APPENDIX B – FRANCHISE ORDINANCESAPPENDIX B – FRANCHISE ORDINANCES\ORD. NO. 1678 (CABLE)

AN ORDINANCE GRANTING TO EAGLE COMMUNICATIONS, INC., A KANSAS CORPORATION, FOR A TERM OF FIVE (5) YEARS, THE RIGHT, AUTHORITY, POWER, PRIVILEGE AND PERMISSION TO OPERATE AND MAINTAIN A CABLE TELEVISION SYSTEM IN THE CITY OF RUSSELL, KANSAS; AND SETTING FORTH THE CONDITIONS AND REGULATIONS TO USE AND OCCUPY THE STREETS AND OTHER PUBLIC PLACES AND WAYS OF THE CITY FOR SUCH CABLE TELEVISION SYSTEM; AND, PRESCRIBING MEASURES FOR THE ENFORCEMENT OF THE PROVISIONS CONTAINED HEREIN.

NOW THEREFORE, be it ordained by the Governing Body of the City of Russell, Kansas, to-wit:

Section 1. INTENT.

The City of Russell, Kansas, (hereinafter called the “City”) finds that the existence of a cable television system within its environs has the potential of having great benefit and impact upon the residents of the City. The City further finds that the public convenience, safety and general welfare can best be served by establishing conditions and regulations under which cable television’s entertainment and informational services may be presented for public use and enjoyment.

Having been requested by Eagle Communications, Inc. (hereinafter called “Grantee”), to renew its franchise for an additional term, and upon their agreement to comply with the ordinances, laws and regulations of the City in the construction, maintenance, and operation of a cable television system, it is the intent of this ordinance to provide for and specify the means by which such authority shall be given to Grantee to continue providing cable television service to the residents of the City. Nothing contained in this ordinance shall require Grantee to waive its First Amendment rights or violate any statute, regulation, rule or decision of any federal, state or local agency or court having jurisdiction.

Section 2. SHORT TITLE.

This ordinance shall be known and may be cited as the “Eagle Communications, Inc. Cable Television Franchise Ordinance.”

Section 3. DEFINITIONS.

For the purpose of this Franchise, the following terms, phrases, words and their derivations shall have the meaning given herein. When not. inconsistent with the context, words used in the present tense include the future, words in the plural number include the singular number and words in the singular number include the plural number. The words “shall” and “will” are mandatory and “may” is permissive. Words not defined shall be given their common and ordinary meaning.

3.01 “ACT” shall refer to the Cable Communications Policy Act of 1984, Public Law Number 98-549, amending the Communications Act of 1934 and providing a national policy regarding cable television, and any amendments to the Cable Communications Policy Act of 1984 during the term of this Franchise.

3.02 “ADDITIONAL SERVICE” means any communications service other than cable television service, as defined in the Act., provided over its System by Grantee directly or as a carrier for its affiliates, subsidiaries or any other person engaged in communications services, including, by way of example but not limited to, burglar alarm, data or other electronic intelligence transmission, voice transmission, facsimile reproduction and home shopping service.

3.03 “AFFILIATE” shall mean, when used in the relation to Grantee, another person, firm, corporation, partnership or other entity that, directly or indirectly, owns or controls, is owned or controlled by, or is under common ownership or control of Grantee.

3.04 “BASIC SERVICE” means any service tier which includes the retransmission of local television broadcast signals or such other definition as may be adopted by federal law.

3.05 “CHANNEL” means a six (6) Megahertz (MHz) frequency band, which is capable of carrying either one standard video signal, a number of audio, digital or other non-video signals, or some combination of such signals.

3.06 “CITY” means the City of Russell, Kansas, and all of the territory within its present and future boundaries.

3.07 “CITY COUNCIL” means the elected governing body of the City of Russell, Kansas.

3.08 “CONNECTION” means the attachment of the drop cable to the first radio, television set, computer terminal, or other terminal of the Subscriber.

3.09 “CONVERTER” means an electronic device which converts cable channel frequencies which are not normally receivable by some/older television sets to an appropriate channel which permits a Subscriber to view all signals included in the service being delivered, according to a designated turning or channel selector dial. Converters may perform additional functions including program selectivity, security, and selection of digital services.

3.10 “DAYS” Unless otherwise specified, all references to a number of days in this ordinance shall mean calendar days.

3.11 “DIRECT BROADCAST SATELLITE (DBS)” means a system composed of an antenna, a radio receiver and associated cables which permits the reception of entertainment and informational services directly from an orbiting satellite transmitter.

3.12 “DISTRIBUTION” means the delivery of any lawful entertainment or informational service via telephonic, audio, video or any other form of optical or electronic signals over the cables of a system, over wires or through the air.

3.13 “DROP” shall mean the cable that connects the antenna terminal on a Subscriber’s radio or television set, computer terminal, or other terminal, to the nearest feeder cable of the system.

3.14 “FEDERAL AGENCY” means any agency of the United State including the Federal Communications Commission (FCC).

3.15 “FRANCHISE” shall mean the rights and obligations extended by City to Grantee to own, operate and maintain a cable television system within the boundaries of the City and manifested by this ordinance.

3.16 “FRANCHISE ADMINISTRATOR” means the Mayor or his/her designee, at City Hall who shall receive inquiries from Grantee’s Subscribers and the general public concerning Grantee’s performance. The Franchise Administrator shall coordinate the resolution of disputes between Grantee, its Subscribers and the general public, and act as the City contact for Grantee regarding cable television matters within the City.

3.17 “GRANTEE” means Eagle Communications, Inc., a Kansas corporation authorized to do business in the State of Kansas and doing business as Eagle Communications, Inc., and its successors, assigns, and permitted transferees, of which Eagle Communications, Inc. is the current managing partner.

