 False Statements SECTION 8.PROGRAMMING 8.1 Broad Programming Categories /t^s 8.2 Parental Control Device f ) 8.3 Leased Access Channels 8.4 Continuity of Service 8.5 Community Programming Needs 8.6 Service for Disabled SECTION 9.GENERAL STREET USE AND CONSTRUCTION 9.1 Construction 9.2 Location of Facilities 9.3 Relocation 9.4 Restoration of Streets 9.5 Maintenance and Workmanship 9.6 Reservation of Grantor Street Rights 9.7 Use of Conduits by Grantor 9.8 Street Vacation 9.9 Discontinuing Use of Facilities 9.10 Hazardous Substances 9.11 Undergrounding of Cable 9.12 Codes 9.13 Standards SECTION 10.MEANS OF FRANCHISE TERM EXTENSION 10.1 Design 10.2 System Functionality ^-^ 10.3 Timing of Construction (I SECTION 11.TEST AND COMPLIANCE PROCEDURE u u u ORDINANCE NO.2636 PAGE 3 December 13,2011 SECTION 12.SERVICE EXTENSION,CONSTRUCTION AND INTERCONNECTION 12.1 Equivalent Service 12.2 Service Availability 12.3 Connection of Public Facilities SECTION 13.STANDBY POWER SECTION 14.FRANCHISE VIOLATIONS;REVOCATION OF FRANCHISE 14.1 Procedure for Remedying Franchise Violations 14.2 Revocation 14.3 Removal 14.4 Receivership and Foreclosure 14.5 No Recourse Against Grantor 14.6 Nonenforcement by Grantor 14.8 Relationship of Remedies SECTION 15.ABANDONMENT 15.1 Effect of Abandonment 15.2 What Constitutes Abandonment SECTION 16.FRANCHISE RENEWAL AND TRANSFER 16.1 Renewal 16.2 Transfer of Ownership or Control SECTION 17.SEVERABILITY SECTION 18.MISCELLANEOUS PROVISIONS 18.1 Preferential or Discriminatory Practices Prohibited 18.2 Notices 18.3 Binding Effect 18.4 Authority to Amend 18.5 Governing Law 18.6 Guarantee 18.7 Captions 18.8 Construction of Franchise 18.9 Entire Franchise 18.10 Time is of the Essence SECTION 1.DEFINITIONS:For the purposes of this Franchise and all exhibits attached hereto, the following terms,phrases,words and their derivations shall have the meaning given herein. When not inconsistentwith the context,words used in the present tense include the future,words in the plural include the singular,and words in the singular include the plural.Words not defined shall be given their common and ordinary meaning.The word "shall" is always mandatory and not merely directory. 1.1 "Affiliate"when used inconnection with Grantee meansany corporation,Person or entitythat owns or controls,is owned or controlled by,or is under common ownership or control with, Grantee. 1.2 "Basic Service"means any service tier, which includes the retransmission of local television broadcast signals,or as such service tier may be further defined by federal law. 1.3 "Cable Act"means the Cable Communications PolicyAct of 1984 and the Cable Television Consumer Protection and Competition Act of 1992 and any amendments thereto,including ORDINANCE NO.2636 PAGE 4 December 13,2011 those contained in the Telecommunications Act of 1996,and any future federal cable television legislation./""N 1.4 "Cable Operator"means any Person or groups of Persons,including Grantee,who provide Cable Service over a Cable System and directly or through one or more Affiliates own a significant interest in such Cable System or who otherwise control or are responsible for, through any arrangement,the management and operation of such a Cable System. 1.5 "Cable Service"means the one-way transmission of video programming or other programming service to Subscribers,and Subscriber interaction,ifany,which is required for the selection or use of such video programming or other programming service,and as otherwise defined or permitted by the FCC from time to time. 1.6 "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 is provided to multiple Subscribers within a community,but such term does not include (1) a facility that serves only to retransmit the television signals of one or more television broadcast stations;(2) a facility that serves Subscribers without using any public right-of-way; (3) a facility of a common carrier which is subject,in whole or in part, to the provisions of Title II of the Cable Act (47 U.S.C.201 et seq.),except that such facility shall be considered a Cable System to the extent such facility is used in the transmission of Cable Service directly to Subscribers;(4) an open video system that complies with federal statutes;or (5)any facilities of any electric utility used solely for operating its electric utility systems. 1.7 "Channel"means a portion ofthe electromagnetic spectrumwhich is used ina Cable System and is capable ofdelivering a television channel,as television channel is defined by the FCC in other applicable regulations. 1.8 "Downstream"means the transmission from the Headend to remote points on the Cable System orto Interconnection points on the Cable System. 1.9 "FCC"means the Federal Communications Commission or any successor agency thereto. 1.10 "Franchise"means the non-exclusive and revocable authorization or renewal thereof for the construction,operation,upgrade,rebuild or maintenance of a Cable System within the Franchise Area such as is granted by this Ordinance,whether such authorization is designated as a franchise,license,resolution,contract,certificate,agreement or otherwise. This Franchise is an agreement between the City of Moses Lake and Northland. 1.11 "Franchise Area"means the area within the jurisdictional boundaries of the City of Moses Lake,Grant County,Washington,including any areas annexed by Grantor during the term ofthis Franchise. 1.12 "Grantee"means Northland Cable Television,Inc.DBA Northland Cable Television or its lawful successors and assigns. 1.13 "Gross Revenues"means all amounts accrued by Grantee in whatever form and from all sources,from the operation of Grantee's Cable System to provide Cable Service within the Franchise Area."Gross Revenues"shall include,without limitation,all amounts for all CableServices,including,but not limited to,Basic,expanded basic,premium,and pay-per-view f^ services,and installation fees and charges."Gross Revenues"shall also includeany revenue received by any Affiliate of Grantee where such revenue in the ordinary course of business has been paid to Grantee from the operation of its Cable System to provide Cable Service n u u u ORDINANCE NO.2636 PAGE 5 December 13,2011 within the Franchise Area."Gross Revenues"shall not include Subscriber leased or purchased equipment related to Cable Service reception,advertising sales,customer bad debt,sales taxes,or other taxes,which are collected by Grantee on behalf of and for payment to,the local,state or federal government. 1.14 "Headend"means a facility for signal reception and dissemination on a Cable System, including cables,antennas,wires,satellite dishes,monitors,switches,modulators, processors and all other related equipment and facilities. 1.15 "Interconnect"means the provision by Grantee of technical,engineering,physical,and all other necessary components to maintain a physical linking of Grantee's Cable System and Cable Service or any designated Channel or signal pathway thereofwith neighboring Cable Systems,so that Cable Service of technically adequate quality may be sentto, and received from,other systems in accordance with this Franchise. 1.16 "Person"means any individual, natural person,sole proprietorship,partnership,association, or corporation,or any other form ofentity or organization. 1.17 "School"means any accredited educational institution, public or private, including, but not limited to, primary and secondary Schools,and colleges and universities. 