HomeMy WebLinkAboutADELPHIA 2 - 2005
A-2005-130
SETTLEMENT AGREEMENT
This Settlement Agreement is entered into this ;;{t1ol day of }Llit~iCiI' 2005, by and
between the CITY OF SANTA ANA, CALIFORNIA ("City"), a California mu icipal
corporation, and ADELPHIA CABLEVISION OF SANTA ANA, L.L.C ("Adelphia"), a
Delaware limited liability company.
WHEREAS, Adelphia is a debtor and debtor-in-possession in a case under chapter
11 of title 11 of the United States Code, which is pending in the United States Bankruptcy
Court for the Southern District of New York; and
WHEREAS, City and Adelphia executed a cable television franchise agreement on
June 21, 1982, ('Franchise Agreement"); and
WHEREAS, City has alleged that Adelphia was in non-compliance with certain
provisions of the City's customer service standards in connection with the Franchise
Agreement; and
WHEREAS, City has conducted a franchise fee audit for the period January 1, 2002,
through December 31,2004, and has alleged that certain unpaid franchise fees are owed
relating to such period; and
WHEREAS, Adelphia has disputed certain allegations of the City; and
WHEREAS, concurrently with the adoption of a renewed franchise agreement
between City and Adelphia (" Renewed Franchise Agreement"), the parties have determined
to settle the aforesaid non-compliance issues and franchise fee audit issues upon the terms
and conditions set forth below;
NOW THEREFORE, in consideration of the following promises and conditions and for
other good and valuable consideration, the parties to this Settlement Agreement agree to be
bound by the following specific conditions:
1. City hereby releases Adelphia and waives any and all claims, as such term is defined
in 11 U.S.C. ~1 01 (5), it has against Adelphia, its successors, affiliates, directors,
officers, employees, attorneys, agents, and representatives regarding issues of non-
compliance with the customer service standards set forth in the Franchise Agreement
and Renewed Franchise Agreement through June 30, 2005.
2. City hereby releases Adelphia and waives any and all claims. as such term is defined
in 11 U.S.C ~101 (5), it has against Adelphia, its successors, affiliates, directors,
officers, employees, attorneys, agents, and representatives regarding unpaid
franchise fees under the Franchise Agreement through December 31, 2004.
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3. City and Adelphia agree that nothing herein shall be deemed to be an admission of
liability with respect to the matters described herein.
4. Adelphia agrees to pay the sum of One Hundred Thirty-Five Thousand
Dollars ($135,000) ("Settlement Amount") to City in full settlement and satisfaction of
alleged unpaid franchise fees through December 31,2004.
5. Adelphia's obligation to produce programming to be cablecast on City's governmental
access channel is set forth in Section I(B)(4) of Exhibit F to the Renewal Franchise
Agreement. The parties agree that Subsection (4) of Section I(B) of Exhibit F is
modified in its entirety to read as follows:
"4. Proqramminq Support Durinq 30-Month Transition Period.
(a) During the first six months after the effective date of this
Agreement, Grantee shall continue to provide the same amount of
programming that was required by the prior franchise agreement. The parties
agree that this obligation requires the Grantee's production of 46 programs,
including the production of Grantor's City Council meetings.
(b) Commencing with the seventh month after the effective date of
this Agreement, and continuing for the remaining term of this Agreement,
Grantee will have no obligation to produce the Grantor's City Council meetings.
(c) Commencing with the seventh month after the effective date of
this Agreement, and continuing through the first anniversary of this Agreement,
Grantee will provide transition support to Grantor. This obligation requires the
production of 23 programs during this six-month period.
(d) Commencing with the thirteenth month after the effective date of
this Agreement, and continuing through the following six-month period, Grantee
will provide additional transition support to Grantor. This obligation requires the
Grantee's production of 23 programs during this six-month period.
(e) Commencing with the nineteenth month after the effective date of
this Agreement, and continuing through the following six-month period, Grantee
will provide additional transition support to Grantor. This obligation requires
Grantee's production of 23 programs during this six-month period.
(f) Commencing with the twenty-fifth month after the effective date of
this Agreement, and continuing through the following six-month period, Grantee
will provide additional transition support to Grantor. This obligation requires
Grantee's production of 23 programs during this six-month period.
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(g) During the thirty-month transition period following the effective
date of this Agreement, Grantee will provide all required programming services
under the direction of the Grantor's Parks and Recreation Department.
(h) Commencing with the thirty-first month after the effective date of
this Agreement, the transition period will terminate, and Grantee shall have no
further obligations to produce any programming for Grantor."
6. Adelphia agrees to cover the operational and maintenance costs for the City's
Coaxial Institutional Network ("I-Net") as it exists on the effective date of this
Settlement Agreement, and the cost to provide power to the I-Net, for a period
of twenty-four (24) months following the effective date of this Settlement
Agreement.
7. City agrees that any capital costs required to maintain or repair the I-Net shall
be City's sole responsibility throughout the term of the Renewed Franchise
Agreement.
8. With regard to the matters described in Sections (1) and (2) of this Agreement,
as to which Adelphia is released and all claims of the City are waived, City and
Adelphia expressly understand and acknowledge the possibility that unknown
losses or claims exist or that present losses may have been underestimated in
amount or severity. City and Adelphia explicitly took that into account in
entering into this Agreement, and the consideration and mutual covenants
contained herein have been bargained for between the parties with knowledge
of the possibility of such unknown claims, and were given in exchange for a full
accord, satisfaction, and discharge of those claims. Accordingly, each of the
parties acknowledges and agrees that it may hereafter discover facts different
from, or in addition to, those which are now believed to be true with respect to
the claims being released herein, and the parties agree that this Agreement will
be and remain effective in all respects notwithstanding such different or
additional facts or the discovery of those facts. It is further expressly agreed
that all rights under California Civil Code Section 1542 are hereby expressly
waived by each of the parties if that statute is asserted or determined to be
applicable to the claims being released herein. Civil Code Section 1542
provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR
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9. This Settlement Agreement is subject to the prior approval of the United States
Bankruptcy Court of the Southern District of New York ("Bankruptcy Court").
Such approval may be obtained pursuant to settlement procedures previously
approved by the Bankruptcy Court. Adelphia shall not be obligated to pay the
Settlement Amount, or to perform any other obligations set forth in this
Settlement Agreement, unless and until the Bankruptcy Court approves this
Settlement Agreement. If the Bankruptcy Court does not approve this
Settlement Agreement, (a) nothing contained herein shall be deemed to be a
waiver of any claims or an admission of liability by any party hereto; and (b) this
Settlement Agreement shall be null and void, and all rights of the parties prior to
this Settlement Agreement shall be preserved.
10. This Settlement Agreement, in conjunction with the Renewal Franchise
Agreement, contains the entire agreement between the parties and supersedes
any and all prior agreements or understandings between the parties relating to
its subject matter. The terms of this Settlement Agreement may not be
modified, except in a writing signed by both parties.
11. This Settlement Agreement is the result of a compromise of disputed claims
and shall not at any time or for any purpose, be considered as an admission of
liability or responsibility on the part of either party. Each of the parties will bear
its respective attorneys' fees incurred in negotiating this compromise and
settlement of disputed claims.
12. This Settlement Agreement will be binding upon City and Adelphia from its
"effective date," as specified below in Section 14, and upon any assignee or
transferee of the Renewal Franchise Agreement that may hereafter be
authorized by City.
13. Except as modified by this Settlement Agreement, either expressly or by
necessary implication, the terms and conditions of the Renewal Franchise
Agreement will remain in full force and effect.
14. It is the intention of the parties that Adelphia will first execute this Settlement
Agreement and then submit it to City. Following its execution by the City, the
City Clerk will insert the execution date on page one of this Settlement
Agreement, attest to the execution of this Settlement Agreement by a duly
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authorized officer of the City, and transmit one fully conformed counterpart to
Adelphia. The "effective date" is the date on which this Settlement Agreement
is signed on behalf of the City.
TO EFFECTUATE THIS SETTLEMENT AGREEMENT, each of the parties has
caused this Settlement Agreement to be signed by its duly authorized representative as of
the date set forth below each authorized signature.
ATTEST:
City Clerk
APPROVED AS TO FORM:
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Corporate Counsel
"CITY"
CITY OF SANTA ANA
Ma.
City Manager
By:
Date:
"ADELPHIA"
ADELPHIA CABLEVISION OF SANTA
ANA, LLC, a Delaware limited liability
company, dba ADELPHIA CABLE
COMMUNICATIONS
By: UCA, LLC, a Delaware limited liability
company, its sole member,
By: ACC Operations, Inc., a Delaware
:~~:Q:'
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Title:)! i J{ i;/i i I;. <\/(Uo
,
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Date:'?,' / / /.
"
Santa Ana
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AN AGREEMENT BETWEEN THE CITY OF SANTA ANA
AND ADELPHIA CABLEVISION OF SANTA ANA, LLC, dba
ADELPHIA CABLE COMMUNICATIONS, RENEWING A
NONEXCLUSIVE FRANCHISE TO OPERATE A CABLE
TELEVISION SYSTEM IN THE CITY OF SANTA ANA AND
SETTING FORTH TERMS AND CONDITIONS RELATING TO
THE RENEWAL OF THE FRANCHISE
[EXECUTION COPY]
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TABLE OF CONTENTS
PAGE
RECITALS ................................................................................................................................. ]
1. RENEWAL OF FRANCHISE............................................................................................2
].]. Parties to the Agreement ......................................................................................... 2
1.2. Representatives of the Parties and Service of Notices............................................ 3
] .3. Definitions..... ... ............................. ......... ... ... ... ... ... ... ......... ......... ...................... ....... 4
] .4. Conflicts........ ......................................... ... ... ... ...... ........................................ ... ....... 4
] .5. Grant ...... ....... .......... ......................... ... ......... ... ... ... ........................................ ... ... .... 4
] .6. Right of Grantor to Issue and Renew Franchise ..................................................... 4
].7. Effective Date of Renewal................................................... ................................... 4
] .8. Duration.. ... ....... ... ...................................... ... ... ... ... ............... ... ...... ... ... ... ...... .... ... ... 4
] .9. Franchise Not Exclusive .........................................................................................5
].] O. Scope ofthe Franchise ............................................................................................ 6
2. GENERAL REQUIREMENTS .......................................................................................... 7
2.1. Governing Requirements ........................................................................................7
2.2. Franchise Fee.. ... ................................ ......... ... ... ... ... ........................................ ........ 7
2.3. Payment to Grantor .................................................................................................9
2.4. Insurance Requirements.................. ... ... ... ... ...... .................................................. .... 9
2.5. Performance Bond for Construction and Security Fund....................................... ] 0
3. R]GHTS RESERVED TO THE GRANTOR................................................................... ]2
3. ] . Reservation ... ... ..................... ........ ... ... ... ... ...... .................. ......................... ... ... ..... ] 2
3.2. Delegation of Powers............ ................. ....................................................... ........ ] 2
3.3. Right to Inspect Construction ............................................................................... 12
3.4. Right to Require Removal of Property ................................................................. 12
3.5. Right of ]ntervention...................... ......... ... ........................................................... 13
3.6. Option to Acquire the Cable System .................................................................... 13
4. SYSTEM DES]GN AND SPECIAL SERVICES ............................................................ 13
4.]. System Design and Operating Characteristics ...................................................... ] 3
4.2. Notices Relating to Future Upgrades.................................................................... ] 3
4.3. Outlets and Services for Public Buildings and Educational Facilities.................. ]4
4.4. Emergency Alert Capability ................................................................................. ]4
4.5. Parental Control Devices ...................................................................................... 15
4.6. Technical Standards.............................................................................................. I 5
4.7. System Testing. ..................................................................................................... ] 5
4.8 Standby Power and Status Monitoring. ................................................................ ]6
4.9 Emergency Plan. ................................................................................................... ] 6
4.10 Emergency Repair Capability ............................................................................... 16
5. SERVICES, PROGRAMMING, AND CONSUMER PROTECTION STANDARDS.. 17
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5.1. Rates and Charges for Cable Services and Equipment......................................... 17
5.2. Discount Program for Low-Income Residents ..................................................... 17
5.3. Leased Channel Service........................................................................................17
5.4. Nondiscrimination................................................................................................. 17
5.5. Consumer Protection Standards ............................................................................ 18
5.6. Entry on Private Property...................................................................................... 18
5.7. Broad Categories of Cable Services. .................................................................... 18
5.8. Local Customer Service Office............................................................................. 18
6. SUPPORT OF LOCAL CABLE USAGE AND TECHNOLOGICAL
INFRASTRUCTURE ........................................................................................... 18
7. DESIGN AND CONSTRUCTION .................................................................................. 19
7.1. System Construction and Extension ..................................................................... 19
7.2. Construction Components and Techniques .......................................................... 19
7.3. Technical and Performance Standards.................................................................. 19
7.4. Construction Codes............................................................................................... 19
7.5. Construction Default............................................................................................. 20
7.6. Vacation or Abandonment ....................................................................................20
7.7. Abandonment in Place .......................................................................................... 20
7.8. Removal of System Facilities ............................................................................... 20
7.9. Relocation of Facilities and Improvements .......................................................... 20
7.10. Undergrounding of Cable ..................................................................................... 22
7.11. Facility Agreements .............................................................................................. 22
7.12. Repair of Streets and Public Ways........................................................................ 22
7.13. Erection of Poles Prohibited ................................................................................. 22
7.14. Miscellaneous Design and Construction Requirements. ......................................22
8. SYSTEM PERFORMANCE TESTS AND COMPLIANCE REVIEWS........................ 24
8.1. System Performance Tests. ........................................................................................ 24
8.2. Compliance Reviews. ................................................................................................24
9. RECORDS; REPORTS; RIGHT TO INSPECT AND AUDIT; EXPERTS ....................25
9.1. Grantee to Provide Records .................................................................................. 25
9.2. Records................................................................................................................. 25
9.3. Maintenance and Inspection of Records ...............................................................26
9.4. Reports of Financial and Operating Activity........................................................ 26
9.5. Additional Reports................................................................................................ 27
9.6. Communications with Regulatory Agencies ........................................................ 27
9.7. Right to Audit ....................................................................................................... 27
9.8. Retention of Experts............................................................................................. 28
10. PROTECTION OF GRANTEE'S PROPRIETARY INFORMATION ........................... 28
10. I. Proprietary Information Defined........................................................................... 28
10.2. Identification of Proprietary Information.............................................................. 29
10.3. Califomia Public Records Act .............................................................................. 29
10.4. Resolution of Conflicts ......................................................................................... 29
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11. FRANCHISE VIOLATIONS, REMEDIES AND ENFORCEMENT PROCEDURES.. 29
11.1. Revocation, Termination, or Forfeiture ................................................................ 29
11.2. Grounds for Revocation, Termination, or Forfeiture............................................ 29
11.3. Authorized Fines, Penalties, and Other Sanctions ................................................ 30
11.4. Notice of Violation ............................................................................................... 32
11.5. Hearings by the City Council................................................................................ 33
12. CONTINUITY OF CABLE TELEVISION SYSTEM SERVICES................................. 34
12.1. Continuity of Service. ........................................................................................... 34
12.2. Operation and Management by Grantor ............................................................... 34
13. MISCELLANEOUS PROVISIONS.................................................................................35
13.1. Assignment, Transfer, Sale, and Change of Control ............................................ 35
13.2. Force Majeure .......................................................................................................37
13.3. Possessory Interest ................................................................................................ 37
13.4. Indemnification..................................................................................................... 37
13.5. Receivership and Foreclosure ............................................................................... 38
13.6. Conflict of Interest ................................................................................................ 39
13.7. Resolution of Disputes .......................................................................................... 39
13.8. Waiver by Grantor ................................................................................................ 39
13.9. Severability........................................................................................................... 39
13.10. Entire Agreement; Amendments........................................................................... 39
13.11. Good Faith and Further Acts................................................................................. 40
13.12. Binding Upon Successors ..................................................................................... 40
13.13. Counterpart Execution .......................................................................................... 40
13.14. Applicable Law '"''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''......................40
13.15. Reservation of Rights............................................................................................ 40
13.16. Cable, Video, and Telecommunications Service Providers Ordinance ................ 40
14. DEFINITIONS.................................................................................................................. 40
IS. AUTHORITY AND EFFECTIVE DATE........................................................................ 46
15.1. Authority ............................................................................................................... 46
15.2. Effective Date ....................................................................................................... 46
EXHIBIT A ARTICLE II OF CHAPTER IS OF THE SANTA ANA MUNICIPAL CODE AS
ADOPTED AND IN EFFECT ON THE EFFECTIVE DATE OF FRANCHISE
RENEWAL ......................................................................................................... A-I
EXHIBIT B OWNERSHIP ..................................................................................................... B-1
EXHIBIT C GRANTEE'S TECHNOLOGY IMPLEMENTATION PLAN .......................... C-I
EXHIBIT D SUPPORT OF GRANTOR'S TECHNOLOGICAL INFRASTRUCTURE
(CABLE SERVICE) ......................................................................................... D I-I
EXHIBIT D SUPPORT OF GRANTOR'S TECHNOLOGICAL INFRASTRUCTURE
(I -NET CONNECT! ONS) ................................................................................ D2-1
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EXHIBIT E CONSUMER PROTECTION STANDARDS ....................................................E-I
EXHIBIT F SUPPORT OF LOCAL CABLE USAGE ...........................................................F-I
EXHIBIT G SAMPLE CABLE TV TOTAL GROSS REVENUE REPORTING
FORM ................................................................................................................. G- I
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FRANCHISE AGREEMENT
THIS FRANCHISE AGREEMENT ("Agreement") is entered into this _ day
of ,2005, at Santa Ana, California, by the City of Santa Ana, a municipal corporation
ofthe State of California ("Grantor"), and Adelphia Cablevision of Santa Ana, LLC, a Delaware
limited liability company, doing business as Adelphia Cable Communications ("Grantee").
RECITALS
A. Grantee currently operates and maintains a cable television system in the
City of Santa Ana under the authority of Sections 1300 et seQ. ofthe Santa Ana City Charter,
Article II of Chapter 15 of the Santa Ana Municipal Code, entitled "Community Antenna
Television Systems," and Ordinance No. NS-1628, as adopted on May 3,1982, which granted a
nonexclusive franchise to Group W Cable, Inc., a New York corporation. The terms ofthat
nonexclusive franchise were set forth in that certain agreement dated June 21, 1982, entitled "An
Agreement between the City of Santa Ana and Group W Cable, Inc. to Use the Streets and
Public Ways within the City of Santa Ana for the Operation ofa Cable Television System for
Fifteen Years under Certain Terms and Conditions and Fixing an Effective Date." This
Agreement was later modified by the following amendments:
(i) A First Amendment to Agreement dated February 7, 1983;
(ii) A Second Amendment to Agreement dated December 28, 1984;
(iii) A Third Amendment to Franchise Agreement dated March 6,
1989;
(iv) A Fourth Amendment to Franchise Agreement dated June 12,
2002;
(v) A Fifth Amendment to Cable Television Franchise Agreement
dated February 18,2003;
(vi) A Sixth Amendment to Cable Television Franchise Agreement
dated August 2, 2004; and
(vii) A Seventh Amendment to Cable Television Franchise Agreement
dated February 14,2005.
B. Under the provisions of paragraph (d) of Section 13 of the Third
Amendment to Franchise Agreement dated March 6, 1989, the Grantor consented to the transfer
of the cable television franchise from Group W Cable, Inc. to Comcast Cablevision of Santa
Ana, Inc., a Delaware corporation.
C. By letter dated January 31, 1997, and in accordance with Section 2.1
("Grant") of the Agreement, as amended by the Second Amendment to Agreement dated
December 28, 1984, Comcast Cablevision of Santa Ana, Inc. exercised its option to extend the
initial IS-year term of the franchise for an additional five years through June 20, 2002, by giving
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written notice by certified mail to the Grantor's City Manager. The termination date of June 20,
2002, was extended by the Fourth Amendment, referenced above in paragraph (A) of these
Recitals, to February 20, 2003, was extended by the Fifth Amendment, referenced above in
paragraph (A) of these Recitals, to August 20, 2004, was extended by the Sixth Amendment,
referenced above in paragraph (A) ofthese Recitals, to February 20, 2005, and was further
extended by the Seventh Amendment, referenced above in (A) of these Recitals, to June 20,
2005.