3.18 “GROSS HEVENUES” shall mean those revenues received directly by Grantee, in connection with the operation of the system in the City for monthly Subscriber service fees and premium service fees, and including advertising revenues received from businesses located within the corporate boundaries of the City. This term does not include reasonable rental fees on equipment provided by Grantee, penalties charged for late payment of monthly service bills, charges for the expense of installing equipment or services nor taxes on services furnished by Grantee and imposed directly upon any Subscriber or user by the state, city or other governmental unit and collected by Grantee on behalf of said governmental unit.

3.19 “PERSON” means any corporation, partnership, proprietorship, individual or organization authorized to do business in the State of Kansas, or any natural person.

3.20 “PREMIUM SERVICE” also known as ‘Pay Television’ means the delivery over the System of per channel, or package of channels, or per program audio-visual, digital or non-video signals, or some combination of such signals, to Subscribers for a fee or charge in addition to the charge for another tier of service or Basic Service.

3.21 “PUBLIC PROPERTY” is any real property owned by City or any other governmental unit that is not otherwise defined herein as a street.

3.22 “RESIDENT” means any person residing in the City as otherwise defined by applicable law.

3.23 “RESIDENTIAL UNIT” means the dwelling places or living quarters for Residents as defined in the zoning codes of the City or other governmental agency and including, for the purposes of this Franchise, the two distinct categories below:

A.   “SINGLE-FAMILY RESIDENCE” means the living quarters, dwellings, domiciles, home, house, building or structure which normally accommodates one (1) family and contains only one (1) residential unit, except that duplex structures, and condominiums and townhouses owned by individuals, and not covered by B. below, may also be considered in this category if the owner of such multi-unit buildings executes Grantee’s Standard Service Agreement.

B.    “MULTI-FAMILY RESIDENCE” means the living quarters, dwellings, domiciles, or other residential units contained in apartments, row-houses, townhouses, condominiums, duplex developments or multi-plexes where three (3) or more Residential Units are present in one building.

3.24 “STREET” shall mean the surface of and the space above and below any public street, road, highway, freeway, lane, path, public way, alley, court, sidewalk, boulevard, parkway, drive or any easement or right-of-way now or hereafter held or designated by City which, shall, within its proper use and meaning in the sole opinion of City, entitle Grantee to use thereof for the purpose of installing poles, wires, cables, conductors, conduits, vaults, manholes, amplifiers, appliances, attachments and other property as may be ordinarily necessary and pertinent to a System.

3.25 “SUBSCRIBER” means any person or entity who subscribes to a service provided by Grantee by means of or in connection with the System, or any other Distribution path, and pays a fee unless such fee is lawfully waived.

3.26 “SYSTEM” means a facility, consisting of a set of closed transmission paths and associated signal generation, reception and control equipment that is designed to provide cable service which includes video programming and which is provided to multiple subscribers within the City, but the term System does not include (1) a facility that serves only to retransmit the television signals of one or more television broadcast stations; (2) a facility that serves only subscribers in one or more multiple unit dwellings under common ownership, control, or management, unless such facility or facilities uses any public right-of-way; (3) a facility or a common carrier which is subject, in whole or in part, to the provisions of Title II of the Cable Communications Policy Act of 1984, except what such facility shall be considered a System to the extent such facility is used in the transmission of video programming directly to subscribers; or (4) any facilities of any electric utility used solely for operating its electric utilities system.

Section 4. GRANT OF AUTHORITY.

4.01 Authority Granted. It is hereby granted, under the terms and conditions of this Franchise Ordinance, to Grantee, for a full term of five (5) years, and any extensions or renewals thereof, from the date hereof, the right, authority, power, and permission to establish, acquire, maintain and operate a cable television system within the City and to furnish, render and sell cable television service and such Additional Service as the Grantee may elect to provide to the residents of the City.

4.02 Grantee’s Rights. Grantee shall have the right and privilege to use and occupy the streets and other public places within the corporate limits of the City, as the same may now exist or hereafter exist, for its System, including the right to use and attach to any City-owned utility poles, and to enter and construct, erect, locate, repair and rebuild on, in, under, along, over and across the streets, alleys, avenues, parkways, lanes, bridges, easements and other public places of City, all towers, poles, cables, amplifiers, conduits and other facilities owned, leased and otherwise used by Grantee for the furnishing of a System, provided that all applicable City codes and ordinances are otherwise complied with.

4.03 Franchise Amendable. In addition to the provisions of Section 8.01 F., this Franchise Ordinance may be amended from time to time throughout its term by mutual written agreement of both the City and Grantee, unless preempted by federal or state law, for the purpose of accommodating changes in the System, clarifying misinterpretations of terms and conditions, extending the term of this Franchise or for other mutually acceptable reasons.

4.04 Franchise Term Extendable. The City shall specifically extend the terms of this Fran6hise Ordinance for an additional five (5) years, at the end of the initial five (5) year term, or at the end of any subsequent five (5) year extension, upon a showing by Grantee and a determination by City that 1) Grantee has generally complied with the provisions of this Ordinance, and 2) that Grantee continues to possess the financial, legal and operational resources to fulfill the obligations of any such extension.

4.05 Franchise Non-exclusive. This Franchise Ordinance shall not be exclusive and City reserves the right to grant a similar franchise to any other person at any time during the term of this Franchise, or any extensions or renewals thereof, to operate a System throughout the City.

A.   In the event City grants a similar Franchise or Franchises on terms and conditions which are less restrictive or less burdensome to the second or subsequent grantee than the terms and conditions of this Franchise Ordinance, then such less restrictive or less burdensome terms and conditions shall be deemed made for the benefit of Grantee, shall be incorporated into this Franchise Ordinance by reference and shall be binding thereafter on both City and Grantee.

B.    Grantee shall be entitled to comply with any less restrictive or less burdensome terms and conditions contained in any such subsequent grant or grants. 4.06 Franchise Renewable: Upon the expiration of this Franchise Ordinance, including any extensions thereof, City and Grantee shall reasonably expect to renew this Franchise under the same terms and conditions as contained herein, or such different terms and conditions as may be lawfully ordained by the City Council of City and agreed to by Grantee, if Grantee has reasonably complied with the terms and conditions herein granted. Such renewal shall be consistent with the provisions of the Act or any other prevailing federal, state, or local laws, rules or regulations governing such extensions or renewals.

