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HomeMy Public PortalAbout2006_06_27_O13The Town of Leesburg, Tirginia ORDINANCE NO. 2006-0-13 AN ORDINANCE: PRESENTED June 27, 2006 ADOPTED June 27, 2006 GRANTING A CABLE TELEVISION FRANCHISE TO VERIZON VIRGINIA COMMUNICATIONS, SUBJECT TO CERTAIN CONDITIONS WHEREAS, on December 6, 2004, Verizon Virginia Inc. filed an application with the Town of Leesburg, Virginia seeking a franchise to build and operate a cable television system and to provide cable service within the Town limits; WHEREAS, on January 18, January 27, and June 20, 2006 the Leesburg Cable Advisory Commission ("Commission") held public meetings on Verizon's application, and received additional input on the matter from electronic mail and other written documents and received written material from the incumbent cable television franchisee, Adelphia Communications Corporation (`Adelphia") setting forth its views on Verizon's application; and WHEREAS, on June 20, 2006, the Commission adopted a resolution recommending approval of Verizon's franchise application subject to conditions; and WHEREAS, Council has considered the input from the public, Verizon, and Adelphia and the input it has received from Town Staff, the Town Attorney, Town's outside counsel, and the Commission; and WHEREAS, on June 27, 2006 the Council conducted a public hearing on Verizon's application after proper public notice; and WHEREAS, Council had considered each of the factors in Sections 5.1-11 and 5.1-12 of the Town Code and Virginia Code Section 5.2-2108 in evaluating Verizon's franchise application; and WHEREAS, Council has considered the impact of new cable franchise legislation on their incumbent franchise and any new franchises granted before July 1, 2006; and AN ORDINANCE: -2- GRANTING A CABLE TELEVISION FRANCHISE TO VERIZON VIRGINIA COMMUNICATIONS, SUBJECT TO CERTAIN CONDITIONS WHEREAS, based on that input and those factors, Council has determined that Verizon's application should be approved, and that Verizon should be granted a cable television franchise. THEREFORE, ORDAINED by the Council of the Town of Leesburg as follows: SECTION I. That Council hereby approves the Verizon Franchise application for a cable television franchise, contingent on Verizon executing the attached agreement (Attachment No. 4) without changes no later than June 28, 2006. SECTION II. That, as further condition of such approval, Verizon shall be required to reimburse the Town for all cost incurred by the Town in the application process within thirty days of execution by the Town. SECTION III. The Town Manager is authorized to execute a franchise agreement, which shall be effective the date of execution. SECTION IV. That in the event Verizon is unwilling to accept franchise terms and conditions substantially similar to those set forth in Attachment 4, Verizon's franchise application shall be deemed to be denied. SECTION V. This ordinance shall be in effect upon passage. PASSED this 27`h day of June 2006. Kristen C. U`mstattd, Mayor Town of Leesburg ATTEST: aleiat rk of Council P drive: ordinances 2006: Verizon Franchise Agreement Cable Franchise Agreement by and between Town of Leesburg, Virginia and Verizon Virginia Inc. Approved by the Town of Leesburg Council on June 27, 2006 TABLE OF CONTENTS ARTICLE PAGE 1. DEFINITIONS 2 2. GRANT OF AUTHORITY; LIMITS AND RESERVATIONS 6 3. PROVISION OF CABLE SERVICE 8 4. SYSTEM OPERATION 10 5. SYSTEM FACILITIES 10 6. PEG SERVICES 14 7. FRANCHISE FEES 16 8. CUSTOMER SERVICE 16 9. REPORTS AND RECORDS 17 10. INSURANCE AND INDEMNIFICATION 17 1 1. TRANSFER OF FRANCHISE 20 12. RENEWAL OF FRANCHISE 20 13. ENFORCEMENT AND TERMINATION OF FRANCHISE 21 14. MISCELLANEOUS PROVISIONS 26 EXHIBIT A - SERVICE AREA EXHIBIT B - TOWN BUILDINGS TO BE PROVIDED FREE CABLE SERVICE EXHIBIT C - THE TOWN'S PEG CHANNELS EXHIBIT D - CUSTOMER SERVICE STANDARDS EXHIBIT E - PERFORMANCE BOND EXHIBIT F - LETTER OF CREDIT EXHIBIT G - ACCEPTANCE OF FRANCHISE BY THE FRANCHISEE THIS CABLE FRANCHISE AGREEMENT (the "Franchise" or "Agreement") is entered into by and between the Town of Leesburg, Virginia (the "Town") and Verizon Virginia Inc., a corporation duly organized under the applicable laws of the State of Virginia (the "Franchisee"). WHEREAS, the Town wishes to grant Franchisee a nonexclusive franchise to construct, install, maintain, extend and operate a cable communications system in the Franchise Area as designated in this Franchise; WHEREAS, the Town is a "franchising authority" in accordance with Title VI of the Communications Act (see 47 U.S.C. §522(10)) and is authorized to gant one or more nonexclusive cable franchises pursuant to the Code of Virginia, Va. Code Ann. § 15.2-2108 and Chapter 5.1 of the Code of the Town of Leesburg, Ord. No. 2000-0-03, § II, 10-31-00; WHEREAS, Franchisee is in the process of installing a Fiber to the Premise Telecommunications Network ("FTTP Network") in the Franchise Area for the. transmission of Non -Cable Services pursuant to authority granted by the Commonwealth of Virginia; WHEREAS, the FTTP Network will occupy the Public Rights -of -Way within the Town, and Franchisee desires to use portions of the FTTP Network once installed to provide Cable Services (as hereinafter defined) in the Franchise Area; WHEREAS, the Town and Franchisee have reached agreement on the terms and conditions set forth herein and the parties have agreed to be bound by those terms and conditions; WHEREAS, the Town Council conducted a public hearing and heard testimony concerning the economic consideration, the impact on private property rights, the impact on public convenience, the public need and potential benefit, the Franchisee's financial, technical, and legal qualifications to provide Cable Service, and other factors relevant to the award of this Franchise, and the Town Council deems the award of this Franchise to be appropriate; WHEREAS, the Town Council made a finding that, subject to the terms and conditions set forth herein and in the Cable Law, the grant of a nonexclusive franchise to Franchisee will enhance the public welfare; and WHEREAS, the Town Council found that the terms and conditions of this Franchise are not more favorable or less burdensome than those in the existing Franchises granted within the Town; NOW, THEREFORE, in consideration of the Town Council's grant of a franchise to Franchisee. Franchisee's promise to provide Cable Service to residents of the Franchise/Service Area of the Town pursuant to and consistent with the Cable Law, pursuant to the terms and conditions set forth herein, the promises and undertakings herein, and other good and valuable consideration, the receipt and the adequacy of which are hereby acknowledged, THE SIGNATORIES DO HEREBY AGREE AS FOLLOWS: 1 1. DEFINITIONS Except as otherwise provided herein, the definitions and word usages set forth in the Cable Law are incorporated herein and shall apply in this Agreement. In addition, the following definitions shall apply: 1.1. Affiliate: Any Person who, directly or indirectly, owns or controls, is owned or controlled by, or is under common ownership or control with, the Franchisee. 1.2. Basic Service: Any service tier, which includes the retransmission of local television broadcast signals as well as the PEG Channels required by this Franchise. 1.3. Cable Law: Chapter 5.1 of the Code of the Town of Leesburg, Ord. No. 2000-0-03. § II, 10-31-00, to the extent authorized under and consistent with federal and state law. 1.4. Cable Service or Cable Services: Shall be defined herein as it is detincd under Section 602 of the Communications Act, 47 U.S.C. § 522(6). 1.5. Cable System or System: Shall be defined herein as it is defined under Section 602 of the Communications Act, 47 U.S.C. § 522(7), meaning Franchisee's 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 Service Area, The Cable System shall be limited to the optical spectrum wavelength(s), bandwidth or future technological capacity that is used for the transmission of Cable Services directly to Subscribers within the Franchise/Service Area and shall not include the tangible network facilities of a common carrier subject in whole or in part to Title II of the Communications Act or of an Information Services provider. 1.6. Channel: Shall be defined herein as it is defined under Section 602 of the Communications Act, 47 U.S.C. § 522(4). 1.7.Communications Act: The Communications Act of 1934, as amended. 1.8.Cable Administrator: The present or succeeding employee of the Town designated as the Community Relations Manager or Cable Television Specialist, or as the Communications Administrator, who shall have the duties as prescribed by the Town Council. 1.9.Control: The ability to exercise de facto or de jure control over day-to-day policies and operations or the management of corporate affairs. 1.10. County: Loudoun County, Virginia, or the lawful successor, transferee, or assignee thereof. 2 1.11. Educational Access Channel: Any Channel required by this Agreement to be provided by the Franchisee to the Town on the Cable System for educational use. 1.12. FCC: The United States Federal Communications Commission, or successor governmental entity thereto. 1.13. Force Majeure An event or events reasonably beyond the ability of Franchisee to anticipate and control. This includes, but is not limited to, severe or unusual weather conditions, strikes, labor disturbances, lockouts, war or act of war (whether an actual declaration of war is made or not), insurrection, riots, act of public enemy, actions or inactions of any government instrumentality or public utility including condemnation, accidents for which the Franchisee is not primarily responsible, fire, flood, or other acts of God, or work delays caused by waiting for utility providers to service or monitor utility poles to which Franchisee's FTTP Network is attached, and unavailability of materials and/or qualified labor to perform the work necessary. 1.14. Franchise Area: The territorial boundaries of the Town and any area added thereto during the Franchise Tcrm, which the Franchisee agrees to serve. 1.15. Franchisee: Verizon Virginia Inc., and its lawful and permitted successors, assigns and transferees. 1.16. Government Access Channel: Any Channel required by this Agreement to be provided by the Franchisee to the Town on the Cable System for government use. 1.17. Gross Revenue: Any and all cash, credits, property or consideration of any kind or nature that constitute revenue in accordance with Generally Accepted Accounting Principles derived directly or indirectly from the operation of the Cable System to provide Cable Services in the Franchise Area; provided, however, that any service provided by Franchisee over the FTTP Network that is a Cable Service shall be considered to be provided over the Cable System for purposes of this definition. Gross Revenues will be calculated on bundled services in accordance with Section 7.4. Consistent with the foregoing, the following, without limitation, shall be included in Gross Revenues to the extent derived from the operation of the Cable System to provide Cable Services in the Franchise Area: monthly fees collected from Subscribers for any basic, optional, premium, per -channel, per -program service, or cable programming service; installation, disconnection, reconnection, and change -in-service fees; revenues from rentals or sales of converters or other equipment used to provide Cable Service over the Cable System; studio rental, production equipment rental, and personnel fees; fees from third party unaffiliated programmers for leased access programming; advertising revenues after deducting agency commissions; revenues from the sale or carriage of other Cable Services over the Cable System in the Franchise Area: and revenues that Franchisee receives from home shopping channels for the use of the Cable System to sell merchandise. However, Gross Revenue shall not include: 1.17.1. Revenues received by any Affiliate or other Person in exchange for supplying goods or services used by Franchisee to provide Cable Service over the Cable System; 3 1.17.2. Bad debts written off by Franchisee in the normal course of its business, provided, however, that bad debt recoveries shall be included in Gross Revenue during the period collected; 1.17.3. Refunds, rebates or discounts made to Subscribers or other third parties; 1.17.4. Any revenues generated from the provision of Non -Cable Services as defined herein, including, without limitation, revenue received from Telecommunications Services; revenue received from Information Services, including, without limitation, Internet Access