D. In a transaction that was consummated on December 31, 2000, Comcast
Cablevision of Santa Ana, Inc. was converted to a Delaware limited liability company, and all of
the ownership interests in Comcast Cablevision of Santa Ana, LLC were transferred by its parent
corporation, Comcast Cablevision Corporation of California, to a wholly-owned subsidiary of
Adelphia Communications Corporation. This transaction, which involved a change of control,
did not require the prior consent of the Grantor under Section 1300 ofthe Santa Ana City
Charter. On February 15,2001, the name of Com cast Cablevision of Santa Ana, LLC was
changed to Adelphia Cablevision of Santa Ana, LLC.
E. Grantee has requested a renewal of its franchise.
F. In accordance with Article II of Chapter 15 of the Santa Ana Municipal
Code, California Government Code Section 53066, and the Cable Communications Policy Act of
1984, as amended (47 United States Code Sections 521 et ~.), Grantor is authorized to grant or
renew a franchise for the construction, operation, and maintenance of a cable television system
within the City of Santa Ana.
G. Grantor and Grantee have negotiated the terms of the franchise renewal,
which are set forth below, in accordance with applicable law. Grantee has agreed to comply with
the provisions of this Agreement and Article II of Chapter 15 of the Santa Ana Municipal Code
('"Chapter IS"), as it now exists. A copy of Chapter 15 is attached as Exhibit A and incorporated
by this reference.
H. The Grantor's City Council has reviewed the present and future cable-
related needs of the Grantor and its residents, the Grantee's record of service and its ability to
carry out its obligations under this Agreement, and the Grantee's financial, legal, and technical
qualifications to hold a cable television franchise, and has determined that the public interest
would be served by renewing Grantee's franchise subject to the terms and conditions of this
Agreement and the provisions of Chapter 15.
NOW, THEREFORE, in accordance with the provisions of Chapter 15 and this
Agreement, Grantor grants to the Grantee, and Grantee accepts from the Grantor, a renewal of
the cable television franchise.
I. RENEWAL OF FRANCHISE
1.1. Parties to the Agreement.
The parties to this Agreement are:
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(a) Grantor: The City of Santa Ana, a municipal corporation, having its
principal office at 20 Civic Center Plaza, Santa Ana, California 92702.
(b) Grantee: Adelphia Cablevision of Santa Ana, LLC, a Delaware limited
liability company, doing business as Adelphia Cable Communications, with ownership as set
forth in the attached Exhibit B that is incorporated by this reference, and currently having a
regional business office at 3041 E. Miraloma Avenue, Anaheim, California 92806.
1.2. Representatives of the Parties and Service of Notices.
The representatives of the parties who are primarily responsible for the
administration of this Agreement, and to whom notices, requests, demands and other
communications must be given, are as follows:
(a) The principal representative of the Grantor is:
City Manager
Santa Ana City Hall
20 Civic Center Plaza
Santa Ana, California 92702
Fax No. (714) 647-6954
(b) The principal representative of the Grantee is:
Regional Counsel
Law and Public Policy Department
Adelphia Cable Communications
3100 Ocean Park Boulevard, Suite 300
Santa Monica, California 90405
Fax No. (310) 314-8979
with a copy to:
Vice President, Legal & Government Affairs
Adelphia Cablevision of Santa Ana, LLC
5619 DTC Parkway, Suite 800
Greenwood Village, Colorado 80111
Fax No. (303) 268-6485
(c) Notices, requests, demands, and other communications to be given by
either party must be in writing and may be effected by personal delivery, by overnight courier,
by first class mail, or by certified mail, return receipt requested.
(d) Ifthere is a change in the title or address of the principal representative or
other recipients designated to receive the notices, requests, demands, and other communications,
written notice must be given at least five working days before the effective date of that change.
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1.3. Definitions.
Unless otherwise defined, or unless the use or context clearly requires a different
definition, the words, terms, and phrases and their derivations, as used in this Agreement, have
the meanings set forth below in Section 14.
1.4. Conflicts.
In the event of any conflict or inconsistency between the provisions of this
Agreement and the provisions of Chapter IS, the provisions of this Agreement will control.
1.5. Grant.
(a) The renewal authorized by this Agreement relates to the cable television
franchise that was originally granted by Grantor's Ordinance No. NS-1628, as adopted on May
3, 1982, and that was thereafter modified and transferred as described in paragraphs (A) through
(D) of the Recitals.
(b) This renewal extends the franchise, authority, right, and privilege to
construct, reconstruct, operate, and maintain a cable television system in the "franchise service
area," which is here defined as the territorial limits of the City of Santa Ana as they exist on the
effective date ofthis Agreement, and any additional territory that may be annexed during the
term of this Agreement.
1.6. Right of Grantor to Issue and Renew Franchise.
Grantee expressly acknowledges the right and authority of Grantor to issue and
renew the franchise.
1.7. Effective Date of Renewal.
Notwithstanding its earlier execution by the parties, performance under the
provisions of this Agreement will commence on July 1,2005, which is referred to herein as the
"effective date." No later than 30 days after the date on which the ordinance authorizing this
Agreement becomes operative, Grantee must file with the City Clerk any required construction
bond, security fund, and verification of insurance coverage; provided, however, that if the filing
of these documents does not occur by the end of that 30-day period, or within any authorized
extension ofthat date, the Grantor may declare this Agreement to be null and void.
1.8. Duration.
The term of the franchise renewal is fifteen (IS) years from the effective date as
specified in Section I .7. Renewal of the franchise, if any, will be in accordance with then
applicable law.
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1.9. Franchise Not Exclusive.
(a) The cable television franchise granted by this Agreement may not be
construed to limit in any manner the right of Grantor, through its authorized officers and in
accordance with applicable law, to grant to other individuals or entities, by franchise, permit,
license, or otherwise, any rights, privileges or authority similar to or different from the rights,
privileges and authority herein set forth, in the same or other streets, public ways, public places,
or other property that the Grantee is entitled to occupy.
(b) After the effective date of this Agreement, if Grantor proposes to award
an additional cable television franchise within the Grantee's franchise service area, a noticed
public hearing must first be held ifrequired under the provisions of Government Code Section
53066.3. Notice of that hearing must be given in accordance with Government Code Section
6066, and in a newspaper of general circulation as defined in Government Code Section 6000.
At any such public hearing, the Grantor will consider all matters that are set forth in Government
Code Section 53066.3, which include the following:
I. Whether there will be significant positive or negative impacts on
the community being served.
2. Whether there will be an unreasonable adverse economic or
aesthetic impact upon public or private property within the area.
3. Whether there will be an unreasonable disruption or
inconvenience to existing users, or any adverse effect on future
use of utility poles, public easements, and the public rights-of-
way contrary to the intent of Section 767.5 of the Public Utilities
Code.
4. Whether the franchise applicant has the technical and financial
ability to perform.
5. Whether there is any impact on the Grantor's interest in having
universal cable service.
6. Whether other societal interests generally considered by
franchising authorities will be met.
7. Whether the operation of an additional cable television system in
the community is economically feasible.
8. Such additional matters, both procedural and substantive, as the
Grantor may determine to be relevant.
(c) Any additional franchise granted to provide cable television service in
the Grantee's franchise service area, and where the Grantee is providing service, or certifies to
the Grantor that it is ready, willing and able to provide service, must require the franchisee to
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wire and serve the same geographical area within a reasonable time and in a sequence that does
not discriminate against lower income or minority residents, and must contain the same public,
educational, and governmental access requirements that are set forth in the Grantee's existing
franchise. These requirements do not apply where all existing cable operators certify to the
Grantor that they do not intend to provide service within a reasonable time to the area to be
initially served by the additional cable television franchisee.
(d) With regard to the reference in paragraph (c) above to "the same public,
educational, and governmental access requirements," the parties agree that a duplication of the
facilities and services involved in meeting those access requirements would not serve the best
interests of cable subscribers and would not constitute the most effective expenditure oflimited
financial resources. Therefore, the parties agree that a competitive cable television service
provider may be required by the Grantor to provide facilities and services that confer benefits
upon the Grantor or upon cable subscribers that are substantially equivalent to those conferred by
the access requirements and that impose upon the competitive cable television service provider
financial burdens that are substantially equivalent to those imposed upon the Grantee in meeting
the access requirements set forth in this Agreement.
I. I O. Scope of the Franchise.
(a) Subject to Grantee's compliance with Grantor's permit procedures
applicable to construction, encroachments, and pole attachments, Grantee is authorized and
obligated to construct, reconstruct, operate, and maintain the cable television system within the
public streets and rights-of-way.
(b) The authority granted by this Agreement relates to the privilege to use the
Grantee's cable television system in the franchise service area solely for the provision of cable
services, and no other services may be provided unless authorized by local, state, or federal law.
(c) Grantor reserves all rights it may subsequently acquire with respect to the
future authorization and regulation of non-cable services, including, but not limited to, the right
to impose reasonable terms and conditions in addition to or different from those set forth in this
Agreement with respect to the provision of any non-cable services, and to charge a franchise fee
or other form of consideration or compensation on those non-cable services in lieu ofthat
specified herein; provided that such terms and conditions and such franchise fee or other form of
consideration or compensation must not be in conflict with federal and state law applicable to
non-cable services; and provided further that the Grantor and Grantee will negotiate in good faith
an agreement as to those terms and conditions and that franchise fee or other form of
consideration or compensation. Grantee reserves all rights it now has or may subsequently
acquire with respect to the provision of non-cable services and does not waive any rights it may
have to provide those services.
(d) At least 30 days before commencing to offer or distribute any services
other than cable services to customers within the franchise service area, Grantee must provide
written notice to the Grantor of its intent to offer or distribute such services and a description of
those services.
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(e) Grantor and Grantee expressly reserve the right to seek a judicial
determination as to whether any particular service offered by Grantee on its system constitutes
cable service for purposes of this Agreement.
2. GENERAL REQUIREMENTS
2.]. Governing Requirements.
Grantee must comply with all provisions of this Agreement, the provisions of
Chapter] 5 as it exists on the effective date of this Agreement, and all other generally applicable
laws, ordinances, and regulations. Grantor will provide advance written notice to Grantee of any
proposed amendments to Chapter ]5 and the opportunity to be heard on those proposed
amendments.
2.2. Franchise Fee.
(a) As compensation for the franchise granted by Grantor, and in
consideration for authorization to use the streets and public ways of Grantor for the construction,
reconstruction, operation, and maintenance of Grantee's cable television system, the Grantee will
pay to the Grantor, in quarterly installments, a franchise fee of five percent (5%) of Gross
Revenues, as defined in Section ]4 ofthis Agreement.
(b) The parties acknowledge that, at present, applicable federal law limits the
Grantor to collection ofa maximum permissible franchise fee of five percent (5%) of Gross
Revenues derived from the operation of the cable system to provide cable services. ]f Congress,
the FCC, or a court of competent jurisdiction alters the current franchise fee limitations on the
percentage of the Gross Revenues to which the percentage is applied, in a manner that materially
changes the benefits or obligations of either party, then the parties agree to comply with the
requirements of Subsection ]3.7 of this Agreement.
(c) Grantor acknowledges that, during the term of this Agreement, Grantee
may offer to its subscribers, at a discounted rate, a bundled or combined package of services
consisting of cable services, which are subject to the fee referenced above in paragraph (a), and
other services that are not subject to that fee. If Grantee, or any of its affiliates, bundles or
combines the sale of some or all of its cable services with non-cable services, and it becomes
necessary to separately compute the amount of Gross Revenues attributable to cable services in
order to determine the amount of franchise fees or PEG access support fees that are payable to
the Grantor, then the following provisions will be applicable:
]. Grantee will not structure the pricing of any bundled or combined
services so as to intentionally or unreasonably cause a reduction in the Gross Revenues upon
which franchise fees or PEG access capital support payments are based.
2. If Grantor reasonably determines that Grantee has, contrary to this
paragraph (c), unlawfully or inequitably allocated Gross Revenues between cable services and
non-cable services in calculating franchise fee payments, then the parties will meet upon advance
notice from the Grantor to discuss the allocation methodology. ]fthe parties cannot resolve the
dispute within a reasonable period of time, then the parties will submit the matter to a mutually-
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agreeable third party for mediation. The cost ofthe mediation will be shared equally by the
parties. If the mediation is not successful, or if the parties cannot mutually agree upon a
mediator, then either party may file an action in a court of competent jurisdiction or pursue any
otherremedies available under the law or this Agreement.
3. In recognition of the regulatory uncertainties that exist on the
effective date ofthis Agreement with regard to bundled services that are offered at a discount,
the parties reserve all rights, claims, defenses, and remedies they may have relating to Grantor's
authority to impose and to enforce requirements concerning the revenue allocation methodology
to be applied in calculating franchise fee payments on Gross Revenues derived from the sale to
subscribers of cable services and non-cable services in a discounted package.
(d) Grantee's franchise fee payments to the Grantor shall be computed for
each preceding calendar quarter ending March 31, June 30, September 30, and December 31, and
must be paid by Grantee to Grantor not later than 45 days after the end of each calendar quarter.
The payment for each calendar quarter must be accompanied by a report containing an accurate
statement, in summary form, that sets forth by type of revenue the Grantee's Gross Revenues and
the computation of the payment amount. The report must also state the total number of
subscribers for each service or tier of service offered in the franchise service area. The report
must include the appropriate information for the following categories of revenue: basic service;
expanded basic service; a la carte services; pay-per view and pay-per-event; digital services;
equipment rental or sale; installation, disconnection, re-connection, change-in-service, or other
service revenue; maintenance plan revenue; satellite audio service; program guide revenue;
itemized franchise fee revenue; itemized FCC regulatory fee revenue; other itemized fee or tax
revenue (if any); late fees and administrative fees; and other miscellaneous subscriber revenue.
A sample report form containing this information is attached as Exhibit G.
(e) In addition to the information required by paragraph (d) above, Grantor
may periodically, but not more frequently than once each calendar year request the following:
I. The total number of subscribers in the regional cluster that includes
the Grantee's franchise service area, and such related information concerning those subscribers
as may be required by Grantor to verify and validate Grantee's calculations as to the proration of
revenues, such as those derived from advertising sales and home shopping commissions, among
Grantor and other local franchising authorities that constitute the regional cluster.
2. The methodology used by Grantee in determining any proration of
revenues, such as those derived from advertising sales and home shopping commissions, among
Grantor and other local franchising authorities that constitute the regional cluster.
(I) If any franchise fee payment, or recomputed amount as determined by a
financial audit under Subsection 9.7, is not made on or before the dates specified in Subsection
2.2( d), Grantee shall pay to Grantor as additional compensation an interest charge, computed at a
rate of one percent (I %) per month, for each entire or partial month from the applicable due date
until the date of receipt by Grantor of the franchise fee payment and the interest charge.
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(g) If a franchise fee payment is overdue by 60 days or more, Grantor may
treat that delay as a material breach, subject to the provisions of Section I I of this Agreement.
(h) Any itemization of franchise fees by Grantee on subscribers' bills must be
in compliance with federal and state law. Itemized franchise fee revenue may not be excluded or
deducted from Grantee's Gross Revenues when computing payments due to Grantor under this
Agreement.
(i) In accepting this franchise, Grantee acknowledges that the costs of the
commitments specified in Sections 2 and 4 of this Agreement are voluntary and that these costs
will not be offset against any franchise fees payable by Grantee to Grantor during the term ofthe
franchise.
2.3. Payment to Grantor.
(a) No acceptance of any payment by Grantor may be construed as an accord
that the amount is in fact the correct amount, nor may acceptance of payment be construed as a
release of any claim the Grantor may have against Grantee for any additional sums payable
under the provisions of this Agreement.
(b) All amounts paid are subject to independent audit and recomputation by
Grantor, as provided for in Subsection 9.7.
2.4. Insurance Requirements.
(a) Upon the effective date of this Agreement, Grantee, at its sole cost and
expense, must obtain, and thereafter maintain for the full term of this Agreement, all ofthe
following insurance coverages:
I. Types of Insurance and Minimum Limits. The coverages required
below may be satisfied by any combination of primary liability and excess liability policies.
a. Workers' Compensation and Employer's Liability
Insurance in conformance with the laws ofthe State of California.
b. Grantee's vehicles, including owned, leased, or hired
vehicles, must each be covered with Automobile Liability Insurance in the minimum amount of
$2,000,000 combined single limit per accident for bodily injury and property damage.
c. Grantee must obtain and maintain Commercial General
Liability Insurance coverage in the aggregate annual amount of $2,000,000 combined single
limit, including bodily injury, personal injury, and completed operation including broad form
property damage. This insurance coverage must include, without limitation, contractual liability
coverage adequate to meet the Grantee's indemnification obligations under this Agreement.
2. All required Commercial General Liability Insurance policies must
contain an endorsement in substance as follows:
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"The City of Santa Ana, its officers, agents, employees, and
volunteers, are added as an additional insured as respects the
operations of the named insured under the cable television
franchise granted by the City. Grantee's insurers will complete
and submit their standard form Additional Insured Endorsement."
3. The insurance required of Grantee under this franchise is primary,
and no insurance held by Grantor may be called upon to contribute to a loss under this coverage.
4. All insurance policies must provide that, in the event of material
change, reduction, cancellation, or non-renewal by the insurance carrier for any reason, not less
than 30 days' written notice will be given to Grantor by registered mail of such intent to cancel,
materially change, reduce, or not renew the coverage. An authorized agent of the insurance
carrier must provide to the Grantor, on such schedule as is requested by the Grantor, a
certification that all insurance premiums have been paid and all coverages are in force. If for any
reason Grantee fails to obtain or keep any of the insurance in force, Grantor may (but is not
required to) obtain that insurance. In that event, Grantee must promptly reimburse Grantor its
premium costs, plus one and one-half percent (1-1/2%) monthly interest thereon until paid.
5. All insurance must be obtained from companies that are licensed to
transact business in California and that have a rating of A-VII or better in A.M. Best Company's
Insurance Guide.
6. The deductibles or self-insured retentions are subject to the
Grantor's prior approval, which approval will not be unreasonably withheld.
(b) No later than 30 days after the effective date of this Agreement, Grantee
must provide to Grantor certificates of insurance evidencing the required coverage and any
required additional insured endorsements.
(c) Upon Grantor's request, Grantor and Grantee will confer in good faith
concerning an increase in the amount or limits of insurance coverage specified above based upon
costs and claims experience, but such negotiations will occur no more often than every three
years during the term of the franchise.
2.5. Performance Bond for Construction and Securitv Fund.
(a) Performance Bond for Construction. During the term of this Agreement,
if Grantee commences new system construction whereby more than 25% of its plant is to be
upgraded or replaced, then Grantee must provide to Grantor a performance bond for construction
in the amount of $500,000 prior to the commencement of construction. The performance bond
for construction will guarantee the Grantee's faithful performance of its obligations under this
Agreement. Prior to construction, and in compliance with all applicable local ordinances relating
to use of the public rights-of-way, Grantee will either prepay or deposit funds to pay Grantor's
inspection fees and administrative costs. The performance bond for construction will guarantee
emergency repairs to public improvements that may be damaged in the course of Grantee's
construction of the cable system, and will also guarantee that, upon any abandonment or other
permanent cessation or termination of the work relating to the construction of Grantee's cable
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system, the Grantor's streets and public rights-of-way will be restored to the condition existing
prior to Grantee's construction work, and the facilities ofthe cable system will either be removed
or abandoned in place, as may be directed by the Grantor's principal representative. Upon
completion of construction to the reasonable satisfaction of Grantor, the performance bond for
construction will be released. Upon completion of the construction, Grantee will provide written
notice to the Grantor. Within 30 days of such notice, Grantor will release the performance bond
for construction.
The performance bond for construction must contain a provision that requires not
less than 30-days prior written notice from the surety to the Grantor's City Clerk of any
determination to cancel or not to renew the bond, or to reduce its coverage below the amount
authorized by this paragraph (a). If the bond is reduced below the amount authorized by this
paragraph (a), or is cancelled, or is not renewed, or if the surety becomes insolvent, then the
Grantee must cease all construction work then in progress until a replacement bond, or its cash
equivalent, is provided to the Grantor in compliance with the requirements of this paragraph (a).
