APPENDIX B – FRANCHISESAPPENDIX B – FRANCHISES\ORD. NO. 867 (GALAXY CABLE)

AN ORDINANCE AMENDING ORDINANCE NO. 656 OF THE CITY OF HILLSBORO, KANSAS, AND ALL AMENDMENTS THERETO, GRANTING A FRANCHISE TO DOUGLAS CABLE COMMUNICATIONS, L.P. TO CONSTRUCT, OPERATE AND MAINTAIN A CABLE SYSTEM WITHIN THE CITY OF HILLSBORO; PROVIDING TERMS AND CONDITIONS FOR THE OPERATION OF SUCH SYSTEM; AND PROVIDING FEES THEREFORE; AND REPEALING THE ORIGINAL OF SAID ORDINANCE.

Section 1. Authority. This ordinance is passed and approved by the City of Hillsboro, Kansas (city) and enacted pursuant to the laws of the State of Kansas.

Section 2. Definitions. For the purpose of this ordinance, the following terms, phrases, words, abbreviations and their derivations have the meanings given herein. When not inconsistent with the context, words used in the present tense include the future tense, words in the plural number include the singular number, and words in the singular number include the plural number.

(a)   Basic Cable Service - means any service tier which includes the retransmission of local broadcast television signals.

(b)   Cable System - means a system of antennae, coaxial cables, wires, wave guides or other conductors, equipment, or facilities designed, constructed, or B-2 used for the purpose of providing television by wire, cable, fiber, or through its facilities as herein contemplated.

(c)   City - means the City of Hillsboro, Kansas, a municipal corporation of the State of Kansas, in its present incorporated form or in any later reorganized, consolidated, enlarged, or re-incorporated form.

(d)   Facilities - means cable liens, conduits, wires, cables, fiber, pipes, poles, towers, vaults, and appliance, either under or above ground.

(e)   Franchise - means and includes any authorization granted hereunder to construct, operate, and maintain cable system in the city.

(f)   Grantee - means Douglas Cable Communications, L.P. or any subsequent provider of cable television service governed by the provisions of this franchise.

(g)   Gross Annual Receipts - means any and all compensation and other consideration derived directly or indirectly by the grantee, any of its partners, affiliates, subsidiaries, parents, and any person in which the grantee has a financial interest from the operation or use of all or part of the cable television system operating within the city and franchised to the grantee pursuant to this ordinance, including, but not limited to, revenue from: subscribers who are residents of the city, service fees, auxiliary service fees, installation and reconnection fees, leased channel fees, converter and other equipment rentals, personnel fees, extraordinary revenues, late payment charges or forfeited discounts, and advertising, revenues; provided however, it does not include any taxes on service furnished by the grantee imposed directly on any subscriber or user by any city, state, or other governmental unit and collected by the grantee on behalf of such governmental unit.

(h)   Property of Grantee - means all property owned, installed, or used by the grantee in the conduct of a cable business in the city under the authority of this franchise.

(i)    Right-of-Way - means present and future streets, alleys, rights-of-way, and public easements, including easements dedicated in plats of the City of Hillsboro, Kansas.

(j)    Street Right-of-Way - means the entire width between property lines of land, property or an interest therein of every way publicly maintained where any part thereof is open to the use of the public for purposes of vehicular traffic, including street, avenue, boulevard, highway, expressway, alley, or any other public way for vehicular travel by whatever name.

(k)   Subscriber - means any person or entity receiving for any purpose the cable service of grantee.

(l)    Transfer - means the sale, forced, involuntary, or voluntary; lease; assignment; disposition of, in whole or in part; merger or consolidation of grantee; or the transfer of 25 percent or more of the beneficial ownership, stock ownership, or right to control the grantee or any of its general partners, either directly or indirectly during the term of this franchise, either in a single transaction or a series of transactions, to a single person or group of persons acting in concert, none of whom owned, beneficially or otherwise, 10 percent or more of the grantee or such general partner at the time this franchise ordinance was approved.

Section 3. Franchise Granted. A non-exclusive franchise is hereby granted to Douglas Cable Communications, L.P., hereinafter referred to as grantee, to operate a cable system in the city and for that purpose to erect, install construct, 8-3 repair, replace, reconstruct, maintain, and retain in, on, over, under, upon, across, and along any public street, such poles, wires, fiber, cable conductors, ducts, conduit, vaults, manholes, amplifiers, appliances, attachments, and other property as may be necessary and appurtenant to the cable system; and in addition, so to use, operate, and provide similar facilities or properties rented or leased from other persons, firms, or corporations, including, but not limited to any public utility or other grantee franchise or permitted to do business in the city. Any privilege claimed under this franchise by the grantee in any street right-of-way or other public property shall be subordinate to any prior lawful occupancy of the streets or other public property. No privilege or exemption is hereby granted or conferred by this franchise except those specifically prescribed herein.

