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92-9492 Agr Cable FranchiseKUM1r�-Cox Priming — Salina, Kansas XT7 6Y ORDINANCE NO. /t6ruaer Y (Published in The Salina Journal January 1992) ORDINANCE NUMBER 92-9492 AN ORDINANCE OF THE CITY OF SALINA, KANSAS, GRANTING TO COMMUNICATIONS SERVICES, INC., OR THE LAWFUL SUCCESSOR, TRANSFEREE, OR ASSIGNEE THEREOF, A FRANCHISE FOR PROVISION OF CABLE SERVICES TO SALINA, KANSAS; AND REPEALING ORDINANCE NUMBER 8544. BE IT ORDAINED by the Governing Body of the City of Salina, Kansas: SECTION I DEFINITION OF TERMS "Affiliate" means any person which directly or indirectly owns or controls Grantee, any person which Grantee directly or indirectly owns or which it controls, or any person under common ownership or control with Grantee. "Basic Cable Service" or "Basic Service" means any (service tier which includes the retransmission of local broadcast television signals. "Cable Act" means the Cable Communications Policy Act of 1984, as amended. "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 of such video programming or other programming service. "Cable System" means, subject to the limitations in 47 U.S.C. 5522(6), a facility, consisting of a set of•closed transmission paths and associated signal generation, reception, and control equipment or other communications equipment that is designed to provide cable service to multiple subscribers in Salina. "City," "Salina" or "Franchising Authority" means the City of Salina, Kansas, or the lawful successor, transferee or assignee thereof. "Effective Date" shall mean the date the City's Grant becomes effective, as provided in accordance with Section 2.3. "FCC" means Federal Communications Commission, or any successor governmental entity thereto. "Franchise" shall mean this document, all exhibits thereto, all matters incorporated by reference and all amendments thereto, which collectively authorize construction and operation of the Cable System for the purpose of offering Cable Service and other service to Subscribers. "Grantee" means Communications Services, Inc., or the lawful successor, transferee, or assignee thereof. "Install, construct, operate and maintain" or similar formulations, shall include, but not be limited to, all work which is or may be performed in connection with the Cable System or any structure installed or used by Grantee in connection with such Cable System, including but not limited to installation, construction, operation, maintenance, relocation, removal, modification, repair or erection of such structures. — Salina, Kansas "Person" means any entity, including an individual, partnership, association, joint stock company, corporation, or governmental entity. "Public Way" shall mean the surface of, and space above and below, any public street, highway, freeway, bridge, land path, alley court, boulevard, sidewalk, parkway, way, lane, public way, drive, circle, or other public right-of-way, including, but not limited to, public utility easements, dedicated utility strips, or rights-of-way dedicated for compatible uses and any temporary or permanent fixtures or improvements located thereon now or hereafter held by the City in the Service Area which shall entitle the City and the Grantee to the use thereof for the purpose of installing, operating, repairing, and maintaining the Cable System. Public Way shall also mean any easement now or hereafter held by the City within the Service Area for the purpose of installing, operating, repairing and maintaining the Cable System. Public Way shall also mean any easement now or hereafter held by the City within the Service Area for the purpose of public travel, or for utility or public service use dedicated for compatible uses, and shall include other easements or rights-of-way as shall within their proper use and meaning entitle the City and the Grantee to the use thereof for the purposes of installing or transmitting Grantee's Cable Service over poles, wires, cables, conductors, ducts, conduits, vaults, manholes, amplifiers, compliances, attachments, and any other property as may be ordinarily necessary and pertinent to the Cable System. "Service Area" means the municipal boundaries of Salina, as those boundaries may be added to or reduced by annexation or other legal means. "Service Tier" means a category of Cable Service provided by Grantee and for which a separate charge is made by Grantee. "Video Programming" means programming provided by or generally considered comparable to programming provided by a television broadcast station. SECTION II GRANT OF FRANCHISE 2.1 Grant. The City authorizes Grantee to use Public Ways to install, construct, operate and maintain a cable television system. Grantee must pay all fees and compensation to the City required by the Franchise or state or federal statutes and constitutions. 2.2 Term. The Franchise granted hereby shall expire fifteen (15) years after its effective date unless lawfully terminated in accordance with its terms or other applicable law, or altered in accordance with Section 14.4. 2.3 Effective Date. This Franchise shall become effective sixty (60) days after publication, provided that, this Franchise shall not become effective until all conditions precedent are satisfied. For all conditions precedent to be satisfied the City must sign the Franchise Agreement, and Grantee must, within forty-five (45) days of the date the Franchise is signed by the City: (a) sign the Franchise and accept its terms; and (b) provide all warranties, proofs, and other documents required by the Franchise. 2.4 Effect of Acceptance. By accepting the Franchise, Grantee: (a) acknowledges and accepts the City's legal right to issue and enforce the Franchise; (b) agrees it will not oppose intervention by the City in any proceeding affecting the Salina system; (c) accepts and agrees to each and every provision contained herein; and (d) agrees that the Franchise was granted 2 — Salina, Kansas pursuant to processes and procedures consistent with applicable law, and agrees it will not raise any claim or defense to the contrary. 2.5 Rights Reserved. The City reserves its rights under its lawful police powers, and nothing in this Franchise shall be read to limit those rights. The City, among other things, does not waive requirements of various codes and ordinances, and resolutions, including zoning codes, codes regarding building permits and fees, or time or manner of construction. Any fees or charges paid, so long as generally applicable and not unreasonably discriminatory, shall be paid in addition to the franchise fee required under this Franchise. 2.6 Effect on Prior Franchise. Ordinance No. 8544 shall be of no further force and effect as of the Effective Date of this Franchise. The parties, upon the Effective Date of this franchise and payment of the amounts required under this Section 2.6, mutually release any claims each had or may have against the other under Ordinance 8544 except with respect to claims related to the drop agreement between Grantee and the City; claims (if any) related to payment of the 1991 franchise fee; and claims for indemnification, contribution or insurance related to Grantee's operations under Ordinance No. 8544, which survive. Grantee shall pay to the City on the Effective Date of the Franchise, the sum of $770,000 as part of the costs relating to the grant of the new franchise which gives the Grantee the right to distribute, sell, or provide goods or services within the specified service area, pursuant to proceedings conducted under 47 U.S.C. 5546. The parties affirm and agree that the payments made hereunder do not constitute franchise fee payments within the meaning of 47 U.S.C. §542 and fall within the exceptions contemplated by 47 U.S.C. S542(g)(2)(C)-(D)• 2.7 Franchise Non-exclusive. This Franchise shall in no way limit the City from authorizing construction of other cable systems. During the term of this franchise, and subject to limitations on local authority under applicable law: a. Before issuing any cable television franchise the City shall conduct a proceeding to determine whether an applicant's proposal meets the future cable -related needs and interests of the community. Grantee shall be notified of that proceeding, and shall be given an opportunity to appear in the proceeding and to present evidence relevant to the determination of future cable -related needs and interests. b. In the event the City enters into any franchise, permit, license, authorization, or other agreement of any kind with any other person or entity other than Grantee to enter upon or use the streets and public rights-of-way for the purposes of constructing or operating a cable system or providing cable service to any part of the Service Area, the material provisions thereof shall be reasonably comparable to those contained herein in order that one operator not be granted an unfair competitive advantage over another. C. However, Grantee must cooperate with a new franchisee concerning the availability of access programming to the new system, to the end that both the benefits and burdens of the access system, including programming shall be equitably shared. 3 — Salina, Kansas SECTION III USE OF STREETS AND PUBLIC GROUNDS 3.1 No Interference or Endangerment. The Grantee may not endanger nor unreasonably interfere with the lives or property of persons; unreasonably interfere with property of the City or any public utility; or unnecessarily hinder or obstruct use of the Public Ways. The Franchise does not establish priority for use of Public Ways over holders of other permits or franchises; it grants no vested interest in occupying any particular position in the Public Ways. The City shall control distribution of space in the Public Ways, but may not exercise that authority unreasonably. No poles shall be erected by the Grantee without the prior approval of the City with regard to location, height, types and any other pertinent aspect. As far as possible, arrangements shall be made for use of existing utility poles. No location of any pole or wire -holding structure shall give rise to a vested interest in City property or Public Ways and such poles or structures shall be removed or modified by the Grantee at its expense whenever the City reasonably determines that the public interest will be enhanced thereby. 3.2 No Hindrance to Public Works and Improvements. Grantee shall, at its cost, install, construct, operate and maintain its System as directed by the City or other authorized government entity so as to permit the City or other authorized government entity to install, construct, maintain or operate public works or public improvements. The Grantee, at its expense, shall relocate or remove its cable system as requested by the City for reasons of traffic conditions, public health and safety and protection of property, street construction, grade change, or construction of any public improvement. Grantee, at its expense, shall promptly alter or relocate its cable system to conform to any new line or grade. Grantee, at its expense, shall remove and relocate its structures which obstruct Public Ways, or whenever the City closes a Public Way. The City shall give the Grantee written notice specifying a deadline for completion of the removal or relocation. If, after fifteen (15) business days from the deadline provided in the written notice, Grantee fails to remove or relocate its system as required by the City or other authorized government entity, the City or other authorized government entity may remove or relocate Grantee's cable system, and Grantee shall compensate the City or other authorized government entity for all reasonable expenses incurred thereby. 