(b) Securitv Fund for Other Obligations. No later than 30 days after the
effective date of this Agreement, Grantee must provide to Grantor a security fund to guarantee
the Grantee's performance of its obligations under this Agreement, excluding those obligations
relating to construction referenced above in paragraph ( a). The security fund will consist of a
$50,000 irrevocable, replenishable Jetter of credit to the order of Grantor, and a $150,000
performance bond ("Security Instruments"). The Security Instruments will be issued by one or
more nationally-recognized banks or financial institutions and will be in form and substance
acceptable to the Grantor's City Attorney. As provided for in Subsection 11.2, Grantee's failure
to provide or to maintain these Security Instruments during the term of this Agreement will
constitute a material default and grounds for revocation, termination or forfeiture ofthis
Agreement. Upon expiration ofthis Agreement, if Grantee is not then in default of its
obligations, then the Security Instruments will be returned to the Grantee. The Security
Instruments will be subject to and in compliance with the following requirements:
I. The Security Instruments will be available to Grantor to secure and
to satisfy all claims, penalties, fines, liens, fees, payments, costs, damages, or taxes due Grantor
from Grantee that arise by reason of the operation or maintenance of the cable television system.
2. After the notice, hearing, and appeal requirements specified in
Section II of this Agreement have been satisfied, if the Grantee fails or refuses to pay to the
Grantor any amounts due under the provisions of this Agreement, the Grantor may thereafter
claim against the Security Instruments the unpaid amount, plus accrued interest and penalties.
3. Within 30 days after Grantee's receipt of written notice from the
Grantor that any amount has been claimed and received by the Grantor under the Security
Instruments in satisfaction of any of Grantee's obligations specified above in subsection (I), the
Grantee must restore the Security Instruments to the amount required by this Agreement.
4. The rights reserved to the Grantor with respect to the Security
Instruments are in addition to all other rights of the Grantor under this Agreement, including
Grantor's rights under the performance bond for construction referenced above in paragraph (a).
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3. RIGHTS RESERVED TO THE GRANTOR
3.1. Reservation.
Grantor reserves every right it may have in relation to its power of eminent
domain over Grantee's franchise and property.
3.2. Delegation of Powers.
(a) Except as provided below in paragraphs (b) and (c), any right or power in,
or duty retained by or imposed upon Grantor, or any officer, employee, department,
commission, or board of Grantor, may be delegated by Grantor to any officer or employee on its
behalf.
(b) The authority delegated by the Grantor to an officer or employee will be
subject to the following limitations: The Grantor's City Council must approve any proposed
transfer or change of control ofthe Grantee's cable television system, as well as any proposed
amendment to this Agreement that is deemed by the Grantor's City Manager, or the City
Manager's designee, to affect the contractual relationship of the parties in a substantial or
significant manner. Proposed amendments to this Agreement that are deemed not to involve
substantial or significant modifications to that contractual relationship may be approved
pursuant to delegated authority.
(c) The proposed imposition ofremedies, such as liquidated damages or
monetary penalties, that do not involve termination, revocation, or forfeiture of the franchise
may, at Grantor's option, be determined by the City Manager or by another officer, employee,
or agency of the Grantor to which the City Council may delegate these administrative decisions,
subject to due process and the criteria contained in Section 11, and subject to the Grantee's right
to appeal to the City Council in accordance with the procedures specified in Chapter 3 of the
Santa Ana Municipal Code.
3.3. Right to Inspect Construction.
The Grantor has the right to inspect all construction, installation, or other work
performed by Grantee in connection with the franchise, and to make such tests as may be
reasonably necessary to ensure compliance with the terms of this Agreement.
3.4. Right to Require Removal of Proper tv.
Consistent with applicable law, at the expiration of the term for which the
franchise renewal is granted, or upon its lawful revocation, expiration, or termination, the
Grantor has the right to require the Grantee to remove, within a reasonable period of time that
will not be less than] 80 days, and at Grantee's expense, all portions of its system and any other
property from all streets and public rights-of-way within the franchise service area, and to restore
those streets and public rights-of-way to a condition that is reasonably satisfactory to the Public
Works Director. Upon Grantee's failure to do so following notice from Grantor and a reasonable
opportunity to cure, the Grantor may perform the work and collect all reasonable and actual costs
from the Grantee. At Grantor's discretion, the cost of that work may be placed as a lien upon all
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plant, property, or other assets of the Grantee, or a claim may be asserted against the security
fund referenced in Subsection 2.5(b).
3.5. Right ofIntervention.
Grantor has the right to intervene in any suit, proceeding, or other judicial or
administrative proceeding in which the Grantor has any material interest, and to which the
Grantee is made a party; provided, however, that Grantee is not responsible for attorneys' fees,
costs, or indemnification of Grantor resulting from Grantor's intervention.
3.6. Option to Acquire the Cable Svstem.
Following the termination or denial ofrenewal of this Agreement, if Grantee
enters into an agreement that involves the proposed sale or other disposition of the cable system
or the coaxial Institutional Network, then the Grantor will have the right to acquire the cable
system or the coaxial Institutional Network, or both, in accordance with the provisions of 47
USC ~547, et seq.
4. SYSTEM DESIGN AND SPECIAL SERVICES
4.1. Svstem Design and Operating Characteristics.
(a) The design and operating characteristics of the cable television system that
has been upgraded to 750 MHz by the Grantee prior to the effective date of this Agreement are
described in Exhibit C.
(b) Upon Grantor's request, Grantee will provide strand maps to Grantor and
will make available for inspection copies of "as-built" system drawings and technical
documentation in a printed or, ifreadily available, an electronic data format. Grantor will
maintain the confidentiality of this information and will not disclose it to third parties without the
Grantee's prior written approval.
4.2. Notices Relating to Future Upgrades.
(a) Notices to Local Newspaper. If requested by Grantor, Grantee must
publish a notice in a newspaper of general circulation before commencing any upgrade of the
cable television system. The notice must be published not less than 45 days prior to
construction. The notice must provide a general summary of the proposed upgrade, and a
telephone number that the public may call for additional information.
(b) Other Notices.
1. Grantee will provide to Grantor at least 60 days prior written
notice of any major upgrade or rebuild of the cable television system. Upon Grantor's request,
Grantee will provide information concerning the proposed locations and types of equipment or
facilities to be installed, such as amplifiers, pedestals, and power supplies.
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2. At least 72 hours prior to the scheduled construction date, Grantee
must provide additional written notice, such as a door hanger, to residents within the proposed
construction area, which notice sets forth a general description ofthe construction project, the
anticipated dates of construction, and a telephone number for the Grantee that a resident may call
with any questions or concerns.
3. Grantee must give at least 30 days' advance notice to all property
owners prior to installing any new above-ground or underground structures upon easements
located on private property.
4.3. Outlets and Services for Public Buildings and Educational Facilities.
(a) Grantee will continue to provide, maintain, and repair cable drops for
those public buildings and educational facilities that have cable drops on the effective date of this
Agreement, as identified in Exhibit D-l.
(b) Cable drops to buildings and facilities referenced above in
subparagraph (a) will be provided by the Grantee within 30 days after notification by the Grantor
or by the governmental or other agency having responsibility for the operation of such building
or facility; provided, however, that if such building or facility is more than 150 feet from
Grantee's activated plant, then the Grantee will be reimbursed for its costs for labor and
materials to install the cable drop.
(c) Grantee will install, maintain, and repair, without charge, one cable drop
at each City-owned or City-occupied building, public library, and public primary and secondary
school that is located within the franchise service area. Grantor will inform Grantee ofthe
construction, acquisition, or lease of new public administration and service facilities so that cable
drops can be installed by Grantee at the time of construction or occupancy in order to minimize
costs. Grantee will not be required to provide free internal distribution or to bear any expense in
excess of a standard 150- foot service drop. One cable drop will be installed by Grantee without
cost to Grantor; Grantor will pay Grantee for additional drops, connections, and outlets at
Grantee's cost for labor and materials.
(d) Grantee will provide, without charge, expanded basic cable service to one
outlet in a non-public area at each of the buildings and facilities where a cable drop has been
installed by the Grantee.
(e) Grantee will make available, without charge to Grantor, high-speed cable
modem service to one non-networked computer at public primary and secondary schools, at
public libraries, and at park facilities where a cable drop has been installed by the Grantee and
where Grantor operates a computer laboratory or similar facility for the benefit of the public.
4.4. Emergency Alert Capability.
Grantee must provide Emergency Alert System ("EAS") capability in full
compliance with all applicable FCC requirements. The system must be capable of transmitting
an emergency alert signal in the form of an audio override to enable Grantor to interrupt and
cablecast an audio message on all channels simultaneously and a video message of emergency
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information on one channel in the event of disaster or public emergency. Grantor's use ofthe
emergency alert system will be restricted to those circumstances that can reasonably be
characterized as unforeseen and requiring immediate action or disclosure, and will be in
accordance with any state or federal laws or regulations that may now or hereafter apply to
emergency alert systems. Emergency messages will be initiated from any touch-tone phone with
an access code. The Grantor will select persons to be provided with access codes and will notify
Grantee ofthe names of those persons upon selection. Grantor will periodically test the
emergency alert system. Grantor will give Grantee prior notice of each test. Grantee will also
comply with any additional FCC rules regarding a national emergency alert system as of the
implementation date of those rules.
4.5. Parental Control Devices.
(a) Grantee must provide subscribers upon request with a "trap," "Iockbox,"
digital code, or similar parental control device that enables a subscriber to block the reception of
video and audio signals from selected channels on the cable television system, including any
premium or pay-per-view channel that is scrambled.
(b) No additional, continuing charge for the use of any such parental control
device may be imposed by Grantee if that device is incorporated into equipment, such as a
decoder, for which a subscriber is already paying a charge.
(c) Upon request, Grantee must provide to subscribers written instructions on
the methods by which selected channels on the cable television system may be restricted or
blocked.
4.6. Technical Standards.
Grantee is responsible for ensuring that the cable system is designed, installed,
maintained, repaired, and operated in a manner that fully complies with FCC rules in Subpart K
of Part 76 of Chapter I, Title 47, of the Code of Federal Regulations as revised or amended from
time to time. Grantor has the right, upon request, to obtain a copy of tests and records related to
compliance with these FCC rules.
4.7. Svstem Testing.
(a) Upon request, Grantee must advise Grantor of schedules and methods for
testing the cable system on a regular basis to determine compliance with the provisions of
applicable FCC technical standards.
(b) As required by FCC rules, Grantee must conduct proof-of-performance
tests and cumulative leakage index tests designed to demonstrate compliance with FCC
requirements. Upon request, Grantee must provide to Grantor summary written reports of the
results ofthose tests.
(c) The Grantor has the right to inspect all work performed in the public
rights-of-way. In addition, for initial and semi-annual FCC proof-of-performance tests, the
Grantor must be given the opportunity to review test sites. Upon request, the tests may be
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witnessed by representatives of the Grantor. Grantee will notify the Grantor of the time and place
ofthe next scheduled test and will cooperate in facilitating witnessing by the Grantor at the time
of the tests.
(d) It is the responsibility of the Grantee to document that the system and its
operation are in compliance with FCC technical specifications and performance requirements. If
the Grantor has received subscriber complaints regarding the performance of the cable system,
and the Grantor determines that the most efficient or only reasonable way to determine a
question of franchise compliance involves specific electronic testing of the cable system in
addition to tests required by the FCC, the Grantee may, upon 30 days written notice by the
Grantor, perform that testing, give the Grantor an opportunity to witness that testing, and provide
the Grantor with documentation of the test results.
4.8. Standbv Power and Status Monitoring.
Grantee must provide standby power-generating capacity at the cable system
headend and at all hubs that is capable of providing at least 24 hours of emergency operation.
Within 24 months after the effective date of this Agreement, Grantee must provide and maintain
standby power system supplies at each node, rated for at least four hours duration.
4.9. Emergencv Plan.
Throughout the term ofthis Agreement, Grantee must have a plan in place for
dealing with outages of more than four hours duration, and must maintain all resources necessary
for implementing the plan. A copy ofthe plan, along with a list of Grantee personnel to contact
in emergencies, must be kept on file with the Grantor.
4.10. Emergencv Repair Capabilitv.
(a) It is Grantee's responsibility to ensure that its personnel are qualified to
make repairs, that they are available at all reasonable times, and that they are supplied with keys,
equipment location instructions, and technical information necessary to begin repairs upon
notification of the need to maintain or restore continuous service to the system.
(b) Grantee will periodically provide to Grantor a current contact number of
the appropriate department or of personnel who are responsible for, and who may be contacted
regarding, responses related to any emergency situation affecting the Grantee's cable system,
whether during normal business hours, nighHime hours, holidays, or weekends.
Repair work must commence no later than 24 hours after an emergency situation
occurs unless such work is prevented by conditions beyond Grantee's control. Action must be
taken by Grantee to correct other service problems no later than the next business day after
notification of the problem.
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5. SERVICES, PROGRAMMING, AND CONSUMER PROTECTION STANDARDS
5. I. Rates and Charges for Cable Services and Equipment.
(a) The Grantor may regulate Grantee's rates and charges for cable services,
and for related equipment and installations, in the manner and to the extent authorized by federal
law.
(b) Grantee must establish and bill its rates and charges for cable services,
including related equipment and installations, in a manner consistent with all applicable laws and
regulations.
(c) Grantee must at all times have on file with Grantor its current channel
line-up and its current schedule of all rates and charges that will be billed to subscribers in the
franchise service area.
(d) All increases in Grantee's schedule of rates and charges for cable services,
including related equipment and installations, must be made in compliance with all applicable
federal and state laws and regulations. Prior to notifying its subscribers, Grantee must notify the
Grantor's principal representative of any proposed increase in its schedule ofrates and charges
and of any proposed change in its channel line-up or programming tiers. Grantee must provide
written notice to its subscribers at least 30 days prior to any change in its schedule of rates and
charges or any changes in its channel line-up or programming tiers.
5.2. Discount Program for Low-Income Residents.
Grantee may offer to qualified low-income residents, including eligible senior
citizens, a discount on subscriptions to the basic service tier of video programming that is offered
on the cable system.
5.3. Leased Channel Service.
Leased channel service offered by Grantee must be offered at nondiscriminatory
rates, on reasonable terms and conditions, and in accordance with applicable federal law.
5.4. Nondiscrimination.
Pursuant to federal laws and regulations, Grantee may not unlawfully discriminate
between or among subscribers within one type or class in the availability of services, at either
standard or differential rates set forth in published rate schedules. No charges may be made for
services except as set forth in published schedules that are available for inspection at Grantee's
office, quoted by Grantee on the telephone, or displayed or communicated to existing or
prospective subscribers. The conduct of promotional campaigns in which rates are discounted or
waived, the offering of bulk rate discounts for multiple dwelling units, hotels, motels, and similar
places of accommodation, and the offering of discounted rates to economically-disadvantaged,
handicapped, or elderly subscribers, will not be deemed to constitute unlawful discrimination
under this subsection.
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5.5. Consumer Protection Standards.
Grantee must comply with all applicable FCC, state, and municipal statutory
standards and regulations relating to consumer protection, including those referenced in
Exhibit E. Unless otherwise authorized by federal or state law, the consumer protection
standards referenced in this Agreement will apply only to the provision of cable service in the
franchise service area.
5.6. Entrv on Private Property.
Whenever possible, Grantee will provide verbal or written notice to affected
property owners before entering upon their property. The notice must include Grantee's
telephone number that property owners may call with regard to any matters related to the
proposed entry.
5.7. Broad Categories of Cable Services.
(a) Grantee must provide, at a minimum, the following broad categories of
programming: local broadcast stations; news; cultural programming; general entertainment;
sports programming; documentaries; PEG access channel programming; children's
programming; religious programming; and business and financial programming.
(b) If any broad category of programming listed above in paragraph (a)
becomes unavailable, or cannot be provided by Grantee under existing FCC regulations, then
Grantee must provide, to the extent feasible, reasonably comparable programming.
5.8. Local Customer Service Office.
Grantee must provide and maintain within the franchise service area a local
customer service office that is open during normal business hours at least eight hours daily on
weekdays, and at least four hours weekly on evenings or weekends, or both. The local customer
service office must be adequately staffed with trained customer service representatives to accept
subscriber payments, to respond to service requests and complaints, and to receive equipment
that is returned by subscribers.
6. SUPPORT OF LOCAL CABLE USAGE AND TECHNOLOGICAL
INFRASTRUCTURE
(a) The obligations of the Grantee that relate to the support oflocal cable
usage, including the provision of adequate public, educational, and governmental access channel
capacity, facilities, and financial support, are set forth in the attached Exhibit F.
(b) During the tenn of this Agreement, Grantee will provide, operate,
maintain, and repair, in accordance with Exhibit F, a Coaxial Institutional Network that connects
all governmental, quasi-governmental, and educational facilities that are identified in the
attached Exhibit 0-2.
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7. DESIGN AND CONSTRUCTION
7.1. Svstem Construction and Extension.
Throughout the franchise service area, Grantee is required to make its cable
television system available to prospective subscribers in accordance with the following
provIsIOns:
(a) Grantee must make its cable television system available within the
franchise service area to any owner or occupant of residential or commercial premises who
requests connection, at the standard connection charge, if that connection (i) is to be made within
an area that has a density of at least 40 homes per mile, and (ii) requires no more than a standard
] 50-foot aerial drop line from the main feeder line. If a connection requires more than a standard
] 50-foot aerial drop line, or an underground service connection, or does not meet the density
requirement, then the owner or occupant must be given the option of paying the additional cost
for that installation, including costs associated with poles or underground facilities required for
the extension.
(b) Service to prospective subscribers residing in multiple-dwelling units need
only be provided if, after evaluating the terms and conditions for access that may be imposed by
an owner or manager of such multip]e-dwelling units, the Grantee determines that those terms
and conditions are reasonably acceptable; provided, however, that Grantee will use all reasonable
diligence to negotiate agreements with owners or managers of multiple-dwelling units to provide
cable services.
7.2. Construction Components and Techniques.
Construction components and techniques must comply with the terms of this
Agreement and with all applicable statutes, ordinances, regulations, and pole attachment
agreements.
7.3. Technica] and Performance Standards.
Grantee must construct, reconstruct, install, operate, and maintain its system in a
manner consistent with all federal, state, and generally applicable local laws and ordinances,
FCC technical standards, and any additional standards set forth in this Agreement. Without
limiting the foregoing, Grantee's system must comply with all FCC regulations that apply to
compatibility as between cable service and consumer equipment for receiving and recording
cable programming.
7.4. Construction Codes.
(a) The Grantee must strictly adhere to all generally applicable building and
zoning codes now or hereafter in force, including Chapter 33 ofthe Municipal Code that
regulates excavations in the public rights-of-way.
(b) The Grantee will make every reasonable effort to arrange its lines, cables,
and other appurtenances, on both public and private property, in such a manner as to minimize
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interference with the use of that property by any person. In the event of such interference, the
Grantor may require the removal or relocation of the Grantee's lines, cables, and appurtenances
from the property in question.
7.5. Construction Default.
Upon the failure, refusal or neglect of Grantee to undertake or complete any
construction, reconstruction, repair, relocation or other necessary work as required by this
Agreement, thereby creating an adverse impact upon the public health, welfare or safety, Grantor
may (but is not required to) cause that work to be completed, in whole or in part, and upon so
doing will submit to Grantee an itemized statement of costs. Grantee will be given reasonable
advance notice of Grantor's intent to exercise this power, and 30 days to cure the default.
Grantee must, within 30 days of billing, pay to Grantor the actual costs incurred.
7.6. Vacation or Abandonment.
If any street, alley, public highway, or portion thereof used by the Grantee is
vacated by the Grantor, or its use is discontinued by the Grantee, then upon reasonable notice the
Grantee may be required to remove its facilities, unless otherwise specifically authorized, or
unless easements for cable television facilities have previously been reserved. Following that
removal, Grantee must restore, repair, or reconstruct the area where that removal has occurred to
the condition that existed prior to removal. Upon any failure, neglect, or refusal of the Grantee,
after 30 days' notice by the Grantor, to do such work, Grantor may cause it to be done, and
within 30 days of billing, Grantee must pay to Grantor the actual costs incurred.
7.7. Abandonment in Place.
Grantor may, upon written application by Grantee, approve the abandonment in
place by Grantee of any property, under such terms and conditions as Grantor may reasonably
approve. Upon Grantor-approved abandonment in place of any property, Grantee must cause to
be executed, acknowledged, and delivered to Grantor such instruments as Grantor may prescribe
and approve in order to transfer and convey ownership of that property to Grantor.