Section 4. Reservation of Powers to City. There is hereby reserved city every right and power which is required to be reserved or provided by any ordinance of the city of general applicability, and the grantee, by its acceptance of this franchise, agrees to be bound thereby and to comply with any action or requirements of the city in its exercise of such rights or power, heretofore or hereafter enacted or established. Neither the granting of this franchise nor any of the provisions contained herein shall be construed to (i) prevent the city from granting any identical, or similar, franchise to any other person, firm, or corporation, within all or any portion of the city, or (ii) constitute a waiver or bar to the exercise of any governmental right or power of the city.

Section 5. Term. The rights, privileges, and franchise granted by this ordinance shall, unless this franchise is sooner terminated as herein provided, be and remain in full force and effect for a period of 10 years from the effective date hereof.

Section 6. Consideration to City.

6.1 Franchise Fee. In consideration of the rights, privileges, and franchise hereby granted, and as compensation to the city for the use of its public ways and places by the grantee, and to properly regulate the activities of grantee, the grantee shall, subject to the provisions hereinafter made, pay to the city a sum equal to three percent of the gross annual receipts of the grantee, provided that the parties shall re-negotiate this provision if federal or state statutes or regulations are amended to allow or mandate a higher or lower amount than that which is presently allowed or mandated by such statutes. The above-reference franchise fee shall be paid by the grantee to the city, on or before the last day of January and the last day of July of each year during which this franchise is effective, for the preceding six month period ending on the last day of December and the last day of June, respectively. Any payments made by the grantee to the city in connection with franchise renewal proceedings, transfer of ownership, or as compensation for costs incurred by the city in connection with the franchise shall not be deemed as any portion of a franchise fee.

6.2 Inspection and Audit of Books, Adjustment of Franchise Fee. The books of grantee shall be open to audit by the city at all reasonable times to verify the accuracy of the computation and the correctness of the report which shall accompany the payment of the franchise fee to the city. Grantee shall keep books and records pursuant to established practices using generally accepted auditing procedures. The grantee agrees to reimburse the city for the reasonable costs of such audit if the audit discloses that the grantee has paid less than 80% of the compensation due the city for the period of such audit. In the event the accounting rendered to the city by the grantee herein is found to be incorrect, then payment shall be made on the corrected amount within 30 days of written notice, it being agreed that the city may accept any amount offered by the grantee but the acceptance thereof by the city shall not be deemed a settlement of such item if the amount is in dispute or otherwise found to be incorrect.

6.3 Free Cable Service to City. In addition to the compensation to the city described above, the city shall have the right to receive Basic Cable Service at buildings and locations owned or operated by the city or its boards and agencies without charge for installation or service. This service shall be provided at those locations now served or those hereafter reasonably requested for service in writing by the city.

Section 7. Rates.

7.1 Basic Cable Service Rates. The parties recognize that under federal statutes, regulations, and rules in existence at the time of the enactment of this ordinance, the city is able to control and regulate the Basic Cable Service rates. All rates and charges made by the grantee for its Basic Cable Service shall be fair, reasonable, just, and uniform. Initially, Basic Cable Service rates will not in excess of the maximum amounts set forth herein: Monthly service charge, Single outlet - $18.95 Additional outlets, each - $2.50 Grantee acknowledges that the Basic Cable Service rates established above presently allow the grantee a fair return on its investment taking into account appropriate costs, including, but not necessarily limited to, capital costs, Basic Cable Service programming, customer service, labor, and ancillary costs attributable to obtaining and transmitting Signals carried on the Basic Cable Service, and the cost of any franchise-imposed requirements not directly related to the provision of cable service, as well as a reasonable profit. It is acknowledged by the parties that the grantee’s Basic Cable Service rates will increase in the event of an increase in the grantee’s costs which may result from pending or future legislation requiring grantee to pay (i) fees for the retransmission of over-the-air broadcast signals and/or (ii) royalties in order to provide certain programming. In the event grantee’s Basic Cable Service rates would increase to an amount which makes it commercially impracticable to continue to provide the existing level of Basic Cable Service, the grantee may, with the city’s prior written consent, discontinue a portion of the grantee’s Basic Cable Service.

7.2 Basic Cable Rate Increases. Any proposed increase in the authorized maximum monthly Basic Cable Service rates may be made only after (i) the grantee has provided documented evidence to the city of the increase in the Basic Cable Service cost factors itemized above, and (ii) the city has approved such increase in writing. Prior to granting an approval of or denying an increase in Basic Cable Service rates, the city shall (i) give formal notice to the public, (ii) provide an B-5 opportunity for interested parties to make their views known, at least through written submissions; and, (iii) make a formal statement (including summary explanation) when a decision on the rate matter is made and issue a written decision, all in accordance with 47 C.F.R. § 76.33, as in effect on the date hereof and as may be hereafter be amended.

