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04-109 5 Resolution No. 04-109 RESOLUTION AUTHORIZING EXECUTION OF A NON-EXCLUSIVE CABLE TELEVISION FRANCHISE AGREEMENT BY AND BETWEEN COMCAST AND THE CITY OF ELGIN BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,ILLINOIS,that Ed Schock, Mayor, be and is hereby authorized and directed to execute a Non-Exclusive Cable Television Franchise Agreement on behalf of the City of Elgin with Comcast of Illinois/West Virginia,LLC for cable television service,a copy of which is attached hereto and made a part hereof by reference. s/Ed Schock Ed Schock, Mayor Presented: April 28, 2004 Adopted: April 28, 2004 Vote: Yeas: 6 Nays: 0 Attest: s%Dolonna Mecum Dolonna Mecum, City Clerk NON-EXCLUSIVE CABLE TELEVISION FRANCHISE AGREEMENT BY AND BETWEEN COMCAST, AND THE CITY OF ELGIN THIS CABLE FRANCHISE AGREEMENT (the "Agreement") is made and entered into this 28th day of April, 2004 (the "Effective Date") by and between the City of Elgin, an Illinois municipal corporation organized under the applicable laws of the State of Illinois (hereinafter referred to as the"City", and Comcast of Illinois/West Virginia, LLC with its principal place of business at 2001 York Road, Oak Brook, Illinois 60523 (hereinafter referred to as the"Franchi- see") . WITNESSETH: WHEREAS, Comcast, a West Virginia limited liability company, has requested a re- newal of its cable television franchise to provide cable television service in the City of Elgin; and, WHEREAS, the City has reviewed the Franchisee's performance under its prior cable television franchise with the City, has identified the future cable-related needs and interests of the community, has considered the financial, legal and technical qualifications of the Franchisee to provide cable television service in the City, and has considered the Franchisee's plans for op- erating and maintaining its cable system during the term of a renewed franchise; and, WHEREAS, after affording the public adequate notice and an opportunity for comment, the City Council has determined that it is in the public interest to renew the grant of a non- exclusive cable television franchise to the Franchisee in accordance with the terms hereinafter set forth; and, WHEREAS, the Franchisee and the City have reached agreement on the franchise terms and conditions hereinafter set forth; NOW THEREFORE, in consideration of the foregoing and the mutual terms, conditions, promises and undertakings contained herein, the Franchisee and the City hereby agree as fol- lows: Section 1: TITLE. This Agreement may be cited as the Comcast Franchise Agreement and is hereinafter referred to as the Agreement. Section 2: DEFINITIONS. For the purposes of this Agreement, the following terms,phrases, words and their derivations shall have the meaning given herein, unless their context clearly indicates that another meaning is intended. Words not otherwise defined herein shall be given their ordinary and common meaning. 2 AFFILIATE(s) When used in relation to any person, means another person who owns or controls, is owned or controlled by, or is under common ownership or con- trol with, such person. "AS BUILT"MAPS Maps showing the completed cable plant system in the franchise area. BASIC CABLE SERVICE (OR CABLE SERVICE) Shall mean(a) the one-way transmission to Subscribers of video pro- gramming, or other programming service; and (b) Subscriber interaction, if any, which is required for the selection of such video or other program- ming service. CABLE ACT The Cable Communications Policy Act of 1984, as amended by the Cable Television Consumer Protection and Competition Act of 1992, as amended by and the Telecommunications Act of 1996, as the same may be amended from time to time. CABLE OPERATOR(OPERATOR, OR CABLE SYSTEM OPERATOR) Any person or group of persons who provides cable service over a cable system and directly, or through one or more affiliates, owns a significant interest in such cable system or who otherwise controls or is responsible for, through any arrangement, the management and operation of such a cable system, including but not limited to multi-channel video providers and Open Video Systems, CABLE SYSTEM (SYSTEM, CABLE COMMUNICATIONS SYSTEM, CATV SYSTEM, OR COMMUNITY ANTENNA TV SYSTEM) A facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide cable service which includes video programming and which is provided to multiple subscribers within a community. CHANNEL (CABLE CHANNEL) A portion of the electromagnetic frequency spectrum which is used in a cable system and which is capable of delivering a television channel as a television channel is defined by the Federal Communications Commission by regulation. CITY The City of Elgin, Illinois. COMMERCIAL BUSINESS UNIT Any commercial building or establishment that is not a dwelling unit as defined hereunder. CONVERTER An electronic device, which converts signal carriers from one form to an- other. CORPORATE AUTHORITY The Mayor and City Council of the City of Elgin. 3 CUSTOMER SERVICE REPRESENTATIVE (CSR) or CUSTOMER ACCOUNT EXECUTIVE (CAE) An individual employed by the cable company to answer the telephone, write service and installation orders, answer customers' questions, receive and process payments, and perform other customer service-related activi- ties. DAY Shall mean"calendar" day unless otherwise specified. DENSITY The number of Dwelling Units that, when measured by a cable plant mile meets the numerical requirement established in this Franchise Agreement, requires the operator to provide cable service at its standard rates and charges. DOWNSTREAM CHANNEL The direction of signal transmission from the headend to the subscriber terminals. SERVICE DROP The coaxial, or fiber cable that connects the feeder portion of the distribu- tion system to the subscriber's premises. DWELLING UNIT A single-family residential building or a unit in a multi-family residential building. EDUCATIONAL ACCESS CHANNEL A downstream cable television channel, or channels, specifically desig- nated for non-commercial use by the local non-commercial educational in- stitutions. FEDERAL COMMUNICATIONS COMMISSION (FCC) The present federal agency of that name as constituted by the Act of 1934 or any legally appointed or elected successor. FRANCHISE (CABLE FRANCHISE) The non-exclusive right and privilege to construct, operate, and maintain a Cable System (and related Cable System equipment) for the purpose of providing Cable Service in the public right-of-way of the City as provided for in this Agreement subject to the conditions and restrictions as hereinaf- ter provided. FRANCHISE AGREEMENT ("also AGREEMENT") The separate contract by which the Corporate Authorities grant the Fran- chisee the right and franchise to operate a cable system within the City. FRANCHISE AREA Shall mean all areas within the municipal boundaries of the City. FRANCHISE FEE The fee that a Franchisee is required to pay to the City for the right, privi- lege and franchise to construct, install, maintain and operate a Cable 4 Communications system within the streets and Public Ways of the City for the purpose of providing cable service to persons in the City. The term "franchise fee" does not include: A. Any tax, fee, or assessment of general applicability (including any such tax, fee or assessment imposed on both utilities and cable op- erators or their services, but not including a tax, fee, or assessment which is unduly discriminatory against cable operators or cable subscribers); B. Capital costs which are required by the Franchise to be incurred by the cable operator for public, educational, or governmental access facilities; C. Requirements or charges incidental to the awarding or enforcing of the Franchise, including payments for bonds, security funds, letters of credit, insurance, indemnification, penalties, or liquidated dam- ages; or D. Any fee imposed under Title 17, United States Code. FRANCHISEE The natural person, partnership, domestic or foreign corporation, associa- tion,joint venture, or organization of any kind granted a franchise by the City and its lawful successor, transferee or assignee. GOVERNMENT ACCESS CHANNEL(GOVERNMENTAL ACCESS CHANNEL) The downstream channel, or channels, set-aside for the exclusive non- commercial use of local government as determined by the City. GROSS REVENUES "Gross Revenues" means any and all revenue derived directly or indirectly by Franchisee, or by Franchisee's Affiliates or by any other entity that is a Cable Operator of the Cable System including Franchisee's Affiliates, from the operation of the Franchisee's Cable System to provide Cable Services in the Franchise Area. Gross Revenues include, by way of illus- tration and not limitation,monthly and other fees charged Subscribers for Cable Services including Basic Cable Service, any expanded tiers of Ca- ble Service, other tiers of Cable Service, optional premium Cable Ser- vices, Cable Service installation, disconnection, reconnection and change- in-service fees, leased access channel fees, remote control rental fees, all Cable Service lease payments from the Cable System, late fees and ad- ministrative fees, fees,payments or revenues from rentals of converters or other Cable System equipment, advertising sales revenues (including lo- cal, regional and a pro rata share of national advertising carried on the Ca- ble System in the Franchise Area), revenues from program guides, addi- tional outlet fees, revenue from the sale or carriage of other Cable Ser- vices, and revenues from home shopping. Gross Revenues shall not in- clude bad debt, provided, however, that all or part of any such bad debt that is written off but subsequently collected shall be included in Gross 5 Revenues in the period collected; or any taxes on services furnished by the Franchisee which are imposed directly on any Subscriber or user by the State, City or other governmental unit and which are collected by the Franchisee on behalf of said governmental unit. In accordance with the above paragraph it is acknowledged herein that Gross Revenues shall include the calculation of non-subscriber revenue, (Home Shopping and Advertising Sales), in accordance with the "Pasa- dena Decision," Texas Coalition of Cities For Utility Issues v Federal Communications Commission, 324 F3d 802 (5th Cir 2003) and calculate the franchise fee collected as part of gross revenues as provided in the "Dallas Decision," City of Dallas v Federal Communications Commission, 118 F3d 393 (5`h Cir 1997). These amounts shall be accounted for sepa- rately and franchise fees derived from these sources shall be paid to the City in a separate disbursement as provided in this franchise. HEADEND The control center of a cable television system, where incoming signals are amplified, converted, processed and combined into a common cable along with any origination cablecasting, for transmission to subscribers. A Headend usually includes antennas, preamplifiers, frequency converters, demodulators, modulators, processors, and other related equipment. INSTALLATION The connection from system feeder cable to the subscriber's converter or terminal and the provision of service. NORMAL BUSINESS HOURS Means those hours during which most similar businesses in the com- munity are open to serve customers. In all cases, "normal business hours" must include some evening hours at least one night per week and/or some weekend hours. NORMAL OPERATING CONDITIONS Means those service conditions that are within the control of the Franchi- see. Those conditions, which are not within the control of the Franchisee, include, but are not limited to, natural disasters, civil disturbances,power outages, telephone network outages, and severe or unusual weather condi- tions. Those conditions, which are ordinarily within the control of the Franchisee, include,but are not limited to, special promotions, pay-per- view events, rate increases, regular peak or seasonal demand periods, and maintenance or upgrade of the cable system. PERSON Any individual, firm, corporation, cooperative, association, trust,partner- ship,joint venture, combination or other legally recognized entity. 