7.8. Removal ofSvstem Facilities.
If Grantee's plant is deactivated for a continuous period of30 days, (except for
reasons beyond Grantee's control), and without prior written notice to and approval by Grantor,
then Grantee must, at Grantor's option and demand, and at the sole expense of Grantee, promptly
remove all of Grantee's property from any streets or other public rights-of-way. Grantee must
promptly restore the streets or other public areas from which its property, including aerial trunk
and feeder lines, has been removed to the condition existing prior to Grantee's use thereof.
7.9. Relocation of Facilities and Improvements.
(a) Grantee will promptly relocate its facilities, at its own expense, upon 90-
days prior written notification by Grantor that such relocation is necessary to make way for a
governmental use or disposition of any street, highway, or rights-of-way where Grantee
maintains its facilities. Ifthc relocation of Grantee's facilities is requested by a person or entity
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other than the Grantor, and for other than a governmental use, the costs of relocation will be
borne by the person or entity requesting that relocation, and such relocation will be undertaken in
a manner that preserves the usefulness and safety of Grantee's facilities.
(b) Grantor reserves the right to change the grade and the width, or to alter or
change the location, of any street, highway, or rights-of-way where Grantee's facilities are
located. Grantee must, at no cost to Grantor, relocate all facilities maintained pursuant to this
Agreement to conform to such change of grade, width, or location to the satisfaction of the
Grantor's City Engineer. Grantee will commence such work of relocation within 90 days after
receipt of a written request from the City Engineer, and will thereafter diligently prosecute that
work of relocation to completion.
(c) If any of the facilities constructed or maintained by Grantee on, along,
upon, over, in, under or across any street, highway, or rights-of-way is located in a manner that
prevents or interferes with the maintenance, improvement, repair, construction, alteration or
relocation of the street, highway, or rights-of-way, Grantee will permanently or temporarily
relocate any such facility at no cost to Grantor. Grantee will commence that work within 90 days
after receipt of a written request from the City Engineer to make such change, and will thereafter
diligently prosecute that work to completion.
(d) Grantor reserves the right, in its governmental capacity, to lay, construct,
repair, alter, relocate, and maintain subsurface or other facilities or improvements of any type or
description within all streets, highways, or rights-of-way. If the Grantor finds that the location or
relocation of its facilities or improvements conflict with the facilities laid, constructed, or
maintained under this Agreement, Grantee will permanently or temporarily relocate any such
facility at no cost to Grantor. Grantee will commence that work within 30 days after receipt of
written notice from the City Engineer to make such change, and will thereafter diligently
prosecute that work to completion.
(e) Grantee will not commence any work for the purpose of constructing,
replacing, repairing, or removing any of its facilities on, along, upon, over, in, under and across
any street, highway, or rights-of-way until it has first obtained a permit to do so. Permit
applications must be submitted in accordance with Grantor's ordinances and regulations.
(t) The work of constructing, replacing, repairing, or removing facilities
authorized by this Agreement on, along, upon, over, in, under or across any street, highway, or
rights-of-way must be conducted with the least possible hindrance to the use of the street,
highway, or rights-of-way. As soon as the construction, replacement, repair, or removal of any
of these facilities is completed, all portions of the street, highway, or rights-of-way that have
been excavated or otherwise damaged must be placed in as good condition as existed before that
work commenced, to the reasonable satisfaction of the City Engineer. Grantee will hold Grantor
harmless from all claims or liability arising from any damage or injury suffered by any person by
reason of any excavation or obstruction being impropcrly guarded during said work, or by reason
of the failure of Grantee to properly make the fill.
(g) In connection with Grantee's compliance with the provisions of this
Subsection 7.9, Grantee does not waive or relinquish any rights it may have under applicable law
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to seek reimbursement from individuals or entities other than Grantor for its costs of compliance
to the extent that those costs qualify for reimbursement and funds are available. If Grantor
administers the funding of reimbursements for a Rule 20(A) or Rule 20(B) project for which
Grantee is eligible to be reimbursed for its undergrounding costs, then Grantee does not waive
any rights to seek such reimbursement from Grantor.
7.1 O. Under grounding of Cable.
Cables must be installed underground at Grantee's cost where all existing utilities
are already underground or all new utilities are being installed underground in the area.
Previously installed aerial cable will be installed underground without cost to Grantor in concert
with utilities whenever all of those utilities convert from aerial to underground construction. The
provisions of Subsection 7.9(g) will apply to any rights of reimbursement that are claimed by
Grantee.
7.11. Facility Agreements.
This Agreement does not relieve Grantee of any obligations to obtain pole or
conduit space from any department of Grantor, from any utility company, or from others
maintaining utilities in Grantor's streets.
7.12. Repair of Streets and Public Ways.
All disturbance or damage to streets and public ways, and to improvements
located within those streets and public ways, caused by the Grantee or its contractors during the
construction, reconstruction, operation, or maintenance of the cable system, must be restored at
Grantee's expense, and within a time frame reasonably specified by Grantor.
7.13. Erection of Poles Prohibited.
Grantee may not erect any pole on or along any street or public way where there
is an existing aerial utility system. If additional poles in an existing aerial route are required,
Grantee must negotiate with the appropriate public utility for their installation. Any such
installation requires the advance written approval of the Grantor. Subject to applicable federal
and state law, the Grantee must negotiate the lease of pole space and facilities from the existing
pole owners for all aerial construction, under mutually acceptable terms and conditions. No pole
line may be extended solely for the purpose of accommodating Grantee's facilities without
Grantor's prior consent. Line extensions beyond any existing pole line must be underground
where practical.
7.14. Miscellaneous Design and Construction Requirements.
(a) New Development -- Underground Utility Areas. Where new construction
or property development occurs, and all utilities are to be placed underground, Grantor will use
its best efforts to require the developer or property owner to give reasonable notice to Grantee of
that new construction or development. Grantee may be involved in all design aspects of the new
construction or development that relate to the infrastructure required for cable service, including
the provision of specifications and engineering assistance prior to construction. The costs of
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easements, trenching, and construction of the conduits required to bring cable service to the new
construction or development will be borne by the Grantee, the developer, or the property owner,
as may be agreed upon between them. Grantee will be notified of any date on which the
installation of conduit, pedestals, vaults, or laterals will be available for Grantee's inspection.
(b) Antennas and Towers. Antenna supporting structures, including towers,
that are owned by or operated for Grantee must comply with all applicable electrical codes and
FCC specifications, and must be erected, illuminated, painted, and maintained in accordance
with all applicable rules and regulations of the Federal Aviation Administration, as well as
generally applicable local ordinances and regulations that require the Grantor's approval ofthe
siting of towers or other support structures within the City.
(c) Tree Trimming. Subject to the prior written approval of the Grantor's
Director of Public Works, Grantee is authorized to trim trees on public property in order to
install or to protect its facilities. All tree trimming will be conducted in compliance with
applicable ordinances and City standards, and in a safe manner with due regard for the health of
the trees involved. Grantee must exercise diligence to ensure that trees are trimmed in a minimal
manner and to employ practices that cause minimum trauma to the trees being trimmed. All
refuse attributable to tree trimming must be removed and disposed of by Grantee in an
acceptable manner.
(d) Mitigation of Adverse Visual Impacts. Grantee must take all reasonable
measures, at its expense, to mitigate the adverse visual impacts of all above-ground equipment in
accordance with the same standards and regulations that are imposed by the Grantor upon other
franchised cable operators and upon public utilities. These measures may include, without
limitation, (i) the installation of landscaping and barriers to minimize public view of above-
surface ground-mounted equipment; (ii) the maintenance of the equipment in good condition,
including compliance with Grantor's ordinances requiring graffiti removal; and (iii) the
placement of overhead drops as close as possible to other utility drops, consistent with all
applicable electrical codes.
(e) Use of Chalk-Based Paints. Grantee must use only chalk-based paints to
mark public rights-of-way in connection with the construction or maintenance of the cable
television system.
(f) Vehicle Access to Private Propertv. In no event may an owner's vehicle
access to private property be precluded for more than three hours during any construction,
operation, or maintenance of the Grantee's cable system. If such preclusion is reasonably
anticipated, Grantee must give 24-hours prior written notice to the owner.
(g) Location of Utilities. Grantee must verify the location of all existing
utilities to ensure that they are not damaged during construction or maintenance of the cable
system. Grantee must be a member of and comply with the procedures of the Underground
Service Alert and must contact that entity 48 hours in advance of any underground construction
in order to ensure that utilities are not damaged. If Grantee fails to comply with applicable law
then, as between the Grantor and the Grantee, the Grantee is solely responsible for the
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replacement or repair of any utilities that are damaged by Grantee or its subcontractors during
construction or maintenance activities.
(h) Newlv Constructed and Reconstructed Arterial Streets. Grantee
acknowledges that Section 33-54 of Chapter 33 of the Municipal Code generally prohibits the
cutting or opening of newly constructed or resurfaced arterial streets for a period of five years
following construction or resurfacing, except in the case of emergency or imminent peril to life,
limb, or property, as determined by the City Engineer. Grantee assumes sole responsibility for
informing itself of planned street construction and resurfacing in connection with its proposed
construction and maintenance activities related to its cable system.
8. SYSTEM PERFORMANCE TESTS AND COMPLIANCE REVIEWS
8.1. Svstem Performance Tests.
(a) Upon reasonable notice, and during normal business hours, Grantee must
permit inspection of its cable system facilities within the franchise service area by any duly
authorized representative of Grantor. Grantee may designate one or more representatives to
accompany Grantor's representatives on any such inspection.
(b) The Grantor may, at its own expense and upon 30 days written notice to
Grantee, conduct independent tests of the system to verify that the system complies with all
technical standards required by this Agreement. Grantee must fully cooperate in facilitating
these independent tests. Grantee's representative will observe system tests that are conducted in
a manner substantially similar to those described in Subsection 4.7 of this Agreement. Test sites
will be selected by the Grantor. If the test results demonstrate that Grantee has materially failed
to comply with required technical standards, the cost of the system performance tests will be
borne by Grantee. No penalty under Subsection 11.3 will apply to any material incident of
noncompliance that is identified for which Grantee reimburses the Grantor and which incident of
noncompliance is corrected within 30 days, or such longer period of time as may be specified in
Grantor's written notice.
8.2. Compliance Reviews.
(a) Upon Grantor's request to be made not more frequently than annually,
Grantor and Grantee will meet to review the performance of the cable television system. This
review may include consideration of the following:
I. Grantce's compliance with the technical standards specified in this
Agreement.
2. The reports required by this Agreement that relate to subscriber
complaints received by the Grantee concerning consumer protection standards specified in this
Agreement.
3. The types and quality of services provided by Grantee.
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4. The results of any subscriber surveys that may be conducted by
Grantor or Grantee, or both.
5. Reports submitted by Grantee or any other person that address
Grantee's compliance with the terms and conditions of this Agreement.
6. Changes in state and federal laws and regulations that affect the
operation of the cable television system.
(b) Within 30 days after the completion of a compliance review, Grantor may
issue findings with respect to Grantee's compliance with this Agreement. If noncompliance with
required standards is identified, then Grantor may provide Grantee with a 30-day written notice
to either (i) correct the noncompliance within a reasonable period of time; or (ii) develop a
corrective action plan.
(c) Participation by Grantor and Grantee in this process does not waive any
rights they may have under applicable federal or state law.
(d) Upon Grantor's request, Grantee will meet with Grantor's representatives
to discuss the extent to which the Grantee's 750 MHz technology and its cable television system
services are comparable to established, operating state-of-the-art technology in cable television
systems serving comparable communities in the Orange County and Los Angeles County areas.
Nothing in this Agreement, however, may be deemed to require that Grantee upgrade or rebuild
its system technology or provide a service where it is not technically or economically feasible to
do so. Topics for discussion at these meetings may also include, without limitation, the future
use of interactive services, the sharing oflocal production facilities with other jurisdictions, the
provision of additional capacity for public, educational, or governmental access channels, the
operation of the Coaxial I-Net, or the need to upgrade or rebuild the cable system to a capacity
equal to or greater than 860 MHz.
9. RECORDS; REPORTS; RIGHT TO INSPECT AND AUDIT; EXPERTS
9.1. Grantee to Provide Records.
All reports and records required under this Section 9 must be furnished by the
Grantee at no cost to the Grantor.
9.2. Records.
Subject to the provisions of Section 10, Grantee must maintain and make
available for inspection during normal business hours, and upon reasonable advance written
notice, a separate and complete set of business records that are reasonably necessary to enable
Grantor to monitor compliance with the terms of this Agreement, or to perform Grantor's
regulatory functions. Grantee need not maintain all such records at the regional business office
specified in Subsection 1 .1 (b), but will make them available for inspection at that location unless
alternate arrangements are agreed upon by Grantor and Grantee. If Grantec's records are not
available at Grantee's regional business office, then Grantee will pay the reasonable travel costs
of the Grantor's representative to review the records at a different location. The Grantee will not
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be required to maintain any books and records for franchise compliance purposes longer than
five years. Notwithstanding any provisions to the contrary contained in this Agreement, the
Grantee will not be required to disclose the books and records of any affiliate that is neither
providing cable service in the franchise service area nor receiving revenue from the provision of
such cable service.
9.3. Maintenance and Inspection of Records.
Grantee must maintain accurate financial books and records, in conformity with
generally accepted accounting principles, relating to the cable television franchise. Grantor,
upon reasonable notice, has the right to inspect those records and to receive copies to the extent
that information is reasonably necessary to monitor Grantee's compliance with the terms of this
Agreement, or to perform Grantor's regulatory functions as they relate to this Agreement. To the
extent authorized by law, and in accordance with Section 10 of this Agreement, Grantor will
protect the confidentiality of information contained in Grantee's business records that are
deemed by Grantee to be proprietary, and Grantor will not disclose that information to third
parties without Grantee's prior written consent.
9.4. Reports of Financial and Operating Activity.
(a) Not later than 90 days after the close of each fiscal year of Grantee during
the term of this Agreement, Grantee must submit to the Grantor a financial report, verified by a
corporate accounting manager designated by Grantee, that sets forth the gross annual cable
service revenues from all sources within the franchise service area, and specifies the type and
source of revenue. The report must also state the number of subscribers to each service or tier of
service at the beginning and end of the period and the total of all high-speed Internet-related
revenues that are excluded from franchise fee calculations. To the extent authorized by law, and
in accordance with Section 10 of this Agreement, Grantor will protect the confidentiality of
information contained in Grantee's business records that are deemed by Grantee to be
proprietary, except as may be ordered by a court of competent jurisdiction after reasonable
written notice to Grantee. Grantee will retain for at least five years all documents upon which
these financial reports are based.
(b) Upon Grantor's written request, Grantee must submit one or more reports
concerning the following operational matters:
I. A summary of outage records, including date, location, time,
cause, and duration of each outage, the number of subscribers affected, and the action taken to
resolve the outage.
2. Copies of all notices and promotional materials provided since the
last report to subscribers or prospective subscribers. This reporting requirement will be satisfied
by Grantee's creation ofa "gratis informational account" in the name of Grantor's cable
administrator.
3. A detailed summary of Grantee's telephone answering statistics
that includes the categories of information required by Grantor's Consumer Protection Standards
referenced in Exhibit E, and that contains sufficient information to enable Grantor to determine
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Grantee's compliance with all applicable standards. If Grantee's collection and tabulation of
telephone answering statistics related to subscribers' service calls and complaints covers a
geographic area that is more extensive than the franchise service area, then Grantee must use its
best efforts to estimate the number of those service calls and complaints originating in the
franchise service area and must inform the Grantor of the methodology used in making those
estimates. Grantee will not be required to provide subscriber information in violation of Section
631 of the Cable Act (47 U.S.C. 9551). If Grantor gives written notice to Grantee that Grantee is
in breach of its telephone answering obligations, then upon Grantor's request Grantee must
submit summaries on either a quarterly or a monthly basis until such time as Grantee has
demonstrated compliance for two consecutive calendar quarters.
4. A summary of Grantee's subscriber metrics within the franchise
service area.
9.5. Additional Reports.
(a) Upon Grantor's written request, Grantee must prepare and submit to the
Grantor, in writing, such additional reports with respect to Grantee's operations, finances,
transactions, or property as the Grantor deems reasonably necessary or appropriate to the
performance ofthe Grantor's functions or duties, or to secure the Grantor's rights under this
Agreement. These additional reports may include, without limitation, Grantee's compliance with
the Consumer Protection Standards specified in this Agreement, Grantee's corrective action
taken in response to subscribers' complaints that are submitted in writing or by telephone, a
current list of Grantee's officers, directors, and other principals, and a description ofthe nature
and purpose of any new construction that is anticipated to commence within the following
calendar year. Grantor will cooperate with Grantee and will accept existing reports that contain
substantially similar information meeting this requirement.
(b) Grantee must maintain at its regional business office, currently located at
3041 E. Miraloma A venue in Anaheim, California, a file of all reports and documents that are
required by the FCC or other governmental agencies to be made available for public inspection
during normal business hours and upon reasonable advance notice. Grantee may charge a
reasonable fee for any copies of documents that may be requested by members of the public.
Grantee must promptly notify Grantor of any relocation of its regional business office.
9.6. Communications with Regulatorv Agencies.
Within 10 days after Grantor's written request that identifies such documents with
reasonably specificity, the Grantee must provide copies of all non-routine and material
communications between the Grantee and the Federal Communications Commission, or any
other agency having jurisdiction in respect to any matters affecting the cable services authorized
by this Agreement. These copies must be submitted to the Grantor within 10 days after
Grantor's request.
9.7. Right to Audit.
(a) In addition to all other inspection rights under this Agreement, upon 10
business days prior written notice, Grantor has the right to inspect, audit, or review, during
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norma] business hours, all documents pertaining to the Grantee's operations in the franchise
service area that are reasonably necessary for the Grantor's enforcement of its rights under this
Agreement; provided, however, that the Grantor may not conduct duplicative inspections and
audits for those periods oftime that have previously been subject to examination. Those
documents will be made available at the Grantee's local office unless otherwise agreed by the
parties. All documents pertaining to financial matters that may be the subject of an audit by the
Grantor, as set forth herein, must be retained by the Grantee for a minimum of five years.
Access by the Grantor to any documents covered by this subsection may not be denied by the
Grantee on grounds that those documents are alleged to contain proprietary information, but
confidentiality will be protected as provided for in Section] 0, except as may be necessary to
administer and enforce the franchise.
(b) Any audit conducted by Grantor under this Subsection 9.7 will be
conducted at the sole expense of Grantor, not more frequently than once in any 12-month period.
Grantor will prepare a written report containing its findings, a copy of which will be mailed to
the Grantee for its review. Grantee must reimburse Grantor for the expense of any such audit if,
as a result of that audit, it is determined that there is a shortfall of more than four percent (4%) in
the amount of fees on gross annual revenue or other payments that Grantee is obligated to pay to
Grantor under the terms of this Agreement. That reimbursement must be made by Grantee
within 30 days of written notice from the Grantor. There shall be an accord and satisfaction with
respect to any payment that has not been audited by Grantor within 36 months following the
close of the fiscal year in which that payment is made.
(c) Any undisputed underpayment of franchise fees, PEG access support
payments, or other fees identified by a financial audit must be paid within 30 days of written
notice from the Grantor of that shortfall. Such underpayments will be subject to interest charges,
calculated from the date the payments were originally due and should have been made, in
accordance with Subsection 2.2(f). Grantee must give written notice to Grantor of any disputed
underpayments that are identified by Grantor in a financial audit.
9.8. Retention of Experts.
When deemed to be necessary for the exercise of its rights under this Agreement,
Grantor has the further right to retain technical experts and other consultants to ensure
compliance with and enforcement of the provisions of this Agreement. The Grantor will bear the
cost of retaining those experts unless the reports of those experts or consultants as submitted to
the Grantor reveal that the Grantee has failed to substantially comply with the terms and
conditions of this Agreement.
]0. PROTECT]ON OF GRANTEE'S PROPR]ETARY ]NFORMATlON
] 0.1 "Proprietarv Information" Defined. For the purpose of this Section I 0, the term
"proprietary information" means any written information or data that the Grantee is required
under this Agreement to submit to the Grantor, or to make available for inspection by the
Grantor, which enables the Grantor to perform its regulatory functions relating to the Grantee's
provision of cable services, and which, if disclosed to other persons, would result in unfair
competitive disadvantage to the Grantec.