Section 5. CONDITIONS OF STREET OCCUPANCY.

5.01 General Construction Practices. All construction practices shall be in accordance with all state and local codes where applicable. All installation of electronic equipment shall be of a permanent nature, durable and installed in accordance with the provisions of the National Electrical Code as amended.

5.02 General Operational Practices. The construction, operation and maintenance of Grantee’s plant and equipment located within the City, including but not limited to the antenna site, headend and distribution system, towers, house connections, structures, poles, wire, cable, fixtures and practices, shall be performed by experienced maintenance and construction personnel who shall keep such facilities in a safe and suitable condition and in good order and repair so as not to endanger or interfere with the improvements the City may deem necessary or the interfere in any manner with the rights of any property owner, or to unnecessarily hinder or obstruct pedestrian or vehicular traffic on the Public Property of City.

5.03 Placement of Facilities. The City reserves the right to establish regulations on the erection, construction or installation of any facilities by Grantee, including the right to require permits prior to excavation and maps showing where construction or excavation is planned, and the right to designate where such facilities are to be placed within the Streets and other Public Property of the City.

5.04 Relocation of Facilities for Public Improvements. Whenever because of public-necessity or the welfare of the public generally, during the term of this Ordinance or any extensions or renewals thereof, the City shall elect to change or alter the grade of any Street, alley or public way, or to sell or vacate any Street, alley easement or public way, or to construct or re-construct any water lines, sanitary and storm sewers, watercourses, drainage ditches, conduits, playgrounds, traffic control devices or other public improvements, Grantee shall, after thirty (30) days written request from City, remove, relay and relocate its poles, wires, cables, conduits and other fixtures at its own expense.

5.05 Relocation of Facilities by Other Entities. If any removal, relaying or relocation is required within a subdivision or area of City where all utility facilities and those of other services, including those of Grantee, are present, the entities requesting such removal, relaying and/or relocation shall bear the cost of removing, relocating or relaying Grantee’s facilities, provided that City shall not be liable to Grantee for such costs. Grantee shall, after thirty (30) days advanced written notice, take action to effect the necessary changes requested by the responsible entity and shall be entitled to reimbursement for the cost of labor and materials to effect such work.

5.06 Temporary Relocation of Facilities.

a.    For the City: Grantee shall, upon the request of City, temporarily raise, lower, relay, relocate or remove its wires, cables and other facilities to accomplish the moving or demolition of a City building, or to temporarily change or alter the grade of any Street, or construct or reconstruct any waterlines, sanitary and storm sewers, watercourses, recreation facilities, traffic control devices or other public improvements. The expense of such temporary relocation of facilities shall be paid by Grantee.

b.    For other entities: Grantee shall, upon the request of any person, other than the City, holding a building moving permit issued by the City, temporarily raise, lower, relay, relocate or remove its wires, cables and other facilities to accommodate the moving of the building, as Grantee shall determine. The expense of such temporary raising or lowering, relaying, relocation or removal of Grantee’s facilities shall be paid by the person requesting the same, and Grantee shall have the authority to establish the reasonable cost of such changes and require such payment in advance. Grantee shall be given no less than seven (7) days advance written notice to arrange for such temporary changes.

5.07 Safety. Grantee shall at all times employ the standard of care attendant to the risks involved and shall install and maintain in use commonly accepted methods and devices for preventing failure and accidents which are likely to cause damage, injury or nuisance to the public or to employees of the City.

5.08 Rf Leakage. FCC rules and regulations shall govern the activities of Grantee regarding Rf leakage and shall prevail in cases of conflict with local rules or requirements, including the provisions of this Franchise Ordinance. Grantee shall, upon request, check at reception locations for Rf leakage related to the System to prove no interfering signal combinations are possible. In addition Rf leakage shall be monitored, recorded and repaired in compliance with current and future FCC Regulations regarding CLI. Grantee shall have the right to discontinue its service to any Subscriber’s Residential Unit where uncontrollable Rf radiation is originating from inside the residence.

5.09 Undergrounding. In all areas of the City where the cables, wires and other like facilities of public utilities exist underground, or as required by the City to be placed underground, the Grantee shall also place its cables, wires or other facilities underground.

5.10 Pole Attachments.

A.   Grantee shall not own any poles within the City unless approval is obtained in advance from City; such approval shall not be unreasonably withheld upon a showing of need by Grantee. If Grantee is permitted to own poles by the City, Grantee shall allow reasonable attachment to such poles by any public utility or public utility district serving the City which the City Council finds would enhance the public convenience and would not unduly interfere with Grantee’s operations. Such attachment would be allowed as long as the public utility or public utility district pays to Grantee any and all actual and necessary costs incurred by the Grantee for permitting such use, and provided a joint use agreement is in effect between Grantee and the utility user.

B.    In all areas of the City where the cables, wires and other like facilities of Grantee are attached to any City-owned utility poles, Grantee shall maintain those attachments without charge by the City during the term of this Ordinance, and any extensions or renewals thereof.

5.11 Disturbances. In the case of any disturbance of any Street or Public Property, permanent sidewalk, driveway or other surfacing of the City, caused by Grantee during the course constructing or maintaining its System facilities, the Grantee shall, at its own expense, endeavor to replace and restore all paving, sidewalk, driveway, landscaping, or surface of any Street or alley disturbed in as good condition as before said work was commenced as is possible to the reasonable satisfaction of the City. Unresolved disagreements between Grantee and City over the adequacy of restoration may be referred, by mutual agreement of the parties, to arbitration in accordance with Section 13 herein, or appealed by either party to a court of competent jurisdiction for a final determination.