service, electronic mail service, electronic bulletin board service, or similar online computer services; and, any other revenues attributable to the provision of Non - Cable Services in accordance with FCC or state public utility regulatory commission rules, regulations, standards or orders; 1.17.5. Any revenue of Franchisee or any other Person which is received directly from the sale of merchandise through any Cable Service distributed over the Cable System; provided, however, that the portion of such revenue which represents or can be attributed to a Subscriber fee or a payment for the use of the Cable System for the sale of such merchandise shall be included in Gross Revenue; 1.17.6. The sale of Cable Services on the Cable System for resale in which the purchaser is required to collect cable franchise fees from purchaser's customer; 1.17.7. The sale of Cable Services to customers, which are exempt, as required or allowed by the Town including, without limitation, the provision of Cable Services to public institutions as required or permitted herein; 1.17.8. Any taxes, fees, or surcharges on services furnished by the Franchisee which are imposed directly on any Subscriber or User (but not on Franchisee) by the City or another governmental unit and which are collected by the Franchisee on behalf of said governmental unit. Sales/use taxes are such a tax; the cable Franchise fee is not such a tax; 1.17.9. Any foregone revenue which Franchisee chooses not to receive in exchange for its provision of free or reduced cost cable or other communications services to any Person, including without limitation, employees of Franchisee and public institutions or other institutions designated in the Franchise; provided, however, that such foregone revenue which Franchisee chooses not to receive in exchange for trades, barters, services or other items of value shall be included in Gross Revenue; 1.17.10. Sales of capital assets or sales of surplus equipment; 1.17.11. Program launch fees; 1.17.12. Directory or Internet advertising revenue including, but not limited to, yellow page, white page, banner advertisement and electronic publishing; 4 1.17.13. Any fees or charges collected from Subscribers or other third parties for PEG Grant. 1.18. Information Services: Shall be defined herein as it is defined under Section 3 of the Communications Act, 47 12.S.C. § 153(20); provided, however, that any reference to Information Services herein shall not include any Cable Services over the Cable System in the Franchise Area. 1.19. Internet Access: Dial -up or broadband access service that enables Subscribers to access the Internet; provided, however, that any reference to Internet Access herein does not include any Cable Services over the Cable System in the Franchise Area. 1.20. Non -Cable Services: Any service that does not constitute a Cable Service as defined herein, including, but not limited to, Information Services and Telecommunications Services. 1.21. Normal Business Hours: Those hours during which most similar businesses in the community are open to serve customers. In all cases, "normal business hours" must include some evening hours at least one night per week and/or some weekend hours. 1.22. Normal Operating Conditions: Those service conditions which are within the control of the Franchisee. Those conditions which are not within the control of the Franchisee include, but are not limited to, natural disasters, civil disturbances, power outages, telephone network outages, and severe or unusual weather conditions. Those conditions which are within the control of the Franchisee include, but are not limited to, special promotions, pay - per -view events, rate increases, regular peak or seasonal demand periods, and maintenance or rebuild of the Cable System. See 47 C.F.R. § 76.309(c)(4)(ii). 1.23. PEG: Public, Educational, and Governmental. 1.24. Person: An individual, partnership, association, joint stock company, trust, corporation, or governmental entity, but such term does not include the Town. 1.25. Public Access Channel: Any Channel required by this Agreement to be provided by the Franchisee to the Town on the Cable System and set aside by the Franchisee for use by the general public who are residents of the Franchise Area. 1.26. Public Rights -of -Way: The surface and the area across, in, over, along, upon and below the surface of the public streets, roads, bridges, sidewalks, lanes, courts, ways, alleys. and boulevards, including, public utility easements and public lands and waterways used as Public Rights -of -Way, as the same now or may thereafter exist, which are under the jurisdiction or control of the Town. Public Rights -of -Way do not include the airwaves above a right-of-way with regard to cellular or other nonwire communications or broadcast services. 1.27. Service Area: The current area of the Town and any additions thereto as outlined in Exhibit A and any additional service areas added pursuant to this Franchise (see paragraph 1.16 above for the Franchise Area). 5 1.28. Service Date: The date that the Franchisee first provides Cable Service on a commercial basis directly to multiple Subscribers in the Franchise Area. The Franchisee shall memorialize the Service Date by notifying the Town in writing of the same, which notification shall become a part of this Franchise. 1.29. Service Interruption: The loss of picture or sound on one or more cable channels. 1.30. Subscriber: A Person who lawfully receives Cable Service of the Cable System with Franchisee's express permission. 1.31. Telecommunications Facilities: Franchisee's existing Telecommunications Services and Information Services facilities and its FTTP Network facilities. 1.32. Telecommunication Services: Shall be defined herein as it is defined under Section 3 of the Communications Act, 47 U.S.C. § 153(46). 1.33. Title II: Title II of the Communications Act. 1.34. Title VI: Title VI of the Communications Act. 1.35. Town: The Town of Leesburg, Virginia, or the lawful successor, transferee, or assignee thereof. or successor. 1.36. Town Council: The Town Council of the Town of Leesburg, Virginia. 1.37. Town Manager: The chief executive officer of the Town, of his designee 1.38. Transfer of the Franchise: 1.38.1. Any transaction in which: 1.38.1.1. an ownership or other interest in Franchisee is transferred, directly or indirectly, from one Person or group of Persons to another Person or group of Persons, so that control of Franchisee is transferred; or 1.38.1.2. the rights held by Franchisee under the Franchise are transferred or assigned to another Person or group of Persons. 1.39. Video Programming: Shall be defined herein as it is defined under Section 602 of the Communications Act, 47 U.S.C. § 522(20). 2. GRANT OF AUTHORITY; LIMITS AND RESERVATIONS 2.1. Grant of Authority: Subject to the terms and conditions of this Agreement and the Cable Law, the Town Council hereby grants the Franchisee the right to own, construct, operate and maintain the Cable System in the Public Rights -of -Way within the Franchise Area, 6 for the sole purpose of providing Cable Service. This franchise grants no authority for Franchisee to use the Town's Public Rights -of -Way for any other purpose unless otherwise expressly provided herein. However, nothing in this Agreement shall be construed to prohibit Franchisee from offering any service over the Cable System that is not prohibited by Federal or State law provided any requirements for Town authorization or registration not inconsistent with federal and state law are satisfied. The Town Council makes no representation or guarantee that its interest in or right to control any Public Right -of -Way is sufficient to permit Franchisee's use, and Franchisee shall gain only those rights to use that are within the Town Council's power to convey. No privilege or power of eminent domain is bestowed by this grant; nor is such a privilege or power bestowed by this Agreement. 2.2. Town Does Not Regulate Telecommunications: The Town's regulatory authority under Title VI of the Communications Act is not applicable to the construction, installation, maintenance or operation of the Franchisee's FTTP Network to the extent the FTTP Network is constructed, installed, maintained or operated for the purpose of upgrading and/or extending thc Franchisee's existing Telecommunications Facilities for the provision of Non - Cable Services. 2.3. Term: This Franchise shall become effective June 28, 2006 (the "Effective Date"). The term of this Franchise shall be fifteen (15) years from the Effective Date unless the Franchise is earlier revoked as provided herein. 2.4. Grant Not Exclusive: The Franchise and the right it grants to use and occupy thc Public Rights -of -Way to provide Cable Services shall not be exclusive, and the Town reserves the right to grant other franchises for similar uses or for other uses of the Public Rights - of -Way, or any portions thereof, to any Person, or to make any such use themselves, at any time during the term of this Franchise. Any such rights which are granted shall not adversely impact the authority as granted under this Franchise and shall not interfere with existing facilities of the Cable System or Franchisee's FTTP Network. 2.5. Franchise Subject to Federal Law: Notwithstanding any provision to the contrary herein, this Franchise is subject to and shall be governed by all applicable provisions of federal law as it may be amended, including but not limited to the Communications Act. 2.6. No Waiver: 2.6.1. The failure of the Town on one or more occasions to exercise a right or to require compliance or performance under this Franchise, the Cable Law or any other applicable law shall not be deemed to constitute a waiver of such right or a waiver of compliance or performance by the Town, nor to excuse Franchisee from complying or performing, unless such right or such compliance or performance has been specifically waived in writing. 2.6.2. The failure of the Franchisee on one or more occasions to exercise a right under this Franchise or applicable law, or to require performance under this Franchise, shall not be deemed to constitute a waiver of such right or of performance of this Agreement, nor shall it excuse the Town from performance, unless such right or performance has been specifically waived in writing. 7 2.7. Construction of Agreement: 2.7.1. The provisions of this Franchise shall be liberally construed to effectuate their objectives. In the event of a conflict between the Cable Law and this Agreement, this Agreement shall prevail. 2.7.2. Nothing herein shall be construed to limit the scope or applicability of Section 625 Communications Act, 47 U.S.C. § 545. 2.7.3. Should any change to state law have the lawful effect of materially altering the terms and conditions of this Franchise, then the parties shall modify this Franchise to the mutual satisfaction of both parties to ameliorate the negative effects on the Franchisee of the material alteration. If the parties cannot reach agreement on the above -referenced modification to the Franchise, then Franchisee may terminate this Agreement without further obligation to the Town in the event the Franchisee determines (in its sole discretion) that the change in state law significantly impairs the Franchisee's ability to provide Cable Service in the Franchise Area or, at Franchisee's option, the parties agree to submit the matter to binding arbitration in accordance with the commercial arbitration rules of the American Arbitration Association. 2.8. Police Powers: Nothing in the Franchise shall be construed to prohibit the exercise of the Town's police powers. However, if the exercise of the Town's police power results in any material alteration of the terms and conditions of this Franchise, then the parties shall modify this Franchise to the mutual satisfaction of both parties to ameliorate the negative effects on the Franchisee of the material alteration. If the parties cannot reach agreement on the above -referenced modification to the Franchise, then Franchisee may terminate this Agreement without further obligation to the Town in the event the Franchisee determines (in its sole discretion) that the Town's exercise of its police power significantly impairs the Franchisee's ability to provide Cable Service in the Franchise Area or, at Franchisee's option, the parties agree to submit the matter to binding arbitration in accordance with the commercial arbitration rules of the American Arbitration Association. 