1.18 "Street"means each of the following which have been dedicated to the public orare hereafter dedicated to the public and maintained under public authority or by others and located within the Franchise Area:Streets,roadways,highways,avenues,lanes,alleys,sidewalks, easements (dedicated for compatible uses),rights-of-way and similar public property and areas. 1.19 "Subscriber"means any Person who elects to subscribe to, for any purpose,Cable Service provided by Grantee by means of, or in connection with,the Cable System,and whose premises are physically wired and lawfully activated to receive Cable Service from Grantee's Cable System serving the Franchise Area. A."Commercial Subscriber"which means any Subscriber other than Residential Subscriber. B."Residential Subscriber"which means any Person who receives Cable Service delivered to single or multiple dwelling units,excluding such multiple dwelling units billed on a bulk- billing basis. 1.20 "Upstream"means the carrying ofa transmission to the Headend from remote points on the Cable System or from Interconnection points on the Cable System. SECTION 2.GRANT OF FRANCHISE: 2.1 Grant: A.Grantor hereby grants to Grantee a nonexclusive and revocable authorization to make reasonable and lawful use ofthe Streets within the Franchise Area to construct,operate, maintain,reconstruct,replace,upgrade and repair a Cable System for the purpose of providing Cable Services subjectto the terms and conditions set forth inthis Franchise. B.This Franchise is intended to convey limited rights and interests only as to those Streets in which the Grantor may lawfully convey such rights and interests.Itis not a warranty of title or interest in any right-of-way; it does not provide the Grantee any interest in any ORDINANCE NO.2636 PAGE6 December 13,2011 particular location within the right-of-way;and it does not confer rights other than as expressly provided in the grant hereof.This Franchise does not deprive the Grantor of /""N any powers,rights or privileges it now has,or may later acquire in the future,to use, perform work on or to regulate the use of and to control the Grantor's Streets covered by this Franchise,including without limitation the right to perform work on its roadways, right-of-way or appurtenant drainage facilities,including constructing,altering,paving, widening,grading, or excavating thereof. C.This Franchise is subject to the general lawful police power of Grantor affecting matters of municipal concern and not merely existing contractual rights of Grantee.Nothing in this Franchise shall be deemed to waive the requirements of the other codes and ordinances of general applicability enacted by Grantor. D.This Franchise authorizes Granteeto engage in providing Cable Service.This Franchise shall not be interpreted to prevent the Grantor from imposing additional conditions, including additional compensation conditions for use ofthe rights-of-way should Grantee provide service other than Cable Service.However,this Franchise shall not be read as a concession by Grantee that it needs authorization to provide service other than Cable Service. E.Grantee promises,as a condition of exercising the privileges granted by this Franchise, Grantee will comply with the terms and conditions of this Franchise. 2.2 Use of Public Streets and Wavs:Subject to Grantor's supervision and control,Grantee may erect,install,construct,repair,replace,reconstruct,and retain in, on,over,under,upon, across,and along the public Streets within the Franchise Area such wires,cables, conductors,ducts,conduits,vaults,amplifiers,pedestals,attachments and other property and equipment as are necessary and appurtenantto the operation ofa Cable System for the provision ofCable Service within the Franchise Area.Grantee shall complywith allapplicable construction codes,laws,ordinances,regulations and procedures,must obtain any and all necessary permits from the Public Works Department priorto commencing any construction activities.Grantee,through this Franchise,is granted extensive and valuable rights to operate its Cable System for profit using the streets within the Franchise Area in compliance with all applicable Grantor construction codes and procedures.As trustee for the public, Grantor is entitled to fair compensation to be paid for these valuable rights throughout the term ofthis Franchise. 2.3 Duration: A.The term of this Franchise and all rights,privileges,obligations and restrictions pertaining thereto shall be from the effective date ofthis Franchise through March 31, 2022. B. If Grantee successfully completes an upgrade as set forth in Section 10,and if such upgrade is confirmed by the City,which confirmation willnot be unreasonably withheld, then Grantee shall be entitled to an automatic five (5)year extension ofthe Franchise term (that is,through March 31,2027). 2.4 Effective Date:The effective date of this Franchise shall be April 1,2012,unless Grantee fails to file an unconditional written acceptance of this Franchise and post the security required by Section 5.3 hereof by August 31,2011,in which event this Franchise shall be null f***) and void,and any and all rights of Grantee to own or operate a Cable System within the Franchise Area under this Franchise are hereby terminated. n u U ORDINANCE NO.2636 PAGE 7 December 13,2011 2.5 Franchise Nonexclusive:This Franchise shall be nonexclusive,and is subject to all prior rights,interests,agreements,permits,easements or licenses granted by Grantor to any Person to use anyStreet,right-of-way,easement, or property for any purpose whatsoever, including the right of Grantor touse same for any purpose itdeems fit in connection with its exerciseof lawful police power.Grantor mayatanytime grant authorization tousethe public rights-of-way for any purpose notincompatible with Grantee's authority underthis Franchise and forsuch additional Franchises for Cable Systems,as Grantordeems appropriate,upon such terms and conditions as Grantor deems appropriate. 2.6 Grant of Other Franchises:In the event the Grantor enters into a Franchise,permit,license, authorization,orotheragreement of any kind with anyotherPersonorentityotherthanthe Grantee to enter into the Grantor's Streets forthe purpose of constructing or operating a Cable System orproviding Cable Servicetoany part ofthe Franchise Areaoris required to extend CableService to underthe provisions of Section 11.2 ofthis Franchise,the material provisions thereof shall be reasonably comparable tothose contained herein,in order that one operator notbe granted an unfair competitive advantage overanother,andto provide all parties equal protection under the law. 2.7 Police Powers:Grantee's rights hereunderaresubjecttothe lawful police powersof Grantor to adopt and enforce ordinancesnecessary to the safety,health,andwelfareofthe public, andGranteeagrees to complywith all applicable lawsandordinancesenacted, orhereafter enacted, by Grantor or any other legally-constituted governmental unit having lawful jurisdiction overthe subject matterhereof.Notwithstanding the foregoing,Grantor agrees it will not impose any regulationpursuanttothe Cable Act notcontained herein duringthe term of this Franchise.Provided however,in the event of conflicts between provisions of this Franchise and other ordinances of the Grantor,the terms of this Franchise shall prevail except as to health and safety issues. 