7.3 Rates for Other Cable System Services. The city reserves the right to further regular cable system rates and services in the event that changes in the law or in competition should allow such regulation. In such event, either the city or the grantee may request negotiation of the provisions providing for such regulation.

Section 8. Billing. Grantee shall provide to each subscriber a bi-monthly bill which gives the subscriber the option to pay for services two months at a time but also clearly permits for the payment of service charges on a monthly basis. The due date for each monthly service charge will be no sooner than five days in advance of the month for which the service charge is billed. At the request of a subscriber, grantee shall provide a pro rata billing abatement to any subscriber who is without service through no fault of the subscriber for a period of over 24 hours, provided grantee has received advance notice from the subscriber of such service outage.

Section 9. Installation and Maintenance of Cable System.

9.1 Technical Standards. The cable system shall be installed and maintained in accordance with the highest and best standards of the industry to the effect that subscribers shall receive the highest quality of service. All of grantee’s technical standards governing construction, reconstruction, installation, operation, testing, use, maintenance, and dismantling of the cable system shall be in accordance with applicable present and future federal, state, and city law and regulation, including but not limited to the most recent editions of the National electrical Code, the National Electrical Safety Code, and the fiber Optic Cable Installation Standard of the Telecommunications Industry Committee, or such substantive equivalents as may hereafter be adopted or promulgated. In determining whether such standards are satisfactory, the following shall be considered: (i) that the system be installed using all band equipment capable of passing the entire VHF and FM spectrum, and that it have the further capability of converting UHF for distribution to subscribers on the VHF band; (ii) that the system, as installed, be capable of passing standard color TV signals without the introduction of material degradation on color fidelity and intelligence; and (iii) that the system and all equipment be designed and rated for 24 hours per day continuous operation. It is understood that the standards established in this subsection are minimum standards and the requirements established or referenced in this ordinance may be additional to or stricter than such minimum standards.

9.2 Testing of Cable System. When the city has reason to believe that the signals being received by individual subscribers do not meet the Federal Communications Commission standards for such signals, on request of the City, grantee will conduct tests of its system to the individual subscribers to determine whether the signals received by these subscribers comply with these standards. Should such tests indicate noncompliance with this section, grantee will immediately take such steps as are required to meet the standards and will furnish to the city test results providing compliance with these standards in either event. The grantee shall measure system performance at least annually, bring any deviations from the standards to the city’s attention, and advise the city of a timetable and plan of action for correcting observed deficiencies.

9.3 Use of Right-of-Way. The grantee’s use of right-of-way shall in all matters be (i) subordinate to the city’s use of the right-of-way for any public purpose, (ii) subject to all rules, regulations, policies, resolutions and ordinances of general applicability now or thereafter adopted or promulgated by the city, including those relating to· permits and fees, sidewalks and pavement cuts, utility location, construction coordination, beautification, and other requirements on the use of the right-of-way, and (iii) in compliance with the following:

(a)   Use of Poles. The poles used for the grantee’s distribution system shall be those erected and maintained by the city as provided in the separate pole rental agreements entered into between the city and grantee from time to time. The grantee may erect poles where shown to be necessary when the necessity, the location, and the style of pole have been approved by the city. The erection of poles shall be subject to all existing and future ordinances and regulations of the city applicable thereto.

(b)   Use of Other Public Property. The grantee shall not install or erect any facilities or apparatus in or on other public property, places or rights-of-way, or within any privately-owned area within the city which has not yet become a public street but is designated or delineated as a proposed public street on any tentative subdivision map approved by the city, except those installed or erected upon public facilities now existing, without obtaining the prior written approval of the city. The grantee shall coordinate the placement of its facilities in a manner which minimizes adverse impact on public improvements, as reasonably determined by the city. Where placement is not otherwise regulated, the facilities shall be placed with adequate clearance from such public improvement.

(c)   Underground Placement of Facilities. All facilities constructed, replaced, or relocated in the right-of-way after the date hereof shall be placed underground unless otherwise agreed to by the city. In those areas and portions of the city where the grantee is using facilities of other utilities which are not placed underground, grantee may continue to use such aboveground facilities until such time as the other utility places them underground. Where there are obstructions in the right-of-way such as trees, shrubs, other utilities, commercial signs, man-made structures, or other like obstructions which make the cost of such underground burial unreasonable, the grantee may request waiver of this requirement, in which event the city will not unreasonably withhold consent. Any amplifiers, vaults, boxes pedestals, and similar facilities placed above ground in streets right-of-way shall be located behind the sidewalk where feasible. For purposes of this subsection underground shall include a partial underground system, e.g., streamlining, so long as it meets the other requirements of this ordinance.

