ĐĎॹá>ţ˙ XZţ˙˙˙W˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙˙ěĽÁ#` đż^+bjbj\.\. @:>D>D^#˙˙˙˙˙˙¤bbbbbbbv^^^^ j,v€<2˘˘˘˘˘˘˘˘˙;<<<<<<$˛=h@Ź%<b…˘˘……%<bb˘˘:<ÓÓÓ….b˘b˘˙;Ó…˙;ÓÓţÓ6¸bb˙8˘– ŕ-ŠKfÇ^ł‹7;9ÄP<0€<Ł7\Ć@ĎîĆ@0˙8Ć@b˙8<˘"ÄÓÜ𕢢˘%<%<˝˘˘˘€<…………vvv zä vvvzvvvbbbbbb˙˙˙˙ SUMMARY OF ORDINANCE CABLE FRANCHISE - CAVALIER DEFINITIONS Many of the technical terms used in both the Ordinance Cable Franchise (“Franchise”) and Master Cable Ordinance (“Ordinance”) are explicitly defined and incorporated into both documents. Many of the Definitions are based on the federal Cable Act and the Virginia Act. GRANT The City grants a non-exclusive Franchise to Cavalier to construct, reconstruct, operate and maintain a cable system within the Rights-of-Way of the City. The Initial Service Area for the Franchise is defined and depicted on a map. The Franchise Term is for Fifteen years and is intended to provide a reasonable time to construct, reconstruct, and operate a modern system and allow for periodic evaluation reviews. Cavalier will comply with the City’s exercise of its governmental powers to their fullest extent. The grant of the Franchise is non-exclusive and preserves the rights of the City to grant other similar franchises. TRANSFER OF OWNERSHIP The Cable Operator is prevented from selling, transferring, assigning, subletting or disposing of any Franchise awarded by the City without prior consent from the City. This section provides that the City will not unreasonably withhold consent, but the City has the right to deny permission upon a good faith finding that the proposed transferee lacks the legal, technical, or financial qualifications to meet the requirements of the Franchise. PROVISION OF CABLE SERVICE The Franchise provides that Cavalier will make service available to all occupied dwelling units in the Initial Service Area within 3 years and to 65% of dwelling units in the locality in which it has its telephone facilities within 7 years. A density requirement for extension of service of 30 units per mile is established and specific standards for extension of service are required. Further, after a public hearing in the future and adoption of an Ordinance, the City may require, by year 10, service to 80% of the households. CONSTRUCTION AND MAINTENANCE The City is given the right to request that Cavalier conduct tests to ensure that the System is in compliance with FCC standards. The Franchise sets forth the conditions for the City to undertake an inspection of the construction, reconstruction work, or installation work performed by Cavalier under the provisions of the Franchise. CABLE SYSTEM FACILITIES, EQUIPMENT AND SERVICES The Franchise requires that the System be compatible with Subscribers equipment and that it complies with all FCC regulations regarding scrambling or other encryption of signals as well as maintaining the quality of PEG Access channel signals. Cavalier will make closed captioning, parental control devises and leased access channels available as required by applicable law. Cavalier will comply with FCC rules and regulations Cavalier will provide an emergency alert system in accordance with FCC rules and/or by federal law or regulation. Cavalier will cooperate with the City in the use and operation of the emergency alert system. SERVICES AND PROGRAMMING Cavalier shall make its best efforts to provide at least the Initial broad categories of programming set forth in the Franchise. Establishing broad categories enables the City to have program guidelines to ensure the current and future City needs are met. Additionally, by agreement Cavalier will include the “NASA” channel and the “Military” channel. PUBLIC, EDUCATIONAL AND GOVERNMENTAL ACCESS After completion of an interconnection agreement with existing cable operator(s), Cavalier will supply three video channels on the subscriber network for non-commercial public, educational and governmental programming. Specific guidelines are set forth for Cavalier to provide any additional PEG channels. Cavalier is to use reasonable effort to interconnect its System with all existing and future cable service franchises. Cavalier is required to provide one free drop and basic cable service at no charge to public buildings, police stations, fire stations, schools and libraries within the Franchise Area. Cavalier will be required to provide a PEG Capital Grant Surcharge on a quarterly basis to meet the reasonable and necessary capital costs of PEG Access Channel facilities. PERIODIC REVIEW The City may commence a Periodic Evaluation session at any time during the franchise term; however, not more than one session