2.9. Acceptance Fee: As additional consideration supporting this Agreement, Franchisee shall pay to the Town, at the time of tendering the Acceptance attached as Exhibit G, an acceptance fee of fifteen thousand dollars ($15,000) payable to the "Town of Leesburg" to be used to offset in whole or in part any direct costs incurred by the Town in granting the Franchise. ,o oS 3. PROVISION OF CABLE SERVICE42 �� S i7 3.1. Service Area:,5� 3.1.1. Franchise Area: Franchisee shall offer Cable Service to significant numbers of Subscribers in residential areas of the Service Area and may make Cable Service available to businesses in the Service Area, within twelve (12) months of the Effective Date of this Franchise, and shall offer Cable Service to all residential areas in the Service Area within three (3) years of the Effective Date of the Franchise, except: (A) for periods of Force Majeure; (B) for periods of delay caused by the Town; (C) for periods of delay resulting from Franchisee's inability to obtain authority to access rights -of -way in the Franchise Area; (D) in areas where developments or buildings are subject to exclusive arrangements with other providers; (E) in 8 developments or buildings that Franchisee cannot access under reasonable terms and conditions after good faith negotiation, as determined by Franchisee; (F) in developments or buildings that Franchisee is unable to provide Cable Service for technical reasons or which require non- standard facilities which are not available on a commercially reasonable basis; and (G) in areas where the occupied residential household density does not meet the density requirement set forth in Sub -subsection 3.1.1.1. 3.1.1.1. Density Requirement: Franchisee shall make Cable Services available to residential dwelling units in all areas of the Service Area where the average density is equal to or greater than thirty (30) occupied residential dwelling units per mile as measured in strand footage from the nearest technically feasible point on the active FTTP Network trunk or feeder line. Should, through new construction, an area within the Service Area meet the density requirements after the time stated for providing Cable Service as set forth in Subsections 3.1.1 and 3.1.2 respectively, Franchisee shall provide Cable Service to such area within six (6) months of receiving notice from the Town that the density requirements have been met. 3.1.2. Additional Service Areas: Aside from the Service Area, Franchisee shall not be required to extend its Cable System or to provide Cable Services to any other areas within the Franchise Area during the term of this Franchise or any Renewals thereof. If Franchisee desires to add Additional Service Areas within the Franchise Area, Franchisee shall notify the Town in writing of such Additional Service Area at least ten (10) days prior to providing Cable Services in such areas. 3.2. Availability of Cable Service: Franchisee shall make Cable Service available to all residential dwelling units and may make Cable Service available to businesses in accordance with Section 3.1 and Franchisee shall not discriminate between or among any individuals in the availability of Cable Service. In the areas in which Franchisee shall provide Cable Service, Franchisee shall be required to connect, at Franchisee's expense, all residential dwelling units that are within two hundred (200) feet of trunk or feeder lines not otherwise already served by Franchisee's FTTP Network. Franchisee shall be allowed to recover, from a Subscriber that requests such connection, actual costs incurred for residential dwelling unit connections that exceed two hundred (200) feet and actual costs incurred to connect any non- residential dwelling unit Subscriber. 3.3. Cable Service to Public Buildings: 3.3.1. Subject to Section 3.1, Franchisee shall provide the following, without charge within the Service Area, at each fire station, public school, police station, public library, and such buildings used for public purposes as designated initially by the Town in Exhibit A and thereafter during the Franchise Term in writing to the Franchisee; provided, however, that if it is necessary to extend Franchisee's trunk or feeder lines more than three hundred (300) feet from the serving terminal whichever is less, solely to provide service to any such school or public building, the Town shall have the option of paying Franchisee's direct costs for such extension in excess of three hundred (300) feet, or of releasing Franchisee from the obligation, or postponing Franchisee's obligation to provide service to such building: 9 3.3.1.1. The first service drop for each site; 3.3.1.2. One Subscriber digital converter activated for the most commonly subscribed to digital tier per site; 3.3.1.3. One service outlet activated for the most commonly subscribed to digital tier. The Parties recognize that this only pertains to the flat rate digital tier offered by Franchisee and does not include any pay per view services orsimilar services. 3.3.2. The Town shall be responsible for the cost of any "terminal equipment," including TV monitors, VCRs, and/or computers. 3.3.3. The Franchisee shall be permitted to recover, from any school or other public building owner entitled to free service, the direct cost of installing, when requested to do so, more than one outlet, or concealed inside wiring, or a service outlet requiring more than three hundred (300) feet of drop cable; provided, however, that Franchisee shall not charge for the provision of Basic Service to the additional service outlets once installed. 3.3.4. The cost of inside wiring, additional drops or outlets and additional converters requested by the Town within these specified facilities, including those drops or outlets in excess of those currently installed, are the responsibility of the Town. If the Town requests the Franchisee to provide such services or equipment, the Town will pay the Franchisee for those costs. 3.3.5. If the Town makes a request to the Franchisee in writing, the Franchisee shall rewire public buildings, move drops or entrance links, and make other changes to installations of inside wiring. The Town will be responsible for the cost of all such work, and the Town will pay the Franchisee for its direct cost plus ten percent (10%) to offset the Franchisee's project administration. 3.3.6. If there is a change in the Franchisee's technology that affects the ability of the Town's public buildings to receive the most commonly subscribed to digital tier, the Franchisee shall be required to replace, at the Franchisee's expense, all the digital converters provided to the Town's public buildings as required in subsection 3.3.1.2 in order to ensure that these public buildings receive the most commonly subscribed to digital tier. 4. SYSTEM OPERATION The parties recognize that Franchisee's FTTP Network is being constructed and will be operated and maintained as an upgrade to and/or extension of its existing Telecommunications Facilities. The jurisdiction of the Town over such Telecommunications Facilities is restricted by federal and state law, and the Town does not assert jurisdiction over Franchisee's FTTP Network in contravention of those limitations. 5. SYSTEM FACILITIES 10 5.1. System Characteristics: Franchisee's Cable System shall tneet or exceed the following requirements: 5.1.1. Shall make available, at a minimum, one hundred eight (108) activated Channels of service some of which may be carried on the Franchisee's digital tier; 5.1.2. Shall be designed with an initial analog and digital carrier passband between 50 and 860 MHz; 5.1.3. Shall be designed to be an active two-way plant for Subscriber interaction, if any, required for selection or use of Cable Service; 5.1.4. Shall have a modern design when built, utilizing an architecture that will permit additional improvements necessary for high quality and reliable service throughout the term of this Franchise. The FTTP Network shall utilize the ITU G.983 Passive Optical Network standard and have no active elements so as to make it more reliable; 5.1.5. Shall have protection against outages due to power failures, so that back-up power is available at a minimum for at least twenty-four (24) hours at each headend, and conforming to industry standards, but in no event rated for less than four (4) hours, at each power supply site; 5.1.6. Shall comprise facilities and equipment of good and durable quality, generally used in high -quality, reliable, systems of similar design; 5.1.7. Shall have facilities and equipment sufficient to cure violations of any applicable FCC technical standards and to ensure that the Cable System remains in compliance with the standards specified in Subsection 5.1.19; 5.1.8. Shall have facilities and equipment as necessary to maintain, operate, and evaluate the Cable System to comply with any applicable FCC technical standards, as such standards may be amended from time to time; 5.1.9. Shall have facilities and equipment designed to be capable of continuous twenty-four (24) hour daily operation in accordance with applicable FCC standards except as caused by a Force Majcure event; 5.1.10. Shall have facilities and equipment designed, built and operated in such a manner as to comply with all applicable FCC requirements regarding (i) consumer electronic equipment and (ii) interference with thereception of off -the -air signals by a Subscriber; 5.1.11. Shall have facilities and equipment designed, built and operated in such a manner as to protect the safety of the Cable System workers and the public; 11 5.1.12. Shall have available sufficient trucks, tools, testing equipment, monitoring devices and other equipment and facilities and trained and skilled personnel required to enable the Franchisee to substantially comply with applicable law, including applicable customer service standards and including requirements for responding to System outages; 5.1.13. Shall have all facilities and equipment required to properly test the Cable System and conduct an ongoing and active program of preventive maintenance and quality control and to be able to quickly respond to customer complaints and resolve System problems; 5.1.14. Shall be designed to be capable of interconnecting with other cable systems in the Franchise Area as set forth in Section 5.6 of this Agreement; 5.1.15. Shall (if applicable) have antenna supporting structures (i.e., towers) designed in accordance with all applicable state and local building codes, as amended, and shall be painted, lighted, erected and maintained in accordance with all applicable rules and regulations of the Federal Aviation Administration, the FCC, and all other applicable codes and regulations; 5.1.16. Shall have all facilities and equipment at the headend allowing the Franchisee to transmit or cablecast signals in substantially the same form received, without substantial alteration or deterioration. For example, the headend should include equipment that will transmit color video signals received at, the headend in color, stereo audio signals received at the headend in stereo, and a signal received with a secondary audio track with both audio tracks. Similarly, all closed -captioned programming retransmitted over the Cable System shall include the closed -captioned signal in a manner that renders that signal available to Subscriber equipment used to decode the captioning; 5.1.17. Shall transmit in high definition any signal, which is received in high definition format; 5.1.18. Shall provide adequate security provisions in its Subscriber site equipment to permit parental control over the use of Cable Services on the System. Such equipment will at a minimum offer as an option that a Person ordering programming must provide a personal identification number or other means provided by the Franchisee only to a Subscriber, provided, however, that the Franchisee shall bear no responsibility for the exercise of parental controls and shall incur no liability for any Subscriber's or viewer's exercise or failure to exercise such controls; 5.1.19. Shall conform to or exceed all applicable FCC technical performance standards, as amended from time to time, and any other future applicable technical performance standards, which the City is permitted by a change in law to enforce, and shall substantially conform in all material respects to applicable sections of the following standards and regulations to the extent such standards and regulations remain in effect and are consistent with accepted industry procedures: 5.1.19.1. Occupational Safety and Health 12 Administration (OSHA) Safety and Health Standards; 5.1.19.2. National Electrical Code; 5.1.19.3. National Electrical Safety Code (NESC); 5.1.19.4. Obstruction Marking and Lighting, AC 70/7460 i.e., Federal Aviation Adrninistration; 5.1.19.5. Constructing, Marking and Lighting of Antenna Structures, Federal Communications Commission Rules, Part 17; and 5.1.19.6. The Uniform Statewide Building Code. 5.1.20. Shall be so constructed and operated that each PEG Channel shall be delivered over the System with transmission quality the same as or better than the transmission quality of any other Channel on the Franchisee's Basic Service within the City; 5.1.21. Shall include optional equipment so that any pay -per -view programming can only be activated by the positive action of a Subscriber using, for example, a private identification number or other individual selection procedure; and 5.1.22. Shall comply with all requirements of applicable law, including, but not limited to, the Americans with Disabilities Act. Franchisee shall comply with FCC rules on transmission of closed captioning for the hearing -impaired. For hearing -impaired Subscribers, the Franchisee shall provide information concerning the cost and availability of equipment to facilitate the reception of all basic services for the hearing impaired. In addition, the Franchisee must provide information (upon request) regarding TDD/TTY (or equivalent) equipment, and a publicly listed telephone number for such equipment, that will allow hearing impaired Subscribers to contact the Franchisee. 