6 PUBLIC ACCESS CHANNEL A downstream cable television channel specifically designated as a chan- nel available to the public for the production of non-commercial television programming operating under rules established by the City. PUBLIC, EDUCATIONAL OR GOVERNMENTAL ACCESS CHANNELS (PEG ACCESS CHANNELS) The downstream channel capacity designated for public, educational or governmental access programming. PUBLIC PROPERTY Any real property owned by the City or any other governmental unit that is not otherwise defined herein as a Public Way. A franchise does not au- thorize the use of any Public Property by the Franchisee. PUBLIC WAY(S) The surface of as well as, the space above and below any public street, road, highway, freeway, lane, path, place, alley, court, sidewalk,boule- vard, parkway drive, bridge, tunnel, or other public easement or extension thereof now or hereafter held by the City which shall entitle the City and Franchisee to the use thereof for any public_purpose (including, but not limited to street, highway, sidewalk, lighting, drainage, utility, or cable television easements, and all public ways and places contiguous thereto). SCHOOLS All public and private elementary and secondary schools which have been granted a certificate of recognition by the Illinois State Board of Educa- tion, pursuant to Illinois State Statutes, and which are located within the Franchise Area. STANDARD INSTALLATION Shall mean cable connections that are located up to one hundred twenty- five (125) feet from the existing distribution system and shall not mean commercial or MDU installations, inside"wall fish" installations or buried installations, irrespective of distance,where adverse terrain (such as ex- cessive rocky conditions) or other factors render extension of the system economically or technically more expensive or difficult than typically en- countered by the Franchisee in its normal operations. SERVICE INTERRUPTION The loss of picture or sound on one or more cable channels. SUBSCRIBER Shall mean any Person, company, corporation, or entity lawfully receiving Cable Service. TRANSFER OR FRANCHISE TRANSFER Any transaction or series of transactions which, singularly or collectively, result in the sale, assignment or transfer of all or a majority of the assets of , 7 the Franchisee, or the cable system, or a change of Fifty percent (50%) or more of the ownership of the Franchisee, or of the franchise, or of the ownership of affiliated entities having ownership of the Franchisee, the franchise or cable system. TRUNK(TRUNK LINE) The main distribution lines leading from the headend of the cable televi- sion system to the various areas where feeder lines (cables) are attached to distribute signals to the subscribers. Section 3: GRANT OF AUTHORITY. A. There is hereby granted by the City which represents and warrants that it has the requisite power and authority to do so, to the Franchisee the non-exclusive right and franchise to construct, use, operate, own,modify, maintain and extend such towers, antennas, cables, electronic equipment and other appurtenances necessary for the operation of a Cable Sys- tem to all territory within the Corporate Limits of the City, subject to all applicable fed- eral, state and local laws and regulations. B. Without reducing its police powers to adopt and enforce any ordinances of general appli- cability that is necessary to protect the health, safety and welfare of the public, the City hereby grants to Franchisee authority to use the Public Ways, and this Franchise shall be construed to authorize the construction, reconstruction, upgrading, or rebuilding of a Ca- ble System in, over, and upon such Public Ways in accordance with Section 621(a)(2) of the Cable Act, and to grant access to such Public Ways whether or not such Public Ways specifically contemplate or designate "Cable TV". The City, to the extent that it is law- fully able, shall also include this grant in future easements, licenses, and rights-of-way as they are created. C. The parties acknowledge the existence and applicability of the terms and conditions of 65 ILCS 5/11-42-11, Illinois's Cable Television Level Playing Field statute to the issuance of additional franchises granted by the City to new operators of cable systems in the City of Elgin. Section 4: DURATION AND ACCEPTANCE OF FRANCHISE AGREEMENT. A. Term: The Franchise granted herein shall expire thirteen (13) years from and after its effective date unless otherwise extended, terminated, or revoked in accordance with this Agreement. The term of the Franchise may also be extended by written agreement of the parties. The effective date shall be the date on the first page of this Agreement. B. Acceptance: The Franchise as well as all rights,privileges, obligations and authority granted therein shall become effective upon the authorization of the Corporate Authority of the City for the execution of this Agreement, and the parties' execution of said Fran- chise Agreement. By their execution of the Agreement, the parties promise to comply with and abide by all provisions, terms and conditions of this Agreement. 8 Section 5: TRANSFER OF FRANCHISE AGREEMENT A. In the event of a change of control or ownership of Franchisee("change of control"shall mean a change in ownership of a majority interest in voting stocks), the parties to the sale or transfer shall make a written request to the City for its approval of sale or transfer(a "Transfer Requiring Approval"). The written request shall be accompanied by informa- tion required by FCC rules and shall be presented on a form as prescribed by FCC rules (currently FCC Form 394). B. In accordance with the Cable Act, the City shall have one hundred twenty(120) days from receipt of the information referred to in Subsection(A) above to act on the request for approval. If the City fails to render a final decision on the request within that time, the request shall be deemed granted unless Franchisee and the City agree to an extension of the time. C. During the review period described in Subsection (b) above, the City may advise Fran- chisee that a public hearing is deemed necessary to evaluate any potential adverse effect of the sale or transfer upon Franchisee's Subscribers. In such event, Franchisee shall re- ceive written notice of the hearing and of the opportunity to participate fully in it., as far in advance as possible, and in no event less than fourteen (14) days before the start of the hearing. D. A decision of the City upon a request pursuant to this Section shall be in writing and sub- ject to review and appeal as provided in the Cable Act. E. In reviewing a request for sale or transfer pursuant to this Section, the City may inquire into the technical, legal, and financial qualifications of the prospective controlling party, and Franchisee shall assist the City in so inquiring. The City shall not unreasonably with- hold its approval. In no event shall a transfer or assignment of ownership or control be approved without the transferee or assignee assuming, in writing, the obligations of the Franchisee under this Agreement. F. Notwithstanding anything to the contrary, no consent or approval by the City shall be re- quired for a transfer or assignment to any Person or entity controlling, controlled by, or under common control with Franchisee, or for any sale, transfer, or assignment other than a Transfer Requiring Approval. Section 6: RENEWAL PROCESS. A. Renewal of Franchise: The City and the Franchisee shall follow the renewal procedure as provided by applicable federal law, namely 47 USC 546, commonly referred to as the Section 626 process. 9 B. In the event of the repeal of Section 626 of the Cable Act, said process shall remain the guidelines for the future renewal unless the parties mutually agree to some alternative method for renewal. Section 7: SERVICE TO FRANCHISE AREA. A. Franchise Area: The Franchise Area shall be the corporate limits of the City as they exist now and throughout the term of the Franchise. Any subsequently annexed or areas al- ready being served by the Franchisee shall continue to be provided service under the franchise pertaining to the annexed area. The Franchisee shall make all reasonable ef- forts, in accordance with this Agreement, to provide common services to the annexed area as soon as practical. B. Extension of Cable System; Line Extension to Residences: In areas of the Franchise ter- ritory not included in the initial Franchise service area, the Franchisee shall be required to extend its Cable System pursuant to the following density and proximity requirements. The Franchisee shall extend and make Cable Service available to every dwelling unit in all unserved, developing areas having at least thirty-five (35) occupied dwelling units per cable mile, as measured from the existing system, simultaneously with the installation of utility lines to the extent practical. C. Non-Standard Extension: In areas not meeting the requirements for mandatory extension of service, the Franchisee shall provide, upon the request of a potential Subscriber(s) an estimate of the Franchisee's costs required to extend service and, if the potential Sub- scriber(s) agrees to pay such costs, the Franchisee shall extend service to the potential Subscriber(s). D. New Development Undergrounding: In cases of new construction or property develop- ment where utilities are to be placed underground, the developer or property owner and City give the Franchisee advance notice at the time of notice to the utilities of such con- struction or development, Costs of trenching and easements required to bring service to the development shall be borne by the developer or property owner; except that if the Franchisee fails to install its conduit, pedestals and/or vaults and laterals, as designated in the notice given by the property owner or developer or the City to Franchisee, then should the trenches be closed, the cost is to be borne by the Franchisee. E. Special Agreements: Nothing herein shall be construed to prevent the Franchisee from serving geographical areas not covered under this Section upon agreement with develop- ers, property owners, residents, or businesses. F. Notice to Franchisee: The City shall notify the Franchisee of any and all planned developments in its Franchise Area or those located in areas expected to be annexed. Such notices shall be provided at the time of notice to all other utilities or like occupants of the City's