ORDINANCE NO. __.

AN ORDINANCE OF THE CITY OF SAN JOSE GRANTING A CABLE FRANCHISE TO [NAME] TO CONSTRUCT AND OPERATE A CABLE SYSTEM TO PROVIDE CABLE SERVICE WITHIN A FRANCHISE AREA WITHIN THE CITY OF SAN JOSE; ESTABLISHING THE TERMS AND CONDITIONS OF THE FRANCHISE GRANT; AND ESTABLISHING CERTAIN REMEDIES FOR THE VIOLATION OF THE FRANCHISE.

WHEREAS, [NAME] filed an Application for the renewal of a cable television franchise to construct, operate and repair a Cable System in, over, along and under public Rights-of-Way in the City of San Jose for the purpose of providing Cable Service; and

WHEREAS, the City has conducted hearings to identify the future cable-related needs and interests of the community; to consider the financial, technical, and legal qualifications of [NAME]; and to consider the matters it is required or permitted to consider under applicable law; and.

WHEREAS, the City has relied on written representations of [NAME] and has considered all information [NAME] has presented to it; and

WHEREAS, the City Council held a public hearing on the proposed franchise terms and conditions on the ___ day of ______, 2001, after providing legal notice of the Application and of the hearing pursuant to applicable laws; and

WHEREAS, the City Council, having considered the needs and interests proposed and advanced, as well as all of the testimony presented to it at the public hearing, believes that the grant of the cable franchise requested, subject to conditions, is in the public interest.

NOW, THEREFORE, BE IT ORDAINED [STANDARD CITY CLAUSE AS SET FORTH IN CHARTER] AS FOLLOWS:

Pursuant to San Jose Municipal Code, Chapter 15.28, the City Council hereby grants a cable franchise to [NAME] as follows:

Section 1. Definitions.

Except as otherwise provided herein, the definitions and word usage set forth in the Cable Ordinance shall govern this Franchise. References to any City official or City office also refer to any official or office that succeeds to any or all of the responsibilities of the named official, whether by delegation, succession or otherwise. References to “Applicable Laws” shall be interpreted broadly to cover government actions, however nominated, and include laws, ordinances and regulations as now in force or hereinafter enacted or amended. . In addition, the following definitions shall apply to this Franchise:

1.1. Access, PEG Access, or PEG Use. The availability of the Cable System, including any institutional network, for Public, Education or Government (“PEG”) use by various agencies, institutions, organizations, groups, and individuals, including the City and its Designated Access Providers, to acquire, create, and distribute video and non-video communications not under Franchisee’s editorial control, including, but not limited to:

1.1.1. Public Access or Public Use means Access where organizations, groups, or individual members of the general public are the designated programmers or users having editorial control over their communications;

1.1.2. Education Access or Education Use means Access where Schools are the designated programmers or users having editorial control over their communications;

1.1.3. Government Access or Government Use means Access where government institutions or their designees are the designated programmers or users having editorial control over their communications;

1.2. Cable Ordinance. San Jose City Municipal Code, Chapter 15.28, as amended from time to time.

1.3. Cable System. The term cable system has the same meaning as in the Cable Ordinance, except that, as capitalized in this document, the term refers to Franchisee’s Cable System

1.4. Designated Access Provider. A non-commercial entity or entities designated by the City to manage some or all of the PEG Channels, facilities and equipment.

1.5. Franchise Area. All parts of the City now existing or hereafter annexed.

1.6. Franchise. This Ordinance and any amendments, exhibits, or appendices hereto.

1.7. Franchisee. [NAME] and its lawful and permitted successors, assigns and transferees.

1.8. Standard Drop. An aerial connection extending no more than 150 feet from the potential Subscriber’s demarcation point to the point nearest the property line on the public Right-of-Way, or if closer, to the nearest point on the Cable System from which Cable Service can be provided to that Subscriber.

1.9. School. Any publicly funded charter schools, or public primary and secondary schools and colleges accredited by the State of California (which term includes all accredited post-secondary institutions, including by way of example and not limitation, community colleges, technical colleges and universities).

1.10. Subscriber Network. Fibers, coaxial cables and the electronic devices that are used in the provision of Cable Service to residential Subscribers.

Section 2. Grant of Franchise; Limits and Reservations.