3.3 Removal or Relocation in Event of Emergency. In event of emergency, or where the cable system creates or is contributing to an imminent danger to health, safety or property, the City may remove or relocate Grantee's cable system without prior notice. 3.4 Relation to Penalties for Failure to Provide Service. The Grantee shall not be penalized by the City for any failure to provide service which results from relocation or removal under section 3.2 or 3.3, where the cable was installed in accord with applicable safety codes and generally accepted industry standards. 3.5 Other General Conditions on Use of Public Ways. a. Grantee, at its cost, shall protect or support public or private property to prevent damage caused by construction, installation, maintenance or operation of its cable system. If Grantee fails to protect such property, the City may do so, and Grantee shall compensate the City for all reasonable expenses incurred thereby. Grantee, within ten (10) days of completion of work and at its expense, shall restore Public Ways it disturbs to as good a condition as prior to disturbance; and within that period shall repair, replace or compensate property owners for damage to public or 4 private property caused by Grantee (the City may elect to repair or replace public property, such as sewage lines, and bill Grantee for the reasonable cost of repair). Subject to the foregoing, Grantee may trim trees and other vegetation from Public Way, at its expense and subject, at the City's option, to the City's supervision. b. Grantee shall notify any person whose property is damaged by Grantee within four (4) hours of the time the damage is discovered. At a minimum, this section requires Grantee to place a prominent notice in a prominent place on the damaged property, and to make diligent efforts to contact the property owner or resident directly. C. All excavation shall be performed so as to create the least inconvenience to public, and in accordance with permits issued by the City. The City shall have the right to supervise all excavation. 3.6 Special Conditions on Use of Compatible Easements. The Grantee shall ensure: a. that the safety, functioning and appearance of the property and the convenience and safety of other persons are not adversely affected by the installation, construction, maintenance or operation of the cable system; b. that the cable system, or any part thereof, shall be removed or relocated at Grantee's expense upon the property owner's request whenever the compatible easement is closed or relocated in accordance with law; C. that the cost of the installation, construction, operation or maintenance of the cable system or any part thereof shall be borne by the Grantee or the subscriber, in accordance with the requirements of the Franchise; and d. the owner of the property shall be justly compensated in accordance with applicable law by the Grantee for any damages caused by the installation, construction, operation or maintenance of the cable system or any part thereof by the Grantee. 3.7 Movement of Wires for Third Person. Grantee shall raise or lower wires or equipment upon the reasonable request of any third person, including any person holding a building moving permit. Expenses associated with raising and lowering the wires or equipment (except where this Franchise or applicable laws or agreements provide otherwise) shall be paid by the person requesting the same and the Grantee may require advance payment. Grantee shall be entitled to require that it be given up to ten (10) business days advance notice by the person requesting the movement. 3.8 No Guarantee of Accuracy of Maps. The City does not guarantee the accuracy of any maps showing the horizontal or vertical location of existing structures. In Public Ways, where necessary, the location shall be verified by excavation. 3.9 Construction Standards. The construction, installation, operation and maintenance of the Cable System and all parts thereof shall be performed in an orderly and workmanlike manner. All such work shall be performed in accordance with the following safety, construction and technical specifications and codes and standards, as they may now exist or be amended or adopted hereafter: a. Occupational Safety and Health Administration (OSHA Safety and Health Standards; 5 K,hn-Con Printing — Salina, Kansas b. National Electrical Code; C. National Electrical Safety Code (NESC); d. Obstruction Marking and Lighting, AC 70/7460 i.e., Federal Aviation Administration; e. Construction, Marking and Lighting of Antenna Structures, FCC Rules Part 17; f. All Federal, State and Municipal Construction Requirements, including FCC Rules and Regulations; g. All Building and Zoning Codes, and all Land Use Restrictions and local safety codes; and In the event of a conflict among codes and standards, the most stringent code or standard shall apply (except insofar as those standards, if followed, would result in a system which could not meet requirements of federal, state or local law; and except for such minor modifications as are typical in the industry). The City may adopt reasonable additional standards after consultation with the Grantee as required to ensure that work continues to be performed in an orderly and workmanlike manner, or to reflect changes in standards which may occur over the franchise term. 3.10 Subcontractors. All contractors or subcontractors shall be properly licensed, and each contractor or subcontractor shall have the same obligations with respect to its work as Grantee would have under this Franchise and applicable laws if the work were performed by Grantee. Grantee shall be responsible for ensuring that the work of contractors and subcontractors is performed consistent with the Franchise and applicable law, shall be fully responsible for all acts or omissions of contractors or subcontractors and shall be responsible for promptly correcting acts or omissions by any contractor or subcontractor. 3.11 Removal of Wires. Grantee shall remove its cable system from the Public Ways within twelve (12) months of the lawful termination of the Franchise, unless City provides for some later date to ensure continuity of service to subscribers, provided that, this Section 3.11 shall not be read to waive rights Grantee might otherwise have under applicable law. The City may require Grantee to continue to provide service and to cooperate with transition to another provider as necessary to assure continuity of service to subscribers. Grantee may be required to continue to provide service, under the same terms and conditions as if the Franchise remained in effect, for a period not to exceed eighteen (18) months from the later of the scheduled termination date, or the final determination of the lawfulness of any termination. Grantee shall have twelve (12) months to remove its cable system from the last day of any period it is required to continue to provide service. If the cable system is not removed, it shall be deemed abandoned. 3.12 Use of Equipment by City. Subject to applicable tariffs, the City may use poles or conduits of Grantee at no charge, so long as the use does not interfere with Grantee's use. The City shall indemnify, defend and save harmless Grantee for all claims arising out of the City's use of Grantee's poles or conduits, including reasonable attorneys fees and costs. Nothing in this Section prohibits the Grantee from participating in the defense of any litigation by its own counsel at its own cost. 3.13 Aerial and Underground Construction. With regard to all areas of new construction or line extension, where the transmission and distribution facilities of public utilities providing telephone communications and electric services are located underground, the Grantee likewise shall locate its cable system underground. In any area of new construction or line extension where the telephone or electric utility lines are relocated so that both electric and telephone lines are located C Kinn -Cox Printing — Salina, Kansas underground, after the effective date of this Franchise, Grantee likewise shall relocate its cable system underground, if it is given notice and access to the public utilities' facilities at the time that such are placed underground. Notwithstanding this Section 3.13, the City, through exercise of its lawful police powers, may require the Grantee to place existing facilities underground, in which case Grantee shall be compensated for its reasonable costs incurred in placing its facilities underground. SECTION IV SYSTEM FACILITIES, EQUIPMENT AND SERVICES 4.1 System Design. a. Grantee shall upgrade its system so that the system in its entirety uses at least 450 mHz equipment of high quality and reliability. Grantee shall integrate a fiber optic backbone design, and in a manner which will reduce the number of trunk amplifiers in a cascade out of the headend to a maximum number of eight (8), and so that optical receive sites have no more than four (4) trunk amplifiers in a cascade. The fiber optic technology will integrate into the system in a manner which permits the Grantee to take full advantage of the benefits of that technology, including increased reliability and improved system performance. b. Grantee shall install, replace as necessary and maintain, a dedicated, bidirectional fiber optic link between the Access Center and the headend. The link shall be completed within six (6) months of the effective date of the Franchise, or the date the Access Center is completed, whichever is later. The dedicated connection shall be designed and include all equipment, including but not limited to laser transmitters, modulators, and processors required so that the Access Center can send signals to the headend on at least three (3) channels initially; and so that the Access Center can remotely (1) route signals originated at the Center or at other locations onto any of the three access channels on the regular subscriber network; and (2) otherwise control the signals to allow for smooth breaks, transitions, insertion of station ID's and other material. C. The Grantee shall install, replace as necessary and maintain, dedicated bidirectional fiber optic links and all equipment required to make them operable so that the City/County Building, the Bicentennial Center, Fire Station #1, the Law Enforcement Center, the two public high schools, Kansas State University -Salina College of Technology, Kansas Wesleyan, the Public Library, and the Community Theatre, will be able to send signals to the Access Center using those dedicated, bidirectional fiber optic links; provided however, that Grantee is obligated to provide a total of one portable laser transmitter one fixed laser transmitter, and two channel modulators for use at these locations. The link between the City/County Building and the Access Center shall be completed within six (6) months of the effective date of this Franchise, or the date the Access Center is completed, whichever is later. The other links required under this Section 4.1.c shall be completed no later than the date the system upgrade is completed as required by Section 4.1.h hereof, or the date the Access Center is completed, whichever is later. 