Article II — Grant of Franchise

In the event that the grantor shall grant to a grantee a nonexclusive, revocable franchise to construct, operate, maintain, and reconstruct a cable communications system within the franchise area, or a renewal of an existing franchise, said franchise shall constitute both a right and an obligation to provide the services of a cable communications system as required by the provisions of this chapter and the franchise

agreement. The franchise agreement shall include those provisions of the grantee's application for franchise that are finally negotiated and accepted by the grantor and grantee.

Any franchise granted under the terms and conditions contained herein shall be consistent with federal laws and regulations and state laws and regulations. In the event of conflict between the terms and conditions of the franchise and the terms and conditions on which the grantor can grant a franchise, the general law and/or statutory requirements shall, without exception, control.

Any franchise granted is hereby made subject to the general ordinance provisions now in effect or hereafter made applicable to new franchises, transfer and renewals. Nothing in the franchise shall be deemed to waive the requirements of the other codes and ordinances of the grantor regarding permits, fees to be paid or manner of construction.

(Prior gen. code § 2-120.0)

No cable communications system shall be allowed to occupy or use the streets in the franchise area, or be allowed to operate, without a franchise in accordance with the provisions of this chapter. Any person who violates this section each day is guilty of a misdemeanor.

(Prior gen. code § 2-120.1)

The grantor may establish appropriate requirements for new franchises, franchise renewals, or franchise transfers, and may modify these requirements from time to time to reflect changing conditions and state of the art in the cable industry. Such requirements shall not be retroactive to franchises then in effect, except as set forth in Section 3.16.150, but shall become applicable when the franchise is renewed or transferred.

(Prior gen. code § 2-120.2)

The grantor may grant a franchise for all or any defined portion of the county. The service area shall be the entire area defined in the franchise agreement. The initial service area shall be that portion of the franchise area scheduled to receive initial service, as stated in the franchise agreement.

(Prior gen. code § 2-120.3)

For the purpose of operating and maintaining a cable communications system in the franchise area, and subject to the provisions of Section 3.16.430 herein, the grantee may erect, install, construct, repair, replace, reconstruct, and retain in, on, over, under, upon, across and along the public streets and ways within the franchise area such wires, cables, conductors, ducts, conduits, vaults, manholes, amplifiers, appliances, pedestals, attachments, and other property and equipment as are necessary and appurtenant to the operation of the cable communications system. Prior to construction or alteration, however, the grantee shall in each case file plans with the appropriate grantor agencies and local utility companies, and

receive written approval before proceeding unless such filing and approval are waived by such agencies and companies. Grantee shall in any event comply with all applicable grantor construction codes and procedures. Such approvals shall not be required for minor alterations and maintenance.

(Prior gen. code § 2-120.4)

The term of any new franchise and all rights, privileges, obligations and restrictions pertaining thereto shall be as established in the franchise agreement, unless terminated sooner as hereinafter provided.

(Prior gen. code § 2-120.5)

Any franchise granted shall be nonexclusive. The grantor specifically reserves the right to grant, at any time, such additional franchises for a cable communications system as it deems appropriate, provided however, that such additional grants shall not operate to materially modify, revoke or terminate any rights previously granted to any grantee. If the terms and conditions of additional franchises in the same service area are more favorable than the terms and conditions of existing franchises, such favorable terms and conditions shall be incorporated into the existing franchise only if the grantee of an existing franchise agrees to be bound by any more burdensome terms and conditions of the additional franchises.

(Prior gen. code § 2-120.6)

Applicants for a new franchise shall submit to the grantor written applications utilizing the standardized format provided by the grantor, at the time and place designated by the grantor for accepting applications, and including the application fees designated by the grantor.

(Prior gen. code § 2-120.7)

All franchise applications when filed shall be available for public inspection at places designated by the grantor. No later that ninety (90) days after the final date for filing applications, one or more public hearings shall be held on the applications. A decision shall be made by the grantor not later than ninety (90) days after the conclusion of all such public hearings based upon an evaluation of the application(s), the hearings, and other information that the grantor may deem relevant. Grantor may grant one or more franchises, or may decline to grant any franchise.

(Prior gen. code § 2-120.8)

A.

Transfer of Franchise. Any franchise granted hereunder shall be a privilege to be held for the benefit of the public. Said franchise cannot in any event be sold, transferred, leased, assigned or disposed of, including

but not limited to, by forced or voluntary sale, merger, consolidation, receivership, or other means, without the prior written consent of the grantor, and then only under such reasonable conditions as the grantor may establish. Such consent as required by the grantor shall be given or denied no later than ninety (90) days following any request, and shall not be unreasonably withheld. Consent shall not be required where grantee borrows money secured by the assets of the system and control thereof is not transferred.