2.1. Grant, Term and Effective Date.

2.1.1. A Cable System Franchise is hereby granted to Franchisee, subject to the conditions set forth in this Ordinance and the Cable Ordinance. This Franchise grants the right, subject to conditions, to construct, operate and repair a Cable System in, over, along and under City public rights-of-way within a Franchise Area in the City of San Jose for the purpose of providing Cable Service, and for providing an institutional network and other facilities or services for PEG Use of the Cable System, commencing on the effective date of the Franchise through and including [DATE], unless terminated prior to that date in accordance with the Franchise or Applicable Law.

2.1.2. The Ordinance shall become effective thirty (30) days after its second reading and final passage before the City Council, but no earlier than the day after the date the Cable Ordinance becomes effective. The date this Ordinance becomes effective is referred to as the “Effective Date”, provided that, the grant of the Franchise to Franchisee shall only become effective if all the conditions of Section 2.1.3 are satisfied .

2.1.3. The grant shall not become effective unless and until Franchisee has (a) filed an unconditional acceptance of the grant made by this Ordinance substantially in the form attached hereto as Exhibit []; and (b) made all payments, posted all securities and guarantees, and supplied all information that it is required to supply prior to or upon the date the Franchise becomes effective. If Franchisee fails to satisfy these obligations within 30 days of the Effective Date , the Franchise grant shall not become effective and shall be deemed rescinded.

2.2. Relation to Other Provisions of Law.

2.2.1. The Franchise issued by the City is subject to, and Franchisee must exercise all rights granted to it in accordance with, Applicable Law, including the Cable Ordinance. This Franchise does not confer rights upon the Franchisee other than as expressly provided herein, or as expressly provided under other Applicable Law. No privilege or power of eminent domain is bestowed by this grant. All rights and powers of the City now existing or hereafter obtained are reserved except as expressly provided to the contrary in the Franchise. The City’s rights of eminent domain are expressly preserved notwithstanding any other provision of this Franchise. Nothing passes by implication under this Franchise. Subject to the foregoing, Franchisee shall provide the Cable Services required hereunder throughout the Franchise Area during the Franchise Term and any holdover term, and shall make any Cable Services it provides over its Cable System available to all entities in its Franchise Area, subject to applicable line extension/density requirements.

2.2.2. This Franchise and all rights granted under the Franchise are subject to the City’s police and regulatory powers. However, once the Franchise grant is effective, this Franchise is a contract and except as to those changes which are the result of the City’s exercise of its police and regulatory powers, neither party may take any unilateral action which materially changes the explicit mutual promises in this contract.

2.2.3. The Franchise shall be interpreted to convey rights and interests only as to those public rights-of-way in which the City has an actual interest and only to the extent and for the purposes set out in the Franchise. The grant of the Franchise is not a warranty of title or interest in any right-of-way; it does not provide the Franchisee any interest in any particular location within the rights-of-way. The issuance of the Franchise does not deprive the City of any powers, rights or privileges it now has or may later acquire in the future to use, perform work on, construct, operate or repair facilities or systems in, or regulate or control the use of the rights-of-way.

2.2.4. The Franchise is not in lieu of any other required permit or authorization.. Without limiting the foregoing, Franchisee is obligated to obtain all applicable permits, to comply with the conditions of all permits; to comply with zoning laws; and to comply with Applicable Law governing the construction, operation or repair of the Cable System.

2.2.5. The fees and other payments made hereunder are not in lieu of any other fee, charge or tax, which may now exist or hereafter be imposed by the City. This provision does not prevent Franchisee from raising a claim that a fee, charge or tax imposed unilaterally by the City is a cable franchise fee under federal law, and subject to federal franchise fee limitations.

2.2.6. Without limiting the provisions of Sections 2.2.4-2.2.5, this Franchise shall not act as a bar or in any respect prevent imposition of additional or different conditions, including additional fees related to the provision of, or the use or occupancy of public rights-of-way to provide, non-cable services. Nothing in this Section 2.2.6 is intended to expand or contract the City’s rights to regulate non-cable services.