5.2 Interconnection: 5.2.1. The Franchisee shall design its Cable System so that it may be interconnected with other cable systems in the Franchise Area at suitable locations as determined by the Franchisee. Interconnection of systems may be made by direct cable connection, microwave link, satellite, or other appropriate methods. 5.2.2. At the request of the Communications Administrator, the Franchisee shall, to the extent permitted by applicable law and its contractual obligations to third parties, use every reasonable effort to negotiate an interconnection agreement with any other franchised cable system in the Town for the PEG channels on the Cable System. of the Cable System. 5.2.3. The Franchisee shall notify the Town prior to any interconnection 13 5.2.4. The Franchisee shall in good faith cooperate with the Town in implementing interconnection of the PEG Cable Service with communications systems beyond the boundaries of the Town 5.3. Emergency Alert System: Franchisee shall comply with the Emergency Alert System ("EAS") requirements of the FCC in order that emergency messages may be distributed over the System. 5.4. Home Wiring: The Franchisee shall comply with all applicable FCC requirements, including any notice requirements, with respect to home wiring. Prior to a Subscriber's termination of Cable Service, the Franchisee will not restrict the ability of the Subscriber to remove, replace, rearrange or maintain any cable wiring located within the interior space of the Subscriber's dwelling unit, so long as such actions are consistent with FCC standards. The Franchisee may require a reasonable indemnity and release of liability in favor of the Franchisee from a Subscriber for wiring that is installed by such Subscriber. 6. PEG SERVICES 6.1 PEG Set Aside: 6.1.1. In order to ensure universal availability of public, educational and government programming, Franchisee agrees, upon the request of the Town, to provide access channels for the following: 6.1.1.1. No less than one (1) downstream channel for educational access to be shared by educational institutions in the County; 6.1.1.2. No less than one (1) dedicated downstream channel solely for the Town of Leesburg governmental access; 6.1.1.3. No less than one (1) channel shall be provided for governmental access which can be shared with the County; 6.1.1.4. No less than one (1) channel which will be designated for public access and local origination used by Franchisee; and, 6.1.1.5. No less than one (1) downstream channel reserved for future access use exclusively by the Town of Leesburg. Such additional access channel will be made available to the Town when seventy percent (70%) of prime -time occupancy with original (non -repeat) programming is demonstrated for six (6) weeks or, alternatively, when and if a Washington, D.C., metro area -wide Access Channel becomes available. If such Washington, D.C., metro area -wide Access Channel is to be carried as part of Cable Service in the Town, it shall be obtained by Franchisee through the same procedures as established under Section 6.2 below and to the extent facilities permit. 6.1.2. Within ten (10) days after the Effective Date of this Agreement, the Town shall notify Franchisee of the programming to be carried on the Town's PEG Channel. Such notification shall constitute authorization to Franchisee to transmit such programming 14 within and without the Town. Thereafter, the Franchisee shall assign the Town PEG Channel on its channel line-up as set forth in such notice to the extent such channel assignment does not interfere with the Franchisee's existing or planned channel line-up. 6.1.4. Within one hundred eighty (180) days of the Effective Date hereof, Franchisee shall carry the three (3) PEG channels on its Cable system set forth in subsections 6.1.1.1 through 6.1.1.3 hereof. Franchisee may accomplish such carriage in the manner that, in its reasonable judgment, is most economically feasible, provided that all three (3) PEG Channels are carried and that the signal quality of such channels on the Cable System is satisfactory and not inferior to that of other non -PEG channels carried on the Cable System. If Franchisee's PEG Channel carriage is to be accomplished through interconnection with the largest incumbent cable franchiseholder's system, the Town shall, to the extent that it can, consistent with the Cable Law and other applicable law, require the largest incumbent cable franchiseholder to accommodate any reasonable request by Franchisee to interconnect to the largest incumbent cable franchiseholder's system for the purpose of carrying the three (3) PEG Channels, provided that Franchisee shall be responsible for extending its Cable System, at its cost, to the nearest feasible point of interconnection with the largest incumbent cable franchiseholder's system ("Interconnection Demarcation Point"), and shall be responsible for paying the largest incumbent cable franchiseholder the reasonable and customary direct costs that the largest incumbent cable franchiseholder incurs to interconnect Franchisee to the largest incumbent cable franchiseholder's system at that Interconnection Demarcation Point. Franchisee shall not be obligated to pay the largest incumbent cable franchiseholder any programming or carriage fees for any of the PEG channels that it received from the largest incumbent cable franchiseholder's system. Franchisee shall have the right to request the Town for an extension of the deadline set forth herein, and the Town shall not unreasonably withhold its consent to such an extension. 6.2. PEG Grant: 6.2.1. Franchisee shall provide grants to the Town to be used for PEG and institutional network ("I -Net") capital expenses as determined by the Town (the "PEG Grants"). 6.2.2. In support of the Town's needs for PEG programming and an I - Net, the Franchisee shall provide the Town with an initial advance on the PEG Grants of ten thousand dollars ($10,000). Thereafter, the PEG Grants shall be equal to the product of (a) 1.7%; times (b) the amount that results from subtracting from Gross Revenues for that quarter the Franchise Fees paid to the Town for that quarter, with such payments being made to the Town only after the initial ten thousand dollars ($10,000) is recovered by the Franchisee. The PEG Grants shall be paid annually. The annual PEG Grants payment, along with a brief summary of the Subscriber information upon which it is based, shall be delivered to the LFA within sixty (60) days after the beginning of each calendar year during the Franchise Term. Calculation of the annual PEG Grants will commence with the first calendar month during which Franchisee obtains its. first Subscriber in the Service Area. 6.2.3. On request, the Town shall provide Franchisee with a complete accounting annually of the distribution of funds granted pursuant to this Section 6.2. 15 6.3. Town shall require all local producers and users of any of the PEG facilities or Channels to agree in writing to authorize Franchisee to transmit programming consistent with this Agreement and to defend and hold harmless Franchisee and the Town, from and against any and all liability or other injury, including the reasonable cost of defending claims or Iitigation, arising from or in connection with claims for failure to comply with applicable federal laws, rules, regulations or other requirements of local, state or federal authorities; for claims of libel, slander, invasion of privacy, or the infringement of common law or statutory copyright; for unauthorized use of any trademark, trade name or service mark; for breach of contractual or other obligations owing to third parties by the producer or user; and for any other injury or damage in law or equity, which result from the use of a PEG facility or Channel. 6.4. To the extent permitted by federal law, the Franchisee shall be allowed to recover the costs of an Annual PEG Grant or any other costs arising from the provision of PEG services from Subscribers and to include such costs as a separately billed line item on each Subscriber's bill. Without limiting the forgoing, to the extent consistent with state and federal laws, Franchisee may externalize, line -item, or otherwise pass -through interconnection costs to Subscribers. 7. FRANCHISE FEES 7.1. Payment to Town: The Franchisee shall pay to the Town a Franchise fee of five percent (5%) of annual Gross Revenue. In accordance with Title VI of the Communications Act, the twelve (I2) month period applicable under the Franchise for the computation of the Franchise fee shall be a calendar year. Such payments shall be made no later than forty five (45) days following the end of each calendar quarter. In the event the Franchisee is unable to compute the Franchisee fee payment within the foregoing time frame, the Franchisee may make an estimated Franchise fee payment based on the payment for the previous quarter. Estimated payments must be trued up within thirty (30) days after the date of the estimated payment. 7.2. Supporting information: Each Franchise fee payment shall be accompanied by a brief report prepared by a representative of Franchisee showing the basis for the computation. 7.3. Limitation on Franchise Fee Actions': The period of limitation for recovery of any Franchise fee payable hereunder shall be three (3) years from the date on which payment by Franchisee is due. 7.4. Bundled Services: If Cable Services subject to the Franchise fee required under this Article 7 are provided to Subscribers in conjunction with Non -Cable Services, the Franchise fee shall be applied only to the value of the Cable Services, as reflected on the books and records of Franchisee in accordance with FCC or state public utility regulatory commission rules, regulations, standards or orders. 8. CUSTOMER SERVICE Customer Service Requirements are set forth in Exhibit D, which shall be binding unless amended by written consent of the parties. 16 9. REPORTS. JD RECORDS 9.1. Open Books and Records: Upon reasonable written notice to the Franchisee and with no less than thirty (30) business days written notice to the Franchisee, the Town shall have the right to inspect Franchisee's books and records pertaining to Franchisee's provision of Cable Service in the Franchise Area at any time during Normal Business Hours and on a nondisruptive basis, as are reasonably necessary to ensure compliance with the terms of this Franchise. Such notice shall specifically reference the section or subsection of the Franchise, which is under review, so that Franchisee may organize the necessary books and records for appropriate access by the Town. Franchisee shall not be required to maintain any books and records for Franchise compliance purposes longer than three (3) years. Notwithstanding anything to the contrary set forth herein, Franchisee shall not be required to disclose information that it reasonably deems to be proprietary or confidential in nature (except that Franchisee shall make available to the Town all information reasonably necessary for the Town to conduct an audit of the Franchise fee payments and the parties shall cooperate to take all lawful actions and audit procedure steps to protect the confidentiality of such information to the fullest extent possible), nor disclose any of its or an Affiliate's books and records not relating to the provision of Cable Service in the Service Area. To the extent permitted by applicable Iaw, the Town agrees to treat any information disclosed by Franchisee as confidential and only to disclose it to employees, representatives, and agents thereof that have a need to know, or in order to enforce the provisions hereof. Franchisee shall not be required to provide Subscriber information in violation of Section 631 of the Communications Act, 47 U.S.C. §551. 