2.8 Relations to Other Provisions of Law:This Franchise and all rights and privileges granted under the Franchise are subject to, and the Grantee must exercise allrights in accordance with,applicable law,as amended over the Franchise term.However,this Franchise is a contract,subject only to the Grantor's exercise of its police and other powers and all applicable law.This Franchise does not confer rights or immunities upon the Grantee other than as expressly provided herein.Neither Grantee nor Grantor waives its rightto challenge the lawfulness of a particular enactment,including on the grounds that a particularaction is an unconstitutional impairmentof contractual rights.The Franchise issued and the Franchise fee paid hereunder are in lieu of any other required permit,authorization,fee,charge,ortax, except for Grantor's utilityoccupation tax, as referenced in Section 3.1,set as ofthe effective date at 3%,which is subject to change at the City Council's discretion,or unless expressly stated herein. 2.9 Effect of Acceptance:By accepting this Franchise,the Grantee: (1)acknowledges and accepts the Grantor's legal rightto issue and enforce this Franchise; (2)accepts and agrees to comply with each and every provision of this Franchise; and (3)agrees that its will not raise any claim to the contrary. SECTION 3.FRANCHISE FEE AND FINANCIAL CONTROLS 3.1 Franchise Fee:Ascompensation forthebenefits and privileges granted underthis Franchise and inconsideration of permission to use Grantor's Streets,Grantee shall pay as a Franchise ii fee to Grantor,throughout the duration of this Franchise,an amount equal to five percent (5%)of Grantee's Gross Revenues.Accrual of such Franchise fees shall commence as of the effective date of this Franchise.The Franchise fees are in addition to all other fees, assessments,taxes or payments of general applicability that the Grantee may be required ORDINANCE NO.2636 PAGE8 December 13,2011 to pay under any federal,state,or local law.The Cityof Moses Lake,as of the date of the adoption ofthis ordinance,assesses a three percent (3%)utility occupational tax against f\ cable subscription systems. The tax issubjectto change.'' 3.2 Payments: Grantee's Franchisefee payments to Grantor shallbe computed monthly.Each monthly payment shall be due and payable no later than thirty (30)days afterthe lastdayof the preceding month. 3.3 Acceptance of Payment and Recomputation: No acceptance of any payment shall be construed as an accord by Grantorthat the amount paid is, in fact,the correct amount, nor shall anyacceptanceof paymentsbe construed as a releaseofanyclaim Grantor mayhave for further or additional sums payable or for the performance of any other obligation of Grantee. 3.4 Monthly Reports: Each payment shall be accompanied by a written report to Grantor, containing an accurate statement in summarized form, as well as in detail, of Grantee's Gross Revenues and the computation of the payment amount. 3.5 Annual Reports: Grantee shall,no laterthan one hundred twenty (120)days afterthe end of each calendaryear,furnish tothe Citya statement statingthe totalamount ofgross revenues and all payments, deductions, and computations forthe periodcovered by the payments. Such statement shall be reviewed and certified by an officer of Grantee prior to submission to the City. 3.6 Audits:On an annual basis,upon thirty (30)days'priorwritten notice,at Grantor's sole cost and expense (except as expressly provided below),Grantor shall have the rightto conduct an independent audit during normal business hours of Grantee's records reasonably related to the administration orenforcement ofthis Franchise, inaccordance with generally accepted accounting principles.The City may hire an independent certified public accountant to audit the Grantee's financial records,in which case the Grantee shall provide copies of all necessary records to the certified public accountant.Ifthe audit shows that Franchise fees have been underpaid by five percent (5%) or more,Grantee shall pay the reasonable fees ofthe independent certified public accountant within thirty (30)days from receipt ofthe audit results.Ifsuch audit reflects an overpayment,Grantor refund such overpayment to Grantee within thirty (30)days ofthe audit results.Any such audit shall take placewithin thirty-six (36) months following the respective calendar year and for records thereof in question. 3.7 Interest on Late Payments:In the event that a Franchise fee payment or other sum is not received by the Grantor on or before the due date,or is underpaid,the Grantee shall pay in addition to the payment,or sum due,interest from the due date at a rate equal to the interest rate specified for judgments entered in the Superior Court of the State of Washington. 3.8 Alternative Remedies:If any Section,subsection,paragraph,term or provision of this Franchise or any ordinance,law, or document incorporated herein by reference is held by a court ofcompetentjurisdiction to beinvalid,unconstitutional or unenforceable,such holding shall be confined in its operation to the Section,subsection,paragraph,term or provision directly involved in the controversy in which such holding shall have been rendered and shall not in any way affect the validity of any other Section,subsection,paragraph,term or provision hereof. 3.9 Additional Commitments Not Franchise Fees:No term or condition in this Franchise shall (] in any way modify or affect Grantee's obligation to pay Franchise fees to Grantor.Although the total sum of Franchise fee payments and additional commitments set forth elsewhere in this Franchise (e.g.business license fee)maytotal more than five percent (5%)of Grantee's n u u u ORDINANCE NO.2636 PAGE9 December 13,2011 Gross Revenues in any 12-month period,Grantee agrees that the additional commitments herein are not Franchise fees as defined under any federal law, nor are they to be offset or credited against any Franchise fee payments due to Grantor. 3.10 Costs of Publication:Grantee shall pay the reasonable cost of newspaper notices and publication pertaining to this Franchise and any amendments thereto,as such notice or publication is reasonably required by Grantor or applicable law. 3.11 Tax Liability:Payment of the franchise fees under this franchise shall not exempt Grantee from the payment of any generally applicable license,permit fee, or other generally applicable fee, tax, or charge on the business,occupation,property, or income of Grantee that may be lawfully imposed by the City. 3.12 Payment on Termination:If this Franchise terminates for any reason,the Grantee shall file with the City within ninety (90)calendar days of the date of the termination, a financial statement,certified by a declaration or affidavit of an officer of the Grantee,showing the Gross Revenues received by the Grantee since the end of the previous fiscal year.The City reserves the rightto satisfy any remaining financial obligations of the Grantee to the City by utilizing the funds available pursuant to security provided by the Grantee in accordance with Section 5. SECTION 4.ADMINISTRATION AND REGULATION 4.1 Authority: Grantor is vested withthe power and rightto regulate the exercise of the privileges permitted by this Franchise in the public interest, orto delegate that power and right,or any part thereof,to the extent permitted under state and local law, to any agent,in its sole discretion. 