5.12 Authority to Trim Trees. Grantee shall have authority to trim trees and shrubbery upon and overhanging Street and other Public Property and ways of the City, so as to prevent the branches and foliage of such trees and shrubbery from coming in contact and interfering with the wires, cables and other facilities of Grantee. All trimming shall be done under the supervision and direction of the City and at the expense of the Grantee.

Section 6. DESIGN AND CONSTRUCTION PROVISIONS.

6.01 Antennas. Antenna supporting structures (towers) shall be designed in accordance with the Uniform Building Code as amended, and shall be painted, lighted, erected and maintained in accordance with all applicable rules and regulations of the Federal Aviation Administration and all other applicable state or local codes and regulations.

6.02 FCC Performance Standards. The System shall be designed and installed so as to be capable of operating according to the technical standards and all applicable Rules and Regulations of the Federal Communications Commission (FCC) or any future amendments or standards required by the FCC.

6.03 Performance Guidelines. The City and Grantee have agreed upon the following performance guidelines for the design, installation and operation of the System:

A.   Capable of continuous twenty-four (24) hour daily operation without severe material degradation of signal except during extremely inclement weather, and immediately following extraordinary storms which adversely affect other utility services or which damage major system components.

B.    Capable of operating over an outdoor temperature range of -20 degrees F to +120 degrees F and over variation in supply voltages from 105 to 130 volts AC; without catastrophic failure or irreversible performance changes.

C.    Capable of meeting all specifications as set forth herein over an outdoor temperature range of 0 degrees F to 100 degrees F and over variation in supply voltages from 105 to 130 volts AC.

D.   Operated in such a manner as to avoid causing interference with the reception of off-the-air signals of a Subscriber to the network.

E.    Capable of producing a picture upon each Subscriber’s television screen in black and white or color, depending upon whether color is being telecast and provided the Subscriber’s television set is capable of producing a color picture, that is materially undistorted and materially free from ghost images, without material degradation of color fidelity. The System shall produce sound that is materially undistorted on any properly working television receiver of a Subscriber.

6.04 Test Procedures. Grantee’s methods and schedules for testing the System on an ongoing basis shall be in compliance with its standard policies. A summary of any test results shall be provided by Grantee for City’s review upon City’s request.

6.05 Emergency Services. Grantee shall designate a channel which may be used by City at a future date for emergency broadcasts of both audio and video information, which shall be designated as [not applicable].

6.06 Line Extension Policy. Grantee shall extend its system pursuant to the following requirements:

A.   Grantee shall extend and make service available to every Single-Family Residential Unit in any existing unserved subdivision or area or any platted phase of an unserved developing subdivision within the City, which is either contiguous or not contiguous to Grantee’s existing service area, when a minimum occupied density of forty-five (45) Single-Family Residential Units per cable mile is realized, according to the overall System extension design necessary to make service available to said platted phase or area, as measured from the existing System.

B.    Grantee will extend and make System service available at the regular connector charge to any isolated Resident requesting service if the connection to the isolated Resident requires no more than a standard one hundred fifty (150) foot Drop.

C.    Where there exists a requirement or request for extension of a service line or distribution cable to serve a commercial or isolated residential Subscriber’s television receiver of more than 150 feet, Grantee may assess the Subscriber for the reasonable cost of the materials, labor and easements needed to provide and install service. Grantee shall be entitled to reimbursement of this cost in advance of providing service, at Grantee’s option.

D.   Any complex of Multi-Family Residential Units not serviced by the Grantee, according to the definitions in Section 3.23 A. and B., Residential Unit, where applicable, shall be considered to be one (1) “Single-Family Residential Unit” for the purposes of determining density according to Section 6.08, Density Per Cable Mile, and for planning System extensions according to this section, until such time as Grantee has obtained private agreements, including Grantee’s Standard Service Agreement (right of entry), with the owner(s) of such complexes. Once such agreements are obtained, the total number of Multi-Family Residential Units will be included as Single-Family Residential Units in the density determination.

E.    City recognizes that Grantee shall need to enter into a Standard Service Agreement (right of entry) with the owner(s) of Multi-Family Residential Units before service can be provided and the total number of units contained therein counted toward any density measurement.

F.    In all cases, the Grantee may enlist the aid of the City to determine density levels in unserved areas, the percent of Residents committed to subscribe to the service once available, the boundaries between residential areas, and/or any other assistance which may facilitate extension and provision of cable television service.

6.07 Density Per Cable Mile. For purposes of this section, density-per cable mile shall be computed by dividing the number of equivalent Single-Family Residences in the area by the length, in miles or fractions thereof, of the total amount of aerial or underground cable necessary to make service available to the residences therein in accordance with Grantee’s System design parameters. The cable length shall be measured from the nearest point of access to the existing System, provided that such access is technically feasible, and located within the Street, easements and rights-of-way granted by this Franchise Ordinance. The total cable length shall exclude the drop cable necessary to serve individual Subscriber premises.

6.08 Low Density Service. City and Grantee may mutually agree to any other alternative methods of extending cable service into areas of the City where the minimum occupied density is less than set forth in Section 6.07 herein, including the following circumstances:

A.    Grantee may extend its System into any such “low density” areas of the City at its own discretion.

B.    In addition, in any unserved, developing area having a minimum occupied density per cable mile which is lower than the minimum density requirements cited in Section 6.07 B above, and which is either contiguous or not contiguous with the existing System, as measured from the existing System and not served by any other System, Grantee may negotiate a cost-sharing agreement with the area’s developer or any of the area’s residents to obtain a share of the initial capital costs to extend cable service into the area.

C.    Nothing in this Franchise Ordinance shall restrict Grantee from using independent microwave radio systems, satellite master antenna systems, Direct Broadcast Satellite systems or other means to provide entertainment and informational services to residents in low density areas of the City where, in the opinion of Grantee, extension of the primary cable television System is not economically or technically feasible.

6.09 Interconnection. The System in the City, operated by Grantee, may be interconnected with other systems operated by Grantee in the area.