7 Ku -C , Printing — Salina. Kansas d. The Grantee shall install, replace as necessary and maintain, dedicated bidirectional fiber optic links and all equipment required to make them operable so that all public schools may send signals to the access facility; provided that, Grantee shall have no obligation under this Section 4.1.d. to provide any laser transmitter or modulator. The links shall be completed by the date the system upgrade is completed as required by Section 4.1.h hereof. e. The Grantee shall use equipment generally used in high-quality, reliable, modern systems of similar design, including but not limited to back-up power supplies capable of providing power to the system for three (3) hours in the event of an electrical outage; and including but not limited to modulators, antennae, amplifiers and other electronics which permit and are capable of passing through the signals received at the headend without substantial alteration or deterioration. This obligation shall include the obligation to install equipment to retransmit in stereo satellite and local broadcast signals provided in stereo. The obligation to provide back-up power supplies requires Grantee to provide back-up power supplies at each fiber optic receive node. f. The Grantee shall install equipment so that the headend is capable of providing at least 60 -plus channels in full configuration and will develop signals of high quality throughout the Service Area (including on channels retransmitting upstream signals received through the headend), and so that the headend has adequate ventilation and space to be able to meet or exceed these design requirements. g. The Grantee, to the extent practical, shall install equipment and construct its system so that, except for premium or pay-per-view services, a subscriber can use all features such as remote control units for VCR and television set for simultaneous viewing and recording on different channels. h. The upgrade required under this Section shall be completed no later than August 31, 1993, if this Franchise is signed by the City no later than January 1, 1992. The completion date will be extended one day for each day between January 1, 1992 and the date the Franchise is signed by the City. The City shall grant reasonable extensions of time to complete construction in particular areas of the City if, prior to the scheduled time for completion, Grantee shows that, notwithstanding its due diligence, it has been unable to extend service to a specified area because the acts or omissions of a third party (not including Grantee's subcontractors or agents) have caused a delay in construction beyond delays reasonably expected during the course of a rebuild or upgrade, and Grantee proposes a reasonable alternative deadline for extension of service to that area. 4.2 Svstem Desian Review Process. a. At least thirty (30) days prior to the date construction of any required upgrade or rebuild is scheduled to commence, Grantee shall provide a detailed system design and construction plan, available for review by the City either at the local office of the Grantee, or, at the City's request, at any TCI office designated by the City, which shall include at least the following elements: 1. Design type; Trunk and feeder design; Number and location of hubs or nodes 2. Distribution system -cable, fiber, equipment to be used. n Kuhn -Cos Printing — Salina, Kansas 3. Headend design and including make and signal processors, etc. reception facilities model number of antennae, modulators, demodulators, 4. Plans for standby power at headend, hubs/nodes, and satellite terminals. The plan should state the make and model number of equipment to be used as well as time capacity. 5. The Emergency Alert System Grantee plans to install including: make and model numbers of equipment; whether system will override all audio and video channels or only audio channels; and how system will be activated and from where. 6. Longest amplifier cascade in system (number of amplifiers, number of miles, type of cable/fibre). 7. Design maps and tree trunk maps for the system. The system design will be shown on maps of industry standard scale using standard symbology, and shall depict all electronic and physical features of the cable plant. b. The City shall have twenty (20) days from the date Grantee notifies the City the design and construction plans are available for review to submit comments on the plans. Grantee must submit a written response to the comments including an amended plans, if appropriate, within ten (10) days of the date it receives the City's comments. The City reserves any rights it may have under this Franchise, including rights to impose penalties or terminate the Franchise based on the design. 4.3 Initial and Continuing Tests. The Grantee shall perform all tests necessary to demonstrate compliance with the requirements of 47 CFR 76 subpart K of the FCC rules and regulations. All tests shall be conducted in accordance with the most current publications of Tektronix, "No Loose Ends", and/or NCTA's, "Recommended Practices for Measurements on Cable Television Systems". The Grantee shall perform at least the following tests: a. The Grantee in conjunction with various manufacturers shall perform a preconstruction quality test on quantities of system components determined by the Grantee based on random samples. All new trunk and distribution cable shall be sweep tested on the reel to verify compliance with manufacturers specification of frequency response and structural return loss. No component shall be used in the system which fails to meet the manufacturers' specification. b. Acceptance Tests. The Grantee shall perform acceptance tests on the entire system at the conclusion of the upgrade to demonstrate compliance with 47 CFR 76 subpart K of the FCC Rules and Regulations in accordance with Section 4.7 The City has the option of witnessing the tests. The test results shall be submitted to the City for review. The Grantee shall have the obligation, without further notice from the City, to take corrective action if any segment is not operating or performing within 47 CFR 76 subpart K of the FCC Rules and Regulations in accordance with Section 4.7. C. Continuing Tests. The Grantee and the City will jointly select test points at various points of the system. The quantity of these test points will be mutually agreed upon based on what best represents the architecture of the system. The Grantee shall perform Proof of Performance Tests at these w Kah, Co. Printing — Salina, Kansas locations annually in conjuction with 47 CFR 76 subpart K through the life of the franchise, and at other points mutually agreed upon where system user complaints indicate tests are warranted or as required to test all major trunk lines. The City shall have the option of witnessing the tests. A written report of the test results shall be filed with the City within thirty (30) days of the test. If a location fails to meet performance specifications as outlined in 47 CFR 76 subpart K in accordance with Section 4.7, the Grantee, without requirement of additional notice or request from the City, shall take corrective action, re -test the locations and advise the City of the action taken and results achieved. 4.4 Inspections during Construction. The City may conduct inspections of construction areas and subscriber installations, including to assure compliance with applicable laws, codes and requirements of this Franchise. The Grantee shall be notified of any violations found during course of inspections. The Grantee must bring violations into compliance within thirty (30) days of date it receives notice, and submit a report to the City describing the steps taken to bring itself into compliance. Inspection does not relieve the Grantee of its obligation to build in compliance with all provisions of the Franchise. 4.5 Other Construction Procedures. The Grantee: a. shall follow a system design and construction plan consistent with its obligations under this Franchise, use the equipment specified, (or substitute equipment of equivalent or better quality) in such distribution system design plan and construction plan (except insofar as those plans, if carried out, would result in construction of a system which would not meet requirements of federal, state or local law; and except for such minor modifications as are typical in the industry). b. shall use equipment of good and durable quality. C. shall provide a monthly construction report to the City in a form reasonably required by the City. d. shall maintain a public file showing its plan and timetable for construction of the cable system. Grantee shall notify residents in any construction area at least one (1) day in advance before first entering onto property to perform any work in conjunction with system construction, and shall additionally notify affected residents in advance of any work which will involve excavation, replacement of poles, or tree trimming. e. shall make available implementation of the upgrade, the City's review at the local the City's request, at any TCI within, sixty (60) days of as -built system design maps for office of the Grantee, or at office designated by the City. f. shall provide maps showing the actual location of additions or extensions to its lines within thirty (30) days of completion of system construction in any geographic area. 4.6 System Maintenance. a. Interruptions to be Minimized. The Grantee shall schedule maintenance so that activities likely to result in an interruption of service are performed during periods of minimum subscriber use of the system. The Grantee shall make best efforts to minimize interruptions of service consistent with reasonable and customary upgrade practices. 10 Kinn -GO. Printing — Salina, Kansas b. Maintenance Practices. In addition to its other obligations, Grantee shall (a) use replacement components of good and durable quality, with characteristics better or equal to replaced equipment; and (b) follow the more stringent of industry maintenance standards or corporate maintenance standards. 4.7 System Performance. The system shall meet or exceed the standards set forth in 47 C.F.R. Section 76.601 et seq. ("FCC Standards"), as those standards may be in effect at all times. The parties anticipate that the standards may be revised between the date the Franchise is signed and the date the initial system upgrade is completed, and agree that the system will be designed and constructed so that it shall meet or exceed FCC Standards in effect at all times. If the FCC Standards are eliminated and not replaced, the City may continue to enforce the standard which existed prior to the date of elimination. If the City has authority to establish standards, standards may be amended or added in conjunction with and subject to the Section 10.12 periodic review. 4.8 Future System Upgrades/Rebuilds. Grantee shall provide additional or new facilities and equipment, expand channel capacity and otherwise upgrade or rebuild its system throughout the franchise term as required to incorporate improvements in technology to reasonably meet the needs and interests of the community in light of the costs thereof. 4.9 System Extension. a. The Grantee shall build its system so that it is able to provide service to all areas located within the City limits as they existed on January 1, 1991. It must build the system so that it can extend service to residents, including residents located in areas which may be annexed in the future, in accordance with 4.9.b. b. Line Extension Requirements. 1. Existing City limits. Within the City boundaries as they existed on January 1, 1991, the Grantee must extend service upon request to any person or business for no charge other than the then -prevailing, normal installation charge, unless the Grantee demonstrates to the City's satisfaction that extraordinary circumstances justify a waiver of this section. 