2.3. Interpretation and Conflicts.

2.3.1. In the event of a conflict between the Cable Ordinance as it existed on the Effective Date , and this Franchise as of the Effective Date, the Cable Ordinance shall control except where expressly provided otherwise in the Franchise. However, although the exercise of rights hereunder is subject to the Cable Ordinance, the Cable Ordinance is not a contract. Nothing in this Section 2.3 prevents the Franchisee from challenging a particular amendment to the Cable Ordinance as an impairment of this Franchise, to the extent that it materially changes the explicit mutual promises in this contract.

2.3.2. The provisions of this Franchise shall be liberally construed in favor of the public interest in order to effectuate its purposes.

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2.4. Affiliates Must Comply. Any affiliate or joint venture or partner of the Franchisee involved in the management or operation of the Cable System in the City that would constitute a cable operator of the Cable System is subject to the limitations of, and shall comply with the terms and conditions of the Franchise. The Franchisee shall be fully liable for any act or omission of an affiliate that controls the Franchisee or is responsible in any manner for the management of the Cable System that results in a breach of this Franchise or a violation of the Cable Ordinance, as if the act or omission was the Franchisee’s act or omission.

2.5. [FOR A RENEWAL FRANCHISE] Relation to Prior Franchise. As of the date the Franchise grant hereunder goes into effect, the franchise [IDENTIFY], is hereby superseded and of no further force and effect. The City and the Franchisee mutually release each other from any claims actually known as of the Effective Date, arising under the [NAME] franchise during the time it was in effect; except that the City does not release Franchisee from its duty to indemnify the City against third party claims, and does not release it from claims related to the use or occupancy of the rights of way or other public or private property (including but not limited to claims for violation of safety codes); or from claims arising out of Franchisee’s rates and charges during the [NAME] Franchise term; or any agreement specifically referenced or incorporated into this Franchise.

In consideration of this release, and as a resolution of past performance issues, Franchisee shall pay the City __________________ Dollars ($_______) prior to the Effective Date of the Franchise. Franchisee shall provide to City the same or greater indemnity required under the [NAME]Franchise and Chapter 15.28 of the San José Municipal Code in effect on the day immediately prior to the effective date of the Cable Ordinance and also shall continue to maintain adequate insurance for injuries to persons or property that may have occurred during the [NAME]Franchise term.

2.6. Validity. Both parties waive any claim or defense that any provision of this Franchise, is unenforceable or otherwise invalid or void.

2.7. Effect of Franchise Acceptance. By accepting the Franchise, the Franchisee:

2.7.1. Acknowledges and accepts the City’s legal right to issue and enforce the Franchise;

2.7.2. Accepts and agrees to comply fully with each and every provision of this Franchise and the Cable Ordinance;

2.7.3. Agrees that the Franchise was granted pursuant to processes and procedures consistent with Applicable Law.

2.8. Franchisee Bears Its Own Costs. Unless otherwise specifically stated in this Franchise, all acts that the Franchisee is required to perform under this Franchise or Applicable Law must be performed at Franchisee’s expense, and at no cost to the City. If Franchisee fails to perform work that it is required to perform within the time provided for performance, City may perform the work or cause the work to be performed and bill Franchisee for costs associated with the work, including staff time. The Franchisee shall pay the amounts billed within thirty (30) days after a bill is submitted to the Franchisee by the City. The City may establish deadlines for performance of Franchisee's obligations under this Franchise unless a time schedule or deadline is specifically set forth in this Ordinance or applicable law.

2.9. No Waiver.

2.9.1. No course of dealing between Franchisee and the City, or any delay on the part of the City or Franchisee in exercising any rights shall operate as a waiver of any such rights, except to the extent expressly waived.

2.9.2. Waiver of a breach of this Franchise is not a waiver of any other breach, whether similar or different from that waived.

2.10. No Recourse. Without limiting such immunities as the City or other Persons may have under Applicable Law, a Franchisee will have no monetary recourse against the City or its officials, boards, commissions, agents or employees for any loss, costs, expense or damage arising out of (i) the construction, operation or repair of its Cable System, including in cases where the act or omission giving rise to the same was required under applicable law or directed by the City; or (ii) the acts or omissions of the City or any other entity using the public rights of way or other property under the City’s control, except acts and omissions of the City that involve criminal misconduct by the City.