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10.2 Identification of Proprietarv Information. Grantor will cooperate with Grantee in
an effort to preserve and to protect, to the maximum extent authorized by law, the privileged and
confidential nature of all proprietary information that, at the time it is submitted to or inspected
by Grantor, is clearly identified by Grantee as being "proprietary, privileged, and confidential."
10.3 California Public Records Act. If Grantor receives a request under the California
Public Records Act (California Government Code Sections 6250 ~ seq.), or under any legal
process that may require disclosure of Grantee's information, data, or documents that have been
identified as "proprietary, privileged, and confidential," then Grantor will: (i) give Grantee
prompt written notice of that request; and (ii) use all reasonable efforts to defer disclosure until
Grantee determines to waive compliance with the provisions of this Section 10, or to seek an
appropriate protective order, or to pursue such other legal remedies as may be necessary to
protect the privileged and confidential nature of Grantee's proprietary information.
10.4 Resolution of Conflicts. This Section 10 is in all respects subject to the California
Public Records Act, which will supersede the provisions ofthis section in the event of any
conflict.
II. FRANCHISE VIOLATIONS, REMEDIES AND ENFORCEMENT PROCEDURES
ILL Revocation, Termination, or Forfeiture.
(a) Consistent with applicable law, and in addition to all rights set out
elsewhere in this Agreement, Grantor reserves the right to revoke, terminate, or declare a
forfeiture of the franchise, subject to the procedural requirements set forth in this Section II, if
the Grantee, whether willfully or negligently, violates any material provision of this Agreement
and, following notice, thereafter fails to correct or cure that violation in accordance with the
terms of this Agreement.
(b) The proposed revocation, termination, or declaration of a forfeiture of the
franchise attributable to Grantee's violation of any of the material provisions ofthis Agreement
specified below in Subsection 11.2 must be considered and determined by the City Council at a
hearing following receipt of the City Manager's recommendation, which recommendation must
be preceded by compliance with the written notice of violation and opportunity to cure
provisions set forth in Subsection 11.4.
11.2. Grounds for Revocation, Termination, or Forfeiture.
Where the Grantee's violation is determined to involve any of the following, each
of which is deemed to constitute a material provision of this Agreement, the Grantor's City
Council may revoke, terminate, or declare a forfeiture ofthis franchise and all rights and
privileges associated with it:
(a) Grantee's repeated failure to make any payment of franchise fees as
provided for in Subsection 2.2( d) after written notice of violation has been given, unless Grantee
is in good faith contesting that payment in a court or governmental agency of competent
jurisdiction. For purposes of this paragraph (a), "repeated" means more than once.
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(b) Grantee's failure to provide or to maintain the insurance coverage in the
amounts specified in Subsection 2.4.
(c) Grantee's failure to provide or to maintain the performance bond or the
security fund specified in Subsection 2.5.
(d) Grantee's failure to comply with the requirements of Subsection 13.1
relating to the assignment, transfer, sale, and change of control ofthe franchise.
(e)
Subsection 13.4.
Grantee's failure to honor its indemnification obligations as specified in
(f) Grantee's failure to receive and to maintain all required approvals from
the Federal Communications Commission in connection with its operation of the cable television
system, unless Grantee is in good faith contesting that failure in a court or governmental agency
of competent jurisdiction.
(g) Grantee's material violation of any final order or ruling of any regulatory
body having jurisdiction over the Grantee relative to the cable television services authorized by
the franchise, unless that order or ruling is in good faith being contested by the Grantee before
the regulatory body or in a court of competent jurisdiction.
(h) Grantee's willful attempt to evade compliance with any provisions of this
Agreement or Chapter 15, or to practice any fraud or deceit upon the Grantor or upon existing or
prospective subscribers.
(i) Grantee's wrongful cessation of cable services to its subscribers for
reasons within Grantee's control; provided that Grantee will not be determined to be at fault
under any provision of this Agreement in any case where the performance of that provision is
excused or excusable under Subsection 13.2.
U) Grantee's persistent failure or refusal to remedy violations, defaults,
breaches, or incidents of noncompliance for which monetary penalties have previously been
imposed, unless Grantee is thcn contesting the same in good faith in a court or governmental
agency of competent jurisdiction.
(k) Grantee's insolvency, inability to pay its debts, or adjudication as a
bankrupt, unless the remedy of franchise revocation is precluded by paramount federal law.
(I) Grantee's falsification of information set forth in any report required to be
submitted to Grantor under this Agreement.
] ] .3. Authorized Fines. Penalties. and Other Sanctions.
(a) Grantor may impose fines, penalties, and other sanctions as set forth in
this Subsection 1].3 for defaults under, or incidents of noncompliance with, the material
provisions of this Agreement. Grantor must first give Grantee written notice of the alleged
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default or incident of noncompliance in accordance with Subsection 11.4 and a reasonable
opportunity to correct the problem.
(b) Following the expiration of any specified period within which Grantee has
failed to cure a default or an incident of noncompliance as directed, the following fines,
penalties, and other sanctions may be imposed by Grantor's City Manager, subject to Grantee's
right to appeal to the City Council in accordance with the procedures specified in Chapter 3 of
the Santa Ana Municipal Code:
I. For Grantee's failure to comply in any material respect with the
periodic system testing requirements set forth in paragraph (b) of Subsection 4.7 or
Subsection 8.1 ofthis Agreement, or Grantee's failure to meet FCC signal quality standards for
PEG access channels as required by Section I(A)(4) of Exhibit F, a penalty not to exceed $500
may be imposed for each day that the incident of noncompliance has not been remedied by the
Grantee.
2. For Grantee's failure to comply in any material respect with any of
the design and construction standards set forth in Section 7 of this Agreement, a penalty not to
exceed $500 may be imposed for each day that the incident of noncompliance has not been
remedied by the Grantee.
3. For Grantee's failure, in any material respect, to maintain or to
provide any books, records, reports, or other documents in the manner and at the time specified
in this Agreement, a penalty not to exceed $500 may be imposed for each day that the incident of
noncompliance has not been remedied by the Grantee.
4. For Grantee's material breach ofthe Consumer Protection
Standards as specified in Exhibit E to this Agreement, excluding violations ofthe four-hour
scheduling requirement for service connections or repairs, and except where the breach is not
within the Grantee's reasonable control, the monetary penalties authorized by Section 15-258(k)
of Chapter 15 may be assessed against the Grantee.
5. If Grantee fails to make an installation within a specified or
agreed-upon four-hour period, then Grantee must provide to the subscriber a free installation; if
Grantee fails to make a service call for purposes other than an installation within a specified or
agreed-upon four-hour period, then Grantee must provide to the subscriber a credit in the sum of
$20.00.
6. For any other default or incident of noncompliance that is material
and that is not specified in this Subsection 1].3, a maximum penalty not to exceed $250 may be
imposed upon Grantee by Grantor for each day that the default or incident of noncompliance has
not been remedied by the Grantee.
(c) The City Manager or the City Manager's designee is authorized to impose
the fines, penalties, and liquidated damages authorized by this Subsection 11.3 if, following
delivery of the written notice of violation referenced below in Subsection 11.4, the Grantee fails
to correct or cure the violation within the specified period of time, or any authorized extension of
that period of time. For the purpose of assessing monetary penalties, if a violation has not been
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corrected or cured by Grantee within the time specified by Grantor, the monetary penalties
specified above in subparagraph (b) may be assessed from the date of delivery to Grantee of the
Grantor's notice of violation. Decisions by the City Manager to assess monetary penalties
against the Grantee must be in writing and must contain findings supporting the decisions.
Decisions by the City Manager are final, unless appealed to the City Council as provided for
below in paragraph (d).
(d) If the Grantee or any interested person is aggrieved by a decision of the
City Manager under this Subsection 11.3, the aggrieved party may, following receipt of notice of
the written decision, appeal that decision in writing to the City Clerk in accordance with the
procedures specified in Chapter 3 ofthe Santa Ana Municipal Code.
11.4. Notice of Violation.
(a) Unless otherwise provided in this Agreement, prior to the City Manager's
recommendation to the City Council that revocation proceedings be conducted pursuant to
Subsection 11.1, and prior to the City Manager's imposition of any monetary sanctions pursuant
to Subsection 11.3, the City Manager must give written notice to the Grantee of the apparent
violation.
(b) The written notice of violation issued by the City Manager must comply
with the following requirements, as may be applicable:
I. The notice must identify the violation of this Agreement or of
Chapter 15 with sufficient particularity to enable the Grantee to make an informed decision and
to submit an appropriate written response.
2. The notice must state the period of time within which Grantee
must take or diligently commence corrective action, which period of time will be determined as
follows:
(i) If the violation arises out of the Grantee's failure or refusal
to satisfy the payment of monetary obligations to the Grantor, then the period for corrective
action may be not less than five nor more than 10 business days, at the reasonable discretion of
the City Manager.
(ii) If the violation arises out of the Grantee's noncompliance
with any obligation referenced above in Section I 1.3, other than the Consumer Protection
Standards, then the period for corrective action may bc not less than 10 business days nor more
than 30 business days, at the discretion of the City Manager.
(iii) If the violation arises out of the Grantee's noncompliance
with any of the Consumer Protection Standards referenced in Exhibit E to this Agreement, then
the period for corrective action may not be less than 30 days.
(iv) If the violation arises out of the Grantee's noncompliance
with any obligations referenced above in Subsection 1 J .2, other than the obligation to pay
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franchise fees on a timely basis, then the period for corrective action may be not less than 10
business days nor more than 30 business days, at the discretion ofthe City Manager.
(v) Notwithstanding the time periods for correction specified
above, ifthe violation creates an immediate threat to the public health, welfare, or safety, then
the City Manager may invoke the expedited procedures authorized by the Municipal Code for the
abatement of a public nuisance.
3. The notice must contain a request that the Grantee respond in
writing within five business days following receipt of the notice concerning each of the
following:
(i) Whether the Grantee disputes the violation and, if so, the
basis for that determination.
(ii) Whether the Grantee intends to correct or cure the violation
within the specified period of time and, if so, the corrective measures that will be taken.
(iii) Whether the Grantee requires additional time to correct or
cure the violation and, ifso, a statement of the reasons supporting Grantee's request for an
extension of time.
4. At the discretion of the City Manager, the notice may set forth the
following:
(i) The date on which monetary sanctions will be imposed on
Grantee, as authorized by this Section II, for Grantee's failure or refusal to correct or cure,
within the specified period oftime, violations that are subject to such monetary sanctions.
(ii) The date on which a hearing will be scheduled before the
City Council to consider revocation of the franchise, as authorized by this Section II, for
Grantee's failure or refusal to correct or cure violations that warrant such revocation and that
have not been corrected or cured within the specified period of time.
(c) If Grantee's written response to the notice of violation, as provided for
above in paragraph (b)(3) ofthis Subsection 11.4, requests additional time to correct or cure the
violation, and reasonably justifies that proposed extension of time, then the City Manager will
grant that request if the City Manager reasonably determines that such extension of time is
appropriate under the circumstances.
11.5. Hearings bv the Citv Council.
(a) Grantor will provide to Grantee written notice of any hearing of the City
Council to consider a hearing officer's report related to an appeal by Grantee from the City
Manager's decision to impose monetary sanctions under Subsection 11.3, or relating to a City
Council hearing on a recommended revocation of the franchise under Subsection I I. I. This
written notice will be given in accordance with the procedures specified in Chapter 3 of the Santa
Ana Municipal Code.
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(b) The City Council's hearing process will afford the Grantee adequate
notice and the opportunity to participate in the proceedings through its designated
representatives.
(c) At the hearing, Grantee may present oral argument to the City Council. At
that or any continued hearing, the City Council will determine appropriate course of action for
enforcement of the Grantor's rights under the franchise. All decisions of the City Council will
be made by resolution and will include findings of fact and conclusions. A copy ofthe
resolution will be transmitted to the Grantee. The decision ofthe City Council will be final and
dispositive and without prejudice to Grantee's right to pursue any remedies provided by state or
federal law.
12. CONTINUITY OF CABLE TELEVISION SYSTEM SERVICES
12.1. Continuitv of Service.
The parties acknowledge that it is the right of all subscribers to receive all
services authorized by this Agreement so long as they honor their financial and other obligations
to the Grantee. During Grantee's operation of the system, and upon any future sale of the
system, Grantee must use commercially reasonable efforts to provide continuous service to
subscribers. In the event of purchase by Grantor, or a change of franchisee, Grantee will
cooperate with Grantor or the new franchisee to operate the system for an interim period in order
to maintain continuity of service to all subscribers. If Grantee intentionally abandons all cable
services on a system-wide basis for seven consecutive calendar days, and Grantee is in material
default of this Agreement, or if the franchise is revoked by Grantor, then Grantor may, by
resolution, when reasonable cause is deemed to exist, assume operation of the system on an
interim basis for the purpose of maintaining continuity of service. Grantor's operation of the
system may continue until the circumstances that, in the judgment of the Grantor, resulted in the
cessation of cable services are resolved to Grantor's satisfaction. Grantor is entitled to receive
all revenues and is responsible for all obligations and liabilities during any period in which it
operates the system.
12.2. Operation and Management bv Grantor.
(a) During any period when the system is being operated by Grantor under
Subsection 12. I above, Grantor will attempt to minimize the disruption of operations in a manner
consistent with the maintenance of continuing service to subscribers. Notwithstanding the
foregoing, Grantor may, as it deems necessary, make any changes in any aspect of operations
that, in Grantor's reasonable judgment, are required for the preservation of quality and continuity
of service. During that period, Grantor will also maintain the system's records, physical plant,
financial integrity, funds, and other elements normally involved in operations.
(b) Grantor may, upon assuming operation of the system, appoint a manager
to act for it in conducting the system's affairs. That manager will have such authority as may be
delegated by Grantor and will be solely responsible to Grantor for management of the system.
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13. MISCELLANEOUS PROVISIONS
13.1. Assignment. Transfer, Sale, and Change of Control.
(a) As specified in paragraph (f) of Section] 5-255 of Chapter] 5,
consummation of the following transactions related to this franchise, or involving the Grantee of
this franchise, requires the prior written consent of the Grantor's City Council expressed by
resolution, which consent will not be unreasonably withheld or delayed:
]. The sale, transfer, lease, assignment, or other disposition of the
franchise, in whole or in part, whether voluntary or involuntary; provided, however, that such
consent is not required for a transfer in trust, mortgage, or other hypothecation for the purpose of
securing an indebtedness of the Grantee relating to the construction, reconstruction, operation, or
maintenance of the cable television system. A transfer, assignment, or other disposition of the
franchise may be made only by an instrument in writing, a duly executed copy of which must be
filed in the office of the City Clerk after the consummation of that transfer, assignment, or other
disposition.
2. Any merger, consolidation, reorganization, business combination,
or other transaction wherein or whereby 20 percent or more of the ownership interests in the
Grantee or in any parent company of the Grantee, will be affected and control of the Grantee will
change or be subject to change. As used herein, "control" means the possession, direct or
indirect, of the power to direct or cause the direction of the management and policies of the
Grantee. A duly executed copy of any written instrument evidencing the closing and
consummation of any such transaction must be filed in the office of the City Clerk after the
closing and consummation ofthat transaction.
(b) In determining whether it will consent to any transfer, assignment, or other
disposition ofthe franchise, or to any transaction affecting the control of the Grantee, the Grantor
may evaluate the financial, technical, legal, and other qualifications of the proposed transferee or
controlling person in accordance with federal law. Grantee must ensure that the proposed
transferee or controlling person submits an application, in the form required by applicable federal
law, not less than ]20 days prior to the closing date of the proposed transaction. After
considering compliance by the Grantee with all terms and provisions of the existing franchise,
and the financial, technical, legal and other qualifications of the proposed transferee or
controlling person, the City Council may, by resolution, authorize the proposed transaction
consistent with Grantee's rights under federal and state law and regulation. Grantor's consent to
any such transaction may not be unreasonably denied or delayed.
(c) Grantee and its proposed transferee or controlling person are jointly and
severally responsible for reimbursement to the Grantor of certain costs and expenses reasonably
incurred in evaluating and processing the application related to the proposed transaction. These
costs and expenses may include, as may be determined by the Grantor to be reasonably
necessary, the following: costs of administrative review; financial, legal, and technical
evaluation of the proposed transferee; costs for technical experts and consultants; notice and
publication costs; and document preparation expenses. Reimbursements of Grantor's costs and
expenses will be made as follows:
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] . ]n connection with the first proposed transfer, lease, assignment, or
other disposition of the franchise following the effective date of this Agreement, Grantor's
reimbursement obligation will be in an amount not to exceed $]0,000, payable as provided for
below in subsection (4).
2. ]n connection with any subsequent transfer, lease assignment or
other disposition of the franchise that is to occur within seven and one-half years after the
effective date of the first transaction referenced above in subsection (]), Grantee's
reimbursement obligation will be in an amount not to exceed $5,000, payable as provided for
below in subsection (4).
3. ]n connection with any subsequent transfer, lease assignment, or
other disposition of the franchise that is to occur more than seven and one-half years after the
effective date of the first transaction referenced above in subsection (I), Grantee's
reimbursement obligation will be in an amount not to exceed $7,500, payable as provided for
below in subsection (4).
4. Concurrently with the filing of an FCC Form 394 or comparable
change of control or transfer of ownership application form, Grantee shall submit an application
fee deposit in one-half the amount specified above in subsections (I), (2), or (3), as maybe
applicable. The application fee deposit shall be made by certified or cashier's checks payable to
Grantor. If the Grantor's actual costs in reviewing and processing the application are less than
the amount on deposit, any remaining funds will be refunded to Grantee within 60 days after
Grantor's final approval or denial of the application. ]fthe application fee deposit is less than
Grantor's actual costs, Grantor may request additional reimbursement from Grantee in an
amount not to exceed the total reimbursement obligation specified above in subsections (1), (2)
and (3), as may be applicable. Grantee's additional reimbursement of costs and expenses will be
made not later than 30 days after receipt from Grantor of an itemized statement setting forth
those costs and expenses.
(d) The requirements of this Subsection 13.] do not apply to the restructuring
of debt or to the transfer of ownership interests in the Grantee to another business entity in the
tier of business entities owned or controlled by Adelphia Communications Corporation that: (i)
controls the Grantee; or (ii) is controlled by the Grantee; or (iii) is under common ownership or
control with the Grantee; provided, however, that the Grantee must: (I) provide to Grantor not
less than 30 days prior written notice of that proposed transaction; (2) provide information
concerning ownership and voting interests in the proposed transferee; (3) provide a list of
officers, directors, and any new managing employees of the proposed transferee, and their cable
industry-related experience and expertise; (4) represent that the proposed transaction will have
no foreseeable effect on the management and operation of the Grantee's cable system in the
franchise service area: and (5) agree to execution by the Grantee and the proposed transferee of
an assignment and assumption agreement, in form and substance acceptable to the Grantor's City
Attorney, whereby the proposed transferee assumes all of Grantee's obligations under this
Agreement and accepts its terms and conditions.
(e) Grantor acknowledges that. as of the effective date of this Agreement,
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Grantee is in a Chapter II proceeding under Section 365 ofthe U.S. Bankruptcy Code and is a
debtor-in-possession of the cable system while in reorganization. Grantor further acknowledges
that the U.S. Bankruptcy Court may ultimately authorize an unrelated third-party to acquire, in a
change of control or an asset purchase transaction, the cable television franchise awarded by this
Agreement. Such transaction may involve the Grantee or its ultimate parent company, Adelphia
Communications Corporation, or intermediate subsidiaries or affiliates of Adelphia
Communications Corporation. Unless specifically precluded by federal bankruptcy laws, or by
order of the U.S. Bankruptcy Court, Grantor reserves all rights that it has to approve and consent
to any sale, assignment, or transfer of control of the cable television franchise to an unrelated
third-party that may be authorized by the U.S. Bankruptcy Court to consummate such
transaction.
13.2. Force Majeure.
(a) If Grantee's performance of any of the terms, conditions, obligations, or
requirements of this Agreement is prevented or impaired by any cause or event beyond its
reasonable control or not reasonably foreseeable, that inability to perform will be deemed to be
excused, and no penalties or sanctions will be imposed. Those causes beyond Grantee's
reasonable control and not reasonably foreseeable include, but are not limited to, acts of God,
civil emergencies, labor unrest, strikes, inability to obtain access to an individual's property, and
inability ofthe Grantee to secure all necessary authorizations or permits to use necessary poles or
conduits so long as Grantee exercises due diligence to timely obtain those authorizations or
permits.