(d)   Repair of Damaged Property. All earth, materials, sidewalks, paving, crossings, utilities, public improvements, or improvements of any kind injured or removed by the grantee in its activities under this franchise shall be fully repaired or replaced promptly by the grantee at its sole expense and to the reasonable satisfaction of the city or owner thereof.

(e)   Notification to City of Construction. The grantee shall notify the city not less than three working days in advance such notice to be adequate for timely notice on the governing body agenda under city procedures) of any construction, reconstruction, repair, or relocation of facilities which would require any street closure which reduces traffic flow to less than two lanes of moving traffic except in the event of an emergency, as reasonably determined by the grantee, no such closure shall take place without prior authorization from the city. In addition, all work performed in the traveled way or which in any way impacts vehicular or pedestrian traffic shall be properly signed, barricaded, and otherwise protected. Such signing shall be in conformance with the latest edition of the Federal Highway Administration’s Standards and Guideline for Work Zone Traffic Control, unless otherwise agreed to by the city.

(f)   Protection of Cable System. It shall be the responsibility of the grantee to take adequate measures to protect and defend its facilities in the right-of-way from harm or damage. The city and its authorized contractors shall be responsible to take reasonable precautionary measures including attempting to ascertain the location of grantee’s facilities and observing marker posts when working near grantee facilities. However, if the grantee fails to accurately or timely relocate facilities when requested, it has no claim for costs or damages against the city and its authorized contractors unless such party is solely responsible for the harm or damage by its negligence or intentional conduct.

(g)   Maps and “As-Built” Drawings. The grantee shall keep and maintain accurate records and as-built drawings depicting accurate horizontal and vertical location of all facilities constructed, reconstructed, or relocated in the street right-of way of arterial streets after the date hereof. Such facilities shall be horizontally and vertically located at least every 100 feet and at any other alignment change. All points of facilities shall be horizontally located from street centerline, or section or quarter section lines or corners. Vertical locations or all points of facilities shall consist of elevations in either city datum or United States Geological Survey datum. The grantee, at its sole expense, shall provide the above-described information to the city when requested by the city or its authorized agents. The grantee shall designate and maintain a local agent, familiar with the facilities, who is responsible for satisfying information needs of the city and other users of the right-of-way.

(h)   Temporary Removal of Cable Wires.

(1)   The grantee shall promptly remove, relocate, or adjust any facilities located in right-of-way if reasonably necessary and directed by the city for a public project including those required by reason of traffic conditions, public safety, street vacation, street construction, change or re-establishment of street grade installation of sewers, drains, water pipes power lines, signal lines and tracts of any other type of structures or improvements by public agencies. Such removal, relocation, or adjustment for a particular public project shall be performed by the grantee once at its sole expense without expense to the city, its employees, agents, or authorized contractors and shall be specifically subject to rules and regulations of the city pertaining to such. If additional removal, relocation, or adjustment is the result of the inaccurate or mistaken information of the grantee, the grantee shall be responsible for such at its sole expense.

(2)   The grantee, at the request of any party holding a permit shall temporarily remove, raise, or lower its wires or cables to permit the moving of buildings or equipment. The expense of such temporary removal, raising, or lowering shall be paid by the party requesting the same, and the grantee may require such payment in advance. The grantee shall be given not less than 48 hours’ advance notice to arrange for such temporary wire or cable change.

(i)    Tree Trimming. The grantee, subject to the rights of adjoining property owners, at its expense, shall have the authority to trim trees upon and overhanging streets, alleys, sidewalks, and public places of the city so as to prevent the branches of such trees from coming in contact with the wires and cables of grantee, all trimming to be done under the supervision and direction of the city, and in all cases to be done in such a manner as to minimize any damage to the health and appearance of the trees. U) Performance of Grantee’s Obligations by City; Grantee’s Liability for Non- Performance. After having received notice and a reasonable opportunity to perform the required work, upon failure of the grantee to commence, pursue, or complete any work required by law or by the provisions of any city ordinance or by its franchise to be done in any street right-of-way or other public place, within the time prescribed, and to the satisfaction of the city, the city, at its option and upon reasonable notice to grantee, may cause such work to be done and the grantee shall pay to the city the cost thereof plus 10% within 30 days after receipt of such itemized report. Grantee shall be responsible to the city and its agents, representatives, and authorized contractors for all damages including, but not limited to, delay damages, repair costs, down time, construction delays, penalties or other expenses of any kind arising out of the failure of the grantee to perform any of its obligations under this agreement unless the damaged party is solely responsible for the harm or damage by its negligence or intentionally caused harm.