2.11. Severability. In the event that a court or agency or legislature of competent jurisdiction acts or declares that any nonmaterial provision of this Franchise is unenforceable according to its terms, or is otherwise void, said provision shall be considered a separate, distinct, and independent part of this Franchise, and such holding shall not affect the validity and enforceability of all other provisions hereof. In the event that a court or agency or legislature of competent and controlling jurisdiction acts so that any material provision of this Agreement is unenforceable according to its terms, or is otherwise void, the parties agree to immediately enter into negotiations in good faith to restore the relative burdens and benefits of this Franchise. If the parties are unable to agree to a modification of this Franchise within 90 days, either party may with ninety (90) days prior notice, terminate or shorten the Franchise term; or resort to litigation to seek any available equitable relief; or do both. Each party agrees to participate in up to sixteen (16) hours of negotiation during the 90-day period provided for good faith negotiations. Notwithstanding the foregoing, if a party believes a provision is not material, it must so notify the other party within thirty (30) days of a request by such other party that it enter into negotiations, or else the materiality claim is waived. The obligation to negotiate is not tolled, and the parties must discharge their negotiation responsibility notwithstanding a dispute as to materiality. The remedies provided for herein do not prevent a party from contending that a particular provision is enforceable, or foreclose any remedies if a provision is enforceable.

2.12. Effect of Change in Law. Subject to Section 2.11, in the event that State or Federal laws, rules, or regulations preempt a provision or limit the enforceability of a provision of this Franchise, then the provision shall be read to be preempted to the extent and for the time, but only to the extent and for the time, that such laws, rules or regulations validly act to preempt such provision. In the event such State or Federal 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 City.

Section 3. Transfers.

3.1. No Transfer Without City Approval. Franchisee agrees that the rights granted to it by the City are personal in nature and held in trust. No Transfer may occur without the prior consent of the City. An Application for a Transfer, containing all information required under Applicable Law, must be filed before a request for a Transfer will be considered by the City.

3.2. Application for Transfer To Be Considered In Accordance With Cable Ordinance. An Application for a Transfer will be considered in accordance with the standards set forth in the Cable Ordinance.

Section 4. Franchise Fee.

4.1. Payment to City. Except as otherwise provided pursuant to the Cable Ordinance, the Franchisee shall pay the City a franchise fee in an amount equal to five percent (5%) of Gross Revenues derived by the Franchisee, or any cable operator of the Cable System from the operation of the Cable System to provide cable services. To prevent evasion of franchise fees, to the extent that Franchisee offers bundles of cable and non-cable services at discounted rates, the fees attributable to cable service will be charges that apply to persons who purchase the cable services from Franchisee separately.

4.2. Not in Lieu of Any Other Assessments, Tax or Fee. The franchise fee is in addition to all other fees, assessments, taxes or payments that the Franchisee may be required to pay under any Federal, State, or local law, subject to any limitations set forth in Applicable Law, including, but not limited to, 47 U.S.C. § 542.

4.3. Payments. Franchise fees shall be paid in accordance with the schedule set forth in the Cable Ordinance, and late payments shall be subject to the additional charges set forth in the Cable Ordinance.

4.4. No Accord or Satisfaction. No acceptance of any payment by the City shall be construed as a release or an accord and satisfaction of any claim the City may have for further or additional sums payable as a franchise fee or for the performance of any other obligation of the Franchisee.

4.5. Payment Records. The City may, from time to time, and upon reasonable advance written notice, inspect and audit any and all books and records to determine whether Gross Revenues and franchise fees have been accurately computed and paid.In addition to paying all fees owed plus interest, in the event that the City reviews the Franchisee’s franchise fee payments, and finds that the Franchisee has underpaid the fee owed for any year in an amount exceeding five percent (5%) of the franchise fees actually paid or Ten Thousand Dollars ($10,000), whichever is less, Franchisee shall pay the reasonable cost of the City’s review. Nothing in this paragraph prevents Franchisee from challenging the City’s finding in a court of competent jurisdiction, or from recouping amounts paid to cover City’s review costs, should Franchisee prevail on the challenge.

4.6. Consumer Disclosure. The amount of a Subscriber’s total bill assessed as a franchise fee may be listed as a separate line item.

Section 5. Construction Provisions.