9.2. Records Required: Franchisee shall at all times maintain: 9.2.1. Records of all written complaints for a period of three years after receipt by Franchisee. The term "complaint" as used herein refers to complaints about any aspect of the Cable System or Franchisee's cable operations, including, without limitation, complaints about employee courtesy. Complaints recorded will not be limited to complaints requiring an employee service call; 9.2.2. Records of outages for a period of three years after occurrence, indicating date, duration, area, and the number of Subscribers affected, type of outage, and cause; 9.2.3. Records of service calls for repair and maintenance for a period of three years after resolution by Franchisee, indicating the date and time service was required, the date of acknowledgment and date and time service was scheduled (if it was scheduled), and the date and time service was provided, and (if different) the date and time the problem was resolved; 9.2.4. Records of installation/reconnection and requests for service extension for a period of three years after the request was fulfilled by Franchisee, indicating the date of request, date of acknowledgment, and the date and time service was extended; and 9.2.5. A public file showing the area of coverage for the provisioning of Cable Services and estimated timetable to commence providing Cable Service. 10. INSURANCE AND INDEMNIFICATION 10.1. Insurance: 17 10.1.1. Franchisee shall maintain in full force and effect, at its own cost and expense, throughout the entire Franchise Term, the following insurance coverage: 10.1.1.1. Commercial General Liability Insurance insuring the Town and the Franchisee with respect to the construction, operation and maintenance of the Cable System, and the conduct of the Cable Service business in the Town in the minimum amounts of $2,000,000 per occurrence; $2,000,000 aggregate for cach occurrence. Such commercial general liability insurance must include coverage for all of the following: comprehensive form, premises -operations, explosion and collapse hazard, underground hazard, products/completed operations hazard, contractual insurance, broad form property damage, and personal injury. 10.1.2. All insurance policies and certificates maintained pursuant to this Agreement shall provide the following: "It is hereby understood and agreed that this insurance coverage may not be canceled by the insurance company nor the intention not to renew be stated by the insurance company until at least 30 days after receipt by the Town's Secretary or clerk of a written notice of such intention to cancel or not to renew." 10.1.3. Each of the required insurance policies shall be with insurers qualified to do business in the Commonwealth of Virginia, with an A- Pi or better rating by Best's Key Rating Guide, Property/Casualty Edition. 10.1.4. Upon written request, Franchisee shall deliver to the Town Certificates of Insurance showing evidence of the required coverage. 10.1.5. All Commercial General Liability Insurance policies shall name the Town, its elected and appointed officials, officers, boards, commissions, commissioners, agents, and employees as additional insureds. 10.2. Indemni f cation: 10.2.1. Subject to the provisions below, the Franchisee shall, at its sole cost and expense, indemnify, hold harmless, and defend the Town, its elected and appointed officials, officers, boards, commissions, commissioners, agents, and employees, against any and all claims, suits, causes of action, proceedings, and judgments, whether for damages or otherwise arising out of or alleged to arise out of the installation, construction, operation, or maintenance of the Cable System, including but not limited to any claim against the Franchisee for invasion of the right of privacy, defamation of any Person, firm or corporation, or the violation or infringement of any copyright, trade mark, trade name, service mark, or patent, or of any other intellectual property right of any Person, firm, or corporation. 10.2.2. This indemnity does not apply to programming carried on any Channel set aside for PEG use, or Channels leased pursuant to 47 U.S.C. § 532, or to operations of the PEG Channels to the extent such operations are carried out by a person other than the Franchisee or its agents. Further, the Franchisee shall not be required to indemnify the Town for 18 acts of the Town which constitute willful misconduct or negligence, on the part of the Town, its officers, employees, agents, attorneys, consultants, independent contractors or third parties or for any activity or function conducted by any Person other than Franchisee in connection with PEG Access, or EAS. 10.2.3. In no event shall the Franchisee be responsible for indemnifying the Town under Section 10.2 for any act or omission by the Franchisee that has been specifically approved by the Town, or for any act or omission by the Town or its elected and appointed officers, boards, commissions, commissioners, agents, or employees that results in personal injury or property damage. 10.2.4. The Town shall give the Franchisee written notice of its obligation to indemnify the Town under Section 10.2 within thirty (30) days of receipt of a claim, suit, cause of action, or proceeding for which the Franchisee is obligated to indemnify the Town. The Town shall take action necessary to avoid entry of a default judgment if such action is needed before the Town provides the Franchisee notice; provided, however, that no such action shall in anyway prejudice or harm the Franchisee. 10.2.5. With respect to Franchisee's indemnity obligations set forth in Section 10.2, Franchisee shall provide the defense of any claims, suits, causes of action, or proceedings brought against the Town by selecting counsel of Franchisee's choice to defend the claim, subject to the consent of the Town, which shall not unreasonably be withheld. Nothing herein shall be deemed to prevent the Town from cooperating with the Franchisee and participating in the defense of any litigation by its own counsel at its own cost and expense, provided however, that after consultation with the Town, Franchisee shall have the right to defend, settle or compromise any claim, suit, cause of action, or proceeding arising hereunder, so long as the settlement includes a full release of the Town, and Franchisee shall have the authority to decide the appropriateness and the amount of any such settlement. In the event that the Town does not consent to the terms of any such settlement or compromise, Franchisee shall not settle the claim or action but its obligation to indemnify the Town shall in no event exceed the amount of such settlement. In the event that Franchisee fails, after notice pursuant to subsection 10.2.4, to undertake the Town's defense of any claims encompassed within this Section 10.2, Franchisee's indemnification shall include, but is not limited to, the Town's reasonable attorneys' fees, including fees for outside counsel hired to defend the Town, incurred in defending against any such claim, suit, cause of action, or proceeding, any interest charges arising from any claim, suit, cause of action, or proceeding arising under this Agreement or the Cable Law, the Town's out-of-pocket expenses, and the reasonable value of any services rendered by the Town Attorney, or the Town staff or its employees. 10.2.6. Neither the provisions of this Section nor any damages recovered by the Town shall be construed to limit the liability of the Franchisee or its subcontractors for damages under the Agreement or the Cable Law or to excuse the faithful performance of obligations required by the Agreement, except to the extent that any monetary damages suffered by the Town have been satisfied by a financial recovery under this section or other provisions of the Agreement or the Cable Law. 19 10.2.7. The Town shall at no time be liable for any injury or damage occurring to any Person or property from any acts or omissions of Franchisee in the construction,. maintenance, use, operation or condition of the Cable System. It is a condition of this Agreement that the Town shall not and does not by reason of this Agreement assume any liability whatsoever of the Franchisee for injury to Persons or damage to property; provided, however, that the Town shall be responsible for its own acts of willful misconduct or negligence, or breach of obligation committed by the Town for which the Town is legally responsible, subject to any and all defenses and limitations of liability provided by law. 11. TRANSFER OF FRANCHISE 11.1. Subject to Section 617 of the Communications Act, 47 U.S.C. § 537, no Transfer of the Franchise shall occur without the prior consent of the Town, provided that such consent shall not be unreasonably withheld, delayed or conditioned. 11.2. No Consent Required For Transfers Securing Indebtedness: The Franchisee shall not be required to obtain the consent or approval of the Town for a transfer in trust, by mortgage, by other hypothecation, by assignment of any rights, title, or interest of the Franchisee in the Franchise or Cable System in order to secure indebtedness. However, upon request by the Town, the Franchisee shall provide the Town with the Franchisee's audited financial statements prepared for the Franchisee's bondholders in order to notify the Town if there is a mortgage or security interest granted on substantially all of the assets of the Cable System. 11.3. No Consent Required For Any Affiliate Transfers: The Franchisee shall not be required obtain the consent or approval of the Town for any transfer of an ownership or other interest in Franchisee, the Cable System, or the Cable System assets to the parent of Franchisee or to another Affiliate of Franchisee; transfer of an interest in the Franchise or the rights held by the Franchisee under the Franchise to the parent of Franchisee or to another Affiliate of Franchisee; any action which is the result of a merger of the parent of the Franchisee; or any action which is the result of a merger of another Affiliate of the Franchisee. However, the Franchisee will notify the Town within thirty (30) days if at any time a transfer of the Franchise or the Franchisee's assets to an Affiliate occurs, and any such Affiliate shall agree in writing to assume and be bound by the term of this Agreement. 12. RENEWAL OF FRANCHISE 12.1. The Town and Franchisee agree that any proceedings undertaken by the Town that relate to the renewal of this Franchise shall be governed by and comply with the provisions of Section 626 of the Communications Act, 47 U.S.C. § 546. 12.2. Notwithstanding anything to the contrary set forth herein, Franchisee and the Town agree that at any time during the term of the then current Franchise, while affording the public appropriate notice and opportunity to comment, the Town and Franchisee may agree to undertake and finalize informal negotiations regarding renewal of the then current Franchise and the Town may grant a renewal thereof. 20 12.3. Franchisee and the Town consider the terms set forth in this Article 12 to be consistent with the express provisions of Section 626. 13. ENFORCEMENT AND TERMINATION OF FRANCHISE 13.1. Notice of Violation: In the event that the Town believes that Franchisee has not complied with the terms of the Franchise, the Town shall informally discuss the matter with Franchisee. If these discussions do not lead to resolution of the problem, the Town shall notify Franchisee in writing of the exact nature of the alleged noncompliance. 13.2. Franchisee's Right to Cure or Respond: Franchisee shall have thirty (30) days from receipt of the written notice described in Section 13.1 to: (i) respond to the Town, if Franchisee contests (in whole or in part) the assertion of noncompliance; (ii) cure such default; or (iii) in the event that, by the nature of default, such default cannot be cured within the thirty (30) day period, initiate reasonable steps to remedy such default and notify the Town of the steps being taken and the projected date that they will be completed. 