Section 10. City’s Right of Inspection. At all reasonable times, the grantee shall permit any duly authorized representative of the city to examine all property of the grantee, together with any appurtenant property of the grantee situated within or without the city and to examine and transcribe any and all maps and other records kept or maintained by the grantee or under its control which deal with the operations, affairs, transactions, or property of the grantee with respect to its franchise. If any such maps or records are not kept in the city, or upon reasonable request are not made available to the city, and if the council shall determine that an examination thereof is necessary or appropriate, then all travel and maintenance expense necessarily incurred in making such examination shall be paid by grantee.

Section 11. Service and Repair.

11.1 Telephone Inquiries. Grantee shall maintain a toll-free telephone number and sufficient staff to provide adequate service and have a listed telephone number so that messages, complaints, and requests for service or repairs or adjustments may be received at any time without toll charges. Inquiries or complaints regarding the quality of service, equipment malfunctions, and similar matters shall be received by personnel of the grantee from 8:00 a.m. until 10:00 p.m. on every day of the week. The grantee shall make investigation of, and resolve, all complaints from subscribers as soon as practical, but in no event later than 24 hours after notification, unless additional time is needed due to circumstances beyond the reasonable control of grantee.

11.2 Complaint Procedures. The grantee shall give notice of the procedures for reporting and resolving complaints to each subscriber at the time of initial subscription to the cable system services. Upon request, grantee shall allow inspection of complaint files. Grantee shall provide the city with periodic reports listing the number and nature of subscriber complaints and actions taken to resolve them.

11.3 Service to Entire Community. No persons, firm, or corporation in the existing service area of the grantee shall be arbitrarily refused service and no resident of the city or group of residents will be denied service because of the income of the residents of the local area in which such resident or group resides; provided however, that the grantee shall not be required to provide service to any subscriber who does not pay the applicable connection fee or monthly service charge. Grantee shall diligently proceed to extend service into areas of the city, arid newly annexed areas of the city, when the population density reaches 20 homes per mile of cable. This requirement may be waived by the city upon written request and good cause shown.

11.4 Continuous Service. Once service is established, the grantee shall be required to provide continuous service to each customer in return for payment of the established fee. If the grantee overbuilds, rebuilds, modifies, or sells the system, or the city revokes or fails to renew this franchise, or the city acquires system, the grantee is required as part of this franchise to continue to operate the system providing all service at existing levels until an orderly change of operation is effectuated. Unless prevented from doing so by an act of God or other causes beyond the grantee’s control, if grantee fails to operate the system for five consecutive days without prior approval of the city, or willfully withholds service for any reason without just cause, the city or its agent shall have the right to operate the system until such time as a new operator is selected. If the city is required to fulfill this obligation for the grantee, grantee shall reimburse the city for any costs, expenses, or damages which are the result of grantee’s failure to perform.

Section 12. Programming. Grantee agrees to provide at least (i) 16 channels of programming as part of its Basic Cable Service; (ii) two channels of premium service; and (iii) the broad categories of programming provided as a part of its Basic Cable Service as of September 21, 1992, including but not limited to, those broad categories set forth on Exhibit “A”, attached hereto and incorporated herein by reference. In addition, upon the city’s request, grantee shall provide free and reasonable channel capacity as a part of its Basic Cable Service for educational and governmental access and use but shall not be required to provide or to furnish a studio or equipment with regard thereto. In the event that the city shall be granted programming control by federal or state law or regulation during the term of this franchise, either party may request that such programming provisions be renegotiated.

Section 13. Indemnity and Hold Harmless.

13.1 The grantee shall hold and save the city, its officers, employees, agents, and authorized contractors, harmless from and against all claims, damages, expense, liability, and costs including attorney fees, which may be occasioned in B-10 any manner, solely or in part by the grantee’s occupancy of right-of-way, or provision of service under this franchise except to the extent caused by the negligence of the city or its agents. In the event a claim shall be made or an action shall be instituted against the city growing out of such occupancy of the right-of-way by facilities of the grantee, then upon notice by the city to the grantee, the grantee will assume liability for the defense of such actions at the cost of the grantee, subject to the option of the city to appear and defend, at its own cost in any such case.

13.2 The grantee shall have no recourse whatsoever against the city for any loss, cost, expense, or damage arising out of any provision or requirement of this ordinance, except to the extent such is caused by the negligence of the city or its agents.

Section 14. Liability Insurance Policies.