(b) Where any cause or event is beyond Grantee's reasonable control or is not
reasonably foreseeable, and that cause or event only partially affects Grantee's ability to
perform, Grantee must perform to the maximum extent possible. In that event, Grantee must
give written notice to the Grantor of any such cause or event within 10 business days after
Grantee has learned of its occurrence.
(c) Grantee's compliance with the terms, conditions, obligations, and
requirements of this Agreement will not be excused on the basis of increases in the cost of
performance, changes in economic circumstances, or nonperformance by an employee, agent, or
contractor of the Grantee; provide, however, that nothing herein will preclude Grantee from
exercising its rights under 47 USC 9545, which relates to commercial impracticability.
13.3. Possessory Interest.
By accepting the franchise, Grantee acknowledges notice was given to Grantee, as
required by California Revenue and Taxation Code Section 107.6, that use or occupancy of any
public property under the authority set forth in this Agreement may create a possessory interest
that may be subject to the payment of property taxes levied upon that interest.
13.4. Indemnification.
(a) Subject to the exceptions specified in paragraph (b) below, Grantee will
indemnify, defend, and hold harmless the Grantor, its officers, agents and employees, from any
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liability, claims, damages, costs, or expenses, including reasonable attorney's fees, arising out of
or attributable to the exercise or enjoyment ofthe franchise renewed pursuant to this Agreement.
Grantee, at its sole cost and expense, and upon demand of Grantor, will appear in and defend all
suits, actions, or other legal proceedings, whether judicial, quasi-judicial, administrative,
legislative or otherwise, instituted by third persons or duly constituted authorities, against or
affecting Grantor, its officers, agents, or employees, and arising out of or pertaining to the
Grantee's exercise ofrights arising under the franchise within the franchise service area, and
injury to persons or damages to property proximately caused by any conduct undertaken by the
Grantee, its agents, employees, or subcontractors, by reason of the franchise.
(b) The Grantee's indemnification set forth above in paragraph (a) does not apply
to the following:
(i) Claims, damages, costs, or expenses, including reasonable
attorneys' fees, attributable in whole or in part to the gross negligence or willful misconduct of
Grantor, its officers, agents, and employees; or
(ii) Grantor's use of the emergency alert system as specified in
Subsection 4.4 titled "Emergency Alert Capability;" or
(iii) Any use of the PEG access channels or the Coaxial
Institutional Network provided for in this Agreement.
(c) Grantor will indemnify, defend, and hold harmless the Grantee, its officers,
agents, and employees, from any liability, claims, damages, costs, or expenses, including
reasonable attorneys' fees, arising out of or attributable to Grantor's use of the emergency alert
system as specified in Subsection 4.4 titled "Emergency Alert Capability," and to Grantor's use
of the Coaxial Institutional Network that is provided for in Section II of Exhibit F.
13.5. Receivership and Foreclosure.
(a) At the option of Grantor, this franchise will terminate 120 days after the
appointment of a receiver, or trustee, to take over and conduct the business of Grantee, whether
in a receivership, reorganization, bankruptcy or similar action or proceeding, unless that
receivership or trusteeship is vacated prior to the expiration of that 120-day period, or unless:
(i) the receiver or trustee, within 120 days after that appointment, fully complies with all the
terms and provisions of this Agreement, and remedies all defaults under this Agreement; and (ii)
the receiver or trustee, within that 120-day period, executes an agreement duly approved by the
court having jurisdiction in the matter, whereby that receiver or trustee assumes and agrees to be
bound by each and every term, provision, and limitation of this Agreement.
(b) In the case ofa foreclosure or other judicial sale of the plant, property, or
equipment of Grantee, or any part thereof, including or excluding this franchise, Grantor may
scrve notice of termination upon Grantee and the successful bidder at that sale, in which event
this franchise, and all rights and privileges of the Grantee under it, will terminate 30 days after
the service of that notice, unless: (i) Grantor approves the transfer of the franchise in the manner
provided by this Agreement: and (ii) the sLlccessful bidder covenants and agrees with Grantor to
assume and be bOLlnd by all the terms and conditions of this Agreement.
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13.6. Conflict ofInterest.
The parties agree that, to their knowledge, no member of the City Council, nor
any other officer or employee of Grantor, has any interest in this franchise, whether contractual,
financial, or otherwise, which has not been disclosed as required by applicable law. In addition,
if any contractual, financial, or other interest within the purview of applicable law comes to the
knowledge of either party at any time, a full and complete disclosure of that information will be
made in writing to the other party, even if that interest would not be considered a prohibited
conflict of interest under applicable law.
13.7. Resolution of Disputes.
(a) Disputes regarding the interpretation or application of any provisions of
this Agreement will, to the extent reasonably feasible, be resolved through good faith
negotiations between the parties.
(b) If any action at law or in equity is brought to enforce or interpret any
provisions of this Agreement, that action must be initiated in federal or state courts located
within the County of Orange, State of California, regardless of any other possible jurisdiction or
venue. In addition, if authorized by applicable law, the prevailing party in any such action is
entitled to reasonable attorneys' fees, costs and necessary disbursements, in addition to any other
relief that may be sought and awarded.
13.8. Waiver bv Grantor.
The Grantor may waive any provisions of this Agreement imposing obligations
on the Grantee, except those required by federal or state laws or regulations, ifthe Grantor
determines (i) that it is in the public interest to do so, and (ii) that the enforcement of such
provision will impose an undue hardship on the Grantee or its subscribers. To be effective, a
waiver must be in writing and signed by a duly authorized representative of the Grantor.
13.9. Severabilitv.
If any provision of this Agreement is determined by a court of competent
jurisdiction to be invalid or unenforceable, the remaining provisions will not be affected unless
their enforcement under the circumstances would be unreasonable, inequitable, or would
otherwise frustrate the purposes of this Agreement. In addition, the provisions of Subsection
13.7 will apply following any determination of invalidity or unenforceability.
13.10. Entire Agreement; Amendments.
This Agreement contains the entire agreement and understanding of the parties
with respect to its subject matter and supersedes all prior proposals, agreements and
understandings between the parties. No modification, tern1ination, or attempted waiver of any of
its provisions will be binding unless in writing and signed by the party against whom the same is
sought to be enforced.
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City of Santa Ana
EXEClJTION COPY 4/07/05
13.11. Good Faith and Further Acts.
In exercising their respective rights and performing their respective obligations,
the parties agree to exercise good faith and fair dealing toward one another in order to achieve
the purposes of this Agreement. The parties will take such additional actions and sign such
additional documents as may be reasonably necessary to effectuate the purpose of this
Agreement.
13.12. Binding Upon Successors.
This Agreement is binding upon and inures to the benefit of each of the parties
and to their respective transferees, successors and assigns.
13.13. Counterpart Execution.
This Agreement may be executed in multiple counterparts, each of which is
deemed to be an original and all of which constitute one and the same instrument.
13.14. Applicable Law.
This Agreement and the transactions contemplated by it are to be construed in
accordance with and governed by the applicable laws of the State of California and of the United
States.
13.15. Reservation of Rights. .
Acceptance of the terms and conditions of this Agreement will not constitute, or
be deemed to constitute, a waiver, either expressly or impliedly, by Grantee or by the Grantor of
any constitutional or legal right that either party may have or may be subsequently determined to
have, either by subsequent legislation or court decisions. The Grantor and Grantee acknowledge
that each reserves all of its respective rights under applicable federal and State Constitutions and
laws.
13.16. Cable. Video. and Telecommunications Service Providers Ordinance.
Grantee shall not be required to provide a renewal application deposit nor to
reimburse Grantor for any costs associated with renewal, including but not limited to, the costs
enumerated in Section 15-256(d) of the Ordinance.
14. DEFINITIONS
(a) Defined Terms. For the purposes of this Agreement, the following words, terms,
phrases, and their derivations have the meanings set forth below. When not inconsistent with the
context, words used in the present tense include the future tense, and words in the singular
number include the plural number. The words "shall" and "must" are always mandatory and not
merely directory.
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City of Santa Ana
EXECUTION COPY 4/07/08
"Access" or "PEG Access" or "PEG Use" means the availability of the cable
system, under Grantor's control, for noncommercial use by various agencies, institutions,
organizations, groups, and individuals in the community, including Grantor and its designees, to
acquire, create, receive, and distribute video and other signals as permitted under applicable law,
including, but not limited to:
(a) "Public Access," which means access by users such as organizations,
groups, or individual members of the genera] public, on a
nondiscriminatory basis;
(b) "Educational Access," which means access by users such as schools and
educational institutions;
(c) "Government Access," which means access by users that are
governmental institutions or agencies; and
(d) "PEG Access," which means Public Access, Educationa] Access, and
Government Access, collectively.
"Affiliated Entitv" or "Affiliate" means any entity having ownership or control in
common with the Grantee, in whole or in part, including, without limitation, Grantee's parent
corporations and any subsidiaries or affiliates of those parent corporations.
"Basic Service" or "Basic Cable Service" or "Basic Service Tier" means the
lowest tier of cable service that includes the retransmission of local television broadcast signals,
including those of public, educational, and governmental access channels.
"]992 Cable Act" means the Cable Te]evision Consumer Protection and
Competition Act of ]992.
"Cab]e Act" means the 1984 Cable Act as amended by the] 992 Cable Act and by
the Telecommunications Act of] 996.
"Cable Operator" means any person or group of persons (i) who provides cable
service over a cable system; or (ii) who controls or is responsible for, through any arrangement,
the management and operation of a cable system.
"Cable Service" means the one-way transmission to subscribers of video
programming, or other programming services, and subscriber interaction, if any, that is required
for the selection or use of that video programming or other programming service. For the
purposes of this definition, "video programming" means programming provided by, or generally
considered comparable to programming provided by, a television broadcast station; and "other
programming service" means information that a cable system operator makes available to all
subscribers generally.
"Cable Svstem" or "Cable Television Svstem" or "Svstem" means a facility,
consisting of a set of closed transmission paths and associated signal generation, reception, and
control equipment that is designed to provide cable service that includes video programming and
] 2097-0002\680672v19.doc
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Cit~, of Santa Ana
EXECUTION COPY 4/07/05
that is provided to multiple subscribers within a community. Unless otherwise specified, the
term "cable system" means the system that Grantee is authorized by this Agreement to construct,
operate, and maintain. The term "cable system" does not include:
(a) a facility that serves only to retransmit the television signals of one or
more television broadcast stations;
(b) a facility that serves subscribers without using any public right-of-way;
(c) a facility of a common carrier that is subject, in whole or in part, to the
provisions of Title II of the Telecommunications Act of 1996, except that such facility will be
considered a cable system (other than for purposes specified in Section 621 (c) ofthe 1984 Cable
Act) to the extent such facility is used in the transmission of video programming directly to
subscribers, unless the extent of such use is solely to provide interactive on-demand services;
(d) an open video system that complies with Section 653 of Title VI ofthe
Telecommunications Act of 1996; or
(e) any facilities of an electric utility that are used solely for operating its
electric utility system.
Unless otherwise specified, the terms "Cable System," "Cable Television System"
and "System" specifically denote Grantee's cable system located in the City of Santa Ana that is
constructed and operated under this Agreement.
"Complaint" means a billing dispute in which a subscriber notifies Grantee of an
outage or degradation in picture quality that is not corrected following the initial telephone or
servi ce call.
"Complimentarv Account" means an account for cable service established by
Grantee for which no revenue is requested or received, such as accounts for cable company
employees, landlords of multi-tenant buildings, public agencies, and schools.
"Control" or "Controlling Interest" means actual working control in whatever
manner exercised, including, without limitation, working control through ownership,
management, or debt instruments, as the case may be, of the cable system or the Grantee.
"Drop" means the cable and related equipment connecting the cable system's
plant to equipment at the premises of a subscriber or the facilities of the Grantor.
"Education Channel" means any channel where non-profit educational institutions
are the primary designated programmers.
"FCC" means the Federal Communications Commission.
"Franchise" means this written agreement in accordance with which the Grantor
authorizes the Grantee to use the Grantor's streets and public ways for the purpose of installing,
operating, and maintaining a cable system to provide cable service.
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City of Santa Ana
EXECUTION COPY 4/07/0S
"Government Channel" means any channel where a local government agency is
the primary designated programmer, and the programming is noncommercial programming
concerning government events, activities, services, personnel, and related matters.
"Grantee" means Adelphia Cablevision of Santa Ana, LLC, dba Adelphia Cable
Communications, and the lawful successors, transferees, or assignees of that entity.
"Grantor" means the City of Santa Ana, acting by and through its elected
governing body, or such representative as the governing body may designate to act on cable
matters in its behalf.
"Gross Revenues" means all revenue, cash, credits, and other consideration that is
received, directly or indirectly, by Grantee or its subsidiaries or affiliates, from or in connection
with the distribution of any cable service provided to subscribers within the franchise service
area, and any other service provided within the franchise service area that may, under applicable
law, be included in the Cable Act's definition of cable service for the purpose of calculating and
collecting the maximum allowable franchise. Such revenue, cash, credits, and other
consideration includes, without limitation, the following:
(a) Fees received from residential and commercial subscribers to any tier of
Cable Service and for all video programming services.
(b)
similar services.
Fees received for installation, reconnection, downgrade, upgrade, and
(c)
(d)
Late fees and interest collected on delinquent subscriber fees or charges.
Fees paid for channels that are designated for commercial use.
(e) Fees paid in connection with the rental, lease, or sale of converters, remote
controls, and other equipment.
(f) Leased or access channel revenues received in connection with the
distribution of any Cable Service.
(g) All bad debts that are recovered.
(h) All revenue that is received by Grantee, or its subsidiaries or affiliates,
from the conduct of any service-related activity directly involving the video portion of the cable
system, including without limitation revenues derived from advertising sales (less agency fees),
the sale of products or services on home shopping channels, and the sale of program guides.
(i) The fair market value of any nonmonetary consideration received by
Grantee in any transaction with another person relating to the receipt of cable service or the
operation of the cable system as it pertains to the offering of cable service, such as a barter
transaction, but not less than the customary prices paid in connection with equivalent
transactions.
] 2097 -0002\6806 72v19 .doc
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City of Santa Ana
EXECUTION COPY 4/07/05
(j) All carriage revenues received from video programming providers,
including incentive fees for carriage, contra expense, barters, or other transactions where
generally accepted accounting principles would require treatment as revenue.
(k) A franchise fee if itemized and added to the bill.
The term "Gross Revenues" does not include the following:
(a) Refundable deposits, rebates, or credits.
(b) Bad debt that is unrecovered or unrecoverable.
(c) Taxes imposed by law on subscribers that Grantee is obligated to collect
on behalf of any governmental agency.
(d) Revenues collected by unaffiliated video programming providers.
(e) PEG fees paid to the Grantor per subscriber as required by this
Agreement.
(t) Advertising commissions paid to advertising rep firms and to advertising
agencies that are not wholly-owned subsidiaries of Grantee.
(g) Programming launch fees and marketing support payments where Grantee
receives mandatory reimbursements for marketing costs associated with the launch and
promotion of services offered.
(h) The value of sponsorships or noncommercial advertisements that are
inserted by Grantee into satellite feeds in connection with charitable, civic, or public service.
(i) The value of complimentary accounts that are established by Grantee.
"Headend" means that central portion of the system where signals are introduced
into and received from the balance of the system.
"Institutional Network" or "I-Net" means a communication network which is
constructed or operated by Grantee and which is generally available only to subscribers who are
not residential subscribers, as defined in 47 USC ~53] (t).
"Leased Channel" or "Leased Access Channel" means any channel where
someone other than Grantor or Grantee is sold the rights to air programming.
"Outage" means the loss of picture or sound on all cable channels, or significant
impairment of the video or audio transmission on all cable channels, for a period of more than 15
minutes.
"Pav Cable," "Pav Service," "Premium-Service," or "Pav Television" means
programs, program services, or channels paid for by subscribers on a per-channel, per-program,
or per-event basis, whether individually or in packages of channels or programs.
12097-0002\6806 72v 19 .doc
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City of Santa Ana
EXECUTION COPY 4/07/05
"Person" means any individual, corporation, partnership, limited liability
company, proprietorship, or organization authorized to do business in the State of California.
"Plant" means the transmitting medium and related equipment that transmits
signals between the headend and subscribers, excluding drops.
"Pole Attachment Agreement" or "Attachment Agreement" means any agreement
with the Grantor, with any other governmental entity, or with any public utility relating to the
Grantee's use of utility poles, ducts, or conduits.
"Programmer" means any person who provides video program material for
transmission by means of the cable system.
"Property of Grantee" means all property owned or leased by Grantee within the
franchise service area in the conduct of its cable system business under a franchise.
"Public Channel," "Access Channel," "Community Service Channel" or
"Community Channel" means any channel for which members ofthe public, or any community
organization, may provide noncommercial supported programming.
"Residential Dwelling Unit" or "Dwelling Unit" means a home, mobile home,
condominium, apartment, cooperative unit, and any other individual dwelling unit.
"Service Area" or "franchise Service Area" means that territory within the City
of Santa Ana that is specifically described in the franchise agreement.
"Service Interruption" means the loss of picture or sound on one or more cable
channels, or significant impairment ofthe video or audio transmission on one or more cable
channels, for more than one minute but not more than 15 minutes.
"Service Tier" or "Tier" means a category of cable service or other services
provided by a cable operator and for which a separate rate is charged by the cable operator, other
than per channel or per event programming or packages of per channel or per event
programmmg.
"Street" or "Public Way" means each of the following that has been dedicated to
the public and maintained under public authority or by others and is located within the City
limits: roadways, highways, avenues, lanes, alleys, sidewalks, easements, rights-of-way, and
similar public property that the City from time to time authorizes to be included within the
definition of a street.
"Subscriber" means any person electing to subscribe to, for any purpose, cable
service provided by Grantee by means of or in connection with its cable system, whether by way
of an individual account or as part of a bulk account.
(b) Terms Not Defined. Words, terms, or phrases not defined above in paragraph
(a) shall first have the meaning as defined in the Cable Act, and next in Chapter 15, and next the
special meanings attributable to their use in any industry, business, trade, or profession where
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City of Santa Ana
EXECUTION COPY 4/07/0,
they commonly carry special meanings. If those special meanings are not common, they will be
defined as set forth in commonly used and accepted dictionaries of the English language.
15. AUTHORITY AND EFFECTIVE DATE
15. I. Authoritv.
The persons signing below represent that they have the requisite authority to bind
the entities on whose behalfthey are signing.
15.2. Effective Date.
This Agreement will become effective as of the date specified in Subsection 1.7.
It is the intention of the parties that Grantee will first execute this Agreement and then submit it
to Grantor. The City Clerk will insert the effective date in all counterparts ofthis Agreement,
attest to their execution by a duly authorized officer of Grantor, and transmit one or more fully
executed counterparts to Grantee.
TO EFFECTUATE THIS AGREEMENT, each of the parties has caused this
Agreement to be executed by its duly authorized representative as of the date set forth below the
authorized signature.
RM:
CITY OF SfryA ANYA
By: ~A'
City Manager
--.
Date:
City Clerk
ADELPHIA CABLEVISION OF SANTA ANA,
LLC, a Delaware limited liability company, dba
ADELPHIA CABLE COMMUNICATIONS
By: UCA, LLC, a Delaware limited liability
company, its sole member,
A/pf;OVE~.AS TO/FORM: ,
1 (;{,L-1:1:J ,,' I{//' // , "
Corporate 'Counsel
By: ACC Operations, Inc., a Delaware
corporat~s sOI~mber
By. ' Cc ..'V\-
T tl i I I '// I', .' /j: .,' "J,~' /,,;, ",
i e:',/;; >:_i' (, j // '~L ."
Date:
,/ '
i- --
.'::'/ ..(
( !