Section 7. OPERATION AND CUSTOMER SERVICES.

7.01 Company Office/Access. Grantee shall maintain an office in the City of Russell which shall be open during normal business hours to allow Subscribers to request service and conduct other business.

7.02 Reports.

A.   Upon request Grantee shall within ninety (90) days provide the following:

1.    A summary of the previous year’s activities in the development of the System in the City, including, but not limited to, additions, deletions or improvements begun or discontinued during the reporting year.

2.    A list of Grantee’s General Partners and Managing General Partners, and any changes thereof.

3.    A response to Subscriber inquiries, complaints or disputes, and a history of trouble complaint information, including Grantee’s responses, or any individual Subscriber.

B.    In addition, Grantee shall, upon request of City from time to time, in response to Subscriber inquiries, complaints or disputes, provide to City a history of trouble complaint information, including Grantee’s responses, on any individual Subscriber.

7.03 Maintenance and Complaints.

A.   Grantee shall render efficient service, make repairs promptly and interrupt service only for good cause and for the shortest time possible.

B.    Grantee’s office staff will maintain regular office hours from Monday through Friday. Complaints concerning billing, employee courtesy, programming, safety or Grantee’s operatl0nal policies shall be handled during those hours.

C.    Grantee shall maintain a sufficient repair force of technicians that shall respond to Subscriber complaints, loss of service, or requests for service. All complaints shall be resolved within seven (7) days from the date of the initial complaint, to the extent possible. No charge shall be made to the Subscriber for this service, except for the cost of repairs to Grantee’s equipment or facilities damaged or impaired by Subscriber.

D.   The account of any Subscriber who requests credit for an interruption of service shall be credited a prorated share of the monthly charge for the service is said Subscriber is without service for any reason, except Subscriber inflicted damages to Grantee’s equipment or impairment of service, for a period exceeding twenty-four (24) hours.

E.    All Subscribers and members of the general public in the City may direct complaints and inquiries regarding Grantee’s service or performance to the Franchise Administrator. The Franchise Administrator shall coordinate with Grantee to obtain an answer to an inquiry or a resolution to a complaint or dispute if there is evidence that Grantee has not attempted to settle the dispute to the reasonable satisfaction of the person initiating the complaint. Upon the request of either Grantee or the complaining party, the Franchise Administrator shall act as a board of review of such complaints or disputes, and recommend action for resolution. Such recommendation shall not be binding on either party.

F.    If a complaint or dispute cannot be resolved by the Franchise Administrator to the satisfaction of Grantee or the complaining party, the matter may be referred to the City Council for hearing. The City Council shall hear the matter during a regular announced meeting, open to the public, in the presence of both parties, and shall recommend resolution.

G.   In the even a complaint or dispute is determined by the Franchise Administrator to be a potential violation of this Ordinance, and after written notification to Grantee of that determination, the procedures set forth in Section 10. Procedures for Correcting Violations, of this Ordinance shall apply.

7.04 Subscriber Practices. Grantee shall have authority to promulgate such rules, regulations, policies, prices and Subscriber practices as are reasonably necessary for its business, including installation and disconnection policies, delinquent accounts collection procedures and late penalty charges.

7.05 Refunds to Subscribers. If any Subscriber terminates, for any reason, a prorated portion of any prepaid Subscriber service fee, using the number of days as a basis, shall be credited to the Subscriber’s account by Grantee, and refunded to the Subscriber upon settlement of all outstanding obligations.

Section 8. FRANCHISE FEE.

8.01 Payment to City.

A.   In consideration of the rights, powers, and privileges, permission and authority hereby granted, for use of City’s Streets and other Public Property, Grantee shall pay to City an annual amount equal to three percent (3%) of its annual basic service revenues received from the operation of the System in the City. City represents, as of the effective date of this Ordinance, that the annual amount is compensation for the cost of reasonable regulation of the use of said Street and Public Property by Grantee, and Grantee relies upon City’s representation.

B.    Payment of the annual franchise fee shall be in lieu of all other fees and taxes levied by City, including subsequent occupational, pole attachment and/or other license fees required by City for construction of facilities within City’s Streets and Public Property, and sales taxes made payable by Grantee by federal or state law or City ordinance.

C.    Payments due City under this provision shall be computed as of June 30 and December 31 of each calendar year and shall be due and payable for the preceding six (6) months on or before the 31st day of the following month. Each payment shall be accompanied by a statement of income revenue received for the year in connection with the operation of the System in the City and a brief report showing the basis for computation of fees.

D.   No acceptance of any payment shall be construed as an accord that the amount paid is in fact the correct amount, nor shall such acceptance of payment be construed as a release of any claim the City may have for further or additional sums payable under the provisions of this Ordinance. All amounts paid by Grantee shall be subject to audit by City at City’s expense in accordance with Section 8.02, Audits.

E.    In the event that any payment or recomputed amount is not made on or before the date specified herein, Grantee shall pay, as additional compensation, an interest charge, computed from such due date, at the annual rate equal to the commercial prime interest rate in effect upon the due date.

F.    In the event the Act is amended to allow franchising authorities the right to receive a franchise fee in excess of 3% of basic service revenues for a period of one year, the City shall be entitled to receive franchise fee payments consistent with the amended Act. The City shall begin receiving the increased franchise fee as of the effective date of the amendment of the Act. If the amendment of the Act does not specify a maximum franchise fee amount, then the franchise fees payable under the terms of this ordinance may be amended by the City, but in no event shall the percentage of annual gross revenues paid by Grantee hereunder exceed the applicable percentage of annual gross revenues paid by Grantee to the City of Russell, Kansas, under any franchise ordinance for the provision of cable television services.

8.02 Audits. At City’s expense, City and its agents and representatives shall have authority to arrange for and conduit an audit of the necessary financial records of Grantee for the purpose of verifying franchise fees. City will notify Grantee in writing at least seven (7) days prior to the date of the audit requested with the description and purpose, to the best of City’s ability, of the records and documents it wants to review. Grantee’s records shall be reviewed during normal business hours at a time and place made available by Grantee and such records shall remain on the premises of Grantee during the review.