B.

Ownership or Control. The grantee shall promptly notify in writing the grantor of any proposed change in, or transfer of, or acquisition by any other party of, control of the grantee. The word "control" as used herein is not limited to major stockholders but includes actual working control in whatever manner exercised. A rebuttable presumption that a transfer of control has occurred shall arise upon the acquisition or transfer by any person or group of persons of twenty-five (25) percent or more of the beneficial ownership interest of the grantee. Every change, transfer, or acquisition of control of the grantee shall make the franchise subject to cancellation unless and until the grantor shall have consented in writing thereto, which consent shall be given or denied no later than ninety (90) days following any request, and shall not be unreasonably withheld. For the purpose of determining whether it shall consent to such change, transfer or acquisition of control, the grantor may inquire into the qualifications of the prospective controlling party, and the grantee shall assist the grantor in any such inquiry.

In seeking the grantor's consent to any change in ownership or control, the grantee shall have the responsibility, unless waived by grantor:

1.

To show to the satisfaction of the grantor whether the proposed purchaser, transferee, or assignee (the "proposed transferee"), which in the case of a corporation, shall include all directors and all persons having legal or equitable interest in five percent or more of its voting stock:

a.

Has ever been convicted or held liable for acts involving moral turpitude including, but not limited to any violation of federal, state or local law or regulations, or is presently under an indictment, investigation or complaint charging such acts,

b.

Has ever had a judgment in an action for fraud, deceit or misrepresentation entered against it, her, him, or them by any court of competent jurisdiction, or

c.

Has pending any legal claim, lawsuit or administrative proceeding arising out of or involving a cable system;

2.

To establish, to the satisfaction of the grantor, the financial solvency of the proposed transferee by submitting all current financial data for the proposed transferee which the grantee was required to submit in

its franchise application, and such other data as the grantor may request. Financial statements shall be audited, certified and qualified by a certified public accountant;

3.

To establish to the satisfaction of the grantor that the financial and technical capability of the proposed transferee is such as shall enable it to maintain and operate the cable system for the remaining term of the franchise under the existing franchise terms.

C.

The grantor agrees that any financial institution having a pledge of the franchise or its assets for the advancement of money for the construction and/or operation of the franchise shall have the right to notify the grantor that it or its designee satisfactory to the grantor shall take control and operate the cable communications system, in the event of a grantee default in its financial obligations. Further, said financial institution shall also submit a plan for such operation that will insure continued service and compliance with all franchise requirements during the term the financial institution exercises control over the system. The financial institution shall not exercise control over the system for a period exceeding one year unless extended by the grantor in its discretion, and during said period of time it shall have the right to petition the grantor to transfer the franchise to another grantee. If the grantor finds that the legal, financial, character, technical and other public interest qualities of the applicant are satisfactory, the appropriate party shall transfer and assign the rights and obligations of such franchise as in the public interest. The consent of the grantor to such transfer shall be given or denied no less than ninety (90) days after any request, and shall not be unreasonably withheld.

D.

The consent or approval of the grantor to any transfer by the grantee shall not constitute a waiver or release of the rights of the grantor in and to the streets, and any transfer shall by its terms, be expressly subject to the lawful terms and conditions of any franchise.

E.

In the absence of extraordinary circumstances, the grantor shall not approve any transfer or assignment of the franchise prior to completion of initial construction of the cable system.

F.

In no event shall a transfer of ownership or control be approved without the successor in interest becoming a signatory to the franchise agreement.

(Prior gen. code § 2-120.9)

Franchise renewal shall be as prescribed by applicable law.

(Prior gen. code § 2-120.10)

In accepting a franchise, the grantee acknowledges that its rights hereunder are subject to the police powers of the grantor to adopt and enforce general ordinances necessary to the safety and welfare of the public; and agrees to comply with all applicable general laws and ordinances enacted by the grantor pursuant to such power.

Any conflict between the provisions of this chapter and any other present or future lawful exercise of the grantor's police powers shall be resolved in favor of the latter. However any exercise of the police power, which is not of general application in the jurisdiction or applies exclusively to any cable communications system franchise and which contains provisions inconsistent with this chapter, shall prevail only if upon such exercise the grantor finds an emergency exists constituting a danger to health, safety, property or general welfare or such exercise is mandated by law.