14.1 The grantee shall, concurrently with the filing of an acceptance of an award of this franchise, furnish to the city and file with the city clerk, and at all times during the existence of any franchise granted hereunder, maintain in full force and effect, at its own costs an expense, a liability insurance policy in the amount of $1,000,000, with a company licensed to do business in the State of Kansas and reasonably satisfactory to the city, and in a form satisfactory to the city attorney, indemnifying and saving harmless the city, its officers and employees from and against any and all claims demands actions, suits, and proceedings by others, against all liability to others, including but not limited to any liability for damages by reason of or arising out of any failure by the grantee to secure consents from the owners, authorized distributors or licensees of programs to be delivered by the grantee’s cable system, and against any loss, cost, expense, and damages resulting therefrom, or from any violation or infringement of any copyright, trademark, franchise, or similar right; because of any breach of the right of privacy; from violation of any copyright or trademark statute or law; because of any unfair competition; including reasonable attorney’s fees, arising out of the exercise or enjoyment of this franchise irrespective of the amount of the comprehensive liability insurance policy required hereunder.

14.2 The grantee shall, concurrently with the filing of an acceptance of an award of this franchise, furnish to the city and file with the city clerk and at all times during the existence, of any franchise granted hereunder, maintain in full force and effect, at its own cost and expense, a general comprehensive liability insurance policy, in protection of the city, all its offices, boards, commissions, agents and employees, with a company licensed to do business in the State of Kansas and in a form satisfactory to the city attorney, protecting the city and all persons against liability for loss or damage for personal injury, death, and property damage occasioned by the operations of grantee under such franchise, with minimum liability limits of $500,000 per single occurrence. In addition, the grantee shall maintain a policy of comprehensive automobile liability insurance in a combined single limit of not less than $500,000 and a Worker’s Compensation and Employer’s Liability policy for limits of not less than the statutory requirement for Worker’s Compensation, and $500,000 Employer’s Liability. Grantee agrees that in the event of future changes in law and upon notice by the city, the minimum levels of 8-11 insurance and scope of coverage required by this paragraph may be increased within the bounds of commercial reasonableness to the amount that may be required to provide coverage of the events of this paragraph.

14.3 The policies mentioned in the foregoing paragraphs shall name the city, its officers, boards, commissions, agents, and employees, as additional insureds, and shall contain a provision that a written notice of cancellation or reduction in coverage of the policy shall be delivered to the city 30 days in advance of the effective date thereof; if such insurance is provided by a policy which also covers grantee or any other entity or person other than those above named, then such policy shall contain the standard cross-liability endorsement.

Section 15. Acceptance.

15.1 This franchise shall not become effective unless and until all things required in this section and Section 14(a) and 14(b) hereof are done and completed, all of such things being hereby declared to be donations precedent to the effectiveness of any such franchise granted hereunder. In the event any of such things ·are not done and completed in the time and manner required, the council may declare the franchise null and void.

15.2 Within 60 days after the adoption date of the ordinance awarding a franchise, the grantee shall file with the city clerk its written acceptance, in form satisfactory to the city attorney, of the franchise, together with insurance policies required by Sections 13, 14, and 15 hereof, respectively, and its agreement to be bound by and to comply with and do all things required of it by the provisions of this franchise. Such acceptance and agreement shall be acknowledge by the grantee before a notary public, and shall in form and content be satisfactory to and approved by the attorney. In the event such written acceptance is not delivered by the grantee within 60 days, the grantee’s operation in the city shall be deemed to constitute an acceptance of all of the terms of this franchise.

Section 16. Transfer.

16.1 This franchise shall be a privilege to be held in personal trust by the original grantee. It cannot in any event be transferred without the prior consent of the city expressed by ordinance and then only under such reasonable conditions as may therein be prescribed. Grantee shall give the city at least 90 days’ advance notice of any proposed transfer, which notice shall set forth the pertinent details of the proposed transfers and provide complete information concerning the transferee’s financial and operational qualifications. The consent of the city to the transfer may not be unreasonably refused; provided however, the proposed assignee must show financial responsibility and must agree proposed assignee must show financial responsibility and must agree to comply with all provisions of this ordinance; and provided further, that no such consent shall be required for a transfers in trust, mortgage, or other hypothecation as a whole, to secure an indebtedness but any further assignment or transfer by any secured party, trustee, mortgagee, or credit or shall be subject to the provisions of this section; and provided further, no such consent shall be required for the sale or transfer of any minority interest in the grantee or for the transfer of ownership and/or control of the grantee to Douglas Cable Communications, Inc., or any subsidiary corporation thereof, provided that 30 days prior written notification be given to the city of any such permitted transfer by registered mail. Any such transfer or assignment shall be made only by an instrument in writing, a duly executed copy of which shall be filed in the office of the city clerk within 30 days after any such transfer or assignment. Grantee shall be required to compensate the city for all reasonable costs incurred in evaluating the merits of a proposed transfer and the financial and operational qualifications of the proposed transferee, regardless of whether approval to such transfer is granted.