4.2 Rates and Charges: Allof Grantee's rates and charges relatedto orregarding Cable Service shall be subject to regulation by Grantorto the full extent authorized by applicable federal, state and local laws. 4.3 Rate Discrimination: All of Grantee's rates and charges shall be published (in the form of a publicly available rate card), and shall be nondiscriminatory as to all Persons and organizations of similarclasses,under similarcircumstances and conditions. Grantee shall apply its rates in accordance with governing law, with similar rates and charges for all Subscribers receiving similarCable Service,without regard to race, color,familial,ethnic or national origin,religion,age,sex,sexual orientation, marital,military or economic status,or physical or mental disability,or geographic location in the Franchise Area.Grantee shall provide equivalent Cable Service to all Residential Subscribers at similar rates and to Commercial Subscribers as authorized byapplicable laws. Nothing herein shall beconstrued to prohibit: A.The temporary reduction or waiving of rates or charges in conjunction with valid promotional campaigns; B.The offering of reasonable discounts to senior citizens or economically disadvantaged citizens; C. Grantee fromestablishing differentand nondiscriminatoryrates and charges and classes ofservice for commercial customers,aswell as different nondiscriminatorymonthlyrates for classes of commercial customers as allowable by federal law and regulations; or ORDINANCE NO.2636 PAGE 10 December 13, 2011 D.Grantee from establishing different and nondiscriminatory rates and charges for residential Subscribers as allowable by federal law and regulations./""N 4.4 Filing of Rates and Charges: A.Upon written request,not more frequent than monthly,Grantee shall provide to Grantor a complete schedule of applicable rates and charges for Cable Service provided under this Franchise.Nothing in this subsection shall be construed to require Grantee to file rates and charges under temporary reductions or waivers of rates and charges in conjunction with promotional campaigns provided that Grantee shall make reasonable efforts to notify Grantor in writing in advance of such promotions. B.Grantee shall provide upon written or faxed request from Grantor a complete schedule of current rates and charges for any and all Leased Access Channels,or portions of such Channels,provided by Grantee. 4.5 Time Limits Strictly Construed:Whenever this Franchise sets forth a time for any act to be performed by Grantee,such time shall be deemed to be of the essence,and any failure of Grantee to perform within the allotted time may be considered a material violation of this Franchise and sufficient grounds for Grantor to invoke any relevant provision of this Franchise,subjectto the notice and cure provisions of Section 14.However,in the eventthat Grantee is prevented or delayed in the performance of any of its obligations under this Franchise by reason beyond the reasonable control of Grantee,such as acts of God (for example,floods,tornadoes,earthquakes,power outages,strikes or walkouts,technical failures or unusually severe weather conditions),Grantee's performance shall be excused during the force majeure occurrence and Grantee thereafter shall,underthe circumstances, promptly perform the affected obligations under this Franchise or procure a substitute for such obligation which is reasonably satisfactory to Grantor.Grantee shall not be excused by mere economic hardship nor by misfeasance or malfeasance of its directors,officers or employees. n 4.6 Performance Evaluation Sessions: A. City may hold upon no less than ninety (90)days written notice to Grantee and no more frequently than once per calendar year regular performance evaluation sessions upon the sixty (60)and one hundred twenty (120)month anniversary dates of the effective date of this Franchise.All such evaluation sessions shall be conducted by City and Grantee jointly. B.Special evaluation sessions may be held at any time by City during the term of this Franchise upon the same notice as specified in Subsection (A). C. All regular evaluation sessions shall be open to the public and announced at least one week in advance in a newspaper of general circulation in the Franchise Area. D.Evaluation sessions shall deal with the Grantee's performance of the terms and conditions ofthe Franchise and compliancewith state and federal laws and regulations. E.As part of the performance evaluation session,Grantee shall submitto the City a plant survey report, or map,reasonably acceptableto the City which includes a description of the portions ofthe Franchise Area that are cabled and have all Cable Services available,f**) including those areas where the system has been upgraded pursuant to Section 10 of this Franchise if so requested by the City.Such report shall also include the number of miles and location of overhead and underground cable plant. Ifthe City has reason to u u u ORDINANCE NO.2636 PAGE 11 December 13,2011 believe that a portion or all of the Cable System does not meet the applicable FCC technical standards,the City, at its expense,retains the right to appoint a qualified independent engineer to evaluate and verify the technical performance of the Cable System;provided, Grantor promptly provides Grantee with a copy of such report, at Grantee's cost,and that Grantee has a representative present during any such evaluation and verification. F.During evaluations under this Section, Grantee shall cooperate with City and shall provide such information and documents that have been filed with the FCCwithin the most recent three year period. SECTION 5.FINANCIAL AND INSURANCE REQUIREMENTS 5.1 Insurance Reguirements: A.General Reguirement.Grantee must have adequate insurance during the entire term of this Franchise to protect against claims for injuries to Persons or damages to property which in any way relate to, arise from,or are connected with this Franchise or involve Grantee, its agents,representatives,contractors,subcontractors and their employees. B.Initial Insurance Limits. Grantee must keep insurance in effect in accordance with the minimum insurance limitsherein set forth by the Grantorfromtime to time.The Grantee shall obtain policies for the following initial minimum insurance limits: 1.Commercial General Liability:Two-milliondollars ($2,000,000)combined single limit peroccurrence for bodily injury,personal injury,and property damage, and for those policies with aggregate limits,a two-and-one-half million dollars ($2,500,000) aggregate limit; 2. Automobile Liability:Two-million dollars ($2,000,000) combined single limit per accident for bodily injury and property damage;and 3.Employer's Liability:Two-million dollars ($2,000,000). 5.2 Indemnification A.Scope of Indemnity.Grantee shall, at its sole cost and expense,indemnify,hold harmless,and defend the Grantor and its officers,boards,commissions,agents,and employees against any and all claims,including,but not limited to,third party claims, suits,causes of action,proceedings,and judgments fordamages orequitable relief(the "Claims")solely to the extent the Claims arise out of Grantee's or Grantee's agent's negligent acts or negligent omissions;provided,however, the Grantee will not be obligatedto indemnifyGrantor oritsofficers,commissions,agents, oremployees should Grantor interveneinany proceeding regarding the grantofthis Franchise.This indemnity provision shall include damages and liabilities,ifand to the extent such damages and liabilities are a result of Grantee's or Grantee's agent's negligent acts or negligent omissions. B. Duty to Give Notice and Tender Defense.The Grantor shall give the Grantee written notice withinfive (5) days of receiving any claimorof the commencement of any action, suit orother proceeding covered by the indemnity inthis Section.Failure of Grantor to providesuch notice shall result inwaiver of Grantee's indemnification obligations with respect to such action;suit orother proceeding otherwise covered by the indemnityin this Section.In the event any such claim arises,the Grantoror any other indemnified ORDINANCE NO.2636 PAGE 12 December 13,2011 party,as defined by this Franchise,shall tender the defense thereof to the Grantee and the Grantee shall have the obligation and duty to defend,settle or compromise any /*"N claims arising thereunder,and the Grantor shall cooperate fully therein.Grantee shall accept or decline the tender within ten (10)days of its receipt of the written notice described above.In the event that the Grantee declines defense ofthe claim in violation ofthis Section 5.2,the Grantor may defend such claim and seek recovery from Grantee its reasonableexpenses forattorneys'fees and otherexpenses,including expertwitness fees,incurred by Grantor for defense and in seeking such recovery. 