13.3. Public Hearing: In the event that Franchisee fails to respond to the written notice described in Section 13.1 pursuant to the procedures set forth in Section 13.2, or in the event that the alleged default is not remedied within thirty (30) days or the date projected pursuant to Section 13.2(iii) above, if it intends to continue its investigation into the default, then the Town shall schedule a public hearing. The Town shall provide Franchisee at least thirty (30) business days prior written notice of such hearing, which will specify the time, place and purpose of such hearing, and provide Franchisee the opportunity to be heard. 13.4. Enforcement: Subject to applicable federal and state law, in the event the Town, after the hearing set forth in Section 13.3, determines that Franchisee is in default of any provision of the Franchise, the Town may: 13.4.1. Seek specific performance of any provision, which reasonably lends itself to such remedy, as an altemative to damages; or 13.4.2. Commence an action at law for monetary damages or seek other equitable relief; or 13.4.3. In the case of a substantial material default of a material provision of the Franchise, seek to revoke the Franchise in accordance with Section 13.5. 13.5. Revocation: Should the Town seek to revoke the Franchise after following the procedures set forth in Sections 13.1 through 13.4 above, the Town shall give written notice to Franchisee of its intent. The notice shall set forth the exact nature of the noncompliance. The Franchisee shalL.have ninety (90) days from such notice to object in writing and to state its reasons for such objection. In the event the Town has not received a satisfactory response from Franchisee, the Town may then seek termination of the Franchise at a public hearing. The Town shall cause to be served upon the Franchisee, at least thirty (30) days prior to such public hearing, a written notice specifying the time and place of such hearing and stating its intent to revoke the Franchise. 21 13.5.1. At the designated hearing, Franchisee shall be provided a fair opportunity for full participation, including the right to be represented by legal counsel, to introduce relevant evidence, to require the production of evidence, to compel the relevant testimony of the officials, agents, employees or consultants of the Town, to compel the testimony of other persons as permitted by law, and to question and/or cross examine witnesses. A complete verbatim record and transcript shall be made of such hearing. 13.5.2. Following the public hearing, Franchisee shall be provided up to thirty (30) days to submit its proposed findings and conclusions in writing and thereafter the Town shall determine (i) whether an event of default has occurred; (ii) whether such event of default is excusable; and (iii) whether such event of default has been cured or will be cured by the Franchisee. The Town shall also determine whether to revoke the Franchise based on the information presented, or, where applicable, grant additional time to the Franchisee to effect any cure. if the Town determines that the Franchise shall be revoked, the Town shall promptly provide Franchisee with a written decision setting forth its reasoning. Franchisee may appeal such determination of the Town to an appropriate court, which shall have the power to review the decision of the Town de novo. Franchisee shall be entitled to such relief as the court finds appropriate. Such appeal must be taken within sixty (60) days of Franchisee's receipt of the determination of the franchising authority. 13.5.3. The Town may, at its sole discretion, take any lawful action which it deems appropriate to enforce the Town's rights under the Franchise in lieu of revocation of the Fran chi se. 13.6. Franchisee Termination: Franchisee shall have the right to terminate this Franchise and all obligations hereunder within ninety (90) days after the end of three (3) years from the Service Date of this Franchise, if at the end of such three (3) year period Franchisee has less than twenty five percent (25%) market penetration of the homes passed in the Franchisee's total cable service area in the Washington D.C. Designated Market Area. Notice to terminate under this Section shall be given to the Town in writing,with such termination to take effect no sooner than one hundred and twenty (120) days after giving such notice. Franchisee shall also be required to give its then current Subscribers not less than ninety (90) days prior written notice of its intent to cease Cable Service operations. 13.7. Performance Bond: Prior to the Service Date, the Franchisee shall provide to the Town security for the performance of its obligations under this agreement in the amount of one hundred thousand dollars ($ 1 00,000), in substantially the same form attached hereto as Exhibit E, in order to ensure the Franchisee's faithful performance of its obligations under this Agreement. The Town may not attempt to collect under this bond unless thirty (30) days have passed since the Town provided the Franchisee with written notice of its intent to collect under this bond. if within this thirty (30) day time frame, Franchisee gives written notice it disputes entitlement to payments from Franchisee for which it has refused to make payment, the parties shall promptly meet to attempt to resolve the dispute in good faith amongst themselves. 13.7.1. The form of this security may, at Franchisee's option, be a performance bond, letter of credit, cash deposit, cashier's check or any other security acceptable to the Town. 22 13.7.2. In the event that a performance bond provided pursuant to the Agreement is not renewed or is cancelled, Franchisee shall provide new security pursuant to this Article with 30 days of such cancellation or failure to renew. 13.7.3. Neither cancellation, nor termination nor refusal by surety to extend the bond, nor inability of the Franchisee to file a replacement bond or replacement security for its obligations, shall constitute a loss to the Town recoverable under the bond. 13.7,4. There shall be recoverable by the Town from the principal and surety, any and all amounts due to the Town and any and all damages, Losses, costs, and expenses incurred by the Town resulting from the failure of the Franchisee to comply with the material provisions of this Agreement, to comply with all orders, permits and directives of any Town agency or body having jurisdiction over its acts or defaults, to pay fees, penalties or liquidated damages due to the Town, or to pay any claims, taxes or liens due to the Town. Such losses, costs and expenses shall include but not be limited to reasonable attorney's fees and other associated expenses. 13.7.5. The total amount of the performance bond required by this Agreement shall be forfeited in favor of the Town in the event: 13.7.5.1. the Franchisee abandons the Cable System at any time during the Franchise Term or any extension thereto; or 13.7.5.2. the Franchisee carries out a transfer requiring Town approval as stated in Article 11 of this Agreement without obtaining Town approval. 13.7.6. The Franchisee shall not permit the performance bond to expire or approach less than thirty (30) days prior to expiration without securing and delivering to the Town a substitute, renewal or replacement bond in conformance with the provisions of this Agreement. 13.7.7. Reduction of Bond: The Town may approve a reduction in the amount of the bond upon written application by the Franchisee, which approval shall not be unreasonably withheld. The amount of the bond may be reduced to $50,000.00 when the Cable System has been extended to more than fifty percent (50%) of the occupied dwelling units within the Franchise Area, as certified by the Franchisee to the Town, and may be further reduced to the sum of $25,000.00 when the Cable System has been extended to more than ninety percent (90%) of the occupied dwelling units within the Franchise Area, as certified by the Franchisee to the Town. Reductions granted or denied upon application by the Franchisee shall be without prejudice to the Franchisee's subsequent applications or to the Town's right to require the full bond at any time thereafter. Further, in the event the Town approves a reduction of the Franchisee's performance bond, the Town may, at any time, increase the amount of the performance bond to reflect any increased risks to the Town and the public and/or require the Franchisee to provide additional sureties to any and all bonds or to replace existing bonds with new bonds that satisfy the criteria in this Article; provided, however, that any such performance bonds or additional sureties shall not exceed one hundred thousand dollars ($100,000). The 23 Town shall provide the Franchisee written notice of at least sixty (60) days in advance of any such increase in the performance bond resulting from this subsection. 13.8. Letter of Credit: 13.8.1. In addition to the performance bond, the Franchisee shall provide to the Town a letter of credit in the amount of ten thousand dollars ($10,000) (the "Letter of Credit"), in substantially the same form as that attached hereto as Exhibit F. The Letter of Credit shall be provided by a third party agent ("Third Party Agent") approved by the Town. The Franchisee shall maintain such Letter of Credit at all times throughout the term of the Agreement. 13.8.2. If the Town notifies the Franchisee of any amounts due to the Town pursuant to this Agreement or applicable law, and the Franchisee does not make such payment within thirty (30) days, the Town may withdraw the amount in question, with any applicable interest and penalties, from the Letter of Credit by notice to the Franchisee and the Third Party Agent specifying the amount and purpose of such withdrawal. However, if within this thirty (30) day time frame, Franchisee gives written notice it disputes entitlement to payments from Franchisee for which it has refused to make payment, the parties shall promptly meet to attempt to resolve the dispute in good faith amongst themselves. 13.8.3. If at the time of a withdrawal from the Letter of Credit by the Town, the amount available with the Third Party Agent is insufficient to provide the total payment of the claim asserted in the Town's notice of withdrawal, the balance of such claim shall not be discharged or waived, but the Town may continue to assert the same as an obligation of the Franchisee to the Town. 13.8.4. No later than thirty (30) days after mailing of notification to the Franchisee by certified mail, return receipt requested, of a withdrawal under the Letter of Credit, the Franchisee shall restore the amount of the Letter of Credit to ten thousand dollars ($10,000). 13.8.5. In the event the Third Party Agent serves notice to the Town that it elects not to renew the Letter of Credit, the Town may withdraw the entire amount of the Letter of Credit unless the Franchisee provides a substitute Letter of Credit, in substantially the same form as that attached hereto as Exhibit F, from a Third Party Agent approved by the Town, before the effective Letter of Credit expires. 13.9. Liquidated Damages: 13.9.1. Because the Franchisee's failure to comply with provisions of this Agreement will result in injury to the Town, and because it will be difficult to estimate the extent of such injury, the Town and the Franchisee agree to the liquidated damages provided for in this Section, with such liquidated damages representing both parties' best estimate of the damages resulting from the specified violations. Such damages shall not be a substitute for actual performance by the Franchisee of a financial payment, but shall be in addition to any such actual 24 performance. The failure of a Franchisee to hire sufficient staff or to properly train its staff shall not preclude the application of the provisions in this Section. 13.9.2. The Communications Administrator, or designee, shall have the authority to waive or reduce the liquidated damage amounts herein for good cause. 13.9.3. Cure periods listed below shall begin to run at the time the Franchisee is notified in writing of a violation by the Town, unless otherwise specified below. Should the Town elect to receive liquidated damages for any of the violations enumerated herein, such liquidated damages shall be the Town's sole remedy for the violations occurring during the period of time to which the liquidated damages apply. 