Section 17. City’s Right to Acquire Cable System. Nothing herein shall be deemed or construed to impair or affect, in any way, to any extent, the right of the city to acquire the property of the grantee by any lawful means. In addition, upon non-renewal or termination of the franchise, the city shall have the right to purchase the cable television system at a fair and just value, which shall not include any amount for the franchise itself or for any of the rights or privileges granted, and, if applicable, considering the harm to the community arising from actions of grantee’s resulting in non-renewal or termination. The price of purchase shall be the fair market value determined by standard appraisal provisions established by two independent appraisers. If the price set by the appraisers differs by less than 10%, the price shall be determined by an average of the two. If the price set by the appraiser differs by more than 10%, a third independent appraiser, appointed by the two and acceptable to both grantee and city, shall make an appraisal and the three prices averaged to determine the purchase price. Nothing herein contained shall be construed to contract away or to modify or abridge, either for a term or in perpetuity, the city’s right of eminent domain, to the extent applicable under appropriate federal and state laws.

Section 18. Grantee’s Property - Abandonment.

18.1 In the event that the use of any part of the cable system is discontinued for any reason for a continuous period of 12 months, or in the event such system or property has been installed in any street or public place without complying with the requirements of this franchise, or the franchise has been terminated, canceled, or has expired, the grantee shall promptly, upon being given 10 days’ notice, remove from the streets or public places all such property and poles of such system other than any which the city may permit to be abandoned in place. In the event of such removal, the grantee shall promptly restore the street or other area from which such property has been removed to a condition satisfactory to the city.

18.2 Any property of the grantee allowed by the city to be abandoned in place shall be abandoned in such manner as the city shall prescribe. Upon permanent abandonment of the property of the grantee in place, the property shall become that of the city, and the grantee shall submit to the city an instrument in writing to be approved by the city attorney, transferring to the city the ownership of such property. Any property of the grantee remaining in place 180 days after the termination or expiration of the franchise shall be considered permanently abandoned. The city may extend such time not to exceed an additional 30 days.

Section 19. Review or Re-Negotiation. Recognizing that the field of cable communications is rapidly changing in the areas of regulation, technology, financing, marketing, and law, therefore, in order to provide maximum flexibility in this franchise and to help achieve a continued advanced and modern system, the following provisions are established for review and re-negotiation of the franchise hereby granted:

(a)   In the event of a change in federal or state law materially affecting such provisions and upon request by either the city or the grantee to the other, the parties shall re-negotiate the provisions of this ordinance pertaining to regulation of rates and services (Section 7), compensation (Section 6), or programming (Section 10).

(b)   The city, at its option, may review the entire franchise operation on each anniversary of the franchise hereby granted to determine to the extent permitted by federal or state law if any changes are needed in the service rate structures;; free or discounted services; application of new technologies; system performances; services provided; programming offered; customer complaints; privacy in human rights; amendments to this ordinance; underground installation policy; and judicial and Federal Communication Commission rulings.

(c)   Special review and re-negotiation sessions may be held at any time during the term of the franchise on the request of either the city or the grantee with such request to specify the topics to be reviewed and re-negotiated including any proposals therefore.

(d)   Nothing contained in subsection (b) or (c) of this section, however, shall be construed as requiring either the city or grantee to negotiate a new franchise, or modify or extend an existing franchise.

Section 20. Franchise Controlling; Repeal of Ordinance 656. This franchise shall be in lieu of any and all other rights, privileges, powers, immunities, and authorities owned, possessed, controlled, or exercisable by grantee, or any successor to any interest of grantee, of or pertaining to the construction, operation, or maintenance of any cable system in the city; and the acceptance hereof shall operate, as between grantee and the city, as an abandonment of any and all of such rights, privileges, powers, immunities, and authorities within the city, to the effect that, as between grantee and the city, any and all construction, operation, and maintenance by grantee of its cable system in the city shall be, and shall be deemed and construed in all instances and respects to be, under and pursuant to the franchise, and not under or pursuant to any other right, privilege, power, immunity, or authority whatsoever. The original of Ordinance No. 656, and amendments thereto are hereby repealed.

Section 21. Franchise Termination. Upon 30 days written notice, this franchise may be terminated by the city prior to its date of expiration in the event that: (i) the grantee has failed to comply with any material provision of this ordinance, or has, by act or omission, materially violated any term or condition of any franchise or permit issued hereunder; (ii) any provision of this ordinance has become invalid or unenforceable, and the parties are unable to reach agreement on a substitute provision, and the city further finds that such provision constitutes a consideration material to the grantee of the franchise; or (iii) the city acquires the cable system property of grantee as set forth herein. Upon such termination, all rights and privileges granted by this ordinance and all rights hereunder shall cease, terminate, and become null and void, provided that the forfeiture shall not take effect until the city shall carry out the following proceedings.