2. New areas. (i) For areas annexed after January 1, 1991, Grantee will extend its trunk and distribution system to serve subscribers requesting service after the date hereof at the then -prevailing normal installation charge (unless the Grantee demonstrates to the City's satisfaction that extraordinary circumstances justify a higher charge) where: A. the new subscriber requesting service is located within five hundred (500) feet from the nearest existing Cable System plant, or B. the number of homes to be passed by such extension is equal to or greater than five (5) homes per quarter mile of such extension measured from the nearest existing Cable System plant. 11 Kuhn-Gow Printing — Salina, Kansas (ii) Cost sharing. In the event that the requirements set forth in 4.9.b.2.i. are not met, the Grantee will extend its cable television system on request based upon the following cost-sharing formula. A. Total Cost to Construct Extension* = Cost Per Quarter Quarter Miles of Extension Mile of Extension B. Total Cost Per Quarter Grantee's Share Per Mile of Extension = Subscriber 5 C. Total Cost to Construct Extension = Cost Per Subscriber Number of Subscribers Requesting Service D. Cost Per Subscriber Minus = Subscriber's Share Grantee's Share Per Subscriber * Total Cost to Construct Extension is defined as the actual turnkey cost to construct the entire extension including electronics, pole make-ready charges and labor, but not the cost of the subscriber drop. 3. Subscriber drops. The Grantee shall not assess any additional cost for service drops of one hundred fifty (150) feet or less unless the Grantee demonstrates to the City's satisfaction that extraordinary circumstances justify a higher charge. Where a drop exceeds one hundred fifty (150) feet in length, Grantee may charge subscriber for the difference between Grantee's actual costs associated with installing a one hundred fifty (150) foot drop, and Grantee's actual cost of installing the longer drop. Provided that, drop length shall be the shorter of (1) the actual length of installed drop or (2) shortest distance to the point where Grantee would be required to extend its distribution system. 4. In any area where Grantee would be entitled to install a drop above -ground, Grantee will provide the subscriber the option to have the drop installed underground, but may charge the subscriber the difference between the actual cost of the above -ground installation and the actual cost of the underground installation. 5. Time for extension. Grantee must extend service to any person who requests it: within seven (7) days of the request, where service can be provided by activating or installing a drop; after the upgrade of the system is completed, within thirty (30) days of the request within the existing City limits as of January 1, 1991, where an extension is required, or in any case where an extension of one-half mile or less is required; or within six (6) months for annexed areas where an extension of one-half mile or more is required. 6. Notwithstanding the foregoing, Grantee shall install one drop at no charge to every school and public building. Grantee may charge for service delivered over that drop; however, the City and school may install facilities and equipment to transmit the signal to all rooms within a building, and shall not be required to pay any more for service than the Grantee charges for delivery to a single drop point to a residential subscriber. 12 — Salina, K-- 4.10 Public, Educational and Governmental Use. a. PEG Channel Capacity. Grantee shall set aside three (3) downstream channels for public, educational and governmental ("PEG") use initially. One (1) channel must be activated on the effective date of the Franchise, and two (2) additional channels must be activated on the earlier of September 30, 1993, or completion of the system upgrade required by Section 4.1.h. hereof. In addition, Grantee must activate upstream capacity in accordance with 4.1.b -d. All PEG access channels must be provided as part of any basic service tier. b. Requirements Regarding Rules and Procedures for Use of PEG Channels. 1. The City shall designate a nonprofit access management corporation (hereafter, "Access Corporation"), initially "Community Access Television of Salina, Inc." to manage the use of the PEG channels required under the Franchise. 2. The Access Corporation shall establish and enforce rules for use of the PEG channels (i) to assure non-discriminatory access to the channels to similarly situated users; and (ii) to promote use and viewership of the channels, consistent with the obligation to provide non- discriminatory access to similarly situated users. The City shall be responsible for establishing and enforcing rules for use of the channel capacity and managing the use of the channels during any period such Access Corporation does not exist. 3. The Grantee may not exercise any editorial control over the content of programming on the designated channels (except for such programming the Grantee may produce and cablecast on the same basis as other channel users). 4. The channels shall be available at no charge to users and to the Access Corporation. 5. When access channels are not being used to carry programming provided by other access users, the Access Corporation at its sole cost and expense shall have the right to back-up access programming with other programming, consistent with its mission to promote public, educational and governmental use of the channels. This paragraph shall not limit Grantee's rights under 47 U.S.C. §531(d). C. Equipment and Facilities. Grantee shall pay to the City for PEG access equipment and facilities the following amounts: 1. for facilities $150,000, to be deposited on the effective date of the franchise; and 2. for equipment; $200,000, to be deposited on the effective date of the franchise. The above-described $350,000 is included in and not in addition to those funds described in Section 2.6 above. 13 Kinn -Cox Printing — Salina, Kansas d. Access Services. Grantee shall have a continuing obligation to provide adequate playback, training, outreach, administrative support and production assistance to access users, in accordance with community needs as reasonably ascertained by the City in light of the costs thereof; provided that, Grantee shall have no obligation under this section so long as it maintains a valid and binding contract with the Access Corporation designated by the City. Nothing in this section requires or shall be deemed to require Grantee to make any payment which constitutes a franchise fee under 47 U.S.C. 6542. e. General. The parties agree that any cost to Grantee associated with providing access services, facilities and equipment under this Franchise, including without limitation the amounts set forth in 4.10.c.1-2, and payments made outside this Franchise, if any, are not part of the franchise fee, and fall within one or more of the exceptions to 47 U.S.C. 5542. 4.11 Leased Use. a. Number of channels. The Grantee shall provide leased access channels as required under the Cable Act. b. Reservation of rights. In the event the leased access requirements of Cable Act change, the City may require Grantee to continue to provide channels it was required to provide under the Cable Act, if consistent with federal law. C. To the maximum extent permitted consistent with federal laws and regulations, the City may regulate terms and conditions for leased use of the channels; may require the Grantee to provide leased users access to system facilities, equipment and services under reasonable terms and conditions; may require the Grantee to attach or interconnect its system to equipment and facilities to facilitate leased use of the channels, under reasonable terms and conditions; and may establish other rules and regulations to promote leased use of the channels. d. The Grantee shall maintain a file showing the terms and conditions under which it provided services, facilities, equipment and channels to leased users. The file shall, at a minimum, show the lease price, all compensation to the Grantee (including compensation in cash, in-kind services, facilities and equipment, or by barter), and the nature of the lessee, or its programming, if considered in establishing the lease term and conditions. The file shall be provided to the City upon request. 4.12 Subscriber Services. a. For the period beginning on the effective date of the Franchise through the completion of the system upgrade required by Section 4.1 hereof: a minimum of thirty-six (36) activated channels and twenty-six (26) basic service channels; b. For the period beginning on completion of the system upgrade required by Section 4.1 hereof, through the end of the Franchise (subject to future agreements in light of changes in system capacity): a minimum of forty-five (45) activated channels and twenty-eight (28) basic service channels. C. In addition to such other service requirements as may be contained in this Franchise, Grantee agrees to provide the following broad categories of service: 1. Kansas broadcast programming; 2. Kansas educational broadcast programming; 14 Huhn -Cox Printing — Selina, Kansas 3. non -network arts/cultural programming; 4. non -network educational and informational programming; 5. children's programming; 6. public affairs programming services which address major local, state and federal issues of interest to the citizens of Salina; and 7. programming which satisfies ascertained needs and interests of the citizens of Salina. Nothing in subparagraphs c.1 or c. hereof shall be read to require Grantee to carry every Kansas commercial or educational broadcast station. d. Grantee shall conduct subscriber surveys on a regular basis, no less than once every three (3) years, to determine the programming needs and interests of its subscribers. 4.13 Non -Discrimination. a. Grantee shall not unlawfully discriminate against any subscriber or potential subscriber on basis of race, color, religion, national origin, age, or sex; or deny service to any group of potential subscribers because of the income of the residents of the area in which a group of potential subscribers reside; provided that, nothing shall prohibit Grantee from providing a "lifeline" type of service to the poor, the elderly, the developmentally disabled or physically disabled. b. Grantee shall ensure that its services are accessible, as far as possible, to disabled people. All closed -caption programming retransmitted by the system shall include the closed -caption signal. 4.14 No City Control. a. During the term of this Franchise, the City may not prohibit Grantee from providing any program or class of programs, or otherwise censor communications over the cable system; except that, nothing in this section shall be read to authorize Grantee to engage in communications which are prohibited by law, or to expand or contract any rights the City may have to enforce generally applicable laws with respect to obscenity, libel, slander or otherwise unprotected speech against the Grantee (for channels the Grantee controls), program producer or other responsible party. b. Parental Control Device. Upon request, Grantee shall provide parental control devices to any subscriber. Grantee shall charge no more than its cost for the parental control devices it provides. SECTION V RATE REGULATION AND CONSUMER PROTECTION 5.1 Regulation of Rates. The City may regulate Grantee's rates and charges to the maximum extent permitted consistent with federal law and regulations. Grantee shall file a schedule of its rates and charges with the City on the effective date of this Franchise. 