5.3 The provisions of Section 5.2 shall apply to claims by Grantee's own employees and the employees of Grantee's agents,representatives,contractors, and subcontractors to which Grantee might otherwise be immune underTitle 51 RCW.This waiver of immunity underTitle 51 RCW has been mutually negotiated by the parties hereto, and Grantee acknowledges that the Citywould not enter intothis Franchise without Grantee's waiver thereof. 5.4 Performance Bond: Upon or before the effective date of this Franchise,Grantee shall obtain and maintain during the entire term of this Franchise, including any extensions or renewals thereof,at its own cost and expense,a performance bond that shall be filedwith the Grantor in the amount of fifteen thousand dollars ($15,000)as guarantee for the faithful performance by itof all the provisionsof this Franchise. Such bond shall be reviewed atthe end of sixty (60)months.The amount of the bond shall be set forthe remainder of the Franchise term at the greater of fifteen thousand dollars ($15,000)orthe amount of franchise fees paidin the sixtieth month. SECTION 6.CUSTOMER SERVICE 6.1 Customer Service Standards:The Grantee shall reasonably meet or exceed any customer service standards adopted by the FCC so long as they are commercially reasonable. 6.2 Subscriber Privacy:Grantee will comply with privacy rights of Subscribers in accordance with federal and state law. 6.3 Local Office:Throughoutthe Franchise term,the Grantee must maintain, at a minimum,one (1)customer service center located in Grant County withinten miles of Moses Lake's city limitswhich willbe open during normal business hours to provide Subscribersthe opportunity for the receipt and pickup of Subscriber equipment and for bill payments and complaints. Grantee shall maintain telephones and other equipment so that customer complaints and service requests can be received by Grantee on a 24-hour basis at a toll-free telephone number. 6.4 Emergency Broadcast:The Grantee shall cooperate to the extent required by FCC rule or the Cable Act with Grant County Emergency Services (GCES)or its successor agency to accommodate Emergency Alert System information or other information the GCES deems appropriate to be broadcast overthe Grantee's system compatible with Grantee's equipment. SECTION 7.REPORTS AND RECORDS 7.1 Open Records A.Grantee shall manage all of its operations in accordance with a policy of keeping itsdocumentsandrecordsopenandaccessibletoCity.City shall have access to,and the f^*) rightto inspect,any books and records of Grantee, which are reasonably related and necessary to the administration or enforcement of the terms of this Franchise.Grantee shall not deny City access to any such records of Grantee on the basis that Grantee's n u U ORDINANCE NO.2636 PAGE13 December 13,2011 records are under the control of any parent corporation,affiliated entity or a third party related to this Franchise.City may,in writing,request copies of any such records or books and Grantee shall provide such copies withinthirty (30)days of the transmittal of such request.One copy of all reports and records required under this or any other Section shall be furnished to Cityat the sole expense of Grantee.Ifthe requested books and records are too voluminous,or for security reasons cannot be copied or removed, then Grantee may request,inwritingwithin ten (10)days,that City inspect them at one of Grantee's local area offices.Ifany books or records of Grantee are not kept ina local area office and not made available in copies to City upon written request as set forth above,and if City reasonably determines that an examination of such records is necessary or appropriate to the performance of any of City's duties,administration or enforcement of this Franchise,then all reasonable travel expenses incurred in making such examination shall be paid by Grantee.If any books or records of Grantee are not kept ina local office,Grantee will provide or otherwise make such documents available for inspection and review at the local office within ten (10)working days. B.Grantee shall at all times maintain and allow City reasonable access and the right to review a full and complete set of plans,records and "as built"maps in the Grantee's possession showing the exact location of allCable System equipment installed orin use in the Franchise Area,exclusive of electronics,Subscriber drops and equipment provided in Subscribers'homes.These maps shall be maintained ina standard format and medium agreed upon by the City and the Grantee. 7.2 Confidentiality:City agrees to treat as confidential any books and records that constitute proprietary orconfidentialinformationunder federalor state law,to the extent Grantee makes ,Cityaware of such confidentiality.Grantee shallbe responsible forclearlyand conspicuously \_J stamping the word "Confidential"on each document that contains confidential or proprietary information, and shall provide a brief written explanation as to why such information is confidential under state or federal law. If City receives a demand from any Person for disclosure of any information designated by Grantee as confidential, City shall, so far as consistent with applicable law,advise Grantee in advance so that Grantee may take appropriate steps to protect its interests and provide Grantee with a copy of any written request by the party demanding access to such informationwithina reasonable time.Until otherwise ordered by a court or agency of competent jurisdiction,City agrees that, to the extent permitted by state and federal law,itshall deny accessto any of Grantee's books and records marked confidential as set forth above to any Person. 7.3 Complaint File:Grantee shall keep an accurate and comprehensive file of any and all complaints regarding the Cable System as required by the FCC. 7.4 Inspection of Facilities:Grantormay, at itsown cost and expense,inspect upon reasonable writtenrequest any of Grantee's facilities and equipment to confirm performance under this Franchise at any time upon at least five (5)business days notice, or, in case of an emergency,upon demand without priornotice. 7.5 False Statements:Any intentional false or misleading statement or representation in any report required by this Franchisemay be deemed a material violation of this Franchiseand may subject Granteeto all remedies, legalorequitable,whichareavailabletoCityunderthis Franchise or otherwise. ORDINANCE NO.2636 PAGE 14 December 13, 2011 SECTION 8.PROGRAMMING 8.1 Broad Programming Categories: A.Grantee's Cable System shall provide a wide diversity of programming.Grantee shall provide at least the following broad categories of programming to the extent such categories are commercially reasonably available: 1.Educational programming; 2.Washington State news and information; 3.Sports; 4.General entertainment (including movies); 5.Children/family-oriented; 6.Arts,culture and performing arts; 7.Foreign language; 8.Science/documentary; 9.Weather information; 10.Programming addressed to diverse ethnic and minority interests in the Franchise Area;and 11.National,state,and local government affairs. B.Grantee shall not delete any broad category of programming within its control. C.The parties expressly agreethat the programming described in Section 8.1 (A)represent broad categories of video programming within the meaning of 47 U.S.C.544(b)(2) (B), as may be amended from time to time. 8.2 Parental Control Device:Upon request by any Subscriber,Grantee shall make available a parental control or lockout device;traps or filters to enable a Subscriber to control access to both the audio and video portions ofanyor all Channels.Granteeshall inform its Subscribers of the availability of the lockout device at the time of their initial subscription and annually thereafter. 