Public Ways. Upon request of the Franchisee, the City shall provide regu- lar summaries of all planned developments in the City or the areas expected to be an- nexed. Said notice is to allow the Franchisee sufficient foresight into the future demands on its design, engineering, construction and capital resources. Should the City fail to 10 provide advance notice of such developments the Franchisee shall be allowed an ade- quate time to prepare, plan and provide a detailed report to be presented to the City as to the timeframe for it to construct its facilities and provide the services required under this Franchise. G. Non-residential Service: The Franchisee will make every effort to offer the commercial establishments within the Franchise Area Cable Service, provided that the installation is economically reasonable. The commercial establishment shall be responsible for the total cost of installation as determined by the Franchisee. Section 8: NOTICES. A. All notices between the parties shall be given as follows and shall be provided to the rep- resentatives specified below. All notices or other written communications required to be provided to the City or the Franchisee under any provision of this Agreement, shall be deemed served when delivered by hand or by Federal Express or similar service to that party's address set forth below during normal business hours; or when mailed to any other Person designated by that party in writing herein to receive such notice, via certi- fied mail, return receipt requested. Notice shall be given to the following: City: Franchisee: City of Elgin Director of Government Affairs 150 Dexter Court Comcast Corporation Elgin, Illinois 60120 2001 York Road ATTN: City Manager Oak Brook, Illinois 60523 B. All notices with regard to compliance or enforcement matters relating to any Ordinance or this Franchise Agreement shall be provided via certified mail with return receipt re- quired. All other routine notices maybe provided via regular U.S. Mail. Routine notices provided via facsimile or other electronic means may be acceptable as long as each is subsequently provided via U.S. Mail. C. Either party can change the designated address for notices provided that the notice of such change complies with this provision as stated above. Section 9: COMPLIANCE WITH STATE AND FEDERAL LAWS. A. The City and the Franchisee shall at all times comply with all applicable laws and regula- tions of federal, state and local governments, or any administrative agencies thereof. 11 B. In the event of a conflict between this Agreement and any local law, rule, or regulation (including, without limitation, any ordinance authorizing the grant of a cable television franchise), the terms of this Agreement shall prevail. Provided however that the City shall have the right to the lawful exercise of its police powers to pass and enforce ordi- nances necessary to protect the health, safety and welfare of the public. Section 10: SECURITY FUND. A. On the effective date of the Franchise Agreement, the Company shall establish a perma- nent Security Fund with the City in the amount of ten thousand dollars ($10,000.00) in the form of a corporate surety bond or other instrument, which complies with the gener- ally utilized requirements of the City for such instruments provided by other occupants of the right-of-ways. The Security Fund shall be maintained by the Company so long as any part of the System is located within the Public Ways of the City. B. Purpose of Fund: The fund shall serve as security for the full and complete performance of the Company for all of its obligations under this Franchise Agreement, including pay- ment of any costs, expenses, damages or loss the City pays or incurs because of any act or omission attributable to the Company that constitutes a violation, default or failure to comply with the codes, Ordinances, rules, regulations or permits of the City, and the payment of any undisputed liquidated damages,judgments, fees or taxes actually due the City. C. Assessing the Fund: The City may assess the Security Fund pursuant to the procedures set forth in Subsection D of this Section in the following circumstances: 1. In the event of any default or failure of the Company, to pay any undisputed liq- uidated damages or undisputed fees due the City and required pursuant to this Agreement. 2. In the event the City has incurred any out-of-pocket cost, expense, damage or loss because of any act or omission attributable to the Company that constitutes a vio- lation, default or failure to comply with the requirements of this Agreement,but only to the extent that the amount of such out-of-pocket cost, expense, damage or loss is not greater than one thousand five hundred dollars ($1,500.00). D. Notice to Company: Before any sums may be withdrawn from the Security Fund, the City shall give not less than thirty(30) days written notice to the Company which shall: 1. Identify the amount that the City contends it is due as liquidated damage fees or out-of-pocket costs incurred by the City as described in Subsection C.1. and C.2. of this Section. 2. Contain a plain statement of the alleged act, omission, default or failure to comply with the requirements of this Agreement stating the default, including a descrip- tion of the Company's failed attempts to correct such errors. 12 3. Provide the Company with an opportunity to review the Notice with City Man- ager or his/her designee. 4. Provide the Company with an opportunity to first pay the amount, if any, due the City. 5. Provide the Company an opportunity to answer the notice, secure a hearing and obtain a written determination in accordance with the violation procedures set forth in Section 22. E. Undisputed Amounts: The Company shall promptly pay any undisputed liquidated dam- ages,judgments, fees, taxes or amounts due the City. If the Company fails to pay any undisputed amounts due the City within thirty (30) days after written notice from the City, the City may withdraw the amount stated in the notice from the Security Fund. F. Restoring the Fund: The Company shall replenish the Security Fund within thirty (30) days after written notice from the City that monies have been withdrawn from the fund, or if there is otherwise a deficiency in the amount of the fund. Section 11: INDEMNIFICATION, LIABILITY AND INSURANCE. A. The City shall not at any time be liable for any injury or damage occurring to any Person or property from any cause whatsoever arising out of this Agreement or from the use, op- eration, or condition of the Cable System; except that the City does hereby indemnify, save, and hold harmless and agrees to defend Franchisee from all liens, charges, claims, demands, suits, actions, fines, penalties, losses, costs (including, but not limited to, legal fees and court costs),judgments, injuries, liabilities, or damages, in law or equity; of any and every kind and nature whatsoever, whether caused by or arising out of any act of omission or commission, or any negligence of the City, or its officers, elected or ap- pointed officials, servants, agents, employees, or contractors, whether or not arising out of or in any way connected with the City's use of the Cable System facilities or equip- ment; however, the indemnity granted hereby shall not extend to liabilities of any type or kind whatsoever arising out of any acts of negligent or willful misconduct on the part of Franchisee, its officers, servants, agents, employees, or contractors. B. The Franchisee shall defend, indemnify, save and hold the City and its officers, agents and employees free and harmless from and against any and all liens, claims, actions, de- mands, suits, damages, costs,judgments, injuries, expenses and liabilities, including legal fees and, court costs and fines, which may be incurred by them, asserted against them, or sought to be imposed upon them, individually, jointly or severally, and which arise di- rectly or indirectly out of or are connected in any way with the construction, installation, maintenance, operation or condition of the Franchisee's Cable System, except to the ex- tent those damages, claims, awards and judgments arise from the negligence of the City, its officers, elected and appointed officials, and employees, including but not limited to: 13 1. Any negligent, tortious or wrongful act or omission of the Franchisee, and its of- ficers, agents, employees, contractors or subcontractors resulting in personal in- jury, bodily injury, sickness or death to any Person, or in loss or damage of any kind to the property of any Person including the Franchisee and its officers, agents, employees, licensees and invitees. 2. Any negligent, tortious or wrongful act or omission of the Franchisee, and its of- ficers, agents, employees, contractors or subcontractors resulting in damage to, loss of, destruction or unauthorized use of any trademark, trade name, copyright, patent or other intangible property rights of any person including libel, slander and invasion of privacy. 3. Loss or damage of any kind related to Franchisee's failure to comply with the provisions of this Franchise Agreement, or of any federal, state or local law or regulation applicable to the Franchisee or the cable system. C. The Franchisee shall assume for its officers, agents, employees, contractors and subcon- tractors all risk of dangerous or hazardous conditions in, on or about any public streets, easements or rights-of-way of the City, except for latent conditions actually caused by the willful or negligent acts of the City or its employees. D The indemnity granted hereunder shall not extend to,judgments or liabilities to the extent they arise out of the negligence or willful misconduct on the part of the City, or its offi- cers, agents or employees while acting on behalf of the City. E. Except to the extent caused by the negligence, malicious or intentional wrongful acts, or the willful misconduct of the City, or its officers, agents or employees while acting on behalf of the City, the City and its officers, agents or employees shall not be liable to the Franchisee for any claims for damage to, or loss of, all or any part of Franchisee's Cable System arising out of any public work, public improvement, alteration of any municipal structure, change in the grade or line of any Public Way of the City, the elimination, dis- continuing or closing of any Public Way of the City, or other exercise by the City of its lawful authority over the Public Ways. F. The Franchisee recognizes the City's right to exercise its police powers over the Public Ways of the City in case of fire, disaster or other emergency as reasonably determined by the City. Notwithstanding the provisions in Paragraph D above, the City shall not be li- able to the Franchisee for any damage to the Franchisee's Cable System or other property when such damage results from the exercise by the City of its police powers in order to protect the public in case of fire, disaster or other emergency. When practicable, as de- termined by the City, the City agrees to consult with the Franchisee prior to the exercise by the City of such police power, where the exercise may affect the Franchisee's Cable System and to permit the Franchisee to take necessary actions to protect the public and the Franchisee's Cable System