5.1. Provision of Service.

[TO BE INSERTED PER RFRP]

5.2. Construction Standards. Without limiting Section 2, Franchisee agrees that at all times it will satisfy the following, minimum conditions:

5.2.1. Minimum Conditions. The construction, operation, and repair of the Cable System will be in accordance with all Applicable Law. At a minimum, Franchisee shall comply with the Manual of Construction Procedures submitted on [DATE]; IEEE standards, the National Electric Code, the National Electrical Safety Code and any other applicable safety codes. The most stringent applicable code or standard will apply in the event of any conflict (except insofar as that standard, if followed, would result in a system that could not meet requirements of Federal, State or local law). Franchisee will employ reasonable care at all times, within the meaning of Applicable Law, and will install and maintain in use commonly accepted methods and/or devices to reduce the likelihood of damage, injury, or nuisance to the public. Franchisee shall ensure that the construction, operation, and maintenance of the Cable System shall be performed by experienced and properly trained maintenance and construction personnel.

5.2.2. Compliance with Laws. Franchisee must install, locate, relocate and remove its Cable System in accordance with the Franchise, the Cable Ordinance and all other Applicable Laws. Franchisee shall not place or maintain its Cable System, including any poles or other structures, in Public Rights-of-Way or on private property except in strict accordance with the requirements of the Franchise, the Cable Ordinance and all other Applicable Laws.

5.2.3. Relocation for Government. Franchisee will protect, support, temporarily disconnect, relocate, or remove any of its property at the time and in the manner required by the City or any other governmental entity for any public purpose.

5.2.3.1. City shall provide written notice describing where the public work is to be performed at least fifteen (15) days prior to the deadline by which Franchisee must protect, support, temporarily disconnect, relocate or remove its facilities. Franchisee may seek an extension of the time to perform the work where it cannot be performed in a week even with the exercise of due diligence, and such request for an extension will not be unreasonably refused.

5.2.3.2. In an emergency, or where Franchisee’s Cable System creates or is contributing to an imminent danger to health, safety, or property, City may protect, support, temporarily disconnect, remove, or relocate any or all parts of the Cable System without prior notice, and charge the Franchisee for the costs associated with the work, including staff time. Franchisee shall pay amounts billed within thirty (30) days after a bill is submitted to Franchisee by the City.

5.2.3.3. The Franchisee may abandon any property in Public Rights-of-Way that is in place upon written notice to the City and separate notice to the City’s Director of Public Works. Abandonment shall be accomplished in a manner acceptable to the City’s Director of Public Works. However, if, within ninety (90) days of the receipt of written notice of abandonment, the City determines, that the safety, appearance, functioning or use of the public right-of-way or public property and facilities in the public right-of-way or on public property will be adversely affected, the property must be removed by a date reasonably specified by the City in light of the amount of work to be performed.

5.2.3.4. If the Franchisee abandons its property, Franchisee must, upon request, transfer ownership of the property to the City at no costs, and execute necessary quitclaim deeds, provided that nothing in this Section 5.2.3.4. prevents Franchisee from bringing an action in a court of competent jurisdiction if Franchisee believes that its property was not abandoned. Whether or not ownership is transferred, Franchisee must indemnify the City against future costs associated with mitigating or eliminating any hazard associated with the abandoned property.

5.2.4. Potholing. Franchisee must bear costs of potholing for any City project (whether undertaken by the City alone, or jointly). Within thirty (30) days after receiving the City’s written request, unless the City agrees otherwise, Franchisee will expose its subsurface Cable System facilities by potholing (digging a test hole) to a depth of one (1) foot below the bottom of such facilities.

5.2.5. Utility Relocations.

5.2.5.1. If any relaying, relocation or temporary removal is required to accommodate the construction, operation, or repair of the facilities of another Person authorized to use Public Rights-of-Way, Franchisee will, no later than after fifteen (15) days’ advance written notice, or such other date as the Person may specify, effect the necessary changes requested by such Person. Costs will be borne as provided in the Cable Ordinance.

5.2.5.2. The City may direct Franchisee to remove, relay relocate or temporarily remove its facilities pending resolution of a dispute as to responsibility for costs upon posting of a bond by the Person requesting such relaying, relocation or temporary removal in the amount of Franchisee’s estimated costs.

5.2.6. Permit Holders. Upon the request of a Person holding a valid permit, a Franchisee will temporarily raise or lower its wires by a time specified to permit the moving of buildings or other objects. The Franchisee shall be given not less than fifteen (15) days advance written notice to make the temporary wire changes. Costs will be borne as provided in the Cable Ordinance.