15 Kuhn -Con Printing — Salina, Kansas 5.2 Prior Approval. Grantee shall be required to submit any change in rates or charges to the City for approval prior to implementing that change, to the extent Grantee may be required to do so consistent with federal laws and regulation. Nothing in this section shall be deemed to waive any rights Grantee may have under 47 U.S.C. S543(e)(1). 5.3 Notice of Changes. At least sixty (60) days prior to implementing any changes in rate levels, services or service terms, Grantee shall provide the City written notice describing any such changes it plans to make and the proposed effective dates for the changes (or, in cases where the change in services or service terms is not known to Grantee sixty (60) days prior to the date the change is to be implemented, as soon as possible and no later than thirty (30) days prior to implementing any change). At least thirty (30) days prior to implementing any changes in rate level, services or service terms and conditions, Grantee must provide each affected subscriber notice, describing the changes it plans to make and the proposed effective dates for the changes. Any change made without the required notice shall be of no force or effect in determining the payments owed or the legal rights of the City or subscribers, but Grantee may make an otherwise lawful change once the notice is given. 5.4 Support for Access. a. The City recognizes that provision of support for PEG access is a valid expense associated with the provision of basic service under this Franchise, and that Grantee should be compensated through its rates for reasonable costs associated with the provision of support for PEG access. The parties agree that existing rates compensate Grantee for costs associated with providing the support required by Section 4.10 a -c. b. The City agrees that Grantee may pass-through in 1992 up to $0.60 per basic subscriber per month to compensate it for any additional support it actually provides for access to the Access Corporation. This pass-through amount to the Access Corporation may be increased each year by an amount not to exceed the percentage increase in basic service (not considering the amount attributable to access collected under this section 5.4.b), or if there is no basic service rate, by an amount not to exceed the percentage increase in the level of service most comparable to basic service. The pass-through for access, as it may be increased from time to time in accordance with this section 5.4.b., may be shown as a separate line item on the subscriber's bill. The amount collected by Grantee under this section 5.4.b shall not be deemed "gross revenues" for purposes of calculating the franchise fee owed to the City. This section 5.4.b. is without prejudice to Grantee's right to provide additional amounts for and in support of access, and to seek to reflect those additional amounts in rates. 5.5 Customer Service Standards. a. Grantee shall have an obligation to provide high- quality service to its subscribers throughout the franchise term. To this end, the parties have established initial customer service standards which standards are set forth in Attachment 1. Grantee shall meet or exceed the customer service standards on an ongoing basis. b. Grantee's service must be provided subject to all rights its subscribers may have under federal, state or local laws. 16 — Salina, Kansas 5.6 Right to Maintain Antenna. The Grantee shall not, as a condition to providing service, require a subscriber or potential subscriber to remove any existing antenna, or disconnect an antenna except at the express direction of the subscriber or potential subscriber, or prohibit or discourage a subscriber from installing an antenna switch provided such equipment and installations are consistent with applicable codes. 5.7 Duty to Install Telephone Monitoring Equipment. The Grantee shall install such devices as are required to enable it to determine whether it is complying with each and every standard for customer telephone service, as amended from time to time. 5.8 Non -Discrimination. Except to the extent and for the time it is prohibited from doing so by federal law, the City prohibits Grantee from discriminating among similarly situated subscribers in the provision of any services, facilities or equipment. Nothing shall prohibit Grantee from conducting temporary bona fide promotions, except the Grantee may not discriminate among subscribers in the price for any service tier or program service unless the promotional rate is available to all similar classes of subscribers throughout Salina. SECTION VI EEO 6.1 EEO. The Grantee shall comply with federal, state and local laws and regulations governing equal employment opportunities, as the same may be from time to time amended. Reserved. SECTION VII SECTION VIII FRANCHISE FEES 8.1 Franchise Fee. As compensation for the use of valuable Public Ways, and to defray certain of the costs associated with cable regulation during the franchise term, Grantee shall pay the City five percent (5%) of the gross revenues it derives or which any person who would be defined as a cable operator under 47 U.S.C. §602(4) derives in connection with the operations of the Salina system. The Franchise shall be read to prevent Grantee from avoiding the provisions of this section by lease, contract or other arrangement. The term gross revenues includes, but is not limited to: revenues from pay, pay-per-view and basic service subscriptions; revenues from the provision of services, facilities or equipment to subscribers; revenues from the sale of all advertising; revenues for carriage of any service; revenues received from home shopping services; and any other compensation received, from any source and regardless of form, cash and non-cash. Any sales tax collected from subscribers on behalf of any federal, state or local government or agency shall not be considered part of Grantee's gross revenues. Grantee is not required to pay a franchise fee on revenues recorded as received but which are in fact "bad debt," except Grantee must pay the fee on all recoveries of bad debt. Revenues from advertising sold for transmission on more than one system shall be allocated on a pro rata basis, (revenues divided by number of basic subscribers capable of receiving the advertising on the systems for which the advertising is sold) times (the number of basic subscribers in the City). 17 Kuhn -Cox Printing — Salina. K-11 8.2 Not in Lieu of Other Taxes. The Franchise fee payment is not a payment in lieu assessment. This paragraph is n Grantee may have to claim that a constitutes a franchise fee for of any other tax, fee or of intended to waive any rights particular tax, fee or assessment purposes of 47 U.S.C. 5542(g). 8.3 Payments Quarterly. Franchise fee payments are due and payable quarterly: May 15 for the first quarter, August 15 for the second quarter, November 15 for the third quarter and February 15 for the fourth quarter of each calendar year. Interest on late payments shall be paid at the statutory rate then applicable on any late payments. Penalties may be imposed for materially inaccurate reporting or underpayment to the City. 8.4 No Accord or Satisfaction. Acceptance of any payment shall not operate as an accord or satisfaction, or a waiver of any right under the franchise or law, provided, however, that the City shall commence any action on any payment within five (5) years of the due date of the payment. 8.5 Reporting Forms. Each payment shall be accompanied by a form reporting revenues and subscriber levels by category. A copy of the form which will be used initially is included as Attachment A. The City may from time to time make such reasonable amendments to the form as are required to ensure that all gross revenues are reported clearly and accurately. 8.6 Right to Audit. The City shall have the right to audit the Grantee's books on reasonable notice to ensure compliance with this Franchise fee section. SECTION IX LIABILITY, INDEMNITY AND INSURANCE 9.1 Indemnity. The Grantee shall indemnify, defend and save the City harmless from all loss or damages sustained by the City on account of any suit, judgment, execution, claim or demand (including legal fees incurred) resulting from Grantee's installation, construction, operation or maintenance of its system. The duty to indemnify and hold harmless shall include but not be limited to a duty to indemnify against losses or damages sustained as a result of Grantee's acts or omissions (1) arising out of Grantee's use or attempt to use Public Ways; and (2) arising out of any claim for invasion of the right of privacy, libel, slander, copyright violation, patent infringement or the like. The indemnity is conditioned on the following: the City must notify Grantee within thirty (30) days after the presentation of any claim or demand, either by suit or otherwise, made against the City on account of any act or omission by Grantee. Nothing in this section prohibits the City from participating in the defense of any litigation by its own counsel at its own cost. 9.2 Insurance. a. The Grantee shall maintain the following insurance for its own coverage and for use in indemnification of the City: 1. A comprehensive general liability policy in the minimum of $500,000 for damage to any single property, and $1,000,000 for damage aggregate per single accident or occurrence; $1,000,000 for bodily injury to any one person and $2,000,000 bodily injury aggregate per single accident or occurrence; or in such other amounts as are acceptable to the City and provide substantially equivalent coverage. The City shall be designated as an additional insured. 18 Kuhn -Cox Printing — Salina. Kansas 2. Automobile liability in the same amounts. 3. Worker's Compensation and Employer's liability insurance in the statutory amounts required. b. No later than sixty (60) days after the effective date of the Franchise the Grantee shall furnish the City certificates of insurance, in a form satisfactory to the City, showing that Grantee has all the insurance required by this section. Grantee shall provide new certificates upon renewal of any policy or if the insurance carrier for any policy changes. The insurance policies required herein shall contain an endorsement stating that: It is understood and agreed that this policy may not be cancelled nor the amount of coverage reduced until thirty (30) days after receipt by the City Clerk of the City of Salina, Kansas, by certified mail, of a written notice of intent to cancel or reduce the coverage. C. The amounts and types of insurance required herein are subject to reconsideration at each four-year review period. The City may request appropriate revisions. Grantee may not unreasonably refuse to comply. Any new certificate must be submitted within thirty (30) days of any agreed revision. d. The Grantee's compliance with these insurance requirements shall in no way waive or limit its duty to indemnify and hold harmless. 9.3 No Limitation. The rights of the City and the obligations of Grantee under this Franchise shall not be diminished in any respect by recovery of any amounts under this Section. 