or other property. G. Each party shall give the other reasonably prompt written notice of any claim, demand, action or proceeding for which indemnification will be sought under this provision of the Agreement and, if such claim, demand, action, or proceeding is a third-party claim, de- mand, action or proceeding, Franchisee will have the right at its expense to assume the 14 defense of such claim, demand, action, or proceeding, using counsel reasonably accept- able to the City. The City shall have the right to participate, at its own expense, with re- spect to any such third-party claim, demand, action, or proceeding. Franchisee and the City shall cooperate with each other and provide each other with access to relevant books and records in their possession. No such third-party claim, demand, action, or proceeding shall be settled without the prior written consent of the City, which consent shall not un- reasonably withhold or delay. H. Insurance: 1. As a part of the indemnification provided by the provisions of this Section, but without limiting the foregoing, the Franchisee shall within thirty (30) days of the execution of this Franchise Agreement, file with the City Manager, and at all times thereafter maintain in full force and effect at its sole expense, evidence of a policy or policies for the following: a. Commercial General Liability Insurance. Comprehensive or Commercial general liability insurance, including, but not limited to, coverage for bod- ily injury, personal injury, and property damage shall be maintained at the sum(s) of five million dollars ($5,000,000)per occurrence and five million dollars ($5,000,000) aggregate. b. Business Automobile Liability. Comprehensive automobile liability in- clude, but not limited to, non-ownership and hired car coverage as well as owned vehicles with coverage for bodily injury and property damage, shall be maintained at the sum(s) of three million dollars ($3,000,000) per accident. c. Property Loss. Fire insurance with coverage for extended perils on the Franchise property used by the Franchisee in the conduct of Franchise op- erations in an amount adequate to enable the Franchisee to resume Fran- chise operations following the occurrence of any risk covered by this in- surance. d. Workers Compensation Insurance. In such coverage, with statutory limits as may be required by the State of Illinois. 2. The policy or policies shall specifically recognize and cover the indemnification provisions of this Agreement. The City and its officers, agents, and employees shall be named as an additional insured, and the policy or policies shall contain cross-liability endorsements. The insurance shall provide that the insurance pro- vided by the Franchisee shall be primary and that any provision of any contract of insurance or other risk protection benefit or self-insurance policy purchased or in effect or enacted by the City and any other insurance or benefit shall be in excess thereof. 3. The insurer or insurers shall have Best Insurance Rating of at least A-, VII and shall be approved by the State of Illinois. 15 4. The policy or policies of insurance shall be maintained by the Franchisee in full force and effect during the entire term of the Franchise. All certificate(s) shall contain the following endorsement: "Should any of the above described policies be canceled before the expiration date thereof, the issuing company will mail 30 day prior written notice to the holder named on the certificate." 5. The Franchisee may, at its option, self-insure with respect to any or all of the foregoing insurance requirements. Section 12: REPORTS AND RECORDS. A. Upon request by the City, no more than once annually and with sixty(60) days notice,the Franchisee shall submit a written report to the City, including the following information: 1. A status report for new construction projects within the City. 2. Upon request, Franchisee shall provide the total number of its Subscribers in the Franchise Area, including Subscribers added and discontinued during the report- ing year. The Franchisee may, at its discretion, identify these statistics as proprie- tary or a trade secret, subject to exemption from the terms and conditions of the Il- linois Freedom of Information Act. 3. A log of service interruptions within the City, including a general description as to the nature of the cause of the interruption. 4. A log of service calls detailed by broad category. 5. A telephone answering profile containing the number of phone calls answered within thirty (30) seconds, the percentage of phone calls answered within thirty (30) seconds and the average speed of answer. B. The City shall have the right, at its expense, to inspect and audit the Franchisee's records to recompute any amounts determined to be payable to the City pursuant to this Agree- ment; provided such audit shall take place within twelve (12) months following the close of each calendar year. Any such audit undertaken by the City shall be conducted in ac- cordance with GAAP. Any additional amounts due the City or the Franchisee as a result of the audit shall be paid within thirty (30) days following written notice to such party (which notice with re- spect to amounts due the City shall contain a copy of the audit report), unless contested by the Franchisee or the City within such thirty (30) days. In the event that the audit re- veals an underpayment of Franchise Fees or other payments to the City of$10,000 or at least five percent (5%), whichever is less, the City may then conduct an audit of the two next preceding calendar years of the Franchisee, (if no audit was conducted of either or both of such prior calendar years) to recompute any amounts determined to be payable to 16 the City pursuant to this Agreement. Under no circumstances shall the City be permitted to conduct an audit of any fiscal year more than three (3) calendar years prior to the cal- endar year during which an audit takes place. C. Additional Information: The Franchisee shall provide such additional information as the City may reasonably require from time to time, regarding the enforcement of this Agree- ment, or any applicable Federal, state, rules or regulations wherein the City is responsible for enforcement. The Franchisee may reasonably require the execution of a confidential- ity agreement by the City before the inspection of any records containing privileged, con- fidential or proprietary information. Section 13: SYSTEM DESIGN. A. Subscriber Network: The Franchisee shall construct, operate and maintain its cable sys- tem in accordance with its current engineering practices. B. The Franchisee shall provide backup power for the cable system including but not limited to backup power supplies capable of providing eight (8) hours of power to the headend and three (3) hours of power to the cable system plant in the event of an electrical outage, with additional backup capacity provided by portable generators. C. Emergency Override: The Franchisee shall provide and maintain an emergency override system capable of providing an audio and video signal over all of the analog Channels on the Cable System. Control over such override shall be assigned to the City and the audio and video signals shall be operable by the City from remote locations. The City agrees to indemnify and hold the Franchisee harmless from any damages or penalties arising out of the willful and wanton negligence of the City, its employees or agents in using such ser- vice. Both parties shall comply with applicable rules and regulations regarding Emer- gency Alert Systems (EAS)by providing the Cable System capability to transmit an emergency alert signal in the event of disaster or public emergency. D. Periodic Testing and Compliance with FCC Standards: 1. The Franchisee shall construct and operate the Cable System to comply with the FCC technical standards contained in Part 76, Subpart K of the Commissions rules and regulations, as updated and amended from time to time (47 U.S.C. §76, Subpart K). 2. The Franchisee shall perform all tests necessary to determine compliance with the FCC technical standards. Tests shall include, at minimum, proof-of-performance tests required by FCC Rule Section 76.601 (47 U.S.C. §76.601) and such addi- tional or repeat tests involving specified Subscriber terminals as may be required to determine compliance with the FCC technical standards. 3. Written records of test results shall be maintained at a Franchisee's local system office and made available for inspection by the City or other designated agent of the City, upon request of the City. 17 4. The City or other designated agent of the City may monitor compliance with the FCC technical standards referenced herein in accordance with applicable law. 5. Not later than ninety (90) days after any new or substantially upgraded or rebuilt portion of the Cable System is made available for service to Subscribers, technical performance tests shall be conducted by the Franchisee to demonstrate full com- pliance with the FCC Technical Standards cited hereinabove. Such tests shall be performed by or under the supervision of a qualified engineer with proper training and experience. Upon request, a copy of the report shall be submitted to the Fran- chising Authority describing test results, instrumentation, calibration, and test procedures. Where said report has been requested, the Franchisee shall send such completed report to the City within seven (7) calendar days of the receipt of said request. 6. Where there exists recurring evidence, which in the judgment of the City, based upon documented reports of poor signal quality in a localized area of the City be- ing served off of a common node that casts doubt upon the reliability or quality of Cable Service, the City shall have the right and authority to require the Franchisee to test, analyze, and report on the performance of the Cable System. The Franchi- see shall fully cooperate with the City in performing such testing and shall pre- pare results, and a report, if requested, within thirty (30) days after notice. Such report shall include the following information: a. The nature of the complaint or problem that precipitated the special tests; b. The system component(s) tested; c. The equipment used and procedures employed in testing; d. The method, if any, in which such complaint or problem is resolved; e. Any other information pertinent to the tests and analysis, which may be required. 7. The City may require that the tests be observed by the City or an agent designated by the City. The selection of any such agent of the City shall be subject to the mutual consent of the City and Franchisee and the Franchisee shall not unrea- sonably withhold its consent to the City's selection. The City or the City's agent as the case may be, shall be given records of the special tests a report interpreting the results of the special tests. E. Permitting and Inspection: 1. The Franchisee shall comply with all applicable federal, state and local rules, regulations and construction codes governing the construction, operation, mainte- nance and installation of the Cable System, as such rules, regulations and codes are in force as of the time of the installation or other work. Franchisee shall com- ply with the provisions of the National Electrical Safety Code of the National Bu- reau of Standards (ANSI-2002), the National Electrical Code of the National Fire Protection Association (NFPA-2001). 