(Prior gen. code § 2-120.11)

A.

Annual Franchise Payment. A grantee of a franchise hereunder shall pay to the grantor an annual fee in an amount as designated in the franchise agreement. Such fee shall commence as of the effective date of the franchise or any renewal date. The grantor, on an annual basis, shall be furnished a statement within sixty (60) days of the close of the calendar year, either audited and certified by an independent certified public accountant or certified by a financial officer of the grantee, reflecting the total amounts of gross receipts and all payments, deductions and computations for the period covered by the payment. Upon ten days' prior written notice, grantor shall have the right to conduct an independent audit of grantee's records, in accordance with generally accepted accounting procedures, and if such audit indicates a franchise fee underpayment of two percent or more, the grantee shall assume all reasonable costs of such an audit.

B.

Acceptance by Grantor. No acceptance of any payment by the grantor shall be construed as a release or as an accord and satisfaction of any claim the grantor may have for further or additional sums payable as a franchise fee under this chapter or for the performance of any other obligation of the grantee.

C.

Failure to Make Required Payment. In the event that any franchise payment or recomputed amount is not made on or before the dates specified herein, grantee shall pay as additional compensation:

1.

An interest charge, computed from such due date, at an annual rate equal to the average rate of return on invested funds of the county during the period for which payment was due;

If the payment is late by forty-five (45) days or more, and payment is not in dispute, a sum or money equal to five percent of the amount due in order to defray those additional expenses and costs incurred by the grantor by reason of delinquent payment.

D.

Franchise fee payment shall be made in accordance with the schedule indicated in the franchise agreement.

E.

Any grantee "pass through" or itemization of franchise fee costs on subscribers' bills shall be in accordance with federal law.

F.

The franchise fee is separate and distinct from any other costs, charge, or fee imposed generally or specifically upon the grantee by this code.

(Prior gen. code § 2-120.12)

A.

Grounds for Revocation. If the grantee has been given due notice and a reasonable opportunity to cure a default, the grantor reserves the right to revoke any franchise granted hereunder and rescind all rights and privileges associated with the franchise in the following circumstances, each of which shall represent a default under this chapter and a material breach of the franchise:

1.

If the grantee shall default in the performance of any of its material obligations under this chapter or under such documents, agreements and other terms and provisions entered into by and between the grantor and the grantee;

2.

If the grantee should fail to provide or maintain in full force and effect, the liability and indemnification coverages or the security fund or bonds as required by the franchise agreement;

3.

If any court of competent jurisdiction, or any federal or state regulatory body determines that any material provision of the franchise documents, including this chapter, the franchise agreement and grantee's proposal is invalid or unenforceable prior to the commencement of initial system construction;

4.

If the grantee ceases to provide all services for a continuous period of seven days for any reason within the control of the grantee over the cable communications system (see Section 3.16.630B);

5.

If the grantee willfully violates any of the material provisions of this chapter or the franchise agreement or practices any fraud or deceit upon the grantor;

6.

If the grantee becomes insolvent.

B.

Procedure Prior to Revocation.

1.

The grantor shall make written demand that the grantee comply with any such requirement, limitation, term, condition, rule or regulation or correct any action deemed cause for revocation. In the event the stated violation is not reasonably curable within ninety (90) days of notice of default, the franchise shall not be terminated or revoked, or damages assessed, if the grantee provides within the said ninety (90) days a plan, satisfactory to the grantor, to remedy the violation. If the failure, refusal or neglect of the grantee continues for a period exceeding ninety (90) days following grantee's receipt of such written demand by the grantor, the grantor may place its request for termination of the franchise upon a regular board meeting agenda. The grantor shall cause notice to be served upon such grantee, at least twenty (20) days prior to the date of such meeting, a written notice of the intent to request such termination, and the time and place of the meeting, notice of which shall be published at least once, ten days before such meeting, in a newspaper of general circulation within the franchise area.

2.

The grantor shall hear any persons interested therein, and the grantee shall be afforded fair opportunity for full participation, including the right to introduce evidence, to require the production of evidence, to be represented by counsel and to question witnesses. The grantor shall determine, within ninety (90) days of the close of the hearing, based upon the preponderance of the evidence, whether the grantee has committed a material breach of this chapter or the franchise agreement. The decision of the board shall be in writing and based upon the record before it. The board may appoint a factfinder to conduct hearings and to submit findings and recommendations to the board on the issues.