5.2.7. Repair of Disturbances and Damage. The Franchisee shall repair any disturbance or damage to private property caused by Franchisee’s construction, operation or repair of the Cable System promptly and to a condition that complies with the then-current Municipal Code and that is as good or better than its prior condition. The Franchisee shall repair any disturbance or damage to public property or to Public Rights- of-Way caused by Franchisee’s construction, operation or repair of the Cable System to a condition as good or better than its prior condition, in a manner and within a time approved or specified by the Director of Public Works. Without limiting the foregoing, or provisions of Section 5.9, Franchisee agrees to compensate any entity whose property is damaged in the course of the construction, operation or repair of the Cable System where the property is not restored by Franchisee to a condition as good or better than existed before the damage.

5.3. Pole attachments and conduits. Franchisee will provide free and useable access to its poles and conduits to the City and for PEG (including I-NET) Uses.

5.4. Notice of use. Franchisee will notify the City when it enters into an agreement for use of its poles and conduits. Copies of agreements for use of Franchisee’s conduits or poles in Public Rights-of-Way will be made available for review upon the City’s request. Copies of existing agreements for use of conduits or other facilities shall be filed with the City upon the effective date of this Franchise, and additional agreements and amendments to agreements shall be filed with the City within sixty (60) days of their execution.

5.5. Contractors and Subcontractors. Franchisee shall ensure that any contractor or subcontractor used for work on construction, operation, or repair of the Cable System is properly licensed under laws of the State and all applicable local ordinances. Each contractor or subcontractor shall have the same obligations with respect to its work as Franchisee would have under this Franchise and Applicable Law if the work were performed by Franchisee. The Franchisee shall be responsible for ensuring that the work of contractors and subcontractors is performed consistent with this Franchise and Applicable Law, shall be responsible for all acts or omissions of contractors or subcontractors, and shall be responsible for promptly correcting acts or omissions by any contractor or subcontractor. Franchisee shall institute procedures adequate to ensure that the work performed by its contractors and subcontractors complies with the requirements of this Franchise and Applicable Law.

Section 6. Preservation of PEG Benefits and Status Quo.

[TO BE INSERTED PER RFRP]

Section 7. System Facilities, Equipment and Services.

7.1. General System Design.

[TO BE INSERTED PER RFRP]

7.2. System Maintenance.

7.2.1. Franchisee may intentionally interrupt service on the Cable System only for required testing, maintenance or other good cause and only for the shortest time possible and, except in emergency situations or to the extent necessary to fix the affected Subscriber’s service problems, only after a minimum of forty-eight (48) hours’ prior notice to Subscribers and the City of the anticipated service interruption; provided, however, that no service interruption notice to the City shall be required for planned maintenance that (i) does not require more than two (2) hours’ interruption of service; and (ii) occurs between the hours of 1:00 a.m. and 6:00 a.m.

7.2.2. Franchisee shall adopt and upon request submit to the City comprehensive maintenance guidelines, which shall include procedures for preventative maintenance. Except insofar as the same are inconsistent with Applicable Law, Franchisee shall follow its maintenance guidelines, subject to such reasonable deviations as are not likely to significantly affect plant life or performance. Franchisee shall review and update the guidelines as necessary to ensure the Cable System is adequately maintained.

7.3. Inspection and Testing. The City shall have the right to inspect the Cable System during and after the upgrade to ensure compliance with the Cable Ordinance, this Franchise, and Applicable Law. In the event Subscriber complaints or the City’s investigation indicates to City that there may be a problem with the System, City may, upon reasonable notice require the Franchisee (i) to perform tests of the Cable System; and (ii) to prepare a report to the City on the results of those tests, including a statement identifying any problems found and the actions taken to correct those problems. This provision is subject to any limitations on the City’s authority under Applicable Law.

7.4. FCC-Mandated Testing. Franchisee shall notify the City in advance of conducting any Proof-of-Performance test required by the FCC, so that the City may observe the testing. Upon request, the City shall be provided the test results and any supporting documentation regarding the tests and testing equipment and procedures.

Section 8. I-NET.

[TO BE INSERTED PER RFRP]

Section 9. Interconnections.