18 2. All construction, installation, restoration and maintenance work shall be subject to pertinent Ordinances, regulations or policies of the City applicable to all occu- pants of the Public Ways. 3. All work done by or on behalf of the Franchisee shall be done in a manner that does not unreasonably interfere with the rights and convenience of property own- ers who adjoin the Public Ways of the City. If property is disturbed or damaged, the Franchisee shall restore the property to its former condition, normal wear and tear excepted. All facilities shall be installed in a manner consistent with existing utility installations in the Public Way and shall be completed in a manner that does not unreasonably interfere with the proper and usual use of the Public Way. 4. All restoration shall be performed in accordance with the permit requirements and with applicable ordinances. 5. The Franchisee shall not construct any facilities within the City until it has se- cured all necessary approvals and permits from the City, and any other govern- mental body having jurisdiction; provided that no permit fees shall be imposed upon the Franchisee by the City. In any permit issued by the City, the City may impose any condition,restriction, or regulation, consistent with the City codes and regulations, for the purpose of protecting any structures or facilities in the Public Ways of the City, for the proper restoration of the Public Ways of the City, for the continuity of pedestrian and vehicular traffic, and for protection of the public. 6. Franchisee may, upon reasonable notice to the City, trim trees or other vegetation on public property owned by the City or encroaching upon the Public Ways to prevent branches or leaves from touching or otherwise interfering with Franchi- see's wires, cables, or other structures. All trimming or pruning shall be at the sole cost of Franchisee. Franchisee may contract for trimming or pruning services with any Person approved by the City prior to the rendering of such services, which approval shall not be unreasonably withheld. Franchisee shall comply with the City's ordinance related to restoration of parkway or tree bank and the City agrees that the security deposit required in said ordinance is satisfied by compli- ance with Section 10 of this Agreement. 7. The Franchisee shall make reasonable effort to avoid major disturbances of street pavements, sidewalks, alleys, public and private landscaping, and all other pub- licly or privately held properties or structures during all phases of construction and maintenance of the cable system within the Public Ways of the City. The open-cutting of Public Ways shall be prohibited except when specifically agreed upon by the City, and restoration shall conform to the City's current engineering standards. 19 8. All cable passing under any roadway or public way shall be installed in conduit, which has been augured, not open cut, under the roadways or Public Ways, unless the permit issued for the work contains an express waiver of this requirement and approval for an alternative installation. 9. In the case of the disturbance for construction or maintenance of any landscape plantings, which may include, but is not limited to trees, shrubs, and grass, none of which are located in the Public Way, Franchisee shall, at its own expense, within five (5) working days, weather permitting, in the manner required by the City's ordinances, regulations, or policies, replace and restore all such surfaces to their condition prior to Franchisee's activities. In the case of grass, restorations shall be accomplished by resodding or seeding the area as appropriate. 10. The City shall have the right to inspect all construction work performed within the City Public Ways. Any inspections of construction work made by the City shall be at the expense of the City. 11. The Franchisee shall be a member of J.U.L.I.E. (the Joint Utility Location Infor- mation for Underground Excavators), and shall be responsible for contacting J.U.L.I.E. or any successor agency for all of its construction and for responding in a timely manner to requests from J.U.L.I.E. or successor agency and the City to locate its cables. The Franchisee is responsible for accurately marking its plant in conformance with J.U.L.I.E. or successor agency standards. 12. A full and complete reproducible set of plans, records, and "as-built"maps show- ing the location of all of the Franchisee's cable installed or in use within the Fran- chise Area, exclusive of Subscriber service drops, shall be provided sixty (60) days after upgrading of the Cable System is completed. The "As-Built" maps shall be provided in computer-readable format compatible with the City's Geo- graphic Information System (GIS). To the extent permitted by law, the Franchisee may declare its "As-Built" maps, plans and records to be proprietary and exempt from the provisions of the Illinois Freedom of Information Act. F. Personnel: The Company Franchisee is responsible for all of its personnel, including its contractors, agents, employees and subcontractors engaged in system construction and maintenance. All employees working for the Company Franchisee in the field shall carry identifications of the person at all times. All of the Franchisee's vehicles, and any con- tractor or sub-contractor vehicles, shall be clearly identified as performing work for the Company Franchisee. G. Installation Standards: 1. All underground drops shall be buried a minimum of six (6) inches. 2. A Subscriber shall have the option to connect a standard drop to the dwelling unit by either: 20 a. Connection of the aerial drop to the dwelling unit at a minimum of twelve (12) feet above the ground level; or, b. Attachment of the drop to the side of the utility pole and buried from the base of the utility pole to the dwelling unit. 3. All temporary service drops placed between November 1 of the prior year and March 1 of the current year, also known as snowdrops, shall be buried between April 1 and May 31, weather permitting, in addition to any delays permitted by the City. 4. Weather permitting; the Franchisee shall bury all temporary drops, excluding snowdrops referenced above, within fourteen (14) business days after placement. H. The City shall give the Franchisee no less than forty-five (45) days (except in case of emergency declared by an appropriate officer of the City in which event such lesser no- tice as shall be reasonable under the circumstances presented) advance written notice of street improvements or other activity which could affect the Cable System, including but not limited to, street or public rights-of-way excavation; construction repair; grading; traffic conditions; installation of sewers; drains or water pipes, power or signal lines; tracks; or vacation or improvement of public works. In any event, the Franchisee shall be given notice simultaneously with notice given other occupants of the right-of way. 1. All such public works shall be done, insofar as possible, in such a manner as not to obstruct, injure or prevent the free use and operation of the poles,wires, con- duits, conductors,pipes or appurtenances of the Franchisee's Cable System. Nothing contained in this Agreement shall relieve any person or entity from liabil- ity arising out of the failure to exercise reasonable care to avoid interfering with Franchisee facilities while performing the public works. 2. If any of the Franchisee's equipment shall interfere with the public works, then, upon receipt of the 45-day notice, that part of the Franchisee's equipment which interferes shall be removed or replaced by the Franchisee in such manner as shall be directed by the City so that the same shall not interfere with the public works as reasonably determined by the City and Franchisee shall bear the expense of such removal or replacement, provided the City is not providing directly or indi- rectly financial assistance or reimbursement to any other occupant of the ROW for like facilities relocations. Section 14: SUBSCRIBER SERVICES. A. The Franchisee agrees to provide, at a minimum, cable programming services in the fol- lowing broad categories: Children Sports Family oriented Ethnic/Minority programming 21 Educational programming Arts, culture and performing arts News & Information General Entertainment Weather B. Business Office: The Franchisee operates and maintains several conveniently located bill payment and customer service facilities throughout metropolitan Chicago, including an office currently located in the Franchise Area. For as long as such facilities continue to be operated by the Franchisee the facilities will be available during normal business hours capable of accepting payments and to the extent provided for the answering of ca- ble television inquiries. Section 15: FCC CUSTOMER SERVICE STANDARDS. A. Telephone Service: 1. The Franchisee will maintain a local, toll-free or collect call telephone access line which will be available to its subscribers 24 hours a day, seven days a week. a. Trained representatives will be available to respond to subscriber tele- phone inquiries during Normal Business Hours. b. After Normal Business Hours, the access line may be answered by a ser- vice or an automated response system, including an answering machine. Inquiries received after Normal Business Hours must be responded to by a trained Franchisee representative no later than the next business day. 2. Under Normal Operating Conditions, the telephone answer time by a customer service representative, including wait time, shall not exceed thirty(30) seconds when the connection is made. If the call needs to be transferred, transfer time shall not exceed thirty(30) seconds. These standards shall be met no less than ninety(90)percent of the time under Normal Operating Conditions, measured on a quarterly basis. 3. Under Normal Operating Conditions, the Subscriber will receive a busy signal less than three (3)percent of the time. B. Installations, Outages and Service Calls: 1. Under normal operating conditions, each of the following four standards will be met no less than ninety-five (95)percent of the time measured on a quarterly ba- sis: a. Standard installations will be performed within seven(7) business days af- ter an order has been placed. "Standard" installations are those that are lo- cated up to 125 feet from the existing distribution system. 22 b. Excluding conditions beyond its control, the Franchisee will begin work- ing on "service interruptions" promptly and in no event later than 24 hours after the interruption becomes known. The Franchisee must begin actions to correct other service problems the next business day after notification of the service problem. c. The "appointment window" alternatives for installations, service calls and other installation activities will be either a specific time or, at maximum, a four-hour time block during normal business hours. The Franchisee may schedule service calls and other installation activities outside normal busi- ness hours for the express convenience of the Subscriber. d. Franchisee may not cancel an appointment with a subscriber after the close of business on the business day prior to the scheduled appointment. 