9.4 No Liability. The City shall not be liable to Grantee for any damages or loss which Grantee may suffer as the result of the City's lawful exercise of the authority granted under this Franchise. SECTION X MONITORING PERFORMANCE; EXERCISE OF REGULATORY AUTHORITY 10.1 Inspection of Books and Records. (a) The City may require Grantee or any Affiliate in control or possession of documents to produce documents, including financial documents the City deems necessary to ensure compliance with the Grantee or any Affiliate obligations under this Franchise, at the City/County Building for inspection and copying. The documents requested shall be produced upon reasonable notice and no later than thirty (30) days after the request for production. If the books, records, maps or plans or other requested documents are too voluminous, or for security reasons cannot be copied and moved, then Grantee or its Affiliate may request that the City inspect them at some other location, provided that (1) the Grantee or its Affiliate makes necessary arrangements for copying documents selected by the City after review; and (2) the Grantee or its Affiliate pays all travel and additional copying expenses incurred by the City in inspection of those documents. The parties agree that any payments made by Grantee or any affiliate hereunder are not a franchise fee and fall within one of the exceptions thereto. 19 KUM1n-C . Priming — Salina, Kansas (b) Grantee has the right to obtain relief from any court of competent jurisdiction on the ground that the City has unreasonably determined that information requested under this Section is necessary to ensure compliance with the Franchise. 10.2 Inspection of Installations. (a) Upon reasonable notice and during normal business hours, the City shall have the right to inspect Grantee's facilities and equipment and to perform tests as the City deems necessary to ensure compliance with the terms of the Franchise. (b) Grantee has the right to obtain relief from any court of competent jurisdiction on the ground that the City has unreasonably determined that the inspection or tests to be performed under this Section are necessary to ensure compliance with the Franchise. 10.3 Requests for Information. The Grantee or any Affiliate in control or possession of information respecting the Grantee's cable system in Salina shall respond to reasonable inquiries from the City concerning the construction, operation, installation or maintenance of that cable system; plans for its expansion; or the Grantee or Affiliate's financial or legal status. The Grantee or Affiliate shall provide the information requested within thirty (30) days of request. Requests for extensions of time to respond shall not be unreasonably denied. 10.4 Records Maintained. In addition to public file records and maps, the Grantee shall maintain records of the following: a. records of outages, indicating date, duration, area and the estimated number of subscribers affected, type of outage and cause in a form reasonably required by the City. b. records of service calls for repair and maintenance, indicating date and time service was requested, date of acknowledgement and date and time service was scheduled (if it was scheduled), the date and time service was provided and (if different) the date and time the problem was solved. Grantee's Service Call log contains this information in a form acceptable to the City. C. records of installation/reconnection and requests for service extension, indicating date of request, date of acknowledgment, and date and time service was extended. Grantee's Work Order contains this information in a form acceptable to the City. d. records of complaints, indicating date complaint received, nature of complaint and resolution of complaint, and date of resolution. Grantee's System Complaint Call Report and the reports provided in b and c above contain this information in a form acceptable to the City. The records shall be kept at the Grantee's local office and shall be available for City review and copying during normal business hours. The parties shall cooperate to amend requirements under this section so that the City has access to information to evaluate Grantee's compliance with the Franchise and so that Grantee may amend its forms as its services evolve. 20 Kuhn -CO% P—tinq — Salina. Kansas 10.5 Reports Prepared. The Grantee shall provide the following reports: a. a monthly report stating subscriber totals for each category of service; the number of subscribers added and the number disconnecting. Grantee's Monthly Subscriber Recap contains this information in a form acceptable to the City. b. an annual report showing the number of system extensions; and the amount of contribution and number of contributing subscribers and costs associated with any extension made under 4.9.b.2.ii in a form reasonably required by the City. C. a monthly summary showing the number of service calls received by type; and the percentage of service calls compared to the subscriber base by type of complaint. Grantee's Monthly Service Call Report contains this information in a form acceptable to the City. d. a summary of number of outages, number of planned outages, number of outages during prime viewing hours, and number of outages by approximate duration in a form reasonably required by the City. e. annually, a Franchise fee report showing revenues received, by category, in a form reasonably required by the City; and f. annually, a list of officers and directors of Grantee and Grantee's parent. 10.6 Documents to be Provided. Grantee shall provide the following documents to the City in a timely manner, so as to permit the City to protect any interests it may have in any proceeding, and in no event later than within thirty (30) days of the date the documents are received or filed, without regard to whether the documents are received or filed by Grantee or an Affiliate. a. annual report, if any, of Grantee, or each Affiliate of Grantee which controls Grantee and issues an annual report; b. copyright filings reflecting the operation of the Salina system; C. FCC Forms 325 and 395 for the Salina system, or their successor forms; d. any filing made at the FCC or any state or federal agency regarding the Salina system; its proof -of -performance tests; its RF signal leakage tests; and e. any notice of deficiency; forfeiture; or other document issued by any state or federal agency instituting any investigation or civil or criminal proceeding; regarding the Salina system, Grantee, or any Affiliate of Grantee, to the extent the same may directly affect or bear upon operations in Salina. f. any request for protection under Bankruptcy laws, or any judgment related to a declaration of bankruptcy. 10.7 Testing. When, based on investigation or subscriber complaint, the City has questions concerning the reliability or technical quality of system, the City may require Grantee to perform tests and prepare a report showing (1) the nature of the complaint or problem which precipitated the test; (2) the system component or area tested; (3) the equipment and procedures used; (4) any conclusions drawn from the tests; and (5) other information pertinent to understanding tests. The City may observe the tests. The City annually may require the Grantee to perform tests and 21 Kuhn -Cox Printing — Salina. Kansas prepare reports regarding two (2) occurrences under this Section 10.7, and Grantee shall bear the costs of performing the tests and preparing the reports regarding those occurrences, whether or not the tests show Grantee's system meets the requirements of this Franchise. If in any calendar year the City requires Grantee to perform more than two (2) tests under this Section 10.7, the reasonable costs associated with performing those tests shall be borne as follows: at the Grantee's expense if the system performance is not in compliance with the requirements of this Franchise, and at the City's expense if the system performance is in compliance with the requirements of this Franchise. 10.8 No Limitation. Grantee's duty to prepare reports, submit documents and conduct tests under this Section 10 shall not limit Grantee's duty to permit the City to inspect documents, or Grantee's duty to respond to requests for other information under other provisions of the franchise or applicable law. 10.9 Confidentiality of Information. The Grantee shall mark any information which it produces to the City which constitutes a business or trade secret "confidential," and produce it to a person designated by the City for purposes of holding such information. To the extent permitted under applicable law, and except where to do so could be inconsistent with its obligations under this Franchise and applicable law, information produced by Grantee which contains business or trade secrets shall be kept confidential. The City shall promptly notify Grantee if any person requests access to the information under the Kansas Open Records Act, or if the City determines that it will be necessary to reveal the information in the discharge of its obligations under the franchise and applicable law, so that Grantee may take appropriate steps as may be available to protect any rights it may claim to have to prevent disclosure. 10.10 Four -Year Review. a. During the years which commence on the fourth, eighth and twelfth anniversaries of the effective date of the Franchise, the City may commence a review of Grantee's performance under the Franchise. As part of this review, the City may consider: (1) whether Grantee has complied with its obligations under Franchise and applicable law; (2) whether customer service standards, technical standards, bond or security fund requirements are adequate or excessive; and (3) other issues as may be raised by Grantee, the City or the public. b. The City shall conduct public hearings to provide Grantee and the public the opportunity to comment on Grantee's performance and other issues considered as part of the four- year review. 10.11 Five-year reviews: technological changes. a. During each of the years which commence on the fifth and tenth anniversaries of the effective date of the Franchise, the City may commence a review to determine whether Grantee has satisfied its obligation to respond to community needs and interests by incorporating technological advances into its system through upgrades and rebuilds. b. The City shall conduct public hearings to provide Grantee and the public the opportunity to comment on the issues which are to be considered in this five-year review. C. At any time after the commencement of the five-year review, the City may require the Grantee to submit a proposal describing its plans including a timetable and costs, to incorporate technological advances into its system through upgrades or rebuilds. The City may set a deadline for 22 K.h,-Cox Printing — Saline. Kansas submission of the paper, which deadline shall provide the Grantee no fewer than ninety (90) days to prepare the proposal from the date a written request for the proposal is submitted to the Grantee. d. Following receipt of the proposal, the City and the Grantee shall negotiate in good faith to develop a plan, including a timetable, for an appropriate upgrade or rebuild of the system. If the parties are unable to reach agreement within ninety (90) days after receipt of the proposal the City may commence an administrative proceeding in accordance with this section to review the proposal. e. The City shall provide prompt public notice of the administrative proceeding to consider whether the Grantee's proposal for upgrade or rebuild is reasonable to meet future community -related needs and interests, taking into account the cost of meeting such needs and interests. f. In any proceeding under paragraph (d), the Grantee shall be afforded adequate notice and the Grantee and City shall be afforded fair opportunity for full participation, including the right to introduce relevant evidence, to require the production of evidence to compel the relevant testimony of officials, agents, employees or consultants of the other, to compel the testimony of other persons