8.3 Leased Access Channels:Grantee shall comply with the FCC's rules and regulations regarding Leased Access Channels. 8.4 Continuity of Service: A. Itshall bethe right ofall Subscribers to continue to receive Cable Service from Grantee insofar as their financial and other obligations to Grantee are satisfied and Grantee continues to serve the Franchise Area.Subject to the force majeure provisions of this Franchise,Grantee shall use commercially reasonable efforts to ensure that all Subscribers receive continuous,uninterrupted Cable Service. B. Inthe event ofa change in ownership,or in the eventa newCable Operator acquires the Cable System in accordance with this Franchise,Grantee shall reasonably cooperate with Grantor and such new Cable Operator in maintaining continuity of service to all Subscribers. 8.5 Community Programming Needs:Atthewritten requestofthe Mayor,but no more than twice during the term of this Franchise,ninety (90)days after a Performance evaluation session f0**) as provided in Section 4.6,the Grantee may furnish to all Subscribers along with their monthly service statement,a list of broad categories of programming,and other services available to Grantee.The menu may be inthe format ofa mailback survey for determination n O u U ORDINANCE NO.2636 PAGE15 December 13,2011 ofthe Subscriber's programming preference.The results ofthe survey are to be provided the City as soon as commercially practical by the Grantee with any proposed change(s)in programming. 8.6 Service for Disabled:To the extent technically feasible and in accordance with FCC requirements,Grantee shall retransmit all closed-captioned signals made available by programmers in conjunction with programming in its line-up and which are provided in order to facilitateviewing by handicapped persons.Grantee shall comply with the Americans with Disabilities Act,any amendments thereto and any otherapplicable federal,state orlocal laws or regulations.To the extenttechnically feasible and in accordancewith FCC requirements, Grantee shall maintain the necessary head-end equipmentto make Second Audio Program (SAP)features available to Subscribers.Grantee's obligations under this subsection do not extend to providing customer premises equipment. SECTION 9.GENERAL STREET USE AND CONSTRUCTION 9.1 Construction: A.Subject to applicable laws,regulations and ordinances of Grantor and the provisions of this Franchise,Grantee may perform all construction necessary for the operation of its Cable System.All construction and maintenance of any and all facilities within Streets incident to Grantee's Cable System shall,regardless of who performs the construction, be and remain Grantee's responsibility.Grantee shall apply for,and obtain,all permits necessary for construction or installation of any facilities, and for excavating and laying any facilities within the Streets.Grantee shall pay, priorto issuance,all applicable fees ofthe requisite construction permits. B.Prior to beginning any construction,Grantee shall provide Grantor with a construction schedule for work in the Streets.All construction shall be performed in compliance with this Franchise.When obtaining a permit,Grantee shall inquire about other construction currently in progress,planned or proposed,in order to investigate thoroughly all opportunities for joint trenching or boring.Whenever it is possible and reasonably practicable to joint trench or share bores or cuts,Grantee shall work with other providers, licensees,permittees and franchisees so as to reduce as far as possible the number of Street cuts. 9.2 Location of Facilities:Grantee shall use the one call locator service priorto performing any excavation in the Grantor's Streets. 9.3 Relocation: Grantorshall havethe rightto reasonably require Granteeto changethe location of any part of Grantee's Cable System within the Streets when the public convenience requires such change,and the expense thereof shall be paid by Grantee.Should Grantee fail to remove or relocate any such facilities by the date reasonably established by Grantor, Grantor may effect such removal or relocation,and the expense thereof shall be paid by Grantee,including all reasonable costs and expenses incurred by Grantor due to Grantee's delay. IfGrantor requires Grantee to relocate its facilities located within the Streets,Grantor shall make a reasonable effort to provide Grantee with an alternate location within the Streets. 9.4 Restoration of Streets: A.Whenever Grantee disturbs the surface of any Street for any purpose,Grantee shall promptly restore the Street to at least its prior condition. ORDINANCE NO.2636 PAGE 16 December 13,2011 B. All of Grantee's work under this Franchise,and this Section in particular,shall be done in strict compliance with this Franchise rules,regulations and ordinances of Grantor./"""N Priorto making any Street or right-of-way cuts or openings,Grantee shall provide written notice to Grantor. 9.5 Maintenance and Workmanship: A.Grantee's Cable System shall be constructed and maintained in such manner as not to interfere with sewers,water pipes,or any other property of Grantor, or with any other pipes, wires, conduits,pedestals,structures,equipment orother facilities that may have been laid in the Streets by, or under,Grantor's authority. B.Grantee shall provide and use any equipment necessary to control and carry Grantee's Cable System signals so as to prevent injuryto Grantor's propertyor property belonging to any Person. Grantee, atitsown expense,shall repair,change and improve its facilities to keep them in good repair,and safe and reasonably presentable condition. 9.6 Reservation of Grantor Street Rights: Nothing in this Franchise shall prevent Grantor or utilities owned,maintained or operated by public entities other than Grantor, from constructing sewers; grading, paving,repairing or altering any Street;repairing orremoving water mains;or constructing or establishing any other public work or improvement.All such work shall be done,insofaras practicable,so as notto obstruct,injure or preventthe use and operation of Grantee's Cable System.However, ifany of Grantee's Cable System interferes with the construction or repair of any Street or public improvement,including construction, repair or removal of a sewer or water main,Grantee's Cable System shall be relocated in accordance with 9.3.