12097-0002\680672v 19.doc
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City of Santa Ana
EXECUTION COPY 4/07/0S
I 2097-0002\680672vl 9.doc
EXHIBIT A
ARTICLE II OF CHAPTER 15 OF THE
SANTA ANA MUNICIPAL CODE AS
ADOPTED AND IN EFFECT ON THE
EFFECTIVE DATE OF FRANCHISE
RENEW AL
[To be attached]
A-I
City of Santa Ana
EXECUTION COPY 4/07/0;;
EXHIBIT B
OWNERSHIP
The ownership of Adelphia Cablevision of Santa Ana, LLC, dba Adelphia
Cable Communications, is described as follows:
Adelphia Communications Corporation,
a Delaware corporation
ACC Operations, Inc.,
a Delaware corporation
UCA, LLC,
a Delaware limited liability company
Adelphia Cablevision of Santa Ana, LLC,
a Delaware limited liability company
12097-0002\680672v19.doc
B-]
City of Santa Ana
EXECUTION COPY 4/07/0,
EXHIBIT C
GRANTEE'S TECHNOLOGY IMPLEMENTATION PLAN
1. DESCRIPTION OF GRANTEE'S UPGRADED 750 MHz CABLE SYSTEM
Grantee's cable system in Santa Ana is a seven hundred fifty megahertz (750 MHz)
hybrid fiber-coaxial (HFC) network that extends fiber optic lines from the headend to nodes
throughout the franchise service area. At each node, the signals enter the coaxial network for
transmission to the home.
The cable system is capable of providing hundreds of channels using both analog and
digital services. Each analog video channel requires six megahertz (6 MHz). Through the use of
digital channels, however, Grantee has the ability to use existing technology to provide eight to
ten video channels in the same six megahertz (6 MHz) spectrum.
II. CONSTRUCTION OF ANY FUTURE CABLE SYSTEM UPGRADE OR REBUILD
If Grantee determines that an upgrade or rebuild of the cable system is required in order
to deliver new or more advanced services, Grantee will undertake and complete such upgrade or
rebuild in compliance with all applicable technical and construction standards that are specified
in this Agreement.
12097 -0002\680672v 19 .doc
c-!
City of Sanla Ana
EXECUTION COPY 4/07/05
EXHIBIT D-l
SUPPORT OF GRANTOR'S TECHNOLOGICAL INFRASTRUCTURE
CABLE SERVICE
[PER SUBSECTION 4.3J
Government Facilities
Address
City Council Chambers
City Hall Annex / Auditorium - Future
City Hall
City Yard 0
Corbin Community Center
Santiago Outreach Center
EI Salvador Recreation Center
Fire Dept. - Administration
Fire Station #1
Fire Station #2
Fire Station #3
Fire Station #4
Fire Station #5
Fire Station #6
Fire Station #7
Fire Station #8
Fire Station #9
Fire Station #10
Jerome Park Center - Recreation
Library - Main Branch
McFadden Technology & Learning Center
Newhope Branch Library
Police - Central Headquarters
Police Substation
Police Substation
Police Substation-Downtown
Santa Ana Zoo
Santa Anita Center
Santa Ana Senior Center
S/W Senior Center
20 Civic Center Plaza
23 Civic Center Plaza
20 Civic Center Plaza
222 S. Daisy Ave.
2215 W. McFadden Ave.
2323 N. Grand Ave.
1825 W. Civic Center Dr.
1439 S. Broadway
1029 W. 17th Street
1668 E. 4th Street
419 S. Franklin St.
1427 S. Broadway
120 W. Walnut St.
950 W. MacArthur Blvd.
2317 S. Greenville St.
501 N. Newhope St.
1320 E. Warner Ave.
2301 N. Old Grand Ave.
726 S. Center St.
26 Civic Center Plaza
2627 W. McFadden Ave.
122 N. Newhope St.
60 Civic Center
1010 Minnie St., #5
*2800 N. Main St. #5
*305 E. 4th St., Suite 200
180 I E. Chesnut Ave.
300 S. Figueroa St.
424 W. Third Street
2201 W. McFadden
Other Facilities
Address
Bowers Museum - Main Gallery
Centennial Center - Santa Ana College
2000 N. Main St.
2900 W. Edinger Ave.
* Not served as of the Effective Date of the Agreement
] 2097-0002\8] 70] 8v] .doc
D-1-1
City of Santa Ana
EXECUTION COPY
(Revised 4/18/05)
Regional Occupation Program
Parks, Recreation & Community Services Agency
Santa Ana Unified School District
Adams Elementary
Carver Elementary
Davis Elementary
Diamond Elementary
Edison Elementary
Franklin Elementary
Freemont Elementary
Garfield Elementary
Grant Elementary
Greenville Fundamental Elementary
Harvey Elementary
Heninger Elementary
Hoover Elementary
Jackson Elementary
Jefferson Elementary
Kennedy Elementary
King Elementary
Lincoln Elementary
Lowell Elementary
Madison Elementary
Martin Elementary
Monroe Elementary
Monte Vista Elementary
Muir Fundamental Elementary
Pio Pico Elementary
Remington Elementary
Roosevelt Elementary
Romero-Cruz Elementary
Santiago Elementary
Sepulveda Elementary
Taft Elementary
Taft / D.H.H.
Thorpe Elementary
Walker elementary
Washington Elementary
Wilson Elementary
Carr Intermediate
Lathrop Intermediate
MacArthur Fundamental Intermediate
McFadden Intermediate
] 2097-0002\8] 70] 8v] .doc
D-I-2
2200 S. Fairview Ave.
888 W. Santa Ana Blvd.
Address
2130 S. Raitt
1401 W. Santa Ana Blvd.
1405 French St.
1450 S. Center
2063 Orange
210 W. Cubbon
1930 W. loth
850 Brown
333 E. Walnut St.
3600 S. Raitt
1635 S. Center St.
417W. Walnut
408 E. Santa Clara
1143 Nakoma Dr.
1522 W. Adams
1300 E. McFadden
1001 S. Graham Lane
425 S. Sullivan
700 S. Flower
1124 E. Hobart
939 W. Wilshire
417 E. Central
2116 Monte Vista Ave.
1951 N. Mabury
931 W. Highland
1325 E. Fourth St.
501 S. Halladay
1512 W. Santa Ana Blvd.
2212 N. Baker
1801 S. Poplar
500 W. Keller
500 W. Keller
2450 W. Alton
811 E. Bishop
910 Anahurst PI.
1317 N. Baker
2120 W. Edinger
] III S. Broadway
600 W. Alton Ave.
2701 S. Raitt
City of Santa Ana
EXECUTION COPY
(Revised 4/18/05)
Sierra Intermediate
Spurgeon Intermediate
Villa Fundamental Intermediate
Willard Intermediate
Century High School
Chavez High School
Mendez Fundamental Intermediate
Saddleback High School
Santa Ana High School
Valley High School
Mitchell Child Development Center
New Schools to be Served
Segerstrom High School
Manuel Esqueda Elementary
Hector G. Godinez High School
Mountain View Continuing Education
Facilitv Name
Central Food Facilities
GGUSD - Hazard Elementary School
GGUSD - Fitz Intermediate School
GGUSD - Heritage Elementary School
GGUSD - Newhope Elementary School
GGUSD - Rosita Elementary School
GGUSD - Russell Elementary School
Immaculate Heart of Mary School
Mater Dei High School
OUSD - Fairhaven Elementary
Our Lady of the Pillar School
Saint Anne's School
Saint Barbara's School
Saint Joseph's School
Trinity School
Santa Ana College - Library Media Playout
SAUSD - T.V. Center
Student Services Center
] 2097-0002\81 70] 8vl .doc
D-I-3
1901 N. McClay
2701 W. Fifth St.
1441 E. Chestnut
1342 N. Ross
1401 S. Grand
218 S. Cypress
2000 N. Bristol
2802 S. Flower
520 W. Walnut
1801 S. Greenville
3001 W. Harvard
2301 W. MacArthur Blvd.
2240 S. Main Street
3002 Centennial Rd.
1629 S. Center Street
Address
1601 S. Center St.
4218 W. Hazard Ave.
4600 W. McFadden Ave.
426 S. Andres PI.
4419 W. Regent Dr.
4726 W. Hazard Ave.
600 S. Jackson St.
2204 W. McFadden Ave.
1202 E. Edinger Ave.
1415 E. Fairhaven Ave.
601 N. Western Ave.
1324 S. Main St.
5306 W. McFadden Ave.
608 E. Civic Center Dr.
906 S. Broadway
1530 W. 17th St.
1601 E. Chestnut
1629 S. Center St.
City of Santa Ana
EXECUTION COPY
(Revised 4/18/05)
EXHIBIT D-2
SUPPORT OF GRANTOR'S TECHNOLOGICAL INFRASTRUCTURE
I-NET CONNECTIONS
FACILITY NAME
Santa Ana Unified School District
Adams Elementary
Carver Elementary
Davis Elementary
Diamond Elementary
Edison Elementary
Fairhaven (OUSD)
Franklin Elementary
Freemont Elementary
Garfield Elementary
Grant Elementary
Greenville Fundamental Elementary
Harvey Elementary
Hazard Elementary (GGUSD)
Heninger Elementary
Heritage Elementary (GGUSD)
Hoover Elementary
Jackson Elementary
Jefferson Elementary
Kennedy Elementary
King Elementary
Lincoln Elementary
Lowell Elementary
Madison Elementary
Martin Elementary
Momoe Elementary
Monte Vista Elementary
Muir Fundamental Elementary
Newhope Elementary (GGUSD)
Pio Pico Elementary
Remington Elementary
Roosevelt Elementary
Romero-Cruz Elementary
Rosarita Elementary (GGUSD)
Russell Elementary (GGUSD)
Santiago Elementary
12097-0002\81701 Xvl.doc
[PER EXHIBIT F]
ADDRESS
2130 S. Raitt
1401 W. Santa Ana Blvd
1405 French St
1450 S. Center
2063 Orange
1415 E. Fairhaven
210 W. Cubbon
1930 W. 10th
850 Brown
333 E. Walnut St
3600 S. Raitt
1635 S. Center St
4218 W. Hazard
417 W. Walnut
426 S. Andnes PI
408 E. Santa Clara
1143 Nakoma Dr
1522 W. Adams
1300 E. McFadden
1001 S. Graham Lane
425 S. Sullivan
700 S. Flower
1124 E. Hobart
939 W. Wilshire
417 E. Central
2116 Monte Vista Ave
1951 N. Mabury
4419 W. Regent Dr
931 W. Highland
1325 E. Fourth St
501 S. Halladay
1512 W. Santa Ana Blvd
4726 W. Hazard
600 S. Jackson St
2212 N. Baker
D-2-]
OUTLETS
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City of Santa Ana
EXECUTION COPY
(Revised 4/18/05)
Sepulveda Elementary
Taft Elementary
Thorpe Elementary
Walker Elementary
Washington Elementary
Wilson Elementary
Carr Intermediate
Fritz Intermediate (GGUSD)
Lathrop Intermediate
MacArthur Fundamental Intermediate
McFadden Intermediate
Mendez Fundamental Intermediate
Sierra Intermediate
Spurgeon Intermediate
Villa Fundamental Intermediate
Willard Intermediate
Century High School
Chavez High School
Mater Dei High School
Saddleback High School
Santa Ana High School
Valley High School
Immaculate Heart Of Mary School
Our Lady Of The Pillar School
Saint Anne's School
Saint Barbara's School
Saint Joseph's School
Santa Ana College
Mitchell Child Development Center
Exploratory Learning Center
Student Services Center
Central Food Facilities
SAUSD TV Center
Government Facilities
Santa Ana Senior Center
S/W Senior Center
Board of Supervisors Chambers
City Council Chambers
City Hall
City Hall Annex / Auditorium
Corbin Community Center
El Salvador Recreation Center
Fire Dept. Administration
Fire Station #]
12097-0002\817018vl.doc
1801 S. Poplar
500 W. Keller
2450 W. AIton
811 E. Bishop
910 Anahurst PI
1317 N. Baker
2120 W. Edinger
4600 W. McFadden
1111 S. Broadway
600 W. AIton Ave
2701 S. Raitt
2000 N. Bristol
1901 N. McClay
2701 W. Fifth St
1441 E. Chestnut
1342 N. Ross
1401 S. Grand
218 S. Cypress
1202 E. Edinger
2802 S. Flower
520 W. Walnut
1801 S. Greenville
2204 W McFadden
601 N Western Ave
1324 S. Main St
5306 W. McFadden Ave
608 E. Civic Center Dr
1530 W Seventeenth St
3001 W. Harvard
3101 W. Harvard
1629 S. Center St
3000 W. Edinger
1601 E. Chestnut
424 W. Third St.
2201 W. McFadden
10 Civic Center Plz
20 Civic Center Plaza
20 Civic Center Plaza
23 Civic Center Plaza
2215 W. McFadden Ave
] 825 W. Civic Center Dr
1439 S. Broadway
1029 W. 17111 Street
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City of Santa Ana
EXECUTION COPY
(Revised 41l8/05)
Fire Station #2 1668 E. 4th Street
Fire Station #3 419 S. Franklin St
Fire Station #4 1427 S. Broadway
Fire Station #5 120 W. Walnut St
Fire Station #6 950 W. MacArthur Blvd
Fire Station #7 2317 S. Greenville St
Fire Station #8 501 N. Newhope St
Fire Station #9 1320 E. Warner Ave
Fire Station #10 2301 N. Old Grand Ave
Police: Central Headquarters 60 Civic Center
Police Substation *2800 N. Main St., # 5
Police Substation 1010 Minnie St., #5
Police Substation *305 E. 4th St., Suite 200
GSA Facilities Operations Complex(County) I 143 E. Fruit St
Jerome Park Recreation Center 726 S. Center St
Library: Main Branch 26 Civic Center Plaza
Library: McFadden Branch 2627 W. McFadden Ave
Library: Newhope Branch 122 N. Newhope St
Other Facilities
Santa Ana Municipal Stadium
Santa Ana Zoo
Santa Anita Center
Bowers Museum: Main Gallery
Parks, Recreation & Community
Services Agency
Centennial Park -Santa Ana College
Regional Occupation Program
Transportation Center
602 N Flower
180 I E. Chestnut Avenue
300 Figueroa St
2000 N. Main St
888 W. Santa Ana Blvd
2900 W. Edinger Ave
2200 S. Fairview Ave
405 W. Fifth St
* Not served as of the Effective Date ofthe Agreement
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City of Santa Ana
EXECUTION COPY
(Revised 4/18/05)
EXHIBIT E
CONSUMER PROTECTION STANDARDS
As modified, supplemented, or superseded in this Agreement, the consumer
protection standards that are set forth in Article II, Chapter 15, of the Santa Ana Municipal Code
will govern the Grantee's obligations under this Agreement. In addition, Grantee must at all
times comply with any additional or more stringent requirements established by FCC
regulations, or other applicable federal, state, or local law or regulations, as the same may be
amended from time to time. Nothing in this Exhibit E in any manner excuses Grantee from its
obligation to comply with other applicable consumer protection standards.
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EXHIBIT F
SUPPORT OF LOCAL CABLE USAGE
1. PEG ACCESS CHANNELS
Grantor has analyzed its current and future needs and interests as they relate to public,
educational, and governmental programming. This analysis concludes that Grantee's current
level of financial and in-kind support is adequate to serve the community's needs and interests
both now and in the foreseeable future. In recognition of the fact that there will be no increase in
incremental costs in meeting these needs and interests of the community, Grantor and Grantee
have agreed upon the following terms and provisions:
A. Channel Capacitv and Use
1. Grantee will continue to make available on the cable system, at no cost to
Grantor, five analog channels. These five channels currently consist of the following, all of
which are now activated:
. Channel 3, which is the governmental access channel.
. Channel 95, which is the public access channel. (The continued
use of Channel 95 is subject to the provisions of paragraph eel) below.)
. Channel 31, which is an educational access channel operated by
the Santa Ana Unified School District under authority delegated by the
Grantor.
. Channel 98, which is an educational access channel operated by
Cal State University Fullerton under authority delegated by the Grantor.
. Channel 99, which is an educational access channel operated by
Santa Ana College under authority delegated by the Grantor.
Each analog channel will be six MHz and will be capable of transmitting a
standard analog video signal. At the request of the Grantor, Grantee will identify these channels
by call letters that are specified by the Grantor.
2. All PEG access channels will be positioned on the basic service tier and
will be fully accessible to subscribers, consistent with FCC regulations.
3. Grantee will not change the positioning of the Grantor's government
access channel 3 or educational access channel 3] without Grantor's prior approval. If any such
change is within the Grantee's control, Grantee will give Grantor at least 90 days prior written
notice. If any such change is not within the Grantee's control, Grantee will give Grantor as
much prior written notice as is reasonably possible, but not less than 30 days. Grantee must
reimburse Grantor for all costs reasonably incurred, up to a maximum of $3,000 per channel, as a
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...
consequence of any change in channel position, including costs of notices to subscribers and
modifications to descriptive literature. Ifthe change is mandated by a federal statute or
regulation and is not within Grantee's control, Grantee may satisfy this reimbursement
requirement by producing a 30-second advertising spot announcing the change in channel lineup
and airing it on Grantee's cable system. The total value of production and air time shall be not
less than $3,000.
4. Grantee will ensure that the signal quality for all PEG access channel
cablecasting is in compliance with all applicable FCC technical standards. Grantee will use
equipment and procedures in order to minimize the degradation of signals carried on any PEG
access channel that do not originate with the Grantee. Failure to comply with these standards
may result in liquidated damages pursuant to Subsection l1.3(b)'.
5. Except to the extent authorized by federal law, Grantee will not exercise
any editorial control over the public, educational, or governmental use of channel capacity that is
made available to Grantor under the provisions of this Exhibit F.
6. Grantee is responsible for the maintenance of the "reverse feed"
distribution plant that is used for the transmission of PEG access programming. Grantee is also
responsible for all costs associated with the maintenance of Grantee's distribution network and
hardware, network management, and maintenance of the modulator at Grantor's City Hall to
provide a feed for City TV Channel 3.
B. Governmental Access Channel.
I. Exclusive Control. The governmental access channel will be under the
exclusive control of the Grantor. The Grantor will select or approve the selection of all video
programming that is cablecast on this channel.
2. Dissemination of Information. Upon Grantor's request, Grantee will
disseminate infonnation to subscribers that is related to governmental access programming using
any of the following methods: (i) on Grantee's program guide channel (and any printed guides if
applicable), provided that Grantor provides Grantee with the information in a compatible fonnat
and meets any required deadlines; or (ii) as an insert in no more than two subscriber bills
annually, for which Grantor shall be responsible for the design, printing, and shipping ofthe
inserts to Grantee. Grantor shall reimburse Grantee for any incremental costs incurred by
Grantee for mailing the insert.
3. Free Advertising Time. The parties acknowledge Grantee's intent to
continue its commitment to community service, which may include the cablecasting of public
service announcements on behalf of Grantor and non-profit community agencies. In this regard,
I Which states: "For Grantee's failure to comply in any material respect with the periodic system testing
requirements set forth in paragraph (b) of Subsection 4.7 or Subsection 8.] of this Agreement, or Grantee's failure to
meet FCC signal quality standards for PEG access channels as required by Subsection I(A)(4) of Exhibit F, a penalty
not to exceed $500 may be imposed for each day that the incident of noncompliance has not been remedied by the
Grantee. "
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Grantee may make available to Grantor, on an "as-needed" basis during the term of this
Agreement, thirty-second commercial programming spots for Grantor's noncommercial use in
publicizing community events and services, announcing local messages of importance to the
community, and promoting the Grantor's governmental access channel. Grantor will be solely
responsible for producing all of the thirty-second announcements and providing them to the
Grantee for cablecasting. Grantor will provide video media in a format that is compatible with
Grantee's advertising insertion equipment.
4. Programming Support During 18-Month Transition Period.
(a) During the first six months after the effective date of this Agreement,
Grantee shall continue to provide the same amount of programming that was required by the
prior franchise agreement. The parties agree that this obligation requires the Grantee's
production of 46 programs, including the production of Grantor's City Council meetings.
(b) Commencing with the seventh month after the effective date of this
Agreement, and continuing for the remaining term of this Agreement, Grantee will have no
obligation to produce the Grantor's City Council meetings.
(c) Commencing with the seventh month after the effective date ofthis
Agreement, and continuing through the first anniversary ofthis Agreement, Grantee will provide
transition support to the Grantor. This obligation requires the production of 23 programs during
this six-month period, which is one-half of the Grantee's commitment during the prior six-month
period. [See subparagraph (g) below.]
(d) Commencing one year after the effective date of this Agreement, and
continuing through the following six-month period, Grantee will provide additional transition
support to the Grantor. This obligation requires the Grantee's production of 12 programs during
this six-month period, which is one-half of the Grantee's commitment during the prior six-month
period. [See subparagraph (g) below.]