as permitted by law and to question witnesses. The parties may introduce evidence regarding system design and capacity in other communities. A transcript shall be made of any proceeding. g. The City and Grantee shall attempt to select jointly a third party to conduct the administrative hearing described above. If the parties are unable to agree upon a single hearing officer, each may select one officer and the two officers so selected shall select a third officer. h. At the completion of a proceeding under section (d), the administrative hearing officer[s] shall issue a written decision, adopting, rejecting or modifying the proposal for rebuild or upgrade, and shall transmit a copy of the decision to the City and to the Grantee. The governing body of the City may then adopt, reject or modify the decision of the hearing officer, and shall issue a written statement setting forth the reasons for its actions. Grantee shall be bound by the City's decision, unless it appeals the decision within sixty (60) days of the date it is issued, under subsection (i). i. If the Grantee is adversely affected by the decision of the City, it may file an appropriate action in any court of competent jurisdiction. For purposes of that action, the parties stipulate that the record of the administrative hearing and the decisions of the administrative hearing officer(s) and the City shall constitute the entire factual record. Grantee shall be entitled to such relief as the Court deems appropriate (i) if the Grantee demonstrates that the action of the City was not supported by a preponderance of the evidence, based on the stipulated record or (ii) if the court finds the City's actions were not in compliance with the procedural requirements of this section. 10.12 Five-year reviews: access equipment and facilities. a. During each of the years which commence on the fifth and tenth anniversaries of the effective date of the Franchise, the City may commence a review to determine whether additional facilities or equipment are appropriate to meet community needs and interests in public, educational or governmental use of cable, taking into consideration the cost of providing the same. 23 Kuftn-Cox Printing — SW-. Kansas b. The City shall conduct public hearings to provide Grantee and the public the opportunity to comment on the issues which are to be considered in this five-year review. C. If the City determines that additional facilities or equipment are required for public, educational or governmental use, it may require Grantee to provide them; provided that, the City shall permit Grantee to pass-through (as a line item at Grantee's option) the cost of providing such facilities and equipment in rates as appropriate in light of then -prevailing federal laws and regulation. Except as prohibited by law, the parties agree to use the following formula, in determining the amount which is eligible for pass-through in any month during which such costs are being recovered: (cost of facilities/equipment) divided by (number of subscribers) divided by (12) divided by (number of years remaining in franchise). 10.13 Grantee Cooperation. The Grantee shall cooperate in the four and five-year reviews, including by submitting reports on the state of cable technology. 10.14 Exercise of Authority. The City may exercise appropriate regulatory authority under the provisions of this Franchise and applicable law, as amended from time to time. 10.15 Obligation to Release. The Grantee shall take all steps required, if any, to ensure that it is able to provide the City all information which must be provided or may be required under this Franchise, including by providing appropriate subscriber privacy notices. Nothing in this section shall be read to require Grantee to violate 47 U.S.C. 5551. SECTION XI PERFORMANCE GUARANTIES; REMEDIES; TERMINATION 11.1 Performance Bond. a. During the period beginning on the effective date of Franchise, Grantee shall maintain a performance bond, or other surety acceptable to the City, in a form acceptable to the City, in the amount of $350,000 to ensure faithful performance of the system construction requirements. b. The Bond or other surety shall be released within twelve (12) months after Grantee provides written notice to City that the system construction has been completed in accordance with the Franchise. C. The City may re-establish performance bond requirements in the event any future system rebuild or upgrade is required, in any amount not to exceed ten percent (10%) of the estimated cost of the proposed re -build or upgrade. 11.2 Security Fund. a. During the term of Franchise, Grantee shall deposit with the City a Security Fund in the amount of $75,000, which shall be provided in cash or in the form of an irrevocable letter of credit or other instrument in a form acceptable to the City. The instrument shall give the City the unconditional right to draw on Security Fund as it deems necessary to ensure the compliance with each and every provision of the Franchise, including provisions with respect to indemnities, damages, losses and penalties, provided that at least thirty (30) days prior to drawing on the fund, the City notifies the Grantee of the reason it intends to draw on the fund, so that Grantee may take steps to cure any noncompliance. 24 Kuhn -Cox Printing — Salina, Kansas b. The Grantee shall replenish the Security Fund within thirty (30) days of the date the City mails the Grantee written notice stating a) that money has been withdrawn from the fund; b) the amount of the withdrawal; and c) the reason for the withdrawal. C. The Security Fund amount may be adjusted throughout the term of the Franchise by the City by resolution to take into account increases in the consumer price index. 11.3 Liquidated Damages. Because Grantee's failure to comply with provisions of this Franchise will result in injury to the City, and because it will be difficult to estimate the extent of such injury, the City and Grantee hereby agree to the following liquidated damages, which represent both parties' best estimate of the damages resulting from the specified injury. Damage amounts may be adjusted throughout term of Franchise by the City by resolution to take into account increases in the consumer price index. a. for failure to complete construction or extend service in accordance with the Franchise: $750/day for each day the violation continues; b. for failure to comply with material requirements for public, educational and government use of system: $250/day for each day the violation continues; C. for repeated, willful or continuing failure to submit reports, maintain records, provide documents or information: $100/day for each day the violation continues; d. for violation of customer service standards, except for those set forth below, $150 per violation per day; e. for repeated, willful or continuing violation of Sections 2, 3 and 9 of the customer service standards, $200 per violation. f. for failure to comply with transfer provisions: $500/day from the date of any unlawful transfer; and g. for all other material violations including an unreasonable claim that a document contains a trade secret or confidential information when the document does not contain a trade secret or confidential information: $250/day for each day violation continues. 11.4 Termination. The Franchise shall terminate on the expiration date hereof, and at the City's option may be terminated, subject to the provisions of Section 11.5 for the following reasons: a. if Grantee's charter or other authorization to conduct business in Kansas is revoked, or any other license which Grantee requires to conduct business in Salina is revoked. b. if Grantee is adjudged bankrupt; C. for a substantial violation of any material provision of the Franchise, or any material rule, order or regulation or other determination of the City made pursuant to the Franchise; d. for any attempt to evade any material provision of the Franchise or to practice any fraud or deceit upon cable system subscribers or the City; 25 Kuhn -Cox Priming — Salina, Kansas e. for failure to complete system construction on schedule; or for failure to obtain necessary licenses or authorizations for construction or operation prior to the scheduled dates, respectively, for commencing construction or commencing service to subscribers; f. if the system is abandoned; or g. for fraudulent or negligent misrepresentation of fact in obtaining the Franchise, obtaining any rate change, or in obtaining or objecting to any amendment of the Franchise. 11.5 Procedures for Termination and Forfeiture. a. The City shall notify Grantee of the alleged violation which may warrant termination, which notice shall (1) describe the specific alleged violation; (2) direct Grantee to correct or to show cause why alleged violation should not be corrected; and (3) state the time for response which shall be no less than thirty (30) days from the date Grantee is sent notice. b. Within the time designated, Grantee must (1) cure the violation or (in the event the violation cannot be completely cured within the time period specified) take reasonable steps to begin to cure, and submit a written response to City, identifying the specific steps taken; or (2) contest the assertion of non-compliance, describing all facts relevant to claim, supported by affidavits and documents. No further opportunity to cure is required before the City exercises its rights under the Franchise. Grantee's duty to cure includes a duty to pay any liquidated damages owed to the City from the date of the initial violation. C. If Grantee contests the City's assertion of non- compliance, or fails to completely cure the default, the City shall schedule a hearing to review the default. The City shall cause to be served upon such Grantee at least seven (7) days prior to the date of such hearing, a written notice of the City's intent to review; the potential remedies sought; and the time and place of the meeting, notice of which shall be published at least once, no later than seven (7) days before such meeting in a newspaper of general circulation within the City. The City shall hear any person interested therein, and shall specifically provide Grantee an opportunity to be heard, and shall determine whether or not any failure, refusal or neglect by the Grantee was with just cause. d. If the City shall determine such failure, refusal, or neglect by the Grantee was without just cause, then the City may take any actions it is permitted to take under this Franchise or applicable law. Such actions may be taken immediately upon completion of the hearing contemplated by this section or at such time or after such additional proceedings as the City may specify. e. Except where precluded by court order, pending litigation or any appeal to any regulatory body or court having jurisdiction over the Grantee shall not excuse the Grantee from the performance of its obligations under this ordinance or the Franchise. f. For purposes of this section, and subject to force majeure, the system shall be deemed abandoned if, during any period this Franchise is in effect, Grantee fails to provide services over the system for ninty-six (96) consecutive hours without the prior consent of the City. M. Kuhn -Cox Printing — Salina, Kansas 11.6 Remedies Cumulative. Remedies provided herein are cumulative and in addition to other rights the City may have at law or equity or under the Franchise, which it may exercise at any time. 11.7 Sale of System on Termination. Without limiting any rights of the City under other provisions of federal, state or local law: a. if renewal of the Franchise is denied, the City shall have an option to acquire ownership of the system or require Grantee to transfer ownership to another person. Any such acquisition or transfer shall be at fair market value, determined on the basis of the cable system valued as a going concern but with no value allocated to the Franchise itself. b. if the Franchise is revoked for cause the City shall have an option to acquire ownership of the cable system or require Grantee to transfer ownership to another person. Any such acquisition or transfer shall be at an equitable price, as that term is used in 47 U.S.C. §547(b). 