Section 9. LIABILITY INSURANCE AND INDEMNIFICATION.

9.01 Liability Insurance. Throughout the term of this Ordinance, and any extensions or renewals thereof, Grantee shall maintain liability insurance insuring Grantee and City against all damages mentioned in Section 9.02 below, entitled Indemnification And Damages, in the minimum amounts of:

$500,000 for property damage to anyone person;

$1,000,000 for property damage in anyone accident;

$1,000,000 for personal bodily injury to anyone person; and

$1,000,000 for personal bodily injury in anyone accident.

At the time of acceptance, Grantee shall submit a certificate of insurance to City confirming that a satisfactory policy is in effect, which policy shall be renewed on its anniversary throughout the term of this Ordinance and any extensions thereof. Any cancellation of insurance shall require thirty (30) days advance written notice to both City and Grantee.

9.02 Indemnification and Damages.

A.   Grantee shall, at its sole expense, fully indemnify, defend and hold harmless City, and in their capacity as such, the officers, agents and employees thereof, from and against any and all claims, suits, and actions, liability and judgment for damages or otherwise:

1.    For actual or alleged injury to persons or property, including loss of use of property due to an occurrence, whether or not such property is physically damaged or destroyed, in any way arising out of or through, or alleged to arise out of or through, the acts or omission of the Grantee or its officers, agents, employees, or contractors, or to which the Grantee’s or its officers’, agents’, employee’s or contractors’ acts or omissions in any way contribute;

2.    Arising out of or alleged to arise out of any claim for damages for invasion of the right of privacy, for defamation of any person, firm or corporation, or for the violation or infringement of any copyright, trade mark, trade name, service mark or patent, or of any other right of any person, firm or corporation in connection with Grantee’s operation of the System in the City; and

3.    Arising out of or alleged to arise out of Grantee’s failure to comply with the provisions of any statute, regulation or ordinance of the United State, state of Kansas or any local agency applicable to the Grantee in its business.

       Nothing herein shall be deemed to prevent the parties indemnified and held harmless herein from participating in the defense of any litigation by their own counsel at their sole expense. Such participation shall not under any circumstances relieve the Grantee from its duty of defending against liability or of paying any judgment entered against said party.

B.    Should Grantee indemnify, defend, and hold harmless City as provided for in this Ordinance, then Grantee’s liability and obligations shall be limited to the actual amount of any damages as finally agreed upon by Grantee and City or determined by a panel of arbitrators and/or a court of competent jurisdiction, together with reasonable expenses actually incurred in connection with any action, suit or proceeding arising out of the construction, maintenance or operation of Grantee’s System to which the City has been made a party.

C.    With regard to A. & B, above, Grantee shall provide a defense for the City in any action, suit or proceeding alleging the City has engaged in willful misconduct or criminal acts; provided, however, that notwithstanding anything to the contrary contained in this section, the City shall not be so indemnified or reimbursed in relation to any matter, in any action, suit or proceeding in which the City is found to have engaged in willful misconduct or criminal acts. In addition, if City is found to have engaged in willful misconduct or criminal acts, the Grantee, shall be reimbursed by the City for all amounts paid and expenses incurred by Grantee in connection with such action, suit or proceeding, including attorney’s fees.

Section 10. PROCEDURE FOR CORRECTING FRANCHISE VIOLATIONS.

10.01 Procedures Should the City determine that Grantee has violated one (1) or more terms, conditions or provisions of this Franchise Ordinance, the City shall give written notice to Grantee informing it of such alleged violation (a “Violation Notice”). Grantee shall have fourteen (14) working days subsequent to receipt of the Violation Notice to inform the City in writing of the action Grantee will take to begin such corrective action. Such corrective action shall be accomplished within a reasonable amount of time. If however, the Grantee disputes that a violation or failure has, in fact, occurred, it shall give written notice to the City within fourteen (14) working days upon receipt of the Violation Notice that there is a dispute (a “Notice of Dispute”). Such Notice of Dispute shall specify with particularity the matter disputed by Grantee and shall stay the running of any performance or corrective deadlines pertaining to the matter in dispute.

B.    The City Council shall hear the disputed matter at a regularly scheduled or specifically called meeting within twenty (20) days after receiving Grantee’s or City request for a hearing. City and Grantee may present evidence in the hearing and call witnesses for specific testimony. The City Council shall decide the matter within seven (7) days of the hearing and supplement its decision wi.th written findings of fact.

C.    If the City Council determines that a violation has not occurred, the matter shall be concluded. However, if the City Council determines that a violation has occurred, Grantee shall have fourteen (14) working days from receipt of written notice of such a decision (a “Notice of Decision”) to give written notice to City of the corrective action it will take and to begin its remedy of the violation. Such corrective action shall be accomplished within a reasonable length of time. If, however, Grantee intends to appeal the City Council’s decision, subject to Grantee’s right of appeal provided in Section 12, Appeals, of this Franchise Ordinance, or offers to submit the matter to the arbitration of disinterested parties in accordance with this Ordinance, such notice if intent to appeal or arbitrate shall be presented to the City in writing (a “Notice of Appeal or Arbitration”) within fourteen (14) working days of Grantee’s receipt of the City Council’s decision. Such Notice of Appeal or Arbitration shall stay the running of any performance or corrective deadlines pertaining to the matter.

10.02 Citizens’’ Rights Nothing in this Ordinance shall act as a waiver of any citizens’ rights to pursue all available legal remedies.

SECTION 11. REVOCATION AND REMOVAL.