3.

If the grantor determines that the grantee has willfully and inexcusably committed a material breach, then the grantor may, by resolution, declare that the franchise of such grantee shall be terminated and security fund and bonds forfeited, or the grantor may, at its option and if the material breach is capable of being cured by the grantee, direct the grantee to take appropriate remedial action within such time and manner and upon such terms and conditions as the grantor shall determine to be reasonable under the circumstances.

4.

Should the grantor purchase or take over the cable system upon revocation, the valuation of the cable system upon revocation, the valuation of the cable system shall be at fair market value.

(Prior gen. code § 2-120.13)

A.

Disposition of Facilities. In the event a franchise expires, is revoked, or otherwise terminated, the grantor may order the removal of the above-ground system facilities from the franchise area within a reasonable period of time as determined by the grantor or require the grantee to maintain and operate its cable system for a period not to exceed twenty-four (24) months as indicated in subsection D of this section.

B.

Restoration of Property. In removing its plant, structures, and equipment, the grantee shall fill, at its own expense, any excavation that shall be made by it and shall leave all public ways and places in as good condition as that prevailing prior to the grantee's removal of its equipment without affecting the electrical or telephone cable wires, or attachments. The liability, indemnity and insurance, and the security fund and bonds provided shall continue in full force and effect during the period of removal or extended operations until full compliance by the Grantee with the terms and conditions of this section.

C.

Restoration by Grantor—Reimbursement of Costs. In the event of a failure by the grantee to complete any work required by subsection A and/or subsection B of this section, or any other work required by grantor by law or ordinance, within ninety (90) days after receipt of written notice, and to the satisfaction of the grantor, the grantor may cause such work to be done and the grantee shall reimburse the grantor the cost thereof within thirty (30) days after receipt of an itemized list of such costs or the grantor may recover such costs through the security fund or bonds provided by grantee. The grantor shall be permitted to seek legal and equitable relief to enforce the provisions of this section.

D.

Extended Operation. Upon either the expiration or revocation of a franchise, the grantor may require the grantee to continue to operate the cable communications system for a definite period of time not to exceed twenty-four (24) months from the date of such expiration or revocation. The grantee shall, as trustee for its successor in interest, continue to operate the cable communications system under the terms and conditions of this chapter and the franchise agreement and to provide the regular cable service and any of the other services that may be provided at that time. The grantor shall be permitted to seek legal and equitable relief to enforce the provisions of this section.

E.

Grantor's Right Not Affected. The termination and forfeiture of any franchise shall in no way affect any of the rights of the grantor under any provision of law.

(Prior gen. code § 2-120.14)

A.

Any franchise shall, at the option of the grantor, cease and terminate one hundred twenty (120) days after the appointment of a receiver or receivers or trustee or trustees to take over and conduct the business of the grantee whether in a receivership, reorganization, bankruptcy or other action or proceeding unless such receivership or trusteeship shall have been vacated prior to the expiration of said one hundred twenty (120) days, or unless:

1.

Such receivers or trustees shall have, within one hundred twenty (120) days after their election or appointment, fully complied with all the terms and provisions of this chapter and the franchise granted pursuant hereto, and the receivers or trustees within said one hundred twenty (120) days shall have remedied all defaults under the franchise; and,

2.

Such receivers or trustees shall, within said one hundred twenty (120) days, execute an agreement duly approved by the court having jurisdiction of the premises, whereby such receivers or trustees assume and agree to be bound by each and every term, provision and limitation of the franchise agreement.

B.

In the case of a foreclosure or other involuntary sale of the plant, property and equipment of the grantee, or any part thereof, the grantor may serve notice of termination upon the grantee and to the purchaser at such sale, in which event the franchise and rights and privileges of the grantee hereunder shall cease and terminate thirty (30) days after service of such notice unless:

1.

The grantor shall have approved the transfer of the franchise, as and in the manner in this chapter provided; and,

2.

Such successful purchaser shall have covenanted and agreed with the grantor to assume and be bound by all the terms and conditions of the franchise agreement.

(Prior gen. code § 2-120.15)

The grantee shall pay to the grantor any additional reasonable costs actually incurred by the grantor in the processing of an application or proposal for a new franchise or the renewal or transfer thereof, including but not limited to, any costs for the review and evaluation of such applications or proposals, the development

of a franchise agreement, and attorney and consultant fees incidental thereto. Any application fee paid by the grantee shall be deducted from such costs.

(Prior gen. code § 2-120.16)