11.8 Notification of Option. The City shall notify the Grantee of its intent to exercise its option to buy upon termination for cause within six (6) months of the final determination of the validity of the City's decision to terminate. The City and Grantee shall enter into good faith negotiations promptly to establish price in accordance with section 11.7 and terms and conditions which reflect usual industry practices. SECTION XII TRANSFER 12.1 No Transfer Without Consent. The Franchise may not be assigned or transferred, in whole or part, or leased or sublet, mortgaged or pledged in trust by any means without the City's prior consent. A change of control or ownership of Grantee shall be considered a transfer of the Franchise. The term "control" includes actual working control in whatever manner exercised, and shall be deemed to have occurred upon acquisition or accumulation by any person of ten percent (10%) of the shares or interests in Grantee or any entity which directly owns or controls Grantee. Grantee and the proposed transferee must cooperate in the City's investigation of the transfer and each is required to provide pertinent documents and respond to reasonable requests for information. In reviewing a transfer request, the City may examine the financial, technical and legal qualifications of the transferee; whether the transferee agrees to accept and be bound by each and every term of the Franchise; whether the transferee agrees to accept to be bound by related amendments, ordinances and resolutions then lawfully in effect; whether the transferee agrees to assume all liability and responsibility for acts or omissions of Grantee, known and unknown; whether the transferee agrees that the transfer will not allow it to exercise any rights which could not have been exercised by the transferor, had it continued to hold the Franchise; and any other matter which the City is legally entitled or required to consider. The City may grant, deny or establish conditions on transfer, as appropriate hereunder to protect its interests in the Franchise and the public interest but may not withhold its consent to a transfer unreasonably. 12.2 Securing Debt. Notwithstanding the foregoing, pledges in trust or mortgages of the assets of the system to secure an indebtedness may be made without the City's prior consent; except that no such arrangement may be made which would in any respect under any condition prevent Grantee or any successor from complying with all its obligations under the Franchise, nor may any such arrangement permit a third party to succeed to the interest of Grantee without the prior consent of the City. 27 Kuhn -Cox Priming — Salina, Kansas 12.3 Certain Transfers to Affiliates. Notwithstanding the foregoing, the City recognizes that Grantee is indirectly owned by TCI Central, Inc. ("TCI Central"), which in turn owns or controls directly a number of other cable companies. In order to facilitate reorganization of TCI Central companies, as deemed appropriate, the City agrees that prior consent shall not be required for any transfer to any company owned or controlled or under common control and with the same direct parent as TCI Central, i.e., TCI Holdings, Inc., and which is intended after such transfer to remain under the ownership or control of TCI Central or an entity under common control or with the same direct parent as TCI Central, provided that, no such transfer shall be valid unless and until Grantee and transferee submit a binding agreement and warranty to the City, stating that: (a) the transferee has read, accepts and agrees to be bound by each and every term of the franchise and related amendments, regulations, ordinances and resolutions then in effect; (b) the transferee assumes all liabilities and responsibility under the Franchise, and related amendments, regulations, ordinances and resolutions then lawfully in effect for the acts and omissions of Grantee known and unknown, and agrees that the transfer shall not permit it to take any position or exercise any right which could not have been exercised by Grantee; (c) the transfer will not substantially increase the financial burdens upon or substantially diminish the financial resources available to the system operator, comparing the Grantee to the transferee in a manner which materially may affect the Salina system; Grantee and transferee shall also describe the nature of the transfer, and submit complete information regarding the effect of the transfer on the direct and indirect ownership and control of the system operator. 12.4 Prior To Construction. No transfer shall be granted prior to substantial completion of the system construction required under this Franchise. 12.5 Effect of Unlawful Transfer. Notwithstanding Sections 11.4 and 11.5 every transfer, assignment or change of control made in violation of this section shall make the Franchise subject to cancellation. 12.6 Timetable for Consideration. Any request for a transfer shall be deemed granted unless the City acts upon the request within one hundred twenty (120) days of the date the transferee submits a request for approval of the transfer and transferee and transferor have submitted the information which they may be required to submit in connection with the transfer. The timetable may be extended with the consent of the City and either the Grantee or transferee. 12.7 Transfer Fees. Any person who desires the City to consider an application for transfer or assignment of the Franchise to it shall compensate the City for all costs (including reasonable consultant and attorneys fees) associated with considering the application for transfer or assignment. SECTION XIII REPRESENTATIONS AND WARRANTIES 13.1 Valid Corporate Form. Grantee represents and warrants it is a corporation duly authorized to conduct business in Kansas and to enter into this Franchise. 13.2 No Outstanding Forfeitures. Grantee represents and warrants that to the best of its knowledge there are no forfeitures or notices of investigations pending against it at state and federal levels relating to the operation of the Salina system and that Grantee is, to the best of its knowledge, in compliance with all applicable state and federal laws governing operation of the Salina cable system. 28 — Salina, Kansas 13.3 Familiarity with Franchise. Grantee and the City represent and warrant that they have read and understand all provisions of this Franchise. 13.4 Ability to Perform. Grantee represents that it has the financial, legal and technical ability to comply with all its obligations under the Franchise. SECTION XIV MISCELLANEOUS 14.1 Time of Essence, Maintenance of Records of Essence. In determining whether Grantee has substantially complied with Franchise, the parties agree that time is of essence to the agreement. As a result, Grantee's failure to complete construction, extend service, seek approval of transfers or provide information in a timely manner may constitute substantial breaches. The maintenance of records and provision of reports in accordance with the Franchise is also of essence to the agreement. 14.2 No Waiver. No failure of City or Grantee to exercise and no delay in exercising any right shall operate as a waiver of City's or Grantee's rights hereunder, nor shall single or partial exercise of any right preclude any other right. A waiver of any right or remedy at one time shall not affect exercise of that right or remedy at any other time, or limit Grantee's duty to comply with the Franchise at any other time. For a waiver by either party to be effective, it must be in writing. The failure of City to take any action in the event of a material breach shall not constitute a waiver of rights, or affect the right of the City to enforce the Franchise with respect to that breach or any other breach. 14.3 Effect of Preemption; Federal and State Law. Grantee must comply with all applicable provisions of federal and state law, except to the extent those provisions are superseded by a provision of this Franchise. If the City's ability to enforce any Franchise provision is finally and conclusively preempted, then the provision shall be deemed preempted but only to the extent and for the period the preemption is required by law. If, as a result of a change in law or otherwise, the provision would again be enforceable, it shall be enforceable and Grantee will comply with all obligations thereunder without the requirement of any action by City. 14.4 Severability. If any section, subsection, sentence, clause or phrase of this Franchise is for any reason held illegal, invalid or unconstitutional by the decision of any court of competent jurisdiction, or by any state or federal regulatory authority having jurisdiction thereof, such decision shall not affect the validity of the remaining portions hereof; provided that if a court of competent jurisdiction declares, or any state or federal regulatory authority having jurisdiction declares that Section 10.12 is illegal, invalid, or unconstitutional, or may otherwise not be enforced according to its terms, the City at its option may shorten the Franchise term to a period no shorter than ten (10) years from the effective date of this Franchise, and in any event no shorter than thirty-six (36) months from the date the City exercises its option. 14.5 Interpretation. Any dispute regarding the interpretation of the Franchise terms is to be resolved in a manner most favorable to the public interest. 14.6 Acts of God. Grantee shall not be deemed in default or non-compliance with provisions of this Franchise where performance was rendered impossible by war or riots, civil disturbance, hurricanes, floods or other natural catastrophes or similar events beyond Grantee's control, and the Franchise shall W Kuhn -Cox Printing — Sallna Kansas not be revoked or Grantee penalized for such non-compliance, provided the Grantee takes immediate and diligent steps to bring itself back into compliance and to comply as soon as possible with the Franchise under the circumstances without endangering the health, safety and integrity of Grantee's employees or property, or the health, safety and integrity of the public, or public or private property. 14.7 Notice. Notice shall be provided by mail, to persons designated by the Grantee and the City. 14.8 Descriptive Headings. are descriptive only. 14.9 Kansas Law Applies. interpretation of this Franchise. The headings set forth herein Kansas law shall govern the 14.10 Compliance with Applicable Laws. Except as otherwise provided in this Franchise, the Grantee and the City shall comply with applicable federal and state laws. repealed. Section 15. That Ordinance Number 8544 is hereby Section 16. That this ordinance shall be in full force land effect from and after its adoption and publication once in the official city newspaper. (SEAL) ATTEST: -1,,a-�- I kL w4.A_ Jacqu line Shiever, City Clerk Introduced: January 6, 1992 Second Reading: January 13, 1992 Third Reading: January 27, 1992 I Ai Stephen C. Rya , Mayor 30