11.01 Revocation For Cause In addition to all other rights, powers and remedies reserved by the City, the City shall have the additional, separate and distinct right to revoke this Franchise and all the rights, authority, power, privileges and permissions of Grantee authorized herein as a result of and in response to the following events or reasons:

A.    Grantee becomes fiscally unable or unwilling to pay its debts, or is judged to be bankrupt.

B.    Grantee attempts to or does practice any fraud or deceit in its conduct or relations under this Ordinance or in the process of being granted the rights, authority, power, privileges and permission herein; or

C.    Grantee fails to correct a material violation of this Ordinance within thirty (30) days following written demand by City to effect such compliance and after the provisions of Section 10, Procedure For Correction Franchise Violations, have been pursued and completed, and/or after the provisions of Section 12, Appeals, and/or Section 13, Arbitration, have been elected and a decision rendered.

11.02 Revocation By Ordinance No such revocation shall be effective unless or until the City Council of City shall have adopted an ordinance setting forth the cause and reason for the revocation and the proposed effective date thereof. Such an ordinance shall not be adopted without thirty (30) days prior written notice to Grantee and an opportunity provided by City for the Grantee to be heard regarding the proposed adoption of such an ordinance. All revocations shall be supported by findings of fact as made by the City Council after such hearing. Either City or Grantee may request a review of the revocation findings by a court of competent jurisdiction. Grantee shall not be declared in default or be subject to any sanction under any provision of this Ordinance in any case in which the performance of any such provision is prevented for reasons beyond Grantee’s control.

11.03 Removal After Revocation

A.   Upon revocation of this Franchise Ordinance for cause, as provided for, City shall have the right to require Grantee to remove, at Grantee’s expense, any above ground portion of System from all Streets, alleys, facilities, public places or ways of City. In so removing System, Grantee shall refill and compact, at its own expense, any excavation that shall be made and shall leave all Streets, alleys, Public Property, places and ways, and private property, in as good condition as that prevailing prior to Grantee’s removal of System as is possible, and without affecting, altering or disturbing in any way electric, telephone, or utility cables, wires or attachments. The Insurance, Indemnity and Damage provisions of this Ordinance shall remain in full force and effect during the entire term of removal.

B.    If Grantee has failed to commence removal of System, in accordance with Section 11.03 (A) above, or such part thereof as was designated, within one hundred eighty (180) days after written notice of City’s demand for removal is given, or if Grantee has failed to complete such removal within one (1) year after removal has begun, City shall have the right to exercise one of the following options:

1)    Declare all right, title and interest to System to be in City or its delegator with all right of ownership including, but not limited to, the right to operate System or transfer System to another for operation by it. Upon such declaration by City, Grantee shall be entitled to receive equitable reimbursement from the City for the value of the System.

2)    Declare System abandoned and cause System, or such part thereof as the City shall designate, to be removed at no cost to the City. The cost of said removal shall be recoverable from the Insurance and Indemnity sections provided herein, or from Grantee directly.

SECTION 12. APPEALS.

12.01 Revocation In the event the Grantee is dissatisfied with-the decision of the City Council in their decision as to revocation, Grantee may submit the matter to a court of competent jurisdiction for a final determination. Notice by either City or Grantee of their intent to submit a matter of revocation to a court of competent jurisdiction shall stay the running of any performance or violation deadlines pertaining to revocation and the matter as contained herein. Such notice of intent to submit a matter of revocation to a court of competent jurisdiction shall be given no later than thirty (30) days after the date that the revocation ordinance described in Section 11.02 becomes final and effective.

12.02 Appeal Procedure Generally When any part of this Franchise Ordinance is in dispute, or when any performance of the Franchise by city or Grantee shall be in dispute, other than a decision as to revocation, and after the procedures of Section 10, Procedure For Correcting Franchise Violations, if applicable, of this Ordinance have been followed, City and Grantee may mutually agree to submit the dispute to arbitration, in accordance with the provisions of Section 13, Arbitration, of this Ordinance, and/or either City or Grantee may elect to appeal the matter to a court of competent jurisdiction, for a final determination. The right to submit a matter to a court of competent jurisdiction shall not apply to the provisions of Section 5.11, Disturbances, or to any dispute between Grantee and City having a present or future value of less than or equal to Five Thousand Dollars ($5,000.00). Notice by either City or Grantee of the intent to submit a matter to a court of competent jurisdiction, or an agreement of arbitration, shall stay the running of any performance or violation deadlines pertaining to the matter as contained herein.

SECTION 13. ARBITRATION.

13.01 Procedures In the event the City and Grantee mutually agree to submit a disputed matter to the arbitration of disinterested parties for hearing and determination, excluding individual Subscriber disputes with Grantee, and after the procedures of Section 10, Procedure for Correcting Franchise Violations, have been followed, if applicable, the following procedures shall be observed:

A.   City and Grantee shall each, within fifteen (15) days of the agreement by City and Grantee to proceed with arbitration, appoint one (1) arbitrator. The panel of two (2) arbitrators shall agree upon the selection of a third member, similarly qualified, within fifteen (15) days after appointment of the second arbitrator.

B.    Within thirty (30) days after appointment of all arbitrators and upon ten (10) days advance written notice to City and Grantee, the arbitrators shall commence a hearing of the dispute.

C.    All hearings, debates and deliberations shall be open to the public, but the public shall not participate in such hearings unless duly called as individual witnesses. The times and places of the hearings shall be announced by public notice or as thereafter publicly stated in the order to adjourn. Each hearing shall be recorded and may be transcribed at the request of either the Grantee or the City.

D.   At the close of the hearings the arbitrators shall prepare written findings and make a written decision within thirty (30) days of their final adjournment. Their decision shall be a majority agreement and shall be served by mail upon City and Grantee.

13.02 Judicial Review Either City or Grantee may seek judicial relief of arbitration proceedings, to the extent authorized under Kansas law, regarding any matter in dispute between the parties and, in addition, in the following circumstances:

A.   City or Grantee fails to select an arbitrator;

B.    The arbitrators fail to select a third member;

C.    One (1) or more arbitrator(s) is unqualified;

D.   The designated time limits have been exceeded;

E.    The arbitrators have not proceeded expeditiously;

13.03 Costs of Arbitration The costs of arbitration shall be borne equally by City and Grantee unless otherwise ordered by the arbitrators.