^-v^ 9.7 Use of Conduits bv Grantor:The Grantee and the City shall grant to each other,free of expense,joint use of any and all poles, ducts,conduits or equipment inthe streets or other public places owned by either party for any proper purpose, insofar as the same may be done without interfering with the use and enjoyment of either party's own wires and other facilities and provided that all such joint use shall be in full compliance with all rules, regulations,requirements and conditions of the National Electrical Safety Code prepared by the National Bureau of Standards,the National Electrical Code ofthe National Board of Fire Underwriters affecting electrical installations which may be presently in effect or future amendments thereto as well as being subject to the City's obligations to any other franchise holder with which it may have a similar joint use agreement.Additionally,the City may install or affix and maintain wires and equipment owned by the City for municipal purposes in or upon Grantee's equipment in the Streets and other public places without charge to the City, to the extent spacetherein or thereon is reasonably available,and pursuant to all applicable City Ordinances and Codes.For the purposes of this Subsection 9.7, "municipal purposes" includes,but is not limited to,the use of the structures and installations by Grantor for fire, police,traffic,water,telephone,or signal systems,but not for Cable System purposes in competition with Grantee.Grantee shall not deduct the value of such use of its facilities from its Franchise fees payable to Grantor. 9.8 Street Vacation:If any Street or portion thereof used by Grantee is vacated by Grantor during the term of this Franchise,unless Grantor specifically reserves to Grantee the right to continue its installation in the vacated Street,Grantee shall with thirty (30)day written notice and without expense to Grantor either remove its facilities from such streets and restore street in accordance with 9.4 or negotiate an arrangement with the owner or controller {"**) ofthe vacated Street apart from this Franchise. u u u ORDINANCE NO.2636 PAGE17 December 13,2011 9.9 Discontinuing Use of Facilities:Whenever Grantee discontinues using any facilitywithin the Streets,Grantee shall provide written notice to Grantor's with a complete description of the facility and the date on which Grantee intends to discontinue using the facility.Grantee may remove the facility or request that Grantor allow it to remain in place.Notwithstanding Grantee's request that any such facility remain in place, Grantor may require Grantee to remove the facilityfrom the Street or modify the facility to protect the public health,welfare, safety,and convenience,or otherwise servethe publicinterest. Grantor mayrequire Grantee to perform a combination of modification and removal of the facility.Grantee shall complete such removal or modification in accordance with a schedule approved by Grantor.Until such time as Grantee removes or modifies the facility,or until the rights to and responsibility for the facility are accepted by another Person having authority to construct and maintain such facility,Grantee shall be responsible for all necessary repairs and relocations of the facility, as well as maintenance ofthe Street,in the same manner and degree as ifthe facilitywere in active use,and Grantee shall retain all liability for such facility.If Grantee abandons its facilities,Grantor may choose to use such facilities for any purpose whatsoever including, but not limited to, public,governmental or educational purposes.For purposes of this Section 9.9,"abandons"shall have the meaning set forth in Section 15.1 of this Franchise. 9.10 Hazardous Substances: A Grantee shall comply with all applicable local,state and federal laws,statutes, regulations and orders concerning hazardous substances relating to Grantee's Cable System in the Streets. B.Grantee shall maintain and inspect its Cable System located in the Streets.Upon reasonablewritten notice to Grantee,Grantor and Grantee mayjointly inspect Grantee's facilities in the Streets to determine if any release of hazardous substances has occurred, or may occur, from or related to Grantee's Cable System.In removing or modifying Grantee's facilities as provided in this Franchise,Grantee shall also remove all residues of hazardous substances related thereto. 9.11 Undergrounding of Cable: A.Wiring: 1.Where electric,telephone or other utility or other third party wiring is installed .underground at the time of Cable System construction,or when such wiring is subsequently placed underground,all Cable System lines orwiringand equipment shall also be placed underground on a nondiscriminatory basis with other wire line service at no additional expense to the Grantor.Related Cable System equipment such as pedestals mustbe placed inaccordancewith applicable Code requirements and underground utility rules as reasonably interpreted by the Grantor's Directorof Public Works.In areas where electric,telephone or other utility or other third party wiring is aerial,the Grantee may install aerial cable,except when a property owner or resident requests underground installation and agrees to bear and pre-pay the additional cost in excess of aerial installation. 2.The Grantee shall utilize existing poles and conduit wherever commercially reasonable. 3.This Franchise does not grant, give or convey to the Grantee the right or privilege to installits facilitiesinany manner on specific utility poles orequipment orany other Person without their permission except to the extent permitted under applicable federal and state law. ORDINANCE NO.2636 PAGE 18 December 13,2011 B.Repair and Restoration of Property: 1.The Grantee shall protect public and private property from damage by its Cable System.If damage occurs the Grantee shall promptly notify the property owner within twenty-four (24)hours of its knowledge of such damage in writing or in person. 2. If public or private property is disturbed or damaged by Grantee,the Grantee shall restore the property to its former condition,normal wear and tear excepted.Public right-of-way shall be repaired and restored in accordance with Section 9.4. Private property must be restored promptly,considering the nature ofthe workthat must be performed and in no event later than five (5)business days. 3. Prior to entering onto private property to construct,operate or repair its Cable System where the property owner has not requested such construction,operation or repair,Grantee shall give the Person residing on or using the property adequate written notice (such as a door hanger which clearly identifies the anticipated construction)that it intends to work on the property,a description of the work it intends to perform and a name and phone number the Person can callto protest or seek modification of the work.Work shall bedone in a mannerthat causesthe least interference with the rights and reasonable convenience of property owners, residents and users. C.Movement of Cable System For and Bv Grantor: To the extent necessary,the Grantor may remove,replace,modify or disconnect Grantee's facilities and equipment located in the public right-of-way or on any other property of the Grantor in the case of fire, disaster,or other emergency,or when a project or activity of the Grantor's makes the removal,replacement,modification or disconnection necessaryor less expensive for the Grantor.Except during an emergency,the Grantor shall provide reasonable written notice to Grantee priorto taking such action and shall provide Grantee with reasonable opportunity to perform such action.Following notice by the Grantor,Grantee shall remove,replace,modify or disconnect any of its facilities or equipment within any public right-of-way,or on any other property of the Grantor,except that the Grantor shall provide at least sixty (60)days'written notice of any major capital improvement project which would require the removal,replacement,modification or disconnection of Grantee's facilities or equipment.Ifthe Grantee failsto complete this workwithin thetime prescribed and to the Grantor's reasonable satisfaction,the Grantor may cause such work to be done and bill the cost of the work to the Grantee.Within thirty (30)days of receipt of an itemized list of those reasonable costs,the Grantee shall pay the Grantor. D.Movement for Other Franchise Holders: If any removal,replacement,modification or disconnection is required to accommodate the construction,operation or repair of the facilities or equipment of another Franchise holder,Grantee shall, after at least thirty(30) days'advance written notice,take action to effect the necessary changes requested by the responsible entity at the responsible entity's sole and pre-paid cost and expense. E.Movement for Other Permittees:At the request of any Person holding a valid permit and upon reasonable advance notice,Grantee shall temporarily raise,lower or remove its wires as necessary to permit the moving ofa building,vehicle,equipment or other item. The permit holder must pay the expense of such temporary changes,and Grantee may require areasonable deposit of the estimated payment in advance.