2. If Franchisee's representative is running late for an appointment with a Sub- scriber and will not be able to keep the appointment as scheduled, the Subscriber will be contacted. The appointment will be rescheduled, as necessary at a time that is convenient for the Subscriber. C. Notifications to Subscribers: 1. The Franchisee shall provide written information on each of the following areas at the time of installation of service, at least annually to all subscribers, and at any time upon request: a. Products and services offered; b. Prices and options for programming services and conditions of subscrip- tion to programming and other services; c. Installation and service maintenance policies; d. Instructions on how to use the Cable Service; e. Channel positions of programming carried on the system; and f. Billing and complaint procedures, including the address and telephone number of the local franchise authority's cable office. 2. Subscribers will be notified of any changes in rates,programming services or channel positions as soon as possible through announcements on the Cable Sys- tem and in writing. Notice must be given to Subscribers a minimum of thirty(30) days in advance of such changes if the change is within the control of the Franchi- see. In addition, the Franchisee shall notify subscribers a minimum of thirty(30) days in advance of any significant changes in the other information required by Section A.1. of this Section. Notwithstanding any other provision of Part 76, Franchisee shall not be required to provide prior notice of any rate change that is the result of regulatory fee, Franchise Fee, or any other fee, tax, assessment, or 23 charge of any kind imposed by the Federal agency, state, or City on the transac- tion between the operator and the Subscriber. D. Subscriber billing: 1. Subscriber bills will be clear, concise and understandable. Bills must be fully itemized, with itemizations including,but not limited to, basic and premium ser- vice charges and equipment charges. Bills will also clearly delineate all activity during the billing period, including optional charges, rebates and credits. 2. In case of a billing dispute, the Franchisee must respond to a written complaint from a subscriber within 30 days. 3. Refund checks will be issued promptly, but no later than either: a. The Subscriber's next billing cycle following resolution of the request or thirty(30) days,whichever is earlier; or b. The return of the equipment supplied by the Franchisee if service is termi- nated. 4. Credits for service will be issued no later than the Subscriber's next billing cycle following the determination that a credit is warranted. E. Definitions: 1. NORMAL BUSINESS HOURS Means those hours during which most similar businesses in the community are open to serve customers. In all cases, "normal business hours" must include some evening hours at least one night per week and/or some weekend hours. 2. NORMAL OPERATING CONDITIONS Means those service conditions that are within the control of the Franchisee. Those conditions, which are not within the control of the Franchisee, include, but are not limited to,natural disasters, civil disturbances, power outages, telephone network outages, and severe or unusual weather conditions. Those conditions, which are ordinarily within the control of the Franchisee, include, but are not lim- ited to, special promotions,pay-per-view events, rate increases, regular peak or seasonal demand periods, and maintenance or upgrade of the cable system. Section 16: NOTICE TO CITY REGARDING PROGRAMMING AND PRICE ADJUSTMENTS. A. The Franchisee shall provide thirty(30) day written notice of all programming changes and price adjustments to the City. 24 B. In the instances of the Franchisee's intention to add or supplement programming without re-locating existing programming or other services or impacting customer bills the Fran- chisee should be permitted to provide such programming or services as soon as possible. Therefore in those instances the Franchisee shall do so at the earliest practical opportu- nity and make every effort to notify the City and its customers of those additional bene- fits as soon as possible. Section 17: GOVERNMENT AND INSTITUTIONAL SERVICES. A. The Franchisee will provide and maintain without charge one standard video service con- nection to each non-residential, non-commercial purpose, local government building and school building within the Franchise Area passed by the Subscriber network as listed in Appendix A, and to any local government building and school building constructed in the Franchise Area during the term of this Agreement. If any such institution declines such installation, the institution shall retain the right to request such installation at any time during the life of this Agreement. B. The Franchisee agrees to install within each local government building and school build- ing at a location to be approved by the institution one service drop, and to provide Basic Cable service. In the event that the existing cable plant must be extended beyond 125 feet, the local institution shall be solely responsible for the labor and materials costs of such extension. At such locations for which internal wiring is required or requested, Franchisee shall provide such internal wiring and the entities shall pay Franchisee's ac- tual expenses therefore. Section 18: PEG ACCESS CHANNELS A. The Franchisee agrees to provide two (2) downstream channels in order to allow the City to provide non-commercial programming to the Franchisee's customers. The City will operate one channel and Elgin Community College currently operates the other channel. B. In the event that the Franchisee would relocate the channel position of either PEG chan- nel the Franchisee will provide thirty(30) days notice of its intention to move the channel and agrees to work with the City to inform its customer's of such relocation. C. The Franchisee will work with the City and take all reasonable steps necessary to estab- lish a return path from the City's studio to the Franchisee's headend. The City shall ad- vise the Franchisee within nine (9) months of the effective date of this franchise as to the location of the studio. The franchisee will work in earnest to complete all work necessary to provide the connection within four (4) months of receiving notice of the studio's loca- tion, the Franchisee shall be accorded reasonable time extensions to allow for the readi- ness of the studio and for weather conditions impact on construction. 25 Section 19: COMMERCIAL LEASED ACCESS. The Franchisee shall comply with the Commercial Leased Access requirements of the Cable Act (47 CFR §532). Section 20: FRANCHISE FEES. A. The franchise fee percentage shall be five percent, (5%), which is currently the maximum amount allowed under the Cable Act. B. The Franchisee shall pay to the City the franchise fee on a quarterly basis within thirty (30) days of the end of the preceding calendar year quarter. This calculation shall not in- clude non-subscriber revenue or include the franchise fees collected in the gross revenue calculation, which amounts will be made in a separate payment as detailed below in paragraph C. C. At least once annually, the Franchisee shall provide the City with a separate check equivalent to 5% of gross revenues from"non-subscriber revenue" and "franchise fee on franchise fee". Franchisee shall be permitted to estimate this payment in order to provide a quarterly payment provided at least once annually it provides an accurate accounting of the annual gross revenues for such specific revenue. D. In no event shall the total of the payments made in paragraphs A and B of this Section exceed the franchise fee cap set forth in the Cable Act 47 USC 543, for any given calen- dar year. E. Each payment shall be accompanied by a statement of revenue received for the quarter in connection with the operation of the Franchisee's Cable System in the City and a show- ing of all Gross Revenues derived from the Cable System as defined herein. F. Any Franchise Fee which remains unpaid in whole or in part after the date specified herein shall be delinquent and shall thereafter accrue interest at the statutory rate. Section 21: FRANCHISE COMPLIANCE. A. General: The Franchisee shall comply with the requirements of this Franchise Agree- ment at all times during the term of its Franchise. In the event of any dispute between Franchisee and City regarding compliance with any aspect of this Agreement, both par- ties agree to cooperate with one another in good faith to assure as much as possible the smooth, continuous operation of the Cable System and the provision of service of the highest possible quality to subscribers; provided, however, nothing herein shall serve to limit or abrogate the rights and duties of either party under this Agreement. B. Material Violations: If the City has reason to believe that the Franchisee has committed a material violation of this Franchise Agreement, the City may act to remedy the violation in accordance with the procedures set forth below. A material violation shall include: 1. Construction or operation in the City or in the Public Ways of the City without a required permit, license or authorization. 26 2. Construction or operation at an unauthorized location. 3. Unauthorized Franchise transfer. 4. Material misrepresentation by or on behalf of the Franchisee in any application to the City. 5. Failure to construct, complete, relocate or remove all or any part of the Cable Sys- tem as required by this Franchise Agreement. 6. Failure to provide the services, facilities or resources required by this Franchise Agreement. 7. Failure to pay taxes, Franchise Fees, or other payments required under this Agreement when and as due the City. 8. Failure to deliver evidence of Franchisee's insurance coverage as specified in Section 11 of this Agreement. 9. Failure to establish and maintain the Security Fund required pursuant to this Agreement. 10. Repeated failure to comply with the Customer Service Standards as required by this Franchise Agreement. 11. Failure to comply with the Public, Educational or Governmental Access provi- sions of this Franchise Agreement. C. Notice of Violations: Written notice shall be given to the Franchisee setting forth the na- ture of the material violation and a reasonable period of time for the Franchisee to correct the violation. Unless the City determines that the violation is of such a nature that a lesser period of time is warranted for remedying the violation, the Franchisee shall be given thirty(30) days after receipt of such notice to remedy the violation. D. Answer to Notice of Violations: Within the thirty(30) days, or such other period of time specified by the City,but not less than thirty 30 days, in its notice to the Franchisee, the Franchisee shall respond in writing to the City: 1. That it contests the City's notice of violation and requests an opportunity to be heard as provided herein. The Franchisee shall submit supporting documentation with its response to the notice. 2. That it contests the City's notice of violation for the reason(s) that no violation ex- ists or the violation was beyond the reasonable control of the Franchisee, and re- 27 quests an opportunity to be heard as provided herein. The Franchisee shall submit supporting documentation with its response to the notice. 