13.9.4. On an annual basis from the Effective Date, the Franchisee shall not be Iiable for liquidated damages that exceed ten thousand ($ 1 0,000) (the "Liquidated Damages Cap"). The liquidated damages shall be assessed in the following manner: 13.9.4.1. For each day during which the Town determines that the Franchisee has violated customer service standards pursuant to Exhibit E, except for those standards set forth in Subsection 13.9.4.2 below: $200 per violation, treating each failure to comply as a separate violation, following a seven (7) day cure period, except that such cure period does not apply to customer service standards that themselves provide a time to act or a specific cure period; 13.9.4.1.1. a separate violation under Subsection 13.9.4.1 shall be deemed to occur whenever the Town reasonably determines that a separate customer service standard violation has occurred on one day. Thus, for example, if the Franchisee fails to provide Cable Service to one subscriber for two days pursuant to Exhibit D, there would be two violations; if the Franchisee fails to keep an appointment pursuant to Exhibit D with one Subscriber on one day and on that same day, independent of the missed appointment, the Franchisee fails to disclose price terms to that same Subscriber, then there would be two violations. However, the Franchisee shall not be charged with multiple violations for a single act or event affecting a single Subscriber or for a single act or event affecting multiple Subscribers on the same day. For example, the failure of the Franchisee to send out its annual notice to multiple Subscribers would constitute a single violation. 13.9.4.2. For failure to meet customer service standards with regard to telephone answering time, time to transfer a call to a customer service representative, or excessive busy signals: if such standards are not met according to the terms in which such standards are established in Exhibit D: $100 for each quarter in which such standards were not met if the failure was by less than 5%; $200 for each quarter in which such standards were not met if the failure was by 5% or more but less than 15%; and $300 for each quarter in which such standards were not met if the failure was by 15% or more; 13.9.4.3. For failure to pay any Franchisee Fees pursuant to Article 7 or PEG Grants pursuant to Section 6.2: $100 per day after a seven day cure period; 25 13.9.4.4. For failure to file, obtain or maintain the required performance bond or letter of credit pursuant to Sections 13.7 and 13.8 in a timely fashion: $200 per day, following a fourteen (14) day cure period; and 13.9.4.5. For violation of applicable technical standards established by the FCC or other lawful authority: $100 per day for each day the violation continues after a thirty (30) day cure period. 14. MISCELLANEOUS PROVISIONS 14.1. Actions of Parties: In any action by the Town or Franchisee that is mandated or permitted under the terms hereof, such party shall act in a reasonable, expeditious, and timely manner. Furthermore, in any instance where approval or consent is required under the terms hereof, such approval or consent shall not be unreasonably withheld, delayed or conditioned. 14.2. Binding Acceptance: This Agreement shall bind and benefit the parties hereto and their respective heirs, beneficiaries, administrators, executors, receivers, trustees, successors and assigns, and the promises and obligations herein shall survive the expiration date hereof. 14.3. Preemption: In the event that federal or state law, rules, or regulations preempt a provision or limit the enforceability of a provision of this Agreement, the provision shall be read to be preempted to the extent, and for the time, but only to the extent and for the time, required by law. In the event such federal or state law, rule or regulation is subsequently repealed, rescinded, amended or otherwise changed so that the provision hereof that had been preempted is no longer preempted, such provision shall thereupon return to full force and effect, and shall thereafter be binding on the parties hereto, without the requirement of further action on the part of the Town. 14.3.1. If, subsequent to the Effective Date, there is a change in federal law or state law that eliminates the authority of local governments to require or grant cable television franchises for the provision of Cable Service, then to the extent permitted by law this Franchise shall survive such legislation and remain in effect for the term of this Franchise. 14.4. Force Majeure: Franchisee shall not be held in default under, or in noncompliance with, the provisions of the Franchise, nor suffer any enforcement or penalty relating to noncompliance or default, where such noncompliance or allegeddefaults occurred or were caused by a Force Majeure. 14.5. Notices: Unless otherwise expressly stated herein, notices required under the Franchise shall be mailed first class, postage prepaid, to the addressees below. Each party may change its designee by providing written notice to the other party. 14.5.1. Notices to Franchisee shall be mailed to: Robert W. Woltz, Jr. President 26 600 E. Main Street Suite 1100 Richmond, VA 23219 I4.5.2. with a copy to: Mr. Jack White Senior Vice President and General Counsel Verizon Telecom One Verizon Way Room VC43E010 Basking Ridge, NJ 07920-1097 14.5.3. Notices to the Town shall be mailed to: Cable Administrator Town of Leesburg, Virginia 25 West Market Street Leesburg, Virginia 20178 14.6. Entire Agreement: This Franchise and the Exhibits hereto constitute the entire agreement between Franchisee and the Town, and it supersedes all prior or contemporaneous agreements, representations or understanding of the parties regarding the subject matter hereof. 14.7. Amendments: Amendments to this Franchise shall be mutually agreed to in writing by the parties. 14.8. Captions; The captions and headings of articles and sections throughout this Agreement are intended solely to facilitate reading and reference to the sections and provisions of this Agreement. Such captions shall not affect the meaning or interpretation of this Agreement. 14.9. Severability: If any section, subsection, sentence, paragraph, term, or provision hereof is determined to be illegal, invalid, or unconstitutional, by any court of competent jurisdiction or by any state or federal regulatory authority having jurisdiction thereof, such determination shall have no effect on the validity of any other section, subsection, sentence, paragraph, term or provision hereof, all of which will remain in full force and effect for the term of the Franchise. 14.10. Recitals: The recitals set forth in this Agreement are incorporated into the body of this Agreement as if they had been originally set forth herein. 14.11. Franchisees FTTP Network: The Town and the Franchisee recognize and agree that certain provisions of the Cable Law are not applicable to the Franchisee, including, but not limited to the following sections; 5.1-17(c) -- 5.1-17(g); 5.1-18(2)-(3); 5.1-20 — 5.1-22; 5.1- 24; 5.1-26; 5.1-32; 5.1-33; 5.1-35; 5.1-40; and, 5.1-41. 27 14.12. Modification: This Franchise shall not be modified except by written instrument executed by both parties. 14.13. FTTP Network Transfer Prohibition: Provided that and for so long as Franchisee retains its right under applicable law to use the Public Rights -of -Way to provide Telecommunications Services, under no circumstances including without limitation, upon expiration, revocation, termination, or denial of renewal of the Franchise or any action to forbid or disallow Franchisee from providing Cable Services, shall Franchisee or its assignees be required to sell any right, title, interest, use or control of any portion of Franchisee's FTTP Network including, without limitation, any capacity on that network that has been or could be used to provide Cable Service or otherwise, to the Town or any third party. Provided that and for so long as Franchisee retains its right under applicable law to use the Public Rights -of -Way to provide Telecommunications Services, Franchisee shall not be required to remove the FTTP Network(s) or to relocate the FTTP Network(s) as a result of revocation, expiration, termination, denial of renewal or any other action to forbid or disallow Franchisee from providing Cable Services. However, the foregoing FTTP Network Transfer Prohibition shall be ineffective if for any reason in the future the Franchise ceases to provide Telecommunication Services over its FTTP Network and the Franchisee lacks the authority to use the Public Rights -of -Way to provide any such Telecommunications Services. This provision is not intended to contravene leased access requirements under Title VI or PEG requirements set out in this Agreement. 14.14. Town and Franchisee each acknowledge that they have received independent legal advice in entering into this Agreement. In the event that a dispute arises over the meaning or application of any term(s) of this Agreement, such terms) shall not be construed by the reference to any doctrine calling for ambiguities to be construed against the drafter of the Agreement. [SIGNATURE PAGE FOLLOWS) 28 AGREED TO THIS a; 7 DAY OF 3L1 , 2006. Town of Leesburg, Virginia By: . i.�1tX.� i4t3i c4. Town 1 o n ,�? ager Verizon Virginia Inc. By: Robert W. Woltz, Jr. President EXHIBITS Exhibit A: Service Area APPROVED :,W DEPT. Exhibit B: Town Buildings to be Provided Free Cable Service Exhibit C: The Town's PEG Channels Exhibit D: Customer Service Standards Exhibit E: Performance Bond Exhibit F: Letter of Credit Exhibit G: Acceptance of Franchise by the Franchisee EXHIBIT A SERVICE AREA The service area is shown in the attached map. ay ivacio m Counuy Service Area ,.q Leesburg Lief Town Boundary El County Boundary Service Area Map for Leesburg, Virginia 1i3osagoruety Cottt y 1.4 —� Miles EXHIBIT B TOWN BUILDINGS TO BE PROVIDED FREE CABLE SERVICE Site Name Leesburg Town Hall Wirt Street Annex Leesburg Public Safety Center Ida Lee Park Recreation Center Ida Lee Administrative Building Thomas Balch Library Leesburg Water Treatment Plant Leesburg Water Pollution Control Facility Leesburg Airport Utility Lines Division Future Sites This site is currently under construction Utility Lines Division Street # Street 25 West Market Street 7 Wirt Street 65 Plaza St N.E. 60 Ida Lee Drive N.W. 50 Ida Lee Drive N.W. 208 W. Market St. Edwards Ferry Road Northeast, I391 East Market Street 1001 Sycolin Road Southeast 1393 East Market Street 1389 East Markct Street EXHIBIT C THE TOWN'S PEG CHANNELS Franchisee shall provide the following PEG Channels to the Town: One (1) Channel solely for the Town of Leesburg governmental access; One (1) Channel for educational access shared by educational institutions in the County;* One (1) Channel provided for governmental access to be shares with the County;* One (1) Channel for public access and local origination used by the Franchisee;* and, One (1) Channel reserved. * Loudoun County PEG Channels EXIIIB�'h D CUSTOMER SERVICE STANDARDS This Section sets forth the minimum customer service standards that the Franchisee must satisfy. In addition, and subject to the provisions of this Agreement, the Franchisee shall at all times satisfy any additional requirements established by applicable federal and state or regulation, as the same may be amended from time to time, including, without limitation, consumer protection laws. These standards shall, starting six (6) months after the Service Date, apply to the Franchisee to the extent it is providing Cable Services over the Cable System in the Franchise Area. I. DFFINITIONS The Town and the Franchisee agree that the following definitions shall govern the Town's enforcement of and the Franchisee's obligations under the customer service standard requirements under this Exhibit D: As Soon As Possible: As used in 47 C.F.R. § 76.1603(h), means no sooner than thirty (30) days in advance of such change. Customer Service Center: As used in 47 C.F.R. § 76.309(c)(1)(v), means that the Franchisee must provide for the pick up or drop off of equipment in one of the following manners: (i) by having a Franchisee representative going to the Subscriber's residence, (ii) by using a mailer, or (iii) by establishing a local business office in the Town. Customer Service Representative: As used in 47 C.F.R. § 76.309(c)(1)(ii), means a live representative, an Automated Response Unit ("ARU"), or a Voice Response Unit ("VRU"). If an ARU or VRU is used, then the Franchisee must make every effort to assure that the device provides customer service similar to that provided by a qualified live representative. Next Billing Cycle: As used in 47 C.F.R. § 76.309(c)(3)(i)-(ii) and in this Agreement, means the Subscriber's next available billing cycle. Resolution of the Request: As used in 47 C.F.R. § 76.309(c)(3)(i)(A), means the Subscriber's Next Billing Cycle following determination by the Franchisee of the Subscriber's right to a