Section 22. Miscellaneous.

22.1 Force Majeure. In the event that the performance of obligations of the city and grantee provided for herein is hindered, delayed or prevented by acts of God which could not be reasonably foreseen (or similar unforeseen events and circumstances beyond the control of either of the parties hereto), such delay, partial performance or nonperformance shall not constitute a breach of this franchise.

22.2 Headings. The section and subsection headings contained in this ordinance are for reference purposes only and shall not affect in any way the meaning or interpretation of this ordinance.

22.3 Publication Expenses. The grantee shall pay to the city a sum of money sufficient to reimburse it for all publication expenses incurred by it in connection with the granting of this franchise. Such payment shall be made within 30 days after the city furnishes the grantee with a written statement of such expense.

22.4 Time of Essence. Time shall be of the essence for the franchise granted hereunder.

22.5 Waiver. The grantee shall not be relieved of its obligation to comply promptly with any of the provisions of this ordinance or by any failure of the city to enforce prompt compliance.

22.6 Severability. If any section, subsection, sentence, clause, or phrase of this ordinance is for any reason held illegal, invalid, or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions hereof. The council hereby declares that it would have passed this ordinance and each section, subsection, sentence, clause, or phrase hereof, irrespective of the fact that anyone or more sections, subsections, sentences, clauses, or phrases be declared illegal, invalid, or unconstitutional. The invalidity of any portion of this ordinance shall not abate, reduce, or otherwise affect any consideration or other obligation required of the grantee of any franchise granted hereunder.

22.7 Governing Law. The provisions of this franchise shall be subject to applicable federal statutes, rules, and regulations, including but not limited to the Communications Act of 1934, as amended. In the event of any conflict between the provisions of this franchise and such federal law, the latter shall prevail. In all other matters, this franchise shall be governed according to the laws of the State of Kansas.

(11-03-92)

ORDINANCE NO. 937

AN ORDINANCE PROVIDING FOR AND APPROVING THE TRANSFER OF THE CABLE TELEVISION FRANCHISE IN THE CITY OF HILLSBORO, KANSAS (THE “CITY”) GRANTED PUHSUANT TO ORDINANCE 867, DATED NOVEMBER 3, 1992, (THE “FRANCHISE ORDINANCE”); AMENDING THE FRANCHISE ORDINANCE IN CERTAIN RESPECTS; PROVIDING FOR PUBLICATION OFTHE CAPTION; AND PROVIDING THE EFFECTIVE DATE OF THE TRANSFER ENACTED IN COMPLIANCE WITH K.S.A. 12-2006 et seq.

WHEREAS, by the franchise ordinance, the city has granted to Douglas Cable Communications, L.P., a Delaware limited partnership, (“Douglas”) the authority to operate a cable television system within the boundaries of the city; and

WHEREAS, Douglas has requested that the city approve the proposed transfer and assignment of the franchise ordinance by Douglas to Galaxy Telecom, L.P., a Delaware limited partnership, (“Galaxy”) and/or its permitted assigns (as may be later provided by Galaxy and attached as Exhibit A); and the city is willing to consent to such transfer and assignment; and

WHEREAS, the governing body has complied with the requirements of K.S.A. 12-2007.

Section 1. Transfer of Franchise Ordinance. Pursuant to the franchise ordinance, consent and approval is hereby granted by the city for the transfer and assignment of the franchise ordinance by Douglas to Galaxy. The mayor of the city is hereby authorized to execute the Consent to Assignment attached hereto as Annex 1.

Section 2. Ordinance Affirmed and Term Extended. All terms and provisions of the franchise ordinance shall continue in full force and effect except that the remaining term of the franchise ordinance shall be extended to expire on the 10th anniversary of the date of transfer by Douglas to Galaxy. As set forth in the Consent to Assignment, the city consents to the grantee by Galaxy of a security interest in the franchise ordinance to its lenders to secure indebtedness or other obligations incurred by Galaxy with respect to the cable television system to be operated by Galaxy pursuant to the franchise ordinance and subject to K.S.A. 12- 2006 through 2012 and city ordinances applicable to this franchise.

Section 3. Effective Date. The transfer of the franchise ordinance shall be effective upon the closing of the sale by Douglas to Galaxy of the cable television facilities serving the City of Hillsboro. Galaxy shall notify the city of the transfer of the franchise ordinance within 30 days of such closing and provide therewith a copy of the assignment and assumption of franchise by which the franchise ordinance was transferred and assigned by Douglas to Galaxy.

Section 4. Inconsistency. In the event any of the terms and provisions of any other ordinance or regulation of the city are inconsistent with the terms and provisions of this ordinance, the terms and provisions of this ordinance shall govern and control.

(09-19-95)