3. That the Franchisee will remedy the violation within the time specified by the City in its notice to the Franchisee. 4. If the Franchisee contends that an extended period of time is reasonably needed to remedy the violation, it shall submit a written request for an extension, together with supporting documentation that the Franchisee cannot reasonably remedy the violation within the time period specified by the City in its notice to the Franchi- see. The City shall not unreasonably deny an extension of time to remedy the vio- lation. If the City grants the extension, the Franchisee shall proceed to remedy the violation within the extended time prescribed,provided that the Franchisee shall also inform the City on a regular basis of the steps being taken to remedy the vio- lation. E. Public Meeting: The City shall give the Franchisee not less than fourteen (14) days writ- ten notice of the date, time and place of the public meeting to be held before the Corpo- rate Authorities. At the public meeting, the Corporate Authorities shall hear and deter- mine the issues and render its findings and its decision. If the City has appointed a hear- ing officer, the hearing officer shall hear the relevant evidence and shall render a record of the administrative hearing and recommended findings and decision to the Corporate Authorities. F. Determination: If the Franchisee fails to submit a written response to the City's notice of violation as provided in Paragraph D of this Section; or if the Franchisee fails to remedy the violation within the time period specified by the City in its notice to the Franchisee, or any extensions thereto granted by the City; or if the Franchisee submits a response, and if the Corporate Authorities determine after a hearing that the Franchisee has committed a material violation as provided herein; the Corporate Authorities may, after giving the Franchisee an opportunity to be heard, seek or obtain judicial relief to enforce the provi- sions of this Franchise Agreement. Section 22: FRANCHISE REVOCATION AND TERMINATION. A. Revocation. The Franchise granted to the Franchisee pursuant to this Agreement is sub- ject to revocation in the event of any substantial breach of this Franchise Agreement or default in performance of the Franchisee's performance of the Franchise. The following events, acts or omissions on the part of the Franchisee are a substantial breach and may be considered cause for revocation of the Franchise and termination of this Franchise Agreement: 1. Repeated failure, after notice and an opportunity to cure, to comply with the mate- rial terms or provisions of this Agreement; 28 2. Repeated failure to cure material violations of the Franchise Agreement within a reasonable time after notice from the City; 3. Practices fraud or deception upon the City which actions may include any attempt to purposefully evade or avoid any of the provisions of this Franchise; 4. The Franchisee has been adjudged to be bankrupt, has a receiver appointed for it, makes an assignment for the benefit of creditors, or has a significant amount of its property sold under the execution or other legal process or is seized by creditors; or, 5. Repeated failure to pay taxes, Franchise Fees, other financial obligations under this Agreement, costs or penalties when and as due the City. B. Notice of Substantial Breach: Written notice shall be given to the Franchisee setting forth: 1. The nature of the substantial breach or default by the Franchisee; 2. A written demand that the Franchisee correct the violation; and 3. Notice that any failure to correct the substantial breach or default within thirty (30) days or other time period_as the parties may agree may be cause for revoca- tion of the Franchise. C. Answer to Notice of Breach. Within thirty(30) days the Franchisee shall respond in writ- ing to the City, together with documentation in support of its response: 1. That it contests the City's notice of substantial breach and requests an opportunity to be heard as provided herein. 2. That corrective action has been implemented by the Franchisee and the substantial breach or default has been cured. 3. That corrective action has been implemented by the Franchisee and is being ac- tively and diligently pursued in accordance with a written corrective action plan to be submitted to the City. D. Opportunity For Franchisee to be Heard: If requested by the Franchisee, or if the City is not satisfied that sufficient corrective action is being actively and expeditiously pursued by the Franchisee to remedy the substantial breach or default, the City shall schedule a public meeting to hear and determine the issues and to consider whether sufficient cause exists to revoke the Franchise. The City shall give the Franchisee not less than fourteen(14) days written notice specify- ing the City's intent to consider the revocation of the Franchisee's Franchise, and the date, time and place of the public hearing to be held before the City Council, or a hearing 29 officer appointed by the City Council. If a hearing officer has been designated, the officer shall hear the relevant evidence and shall render a record of the administrative hearing and recommended findings and decision to the City Council. E. Determination by Hearing Officer: If the recommended findings and decision in subsec- tion D above are provided to the City Council by a hearing officer, the parties shall be en- titled to an opportunity to present their respective positions to the City Council. The City Council shall hear the relevant evidence,provide the Franchisee the opportunity to be heard on said relevant evidence and shall determine whether or not a substantial breach or default by the Franchisee has occurred, whether it has been cured or a satisfactory correc- tive action plan has been submitted and is being actively and diligently pursued, and whether cause exists to impose a lesser sanction. In the event that the City is caused to revoke the Franchise, it shall send notice of revocation and file within a reasonable time after said determination. F. Determination by Corporate Authorities: If the Corporate Authorities determine that cause exists to revoke the Franchise, it may by ordinance declare a Franchisee's Fran- chise to be terminated and revoked,provided that the City may grant the Franchisee an additional period of time to remedy the substantial breach or default before such ordi- nance is fully effective. G. Judicial Relief: No provision of this Section shall be deemed to bar or otherwise limit the right of the City to seek or obtain judicial relief to enforce the provisions of this Franchise Agreement. Section 23: LIQUIDATED DAMAGES. A. Amounts. Because Grantee's failure to comply with or to perform certain obligations un- der this Franchise Agreement, or its failure to do so in a timely manner may result in damage to the City that is difficult to determine, the City and the Grantee agree to the fol- lowing liquidated damages as the liquidated sum or sums to be reasonably paid in light of the anticipated loss caused by or resulting from the specified violation, default and result- ing injury: 1. Failure to provide data, documents, applications or reports, including financial re- ports to the City----$50.00 per day or any part thereof until filed. 2. Failure of Grantee to provide or maintain required insurance coverage----$150.00 per day from the time the insurance lapsed until policy is reinstated, but not more than $750.00 for failure to provide evidence of required insurance. 3. Commission of a material violations of this Franchise Agreement as set forth in Section 21 of this Agreement----$100.00 per day. B. Accrual of Liquidated Damages. Unless otherwise specified in this Agreement, liqui- dated damages accrue from the date written notice of the violation is given. 30 C. Assessment of Liquidated Damages. Liquidated damages shall be assessed against the Grantee at such time upon the following events: 1. The failure to answer a Notice of Violation within the time period allowed as pro- vided in Section 21.C. of this Agreement and a determination made pursuant to Section 21.F. of this Agreement. 2. If not disputed, the failure to cure the violation within the time period allowed in the Notice of Violation or such extended time period as provided in Section 21.D.4. of this Agreement and a Determination made pursuant to Section 20.F. of this Agreement; or 3. If disputed, a determination that a violation occurred as provided in Section 20.F. of this Agreement. D. Effect on Grantee's Franchise Duties. The assessment and collection of liquidated dam- ages shall not affect Grantee's obligation to comply with the provisions of this Agreement or applicable law. E. Other Remedies. If the City elects to assess liquidated damages, such election shall con- stitute the exclusive remedy for a period of sixty(60) days. Thereafter, if the Grantee remains in noncompliance with the requirement of this Agreement, the City may pursue any available remedy. Section 24: PRIVACY. The Franchisee agrees to comply with the specific provisions and restrictions of the Cable Pri- vacy Act and its subsequent amendments if any. Section 25: MISCELLANEOUS PROVISIONS. A. No Waiver: The failure of the City or the Franchisee on one or more occasions to exer- cise a right or to require compliance or performance under this Agreement or any other applicable law shall not be deemed to constitute a waiver of such right or a waiver of compliance or performance, unless such right has been specifically waived in writing. Any waiver of a breach is not a waiver of any other breach. No delay or omission of the City or Franchisee to exercise any right or remedy shall be considered to be a waiver of or acquiescence in any default. B. Severability: If any section, subsection, sentence, clause, phrase, or provision of this Agreement is for any reason held to be unconstitutional or invalid as conflicting with any federal, state or local law rule or regulation now or hereafter in effect by any federal or state court, or administrative or governmental agency of competent jurisdiction, including but not limited to the FCC, or is held by such court or agency to be modified in any way 31 to conform to the requirements or any such law, rule or regulation, such provision shall be deemed a separate, distinct and independent part of this Agreement, and such holding shall not affect the validity of the remaining parts of this Agreement,which shall be ap- plied and construed as reasonably as possible in the absence of the invalidated provision. C. Franchisee's Inability to Perform(Force Majeure): In the event the Franchisee's per- formance of any of the terms, conditions, obligations of this Franchise is prevented or impaired by a cause or event beyond the Franchisee's reasonable control, the inability to perform shall be deemed to be excused and no liquidated damages,penalties or sanctions shall be imposed as a result thereof,provided, however, that the inability to perform shall not relieve the Franchisee from the obligations pertaining to refunds and credits for inter- ruptions in service. For the purpose of this Section, causes