SECTION 14. MISCELLANEOUS PROVISIONS.

14.01 Transfer of Franchise Prior approval of the City shall be required before the Franchise granted herein shall be assigned or transferred, either in whole or in part, or leased or sublet in any manner, nor shall title thereto, either legal or equitable, or any right, interest or property therein, pass to or vest in any person or persons, except as provided in A. below.

A.   The requirement of prior approval of the City before a transfer of interest shall not apply to a transfer by Grantee, or of Grantee’s partners, to an Affiliate, to the other principal partner of Grantee, to any parent or subsidiary, or to an Affiliate corporation of either of the principal partners of Grantee, or to any other person, firm, corporation, partnership or other entities owned or controlled by, or under common control with, any of the principal partners of Grantee.

B.    If none of the provisions of Section 14.01 A. above are applicable, the following procedures shall govern the City’s approval process for the transfer of this Franchise:

1)    The parties to the transfer of this Franchise Ordinance shall make a written request of City for its approval.

2)    City shall reply in writing within forty-five (45) days of the request and shall indicate whether it grants or denies its approval; such approval shall not be unreasonably withheld.

3)    If a public hearing is deemed necessary pursuant to 2) above, such hearing shall be conducted within thirty (30) days of such determination and notice of such public hearing shall be given pursuant to applicable law.

4)    Within fifteen (15) days after the public hearing, the City shall approve or deny, in writing, the transfer request.

5)    Grantee, upon transfer, shall within sixty (60) days thereafter file with City a copy of the deed, agreement, mortgage, lease or other written instrument evidencing transfer or ownership control or lease of the System, certified and sworn to as correct by Grantee.

C.    In reviewing a request for Franchise transfer, City may inquire into the qualifications of the prospective controlling party, and Grantee shall assist City in so inquiring.

D.   In no event shall any transfer or assignment of control be approved without the transferee accepting the terms and conditions of this Franchise Ordinance.

14.02 Subsequent Action By State or Federal Bodies; Severability

A.   It is the intent of the City and Grantee that the terms, conditions and obligations set forth herein shall govern their relationship for the full term of this Franchise, and any extensions or renewals thereof, unless due to court determination, federal or state law or regulation applicable to this Ordinance, one (1) or more of the following exist:

1)    City or Grantee is specifically prohibited from performing any service or obligation of this Franchise;

2)    City or Grantee is specifically required to perform a service consistent with this Franchise; or

B.    City and Grantee agree that either party may seek a ruling as to the applicability of any court determination, federal or state law or regulation to the terms of this Ordinance.

14.03 Nonenforcement by City Grantee shall not be relieved of its obligation to comply with any of the provisions of this Franchise Ordinance by reason of any failure of City to enforce prompt compliance. However, City shall not require compensation from Grantee in lieu of City’s nonenforcement of grantee’s failure to comply with any provision of this Ordinance, nor shall compensation be required of Grantee in lieu of such nonenforcement as a condition of City’s approval of any transfer or renewal of this Franchise; further provided, however, that this provision shall not be construed as a limitation on any damages that might be recoverable as a result of any breach of the terms of this Franchise Ordinance.

14.04 Separability If any provision of this Franchise Ordinance is held by a court or by any federal, state, or county agency of competent jurisdiction to be invalid as conflicting with any federal, state, or county law, rule or regulation now or hereafter in effect, or is held by such court or agency to be modified in any way in order to conform to the requirements of any such law, rule or regulation, said provision shall be considered to be separate, distinct and independent part of this Franchise Ordinance, and such holding shall not affect the validity and enforceability of any other provision hereof.

14.05 Written Notice All notices, reports or demands required to be given in writing under this Franchise shall be deemed to be given when delivered personally to any officer of Grantee or City, whichever is appropriate, or when forty-eight (48) hours have elapsed after it is deposited in the United States mail in a sealed envelope, with registered or certified mail postage prepaid thereon, addressed to the party to which notice is being given. Such addresses may be changed by either party upon notice to the other party given as provided in this section. At the date of execution herein the addresses of the parties are as follows:

Grantee:

Eagle Communications, Inc.

2703 Hall

PO Box 817

Hays, KS 67601

City:

City of Russell, Kansas

City Building

PO Box 112

Russell, KS 67665

14.06 Grantee’s Warranty Grantee represents, warrants and guarantees that neither it, nor its representatives or agents, have committed any illegal acts or engaged in any wrongful conduct contrary to, or in violation of, any federal, state or local law or regulation in connection with the passage of this Franchise Ordinance. Grantee further warrants and represents as follows:

A.   That it is a Kansas corporation authorized to do business in the State of Kansas, and has full right and authority to enter into and fully perform the Franchise Ordinance; that all action required to authorize the acceptance of the Franchise Ordinance and execution and delivery of all other documents to be executed and/or delivered by Grantee pursuant to this Franchise, and to authorize the performance by Grantee of all of its obligation under the Franchise, and all such other documents to be executed and/or delivered by Grantee, have been validly and duly acted on and are in force and effect; and that this Franchise Ordinance and all other documents executed and/or delivered by Grantee have been duly accepted and executed and the terms of each thereof are fully binding upon and enforceable against Grantee.

B.    That Grantee has the fiscal and technical capability to commence, complete, operate and maintain a System pursuant to the terms of this Ordinance.

14.07 Grantee’s Acceptance This Ordinance shall be in full force and effect after the expiration of sixty (60) days from the passage and all terms and conditions understood and accepted by Grantee unless previously rejected in writing by Grantee’s managing partner delivered by certified mail to the City.

14.08 Revocation of Previous Ordinances All ordinances or parts of ordinances in conflict with the provisions of this ordinance, and more particularly Ordinances No. 1543 are hereby repealed.

(4-18-2000)