(^) F.Tree Trimming:Subject to acquiring priorwritten permission of the City,the Grantee shall havethe authoritybut not the obligationtotrimtrees that overhang a publicright-of- n n u u u ORDINANCE NO.2636 PAGE19 December 13,2011 way of the City so as to prevent the branches of such trees from coming in contact with its Cable System,in accordance with applicable codes and regulations and accepted professional tree trimming practices; provided that in an emergency situation Grantee may trim trees to protect its facilities in which circumstance written notice of that the trimming occurred shall be delivered to Grantor. 9.12 Codes:Grantee shall strictly adhere to allbuildingand zoning codes in effect at the time of applicable construction.Grantee shall arrange its lines;cables and otherappurtenances,on both publicand private property,insuch a manneras to not cause unreasonable interference with the use of said public or private property by any Person.In the event of such interference,Grantor may require the removal or relocation of Grantee's lines,cables and other appurtenances from the property in question. 9.13 Standards: A. All work authorized and required hereunder shall be done in a safe,thorough and workmanlike manner.The Grantee must complywith all safety requirements,rules and practices and employ all necessary devices as required by applicable law during construction,operation and repair of its Cable System.By way of illustration and not limitation,the Grantee must comply with the National Electric Code,National Electrical Safety Code and Occupational Safety and Health Administration (OSHA)Standards. B.Grantee shall ensure that the drops are properly bonded to the electrical power ground at the home,consistent with the requirements of the National Electric Code and the National Electrical Safety Code. All non-conforming or non-performing drops shall be replaced by Grantee as necessary. SECTION 10.MEANS OF FRANCHISE TERM EXTENSION 10.1 Design. A.Grantee has determined that an appropriate design plan for Cable System upgrade in the Franchise Area will include the following components,which Granteewill provide and construct,in order to take advantage of the five (5) year automatic extension of the Franchise term as provided in Section 2.3 hereof: 1.The System will utilize hybrid fiber/coax architecture. This will utilizedeployment of fiber optic cable throughout those portions of the System to be upgraded.The upgraded plant will tie into a hybrid fiber/coaxial Cable System already serving Subscribers. 2.The System will serve no more than 1,500 customers per fiber node. 3. All active electronics will be at minimum 550 MHZ capable equipment. 4. All passive devices will pass a minimum bandwidth of 550 MHZ. 5. Upon completion of the upgrade,the Cable System shall be capable of delivering at least seventy-seven (77) analog and/or digital Channels of video programming services to Subscribers. 6.As designed,upgraded and maintained, the facilities and equipment on the Cable System must be able to deliver high quality signals that meet,or exceed,FCC technical quality standards.The upgrade shall be completed on or before the end ORDINANCE NO.2636 PAGE20 December 13,2011 of the seventh (7)year of the current ten (10)year term.The upgraded Cable Systemwillbecapable ofsupporting addressableequipmentthroughoutthe System /~\ and shall enable the provision of digitally compressed video services.Grantee's upgraded Subscriber network shall,at all times,meet or exceed the minimum system design and performance specifications required by the FCC. 10.2 System Functionality: A.It is the intent ofthe parties to provide for a process that provides the Grantor with an opportunity to confirm the Cable System design and functionality and ensure the Cable System meets the specifications described herein.Grantee agrees that it shall provide Grantor,upon written request,information that measures the relevant performance and functionality criteria of the Cable System that is generated through the Grantee's established assurance procedures. B. At least sixty (60)days before the upgrade of the Cable System begins,Grantee shall provide the Grantor with a proposed timeline for the upgrade and an opportunity to review the proposed system design plan consistent with Grantee's obligations as described in section 10(A)The Grantor shall indicate, inwriting,to Grantee,within thirty (30)days ofthe receipt and review of materials,as to any aspects ofthe timeline and/or design plan Grantor believes are inconsistent with the requirements set forth herein in Section 10(A)Grantee shall respond within thirty (30)days to the Grantor to resolve any inconsistencies. C.Grantee and Grantor may meet to discuss the progress of the upgrade and work cooperatively to speed the construction (e.g.by discussing any problems in obtaining permits)and to minimize the impact upon Subscribers.At each meeting,Grantee will provide a progress report on the upgrade detailing its progress in satisfying the requirements of this Section. D.Grantee willtake prompt corrective action ifitfinds that ant facilities or equipmenton the Cable System are not operating as expected,or if it finds that facilities and equipment do not comply with the requirements of this Franchise or applicable law. 10.3.Timing ofConstruction:Grantee's decisions on constructing plant for service from each hub or node shall be based solely upon legitimate engineering decisions and cost analysis and shall not take into consideration the income level of the Franchise Area. SECTION 11.TEST AND COMPLIANCE PROCEDURES Upon reasonable written request,Grantee shall advise Grantor of schedules and methods for testing the Cable System on a regular basis to determine compliance with the provisions of applicable FCC technical standards.Representativesof Grantor maywitnesstests,and any written test reports filedwith the FCC may be made available to Grantor upon reasonable written request. As required by FCC Rules, Grantee shall conduct proof of performance tests and cumulative leakage index tests designed to demonstrate compliance with FCC requirements.Grantee shall provide Grantor copies ofthe results of such teststhat are filedwith the FCC upon written request. SECTION 12.SERVICE EXTENSION.CONSTRUCTION.AND INTERCONNECTION 12.1 Eguivalent Service:It is Grantee's general policy that all residential dwelling units in the Franchise Area served by Grantee's Cable System have equivalent availability to Cable n n