or events not within the rea- sonable control of Franchisee shall include without limitation acts of God, strikes, sabo- tage, riots or civil disturbances,restraints imposed by order of a governmental agency or court, explosions, acts of public enemies, Franchisee's inability to obtain permits or per- mission to access necessary Public Ways or Easements, and natural disasters such as floods, earthquakes, landslides, and fires or other events beyond the Franchisee's control, but shall not include financial inability of the Franchisee to perform or failure of the Franchisee to obtain any necessary permits or licenses from other governmental agencies or the right to use the facilities of any public utility where such failure is due solely to the acts or omissions of Franchisee, or the failure of the Franchisee to secure supplies, ser- vices or equipment necessary for the installation, operation, maintenance or repair of the Cable System where the Franchisee has failed to exercise reasonable diligence to secure such supplies, services or equipment. D. Franchise Validity: The Franchisee expressly acknowledges that upon accepting the right, privilege and Franchise granted it does so relying upon its own investigation and under- standing of the power and authority of the City. By the acceptance of a Franchise, the Franchisee shall agree it will not at any time set up against the City in any claim or pro- ceeding any provision, condition or term of the Franchise Agreement as unreasonable, arbitrary or void or that the City had no power or authority to make such provision, term or condition except as to those matters preempted by federal or state agency or law. E. Acknowledgments by the Parties: The Parties expressly acknowledges the following: 1. By acceptance of the Grant, the parties acknowledge that they have carefully read and considered the terms and conditions of this Franchise Agreement and accept all of the terms and conditions and agree to abide by the same. 2. Acknowledge that they have carefully read the terms and conditions of this Fran- chise Agreement and expressly waives any claims that any provisions are unrea- sonable or arbitrary or void, or that either party had no power or authority to make the provision, term or condition as part of or pursuant to this Franchise Agreement except as to those matters which are preempted by federal or state law. 3. Acknowledge that they have not been induced to accept the Franchise by any promise, oral or written, by or on behalf of the City, Franchisee or by any third • 32 person,regarding any term or condition of this Franchise Agreement not ex- pressed herein. 4. Represent that no promise or inducement, oral or written, has been made to any City employee, agent or official regarding receipt of this Franchise. F. Venue of Enforcement: Except as to any matter within the jurisdiction of the federal courts, all judicial actions relating to any interpretation, enforcement, dispute resolution or any other aspect of this Agreement shall be brought in the Circuit Court of the State of Illinois, Kane County, Illinois. With respect to any matter within the jurisdiction of the Federal Court shall be brought in the United States District Court of the Northern District of Illinois. G. Entire Agreement: This Agreement constitutes the entire Agreement among the parties pertaining to the subject matter of this Agreement and supersedes all prior and contempo- raneous agreements, understandings, negotiations and discussion of the parties,whether oral or written, and there are no representations or other agreements among the parties except as specifically set forth herein. H. Amendment: No provision of this Agreement shall be deemed amended by either party, unless such amendment is in writing and signed by the authorized representative of each party. I. Modification: The Franchisee and the City shall follow the procedures for Franchise modifications as established by the Cable Communications Policy Act of 1984 as set forth in Section 625 (47 CFR §545). This provision only pertains to those modifications meeting the specific parameters of Section 625. Either party has the right to propose any mutually agreed to modifications in writing at any time. J. No Third-Party Beneficiaries. Nothing in this Chapter or any Franchise Agreement is or was intended to confer third-party beneficiary status on any member of the public to en- force the terms of such Chapter or Franchise Agreement. Approved and Accepted By: CITY OF ELGIN COMCAST OF ILLINOIS/WEST VIRGINIA, LL 4,Pak* By: _ � / / B %�� ;% Mayor v.0.,tur Mga,,,4, Attest: /k 1�..;� ' / Witness. City Clerk ra `,c(OF FCC Agenda Item No. § City of Elgin E L 011 April 23, 2004 A uiii poi Fs to I ilC[ TO Mayor and Members of the City Council N 0111 tov FINANCIALLY S TABL E CITYGOVE RNMENT FROM: David M. Dorgan, City Manager EF FICIENT SERVICES. AND OUALIT Y INFRASTRUCTURE Sean R. Stegall, Assistant City Manager SUBJECT: Renewal of the Cable Franchise Agreement with Comcast, Inc. PURPOSE The purpose of this memorandum is to provide the Mayor and members of City Council with information to consider renewing the Cable Franchise Agreement with Comcast, Inc. RECOMMENDATION It is recommended that the City Council approve the franchise agreement by and between the City of Elgin and Comcast, Inc. BACKGROUND Major Issues Language I. Definition of Gross The franchise fee percentage shall be five percent (5%), which is Revenues currently the maximum amount allowed under the Cable Act. This calculation shall not include non-subscriber revenue or include the franchise fees collected in the gross revenue calculation, which amounts will be made in a separate payment. At least once annually, the Franchisee shall provide the City with a separate check equivalent to 5% of gross revenues from "non-subscriber revenue" and "franchise fee on franchise fee". Please see "Financial Impact" for additional information. 2. Local Programming The Franchisee agrees to provide two (2) downstream channels in order to allow the City to provide non-commercial programming to the Franchisee's customers. The City will operate one channel and Elgin Community College currently operates the other channel. In the event that the Franchisee would relocate the channel position of either PEG channel, the Franchisee will provide thirty (30) days notice of its intention to move the channel. The Franchisee will work with the City and take all reasonable steps necessary to establish a return path from the City's studio to the Comcast Franchise Agreement 4 April 23, 2004 Page 2 Franchisee's headend. The City shall advise the Franchisee within nine (9) months of the effective date of this franchise as to the location of the studio. The franchisee will work in earnest to complete all work necessary to provide the connection within four (4) months of receiving notice of the studio's location. In order to provide local programming services, a budget of$70,000 per annum has been established. As directed by the City Council, Staff has begun discussions with BTE Video in order to provide these services. Monies in the amount of$60,000 are available in the 2004 Riverboat Fund in order to provide funding for the establishment of a studio and for video equipment purchases. The Hemmens has been targeted as the studio location. Final information will be presented to the City Council on this matter when the BTE Video Agreement is brought forward. 3. Term The Agreement calls for a term of thirteen (13) years, therefore expiring in 2017. This provides the City with an opportunity to negotiate the terms of this agreement in conjunction with the expiration of the Wide Open West Agreement which also expires in 2017. 4. Customer Service — The Agreement has well-defined customer service standards as Telephone Calls compared with the former agreement. As it relates to telephone service, the telephone answer time by a customer service representative, including wait time, shall not exceed thirty (30) seconds when the connection is made. If the call needs to be transferred, the transfer time shall not exceed thirty (30) seconds. These standards shall be met no less than ninety (90) percent of the time under normal operating conditions. 5. Customer Service — Under normal operating conditions, each of the following four Service Calls standards will be met no less than ninety-five (95) percent of the time measured on a quarterly basis: a. Standard installations will be performed within seven (7) business days after an order has been placed. b. Excluding conditions beyond its control, the Franchisee will begin working on "service interruptions" promptly and in no event later than 24 hours after the interruption becomes known. c. The "appointment window" alternatives for installations, service calls and other installation activities will be either a specific time or, at maximum, a four-hour time block during normal business hours. Franchisee may not cancel an appointment with a subscriber after the close of business on the business day prior to the scheduled appointment. Comcast Franchise Agreement - April 23, 2004 Page 3 6. Territorial Extent of In order to serve future Elgin residents, particularly in the Far West, the Franchise Comcast is required to extend its cable system in all developing areas having at least thirty-five (35) occupied dwelling units per cable mile. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED During the past two (2) years, two public hearings were held regarding the renewal of the franchise. In addition, several other meetings have been held through various means to discuss the matter. eFINANCIAL IMPACT The franchise fee percentage will be five percent, (5%), which is currently the maximum amount allowed under the Cable Act. It is estimated that this will generate approximately $480,000 per annum. These monies will be credited to General Fund, account number 010-0000-604.03-13 "Franchise Fees-Comcast" (2004 budget = $465,000). This amount is conservatively estimated to grow at 5% per annum based upon new Elgin subscribers and rate adjustments put into place by Comcast which, in turn, generates additional revenue for the City. At least once annually, the Comcast will provide the City with a separate check equivalent to 5% r of gross revenues from "non-subscriber revenue" and "franchise fee on franchise fee". Comcast will be permitted to estimate this payment in order to provide a quarterly payment, provided that, at least once annually, it provides an accurate accounting of the annual gross revenues for such specific revenue. It is estimated that this will generate an additional $35,000 per annum. These monies will be credited to General Fund, account number 010-0000-604.03-23 "Comcast-PEG Support". This will provide the funding mechanism, in addition to the $35,000 provided by Wide Open West, for the City's local programming efforts. EGAL IMPACT \i\i‘16)1jNone ALTERNATIVES 1. Deny the renewal of the franchise agreement. A decision to deny the agreement is subject to appeal in federal court. 2. Direct Staff to continue negotiations with Comcast by providing direction on additional areas to be discussed. 3. Approve the recommendation that the franchise agreement with Comcast be renewed. r. Respectfully submitted for Council consideration.