refund. Respond (or Begin Working On as used in 47 C.F.R § 76.309(c)(2)(ii)): Franchisee's investigation of a Service Interruption by receiving a Subscriber call and placing the Subscribers service repair request into the Franchisee's automated repair response system and, if required, taking action. Return of the Equipment: As used in 47 C.F.R. § 76.309(c)(3)(i)(B), a Subscriber's equipment is considered returned when the Franchisee has accepted the condition of the equipment and billed for any outstanding charges, all of which shall be completed no later than the Subscriber's Next Billing Cycle. - Standard Installation: installations where the customer's premises are within two hundred (200) feet of the serving terminal, or the edge of the property, whichever is less, and where an ONT is already present. - System Manctions: Service impacting event originating at the Franchisee's video hub offices or super-headend. II. CUSTOMER SERVICE STANDARDS A. The Franchisee shall comply with the customer service standards set forth in 47 C.F.R. §§ 76.309(c), 76.1602, 76.1603, and 76.1619, as such standards may be amended from time to time. B. Measurement of the standard in 47 C.F.R. § 76.309(c)(1)(ii) may include all calls received by the Franchisee at all call centers receiving calls from Subscribers, whether they are answered by a live representative, by an automated attendant, or abandoned after 30 seconds of call waiting. C. The Franchisee shall employ an operator or maintain a telephone answering device twenty-four hours per day, each day of the year, to receive Subscriber complaints and answer inquiries during Normal Business Hours. D. The Franchisee shall establish maintenance service capable of promptly locating and correcting System Malfunctions. E. The Franchisee shall maintain a publicly -listed, local toll -free telephone number that shall be available to Subscribers to request service calls, twenty-four hours per day, each day of the year. Under Normal Operating Conditions, the Franchisee shall Respond not later than the next business day after a service call is received, and corrective action shall be completed as promptly as practicable. Appropriate records shall be made of service calls, showing when and what corrective action was completed. F. If requested by a mobility -limited customer, the Franchisee shall arrange for pickup and/or replacement of converters or other Franchisee equipment at the Subscriber's address or by a satisfactory equivalent. G. In the event that Franchisee fails to provide service to Subscribers for more than twenty-four hours, the Franchisee shall provide the affected Subscribers with a pro rata credit or rebate of the Subscriber's fees paid or payable, upon request by a Subscriber. H. The failure of the Franchisee to hire sufficient staff or to properly train its staff shall not justify a Franchisee's failure to comply with the provisions in Exhibit D. I. The Franchisee shall maintain a public file containing all notices provided to Subscribers under these customer service standards. The notices shall be placed promptly in the public file and maintained for at least one year from the date of the notice. J. The Franchisee shall establish a clear procedure for resolving complaints filed by Subscribers. Complaints may be made orally or in writing, at the complainant's option. K. The Franchisee shall provide an initial response to a complaint within five (5) days of its receipt and a final response within thirty (30) days after a written complaint is received. At the time of installation, upon request, and annually, the Franchisee shall provide all Subscribers the Communications Administrator's contact information. L. The customer service standards set forth herein shall be in addition to the rights and remedies provided by the Virginia Consumer Protection Act of 1977, as amended. EXHIBIT E Franchise Bond Bond No. KNOW ALL MEN BY THESE PRESENTS: That (name & address) (hereinafter called the Principal), and (name and address) (hereinafter called the Surety), a corporation duly organized under the laws of the State of (state), are held and firmly bound unto (name & address) (hereinafter called the Obligee), in the full and just sum of Dollars ($ ), the payment of which sum, well and truly to be made, the said Principal and Surety bind themselves, their heirs, administrators, executors, and assigns, jointly and severally, firmly by these presents. WHEREAS, the Principal and Obligee have entered into a Franchise Agreement dated which is hereby referred to and made a part hereof. WHEREAS, said Principal is required to perform certain obligations under said Agreement. WHEREAS, the Obligee has agreed to accept this bond as security against default by Principal of performance of its obligations under said Agreement during the time period this bond is in effect. NOW, THEREFORE, THE CONDITION OF THIS OBLIGATION IS SUCH that if the Principal shall perform its obligations under said Agreement, then this obligation shall be void, otherwise to remain in full force and effect, unless otherwise terminated, cancelled or expired as hereinafter provided. PROVIDED HOWEVER, that this bond is executed subject to the following express provisions and conditions: 1. In the event of default by the Principal, Obligee shall deliver to Surety a written statement of the details of such default within 30 days after the Obligee shall learn of the same, such notice to be delivered by certified mail to address of said Surety as stated herein. 2. This Bond shall be effective , 20 . and shall remain in full force and effect thereafter for a period of one year and will automatically extend for additional one year periods from the expiry date hereof, or any future expiration date, unless the Surety provides to the Obligee not less than sixty (60) days advance written notice of its intent not to renew this Bond or unless the Bond is earlier canceled pursuant to the following. This Bond may be canceled at any time upon sixty (60) days advance written notice from the Surety to the Obligee. 3. Neither cancellation, termination nor refusal by Surety to extend this bond, nor inability of Principal to tile a replacement bond or replacement security for its obligations under said Agreement, shall constitute a loss to the Obligee recoverable under this bond. 4. No claim, action, suit or proceeding shall be instituted against this bond unless same be brought or instituted and process served within one year after termination or cancellation of this bond. 5. No right of action shall accrue on this bond for the use of any person, corporation or entity other than the Obligee named herein or the heirs, executors, administrators or successors of the Obligee. 6. The aggregate liability of the surety is IUnited to the penal sum stated herein regardless of the number of years this bond remains in force or the amount or number of claims brought against this bond. 7. This bond is and shall be construed to be strictly one of suretyship only. If any conflict or inconsistency exists between the Surety's obligations as described in this bond and as may be described in any underlying agreement, permit, document or contract to which this bond is related, then the terms of this bond shall supersede and prevail in all respects. This bond shall not bind the Surety unless it is accepted by the Obligee by signing below. IN WITNESS WHEREOF, the above bounded Principal and Surety have hereunto signed and sealed this bond effective this day of ,.2006. Principal Surety By: By: , Attorney -in -Fact Accepted by Obligee: (Signature & date above - Print Name, Title below) EXHIBIT F LETTER OF CREDIT JPMorgan JPMorgan Chase Bank Global Trade Services IRREVOCABLE STANDBY LETTER OF CREDIT Issue Date: L/C No.: Amount: USD $10,000 (Ten Thousand Dollars and 00/100 United States Dollars) Beneficiary: Town of Leesburg 25 Market Street Leesburg, VA 20178 TO: Town of Leesburg Applicant: Verizon Communications Inc. d/b/a Verizon Virginia Inc. One Verizon Way MC: VC53S459 Basking Ridge, NJ 07920 We hereby establish this irrevocable standby Letter of Credit No. in your favor, for an aggregate amount not to exceed the amount indicated above, expiring at JPMorgan Treasury Services, Tampa, Florida, at our close of business on This Letter of Credit is available with JPMorgan Chase Bank against presentation of your draft at sight drawn on JPMorgan Chase Bank when accompanied by the documents indicated herein. Beneficiary's dated statement purportedly signed by the Communications Administrator or the Director of the Department of Finance reading as follows: "The amount of this drawing USD $ , under JPMorgan Chase Bank Letter of Credit No. represents funds due us as Vcrizon Virginia, Inc. has failed to perform its duties pursuant to the Cable Franchise Agreement By and Between the Town of Leesburg, Virginia, and Verizon Virginia Inc., dated , 2005." It is a condition of this Irrevocable Letter of Credit that it shall be automatically extended without amendment for additional one year periods from the present or each future expiration date, unless at least 30 days prior to such date, we send you notice in writing by registered mail return receipt requested or hand delivery at the above address that we elect not to renew this Letter of Credit for such additional period. Upon such notice to you, you may draw drafts on us at sight for an amount not to exceed the balance remaining in this Letter of Credit within the then applicable expiry date, accompanied by your dated statement purportedly signed by the Communications Administrator or the Director of the Department of Finance reading as follows: "The amount of this drawing USD $ under JPMorgan Chase Bank Letter of Credit number represents funds due us as we have received notice from JPMorgan Chase Bank of their decision not to extend Letter of Credit Number for an additional year." All correspondence and any drawings hereunder are to be directed to JPMorgan Treasury Services, Standby Letter of Credit Dept., 4` FL, 10420 Highland Manor Drive, Tampa, Florida 33610. Customer inquiry Number is 1-866-632-5101 and choose option No. 3. We hereby agree with you that drafts drawn under and in compliance with the terms and conditions of this Letter of Credit will be duly honored. This Letter of Credit is subject to the International Standby Practices (ISP98), International Chamber of Commerce Publication No. 590. This Letter of Credit shall be governed by, and construed in accordance with, the Iaws of Virginia without regard to principles of conflict of laws. Authorized Signature (Bank) EXHIBIT G ACCEPTANCE OF FRANCHISE BY THE FRANCHISEE The Franchisee hereby accepts the franchise to erect, construct, maintain, and operate the Cable System offered by Ordinance No. 2006-0-13 of the Town (the "Granting Ordinance"). By this acceptance, the Franchisee agrees that it shall be bound by the terms and conditions of the Agreement and any amendments thereto (the "Franchise Documents"). By accepting the franchise, the Franchisee further: (1) acknowledges and accepts the Town's legal right to issue and enforce the franchise; (2) agrees that it will not oppose the Town's intervention in any proceeding affecting the Cable System; (3) accepts and agrees to comply with each and every provision of the Franchise Documents; (4) agrees that the franchise and Granting Ordinance shall not be effective until and unless all conditions precedent are satisfied; and (5) agrees that the franchise was granted pursuant to processes and procedures consistent with applicable law, and that it will not raise any claim to the contrary. The Franchisee declares that it has carefully read all of the teiiiis and conditions of the Franchise Documents, and accepts and agrees to abide by the same. Upon the franchise becoming effective, the Franchisee shall be immediately bound to maintain and operate the Cable System under the terms, conditions and limitations set forth in the Franchise Documents, as of the time and date it files this written acceptance with the Town. AGREED TO THIS al 7 DAY OF J i/A) e- , 2006. VI R» VIRGINIA INC. 13y: Robert W. Woltz Jr. Its: President APPROVED LAW DEPT. COMMONWEALTH OF VIRGINIA: I HEREBY CERTIFY, that on this 397 day of 37.1 �61--- , 2006, before me, the subscriber, a Notary Public o the Commonwealth of Virginia, personally appeared 'S'o bei / 4). �/i , ,../,R of Verizon Virginia Inc. and acknowledged the foregoing Acceptance of Franchise by the Franchisee, to be the act and deed of said company. Ceitnty/City/Teter of c,i�ivi c Jc+, Y i4 AS WITNESS my hand and Notary Seal Notary Public My Commission Expires: / t41L/L 3/, ,,,W69