(e) During the eighteen-month transition period following the effective date
of this Agreement, Grantee will provide all required programming services under the direction of
the Grantor's Parks and Recreation Department.
(t) Commencing with the nineteenth month after the effective date of this
Agreement, the transition period will terminate, and Grantee shall have no further obligations to
produce any programming for Grantor.
(g) The parties acknowledge that Grantee's obligations set forth above in
paragraphs (a) through (t) of this Subsection (4) are subject to modification by the terms ofa
Settlement Agreement to be executed contemporaneously with this Agreement.
5. Alphanumeric Text (Bulletin Board). Grantee will continue to provide a
cable modem at Grantor's Parks and Recreation Department, or at another location designated by
Grantor, where Grantee's existing cable plant can be used to provide remote access to bulletin
board equipment.
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6. Special Requirements and Conditions.
(a) The government channel will be available to the Grantor 24 hours, seven
days a week, with programming cablecast at the discretion of the Grantor.
(b) Grantor reserves the right to establish conditions for access to Grantor's
facilities for the purpose of fiber system maintenance, consistent with Grantor's then-current
security procedures.
(c) Grantor retains the right to transmit on its government channel
noncommercial programming that is provided by outside sources, such as the traffic report from
CalTrans that is now scheduled to be shown on the government channel twice each day.
7. PEG Capital Support Payment.
(a) Within 60 days after the effective date of this Agreement, Grantee will
provide to Grantor a PEG capital support payment in the sum of $450,000. Grantor may use this
PEG capital support payment for any capital costs incurred in providing PEG access channel
programming and technical support, as well as costs attributable to the maintenance, operation,
repair and replacement of the Coaxial I-Net, as provided for below in Section II.
(b) After Grantee has recovered the $450,000 PEG capital support payment
from its subscribers in accordance with a pass-through methodology that is agreed upon by the
parties, Grantee will remit quarterly PEG capital support payments to Grantor through the end of
the sixth year following the effective date of this Agreement at a rate equal to $0.55 per
subscriber per month. These payments will be remitted concurrently with Grantee's quarterly
franchise fee payments.
(c) On the seventh and twelfth anniversaries of the effective date of this
Agreement, Grantor shall have the right to require Grantee to adjust the pass-through amount
related to the quarterly PEG capital support payments. The need for each such adjustment must
be documented by Grantor. No adjustment may cause the pass-through amount to exceed the
sum of $0.65 per subscriber per month.
(d) The cost of the commitments specified in this Section 7 will not be offset
by Grantee against any franchise fees that are payable by Grantee to Grantor during the term of
this Agreement.
C. Public Access Channel.
1. Channel Allocations. So long as Grantee airs public access programming
in Orange County, Grantee will continue to provide one dedicated channel for public access
programming. Grantee may satisfy this requirement by cablecasting, on the Santa Ana analog
channel line-up, public access programming from another Grantee-operated access programming
center. In doing so, however, Grantee agrees that Grantor will not be charged any costs related
to this requirement, and no offset against franchise fees will result from this requirement.
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2. Programming. Local programming for the public access channel may be
submitted by public access producers residing in Santa Ana. The scheduling of this
programming will be at the discretion of the Grantor.
3. Local Production Studio. The parties acknowledge that the existing
production studio is currently located at Buena Park High School, 8833 Academy, Buena Park,
California. Nothing contained in this subsection is intended to prohibit Grantee from charging
facility users for incidental materials and supplies. The Grantee and Grantor understand that this
Agreement does not require that a studio be maintained.
D. Educational Access Channels.
I. Channel Allocations. During the term of this Agreement, Grantee must
provide three channels for educational access programming to be used by educational institutions
under authority delegated by Grantor
2. Programming. Programming for any educational access channel will be
provided by a direct feed from the educational facility or by any other arrangement that is agreed
upon between the Grantee and the owner or operator of the educational facility. Grantee shall not
be responsible for the cost of relocating the direct feed should an educational facility change the
location from which it transmits the programming, if that relocated facility is not within 150 feet
of Grantee's existing cable plant.
E. Digital PEG Access Channels.
I. The parties acknowledge that Grantee may in the future use video
compression technology in order to transmit PEG access video programming in a digital format
to subscribers. During the transition period when Grantee is converting the cable system to 100
percent digital programming, consistent with federal law, Grantee must carry the PEG access
channels on both its analog and digital cable systems. This provision, however, shall not require
Grantee to carry duplicative digital and analog PEG access channels solely on the basis that
Grantee is offering digital channels, as long as digital subscribers will also have access to PEG
analog channels.
2. When Grantee has converted all video programming, both commercial and
non-commercial, from analog to digital, then the parties will meet and confer concerning
additional bandwidth that may be allocated for PEG access use, taking into consideration the
prior use of PEG access channel capacity, both analog and digital, and the extent of any excess
demand that may then exist.
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II. COAXIAL INSTITUTIONAL NETWORK
A. Grantee to Operate and Maintain Existing Coaxial Institutional Network.
Grantee will continue to operate and maintain its existing Coaxial Institutional
Network (Coaxial I-Net) in accordance with the provisions of this Section II of Exhibit F. The
facilities that are connected to this Coaxial I-Net as of the effective date ofthis Agreement are
identified in Exhibit D-2. Except for the cost reimbursements specified in this Section II, the use
of the Coaxial I-Net will be without charge to Grantor and its designated users. The Grantor will
determine which persons or entities may qualify as designated users ofthe Coaxial I-Net.
B. Grantor's Reimbursement of Grantee's Capital Expenses.
I. Grantor will allocate $50,000 of the initial $450,000 PEG capital support
payment referenced above in Section I(B)(7) to offset certain Coaxial I-Net capital expenses that
are incurred by Grantee in operating and maintaining the Coaxial I-Net electronics and plant
facilities. Capital expenses eligible for reimbursement include, without limitation, the following:
. Modulators
. Demodulators
. Transmission hardware
. Power supplies
. Amplifiers
. Trunk splitters
. Strand
. Coaxial cabling
2. Grantee will accrue all eligible Coaxial I-Net capital expenses on a
quarterly basis and then invoice Grantor for reimbursement. Grantee's invoices will be itemized
and will be accompanied by copies of invoices from vendors showing actual expenses incurred
for Coaxial I-Net capital expenses. Grantor will review and pay these invoices within 45 days of
receipt. Grantor reserves a 30-day right to review and approve any single capital expense that is
$5,000 or more. Grantor's approval will not be unreasonably delayed or denied.
C. Grantor's Reimbursement of Grantee's Operation, Maintenance, and Electricity
Expenses.
1. Commencing with the first day of the 25th month after the effective date
ofthis Agreement, Grantee will be reimbursed by Grantor for its reasonable costs associated
with the operation, maintenance and electrical power for the Coaxial I-Net; provided, however,
that these reimbursable costs shall not exceed $28,200 per year. Costs eligible for
reimbursement include labor costs attributable to Grantee's "on-demand" maintenance, which
the parties estimate will not exceed an average of] 0 hours per month, and to technicians
engaged in general system monitoring, including annual inspections of each power supply and
the biannual monitoring of each location.
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2. Grantee will maintain records related to all reimbursable electrical power
expenses related to the Coaxial I-Net, which records will be made available for Grantor's
inspection. The quarterly reimbursement amount due to Grantee may be deducted from the
quarterly franchise fee and PEG capital support payments to be made by Grantee to Grantor
under the provisions of this Agreement.
3. On the fourth anniversary ofthe effective date of this Agreement, the
parties will meet and confer for the purpose of evaluating the reasonableness of the annual
reimbursement provisions set forth above in paragraph (C)(I). The parties will evaluate the costs
associated with the operation, maintenance, and electrical powering of the Coaxial I-Net and will
determine whether any adjustment in the annual reimbursement amount is required in order to
reflect changes in the costs of electrical power and maintenance. If an increase in the annual
reimbursement amount is determined by Grantor to be reasonable and necessary, then an
adjusted amount may be approved by the parties. If an increase is determined by Grantor to be
unreasonable and unnecessary, then Grantor shall proceed to assess the financial feasibility and
technical practicability of the continued operation ofthe Coaxial I-Net and alternatives to the
Coaxial I-Net, as provided for below in paragraph (D)(I). Designated users of the Coaxial I-Net
within the franchise service area may, at the option of the parties, be invited to participate in
these meetings and deliberations.
D. Miscellaneous Provisions Related to the Coaxial I-Net.
I. At such time as Grantor has expended $50,000 in connection with the
capital expenses referenced above in paragraph (B), the parties will meet and confer in good faith
with regard to the financial feasibility and technical practicability of the continued operation of
the Coaxial I-Net and the alternatives to the Coaxial I-Net that may then exist.
2. At any time during the term of this Agreement, Grantee may evaluate
alternative technologies and submit proposals to Grantor and to the designated users of the
Coaxial I-Net for future services that are comparable or superior to those then provided by the
Coaxial I-Net. The parties acknowledge that designated third-party users ofthe Coaxial I-Net
may terminate their Coaxial I-Net use at any time in order to avail themselves of alternative
technologies.
3. If the Coaxial I-Net is deactivated by Grantee during the term of this
Agreement, and the Coaxial I-Net plant, equipment, and facilities are not removed by Grantee,
then Grantee will continue to be responsible for the safety of those facilities and will remain
liable to Grantor under the indemnification provisions of Subsection 13.4 of this Agreement.
E. Grantee's Future Obligation to Extend the Coaxial I-Net.
1. Grantee will provide a direct fiber connection as described in the letter
dated June 24, 2004, from Grantee's General Manager (see Schedule 2 to Exhibit F) for the
purpose of enabling fiber transmission of video and audio programming from Grantor's City
Council Chambers to the nearest node. Grantee shall be reimbursed for the capital costs of
providing this fiber connection, which will not exceed $37,000. The exclusive source of this
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reimbursement to Grantee will be the PEG capital support payments referenced above in
paragraph (B)(7) of Section I.
2. During the term of this Agreement, Grantee may be requested by Grantor
to provide Coaxial I-Net service to a currently unserved site built by the Santa Ana Unified
School District or by Santa Ana College and to any City or County building that is located in
Grantee's franchise service area. In addition, Grantor may request Grantee to provide a direct
fiber connection to the Information Technology Department of the Santa Ana Unified School
District located at 160 I East Chestnut A venue. Upon request, Grantee will provide an estimate
of cost to design, construct, install, and maintain related Coaxial I-Net cables to the sites in
question, provided that such estimate can be prepared by Grantee without incurring unreasonable
expense. Grantor and Grantee will mutually determine whether the cost to connect is feasible
and whether funding can be obtained by the interested parties.
3. Grantee has no obligation to pay for or to provide trenches for any cable
necessary to comply with the requirements ofthis paragraph (E) to provide Coaxial I-Net service
for any new or future site. Cable may be placed in utility trenches opened by contractors during
the course of construction.
4. The Coaxial I-Net user is responsible for the installation, operation, and
maintenance of terminal and interface equipment within the public building, including equipment
for modulating reverse signals associated with PEG channels. Grantee will install, operate, and
maintain all cable and network components outside the public building in accordance with the
maintenance requirements ofthis Agreement. At its discretion, Grantee will make available to
Coaxial I-Net users any surplus equipment that may be used in operating or maintaining the
Coaxial I-Net.
F. Grantee's Compliance with Performance Standards
I. Grantee must operate and maintain the I-Net in a technically feasible
manner that is consistent with the funding provided for in this Section II, and subject to the
availability of replacement parts, as long as Grantor and its designated users continue their active
use ofthe Coaxial I-Net.
2. If Grantor determines that the Coaxial I-Net is not being operated and
maintained in accordance with the applicable provisions referenced in this Agreement, Grantor
will provide to Grantee a written notice of that deficiency and request that the deficiency be
cured within 30 days of the date of the notice. If Grantor determines that any deficiency has not
been cured at the end ofthat time period, Grantor may request in writing a meeting with
representatives of the Grantee to be held within 30 days of that written request. If the deficiency
is not cured within 15 days after that meeting, or such longer time as may be afforded by the
Grantor, then Grantee may be deemed to be in material breach of this Agreement and may be
subject to penalties or to forfeiture of the franchise as set forth in this Agreement.
G. Restrictions and Conditions Related to Coaxial I-Net Use.
]. Resale. Grantor will not sell, resell, lease, or sublease the use ofthe
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Coaxial I-Net to any other entity for any purpose, commercial or otherwise.
2. Grantor's Continued Use of the Coaxial I-Net.
(a) Grantor will continue to use the Coaxial I-Net for voice, video, and
data communications between the governmental, quasi-governmental, and educational facilities
within the franchise service area that are identified in Exhibit D-2 to this Agreement. Such use
shall be consistent with Grantor's prior use under the pre-existing franchise agreement that is
referenced in paragraph (A) of the Recitals to this Agreement. Grantor shall not provide any
commercial services over the Coaxial I-Net, or engage in any manner in the business of
producing, packaging, distributing, marketing, or otherwise providing, offering, promoting, or
branding such voice, video, and data communications signals.
(b) The parties acknowledge that unanticipated events could adversely
affect the manner in which Grantee has historically owned and operated the Coaxial I-Net over
the last two decades. These unanticipated events may include, without limitation:
(i) The imposition of fees in excess ofthose charged upon the
effective date of this Agreement by the owner or owners of poles, conduit, or similar structures
used by Grantee in operating the Coaxial I-Net within the franchise service area.
(ii) The imposition by state or federal regulatory agencies of
new fees or assessments related to Grantee's ownership or operation ofthe Coaxial I-Net within
the franchise service area.
(iii) The initiation of proceedings by state or federal regulatory
agencies, or by competitive telecommunications service providers, to impose public utility or
common carrier status upon Grantee solely by virtue of Grantee's ownership and operation of the
Coaxial I-Net within the franchise service area.
(iv) Changes in applicable laws or regulations that will have the
effect of imposing public utility or common carrier status upon Grantee solely by virtue of
Grantee's ownership and operation of the Coaxial I-Net within the franchise service area.
(v) Judicial decisions that alter the relationship between
Grantee, as the owner and operator of the Coaxial I-Net, and Grantor (including its designated
public entities and agencies) as the sole users of the Coaxial I-Net within the franchise service
area.
(c) Based upon the actual record relating to the ownership, operation
and use of the Coaxial I-Net over the last two decades, and the non-occurrence of events of the
nature specified above in paragraph (b), the mutual expectation of the parties is that the Coaxial
I-Net will continue to function in the future as it has in the past. Notwithstanding this mutual
expectation, upon the occurrence of any event of the nature specified above in paragraph (b), the
following provisions will apply:
(i) Grantee will immediately give written notice to Grantor of
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the event, which written notice will set forth in detail the facts then known about the event, the
anticipated effect of that event upon Grantee's continued ownership and operation of the Coaxial
I-Net, and the nexus, ifany, between that event and the Grantor's use of the Coaxial I-Net for
voice, video, and data communications within the franchise service area.
(ii) Following Grantee's delivery of written notice, the parties
will meet and confer. The parties will undertake a mutual assessment of the event, its actual or
potential effect on the continued ownership, operation and use of the Coaxial I-Net within the
franchise service area, the actual or potential costs and expenses attributable to the event, the
options and alternatives available to the parties, and such other matters as may reasonably be
related to the event. Ifno mutually acceptable response to or resolution of the anticipated effects
of the event is agreed upon, then the parties will in good faith assess the financial feasibility and
technical practicability of the continued operation and use of the Coaxial I-Net and the
alternatives to the Coaxial I-Net that may then exist.
3. Title. All right, title and interest in the Coaxial I-Net provided by Grantee
hereunder shall at all times remain exclusively with Grantee. Except as expressly provided
elsewhere in this Agreement, Grantor shall be responsible for delegating all authority for the use
ofthe Coaxial I-Net.
4. Liens and Encumbrances. Grantor shall not, either directly or indirectly,
create, impose or suffer to be imposed any lien upon (a) any property interest of Grantee in the
Coaxial I-Net, or (b) the rights or title relating to the Coaxial I-Net, or any interest therein.
Grantor will promptly, at its own expense, take such action as may be necessary to discharge any
such lien.
5. Relocation of Facilities. Grantor recognizes that, from time to time,
Grantee may elect or be required to relocate the Coaxial I-Net. Where such relocation is solely
for the Grantee's convenience, Grantee shall be solely responsible for all costs incurred to
relocate the Coaxial I-Net. (Relocations requested by governmental authorities shall not be
deemed to be for the convenience of Grantee.) In all other cases (including street widening or
improvement projects), Grantor may, in its discretion, pay the direct, out-of-pocket costs of the
relocation, if the relocation involves only the Coaxial I-Net, and only to the extent that such costs
cannot be recovered from a third party. Grantor will, however, have the option of terminating all
use of the Coaxial I-Net and paying Grantee any then unpaid amounts that are due and payable
under Section II of this Exhibit F. Grantee will use commercially reasonable efforts to effect any
relocation in a manner that will not cause any material interruption to Grantor's use ofthe
Coaxial I-Net. Grantee shall use commercially reasonable efforts to give Grantor at least one
month prior notice of any relocation or of any governmental proceedings that could reasonably
be expected to result in a relocation, or such shorter period of notice that Grantee receives from a
governmental authority, and Grantor shall have the right to participate in those proceedings.
6. Disclaimer of Warranties. EXCEPT FOR GRANTEE'S
REPRESENT A TION THA T IT WILL ENSURE THA T THE OPERA nON OF THE
COAXIAL I-NET MEETS ALL RELEV ANT STANDARDS AS SET FORTH IN
APPLICABLE LAW, GRANTEE MAKES NO GENERAL, SPECIAL, EXPRESS, OR
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IMPLIED WARRANTIES AS TO THE FITNESS OF THE COAXIAL I-NET FACILITIES
AND EQUIPMENT THAT IT IS OBLIGATED TO PROVIDE UNDER THIS AGREEMENT
FOR ANY PARTICULAR APPLICA TION OR USE. ANY AND ALL SUCH WARRANTIES
ARE HEREBY DISCLAIMED. IT IS THE RESPONSIBILITY OF GRANTOR AND ITS
DESIGNATED USERS TO DETERMINE THE FEASIBILITY OF USING GRANTEE'S
COAXIAL I-NET FOR ANY PARTICULAR APPLICATION AND THE COMPATIBILITY
OF ANY PARTICULAR EQUIPMENT CONFIGURATION.
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EXHIBIT G
SAMPLE CABLE TV TOTAL GROSS REVENUE REPORTING FORM
For the calendar quarter ending:
ADELPHIA CABLEVISION OF SANTA ANA, LLC
Statement of Gross Receipts
Franchise: Santa Ana, CA
Period:
Service Cateeorv Latest Month Subs Gross Amount
BASIC
CABLEV ALUE/CABLESELECT
DIGITAL PROGRAMMING
NON-STANDARD SERVICE
ADDITiONAL OUTLETS
CINEMAX
DIGITAL TV - PPY
DIGITAL VIDEO RECORDER
ENCORE
FOX SPORTS
HBO
MUSIC CHOICE
PLAYBOY- PAY
SHOWTiME
STARZ
IN DEMAND
PAY PER VIEW
PLAYBOY PPV
INSTALLATiONS
CABLESELECT BOX
CONVERTERS
REMOTES
LATE CHARGES
MISCELLANEOUS
NET ADVERTISING
HNS DISTRIBUTiON
HOME SHOPPING
QVC
QVC REPOSITIONING
LOCAL ORIGINATION
LEASE/OTHER RENTAl.
OTHER NON-SUBSCRIHER
Gross Receipts
Deductions from Gross Receipts
(see detail below)
Bad Debt
Programming Expenses
Net Receipts
Franchise Fcc %
x
%
Gross Franchise Fft' (calculated over total period)
Rounding Adjustment
Cross Franchise Fcc
I 2097-0002\680672vl 9.doc
G-]
City of Santa Ana
EXECUTION COPY 4/07/05
Deductions from Fee
(see detail below)
Local Tax Deduction
Cable Commission Deduction
Net Franchise Fee
Detail for: Deductions from Fee
Detail for: Deductions from Gross Receipts
[NOTE: This reporting form is currently used by Adelphia in
Santa Ana.]
12097 -0002\680672v 19 .doc
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Cit)-, of Santa Ana
EXECIlTlON COPY 4/07/05