is permitted in any calendar year. The purpose of the sessions is to provide for a maximum degree of flexibility to help achieve a continued advanced and modern system. As part of a periodic evaluation the City may require Cavalier to conduct a technical review and performance evaluation and if there is reasonable evidence of inadequate system performance, the City may require an independent review by an independent engineer. As a result of the evaluation, the City and/or Cavalier may determine that a change in the terms of the Franchise may be required, that the system be updated or changed or that additional services be provided. The Franchise sets out the procedures for negotiating a change to the present agreement. FRANCHISE FEES Cavalier will pay to the City a Franchise Fee in the amount of 5% of its annual Gross Revenues as defined in the Franchise. Payments will be made quarterly, and the City will receive a franchise fee payment worksheet showing the sources and amounts of revenue and certified as correct by Cavalier. The City shall have the right to conduct an audit of Cavalier’s records and to recomputed any amounts determined to be payable during the term of the Franchise. Cavalier shall additionally pay the City a PEG Capital Grant Surcharge of 1.5% of its annual Gross Revenue on a quarterly basis. CUSTOMER SERVICE Cable Operators must comply with the minimum customer service standards listed in Exhibit C. A Cable Operator must satisfy the FCC and applicable industry customer service standards as well. Every Cable Operator must maintain an office at a convenient location, which shall be open during normal business hours. The name and local phone number of one person in responsible charge of Cavalier’s operations must be provided to the City. Cable Operators must maintain a local, toll-free or collect call telephone access available 24 hours per day, 7 days per week. Standards for installations, service interruptions, appointments, communications between Cable Operator and Subscribers, billings, credits and late charges are set forth. These standards give the City considerable oversight to insure that the citizens of Hampton are well served. INSURANCE AND INDEMNIFICATION Cavalier will be obligated to indemnify the City against all claims relating to construction, operation and maintenance of its System. Cavalier will maintain insurance policies to protect the City during the term of the franchise. General liability insurance for personal injury, broad form property damage, blanket contractual, completed operations, underground hazard, explosion and collapse hazard, independent contractors, vaults and products liability insurance will be provided in the amount of a minimum combined single liability limit of two million dollars. Workers’ Compensation Insurance will be obtained and maintained by Cavalier for all its employees and Cavalier will require any subcontractors to provide the same insurance. Cavalier shall provide the City with certificates of insurance including any required endorsements as of the acceptance of the Franchise. Provisions for an increase of the policy limits are provided. PERFORMANCE GUARANTEES AND REMEDIES Cavalier will provide a performance bond in the amount of $50,000.00 as a guarantee for faithful performance of the material provisions of the Franchise. Within 30 days after an amount has been withdrawn from the bond, Cavalier shall restore the bond to its original amount. Procedures for withdrawing funds for franchise violations are spelled out in detail in the Franchise. A detailed list of remedies/liquidated damages that the City may impose in the event that the Cable Operator is in material violation of the Franchise is provided. In order to protect the interests of the City, specific provisions for the revocation or termination of a Franchise are outlined in the Franchise. OPERATIONS AND REPORTING PROVISIONS All books, records, etc. relating to compliance with the Franchise shall be maintained by Cavalier and are subject to the City’s inspection upon 24 hours written notice. Cavalier will file an Annual Report on or before April 1 of each year. A detailed list of all information that Cavalier is required to provide in its Annual Report to the City is included in the Franchise. Cavalier shall maintain with the City a current map(s) showing the current System. ACCEPTANCE The Franchise shall take effect retroactively to December 17, 2006 upon the written acceptance of the Franchise by Cavalier along with such bonds and insurance certificates as required by the Franchise. 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