[TO BE INSERTED PER RFRP]

Section 10. Subscriber Network Channels and Facilities for PEG Use.

[TO BE INSERTED PER RFRP]

10.1. Miscellaneous PEG Requirements.

[TO BE INSERTED PER RFRP]

10.2. Cable Outlets for Educational and Government Facilities.

[TO BE INSERTED PER RFRP]

Section 11. Operation and Reporting Provisions.

11.1. Open Books and Records. Without limiting its obligations under Section 2, Franchisee agrees that it will collect and make available books and records for inspection and copying by the City in accordance with the Cable Ordinance.

11.1.1. Production. Books and records shall be produced to the City at City Hall, or such other location as the parties may agree. If Franchisee objects to a request for books and records, and the City does not agree that they need not be produced, Franchisee must produce the books and records unless it has obtained an Order restricting the request from a court of competent jurisdiction. Notwithstanding any provision of the Cable Ordinance, if it is not reasonable for the requested documents to be moved because (i) they are too voluminous; (ii) for security reasons; or (iii) the requested records contain trade secrets, then the Franchisee may request that City inspection and copying of such records take place at some other location mutually agreed to by the City and the Franchisee, and City shall not unreasonably refuse to accede to the request provided that:

11.1.2. The Franchisee must make necessary arrangements for copying documents selected by the City after its review; and

11.1.3. The Franchisee must pay all reasonable travel and additional copying expenses incurred by the City (above those that would have been incurred had the documents been produced in the City) in inspecting those documents or having those documents inspected by its designee.

11.1.4. The parties agree that any amounts paid pursuant to this Section 11.2 are not a franchise fee within the meaning of 47 U.S.C. § 542 and fall within one of the exceptions listed in 47 U.S.C. §542(g)(2).

11.2. Reports Required. The Franchisee shall file reports in accordance with the Cable Ordinance.

11.3. Uses of System. Without limiting the foregoing, upon request, Franchisee must advise the City of all services it provides via the Cable System at least thirty (30) days prior to offering such services (the term “services” for purposes of this section, would include, without limitation, the provision of dark fiber), for entertainment and other purposes, such as data transmission, local area networks, and voice transmission; and to the extent known, the services that are provided by third parties via the Cable System.

11.4. Records Maintained. The Franchisee shall maintain records sufficient to comply with the requirements of the Cable Ordinance, and to show compliance with all the provisions of this Franchise.

11.5. Retention of Records; Relation to Privacy Rights. Franchisee shall take all steps required, if any, to ensure that it is able to provide the City all information which must be provided to the City or that may be requested by the City under Applicable Law or this Franchise, including by providing appropriate Subscriber privacy notices. Nothing in this section shall be read to require a Franchisee to violate 47 U.S.C. § 551 or other Applicable Law governing privacy. Franchisee shall be responsible for redacting any data that State or Federal law prevents it from providing to the City. Records shall be kept for at least five (5) years, except that service call logs may be retained for three (3) years, so long as the information contained therein is reflected in other documents.

Section 12. Customer Service Standards. Franchisee shall meet or exceed the customer service standards of the Cable Ordinance and Applicable Law.

Section 13. Rate Regulation. The City may regulate Franchisee’s rate and charges, and order refunds of unreasonable rates charged, except to the extent that it is preempted from doing so by Applicable Law. All rates that are regulated by the City must be reasonable and, except as Applicable Law provides otherwise, can only be established or changed with the prior approval of the City. Failure of the Franchisee to comply with rate orders issued by the City shall constitute a material breach of the Franchise, subjecting the Franchisee to liquidated damages as set forth in Section 15.4.1.5.

Section 14. Insurance; Surety; Indemnification.

14.1. Insurance.

14.1.1. Franchisee agrees to maintain adequate insurance during the entire term of the Franchise against claims for injuries to persons or damage to property which in any way relate to, arise from, or are connected with the holding of the Franchise or the construction, operation or repair of the Cable System by the Franchisee, its agents, representatives, contractors, subcontractors and employees. Franchisee must keep insurance in effect in accordance with the minimum insurance scope the City may set from time to time. The City may change insurance requirements once every three (3) years after providing Franchisee notice of the proposed changes and the opportunity to comment upon the proposed changes.

14.1.2. The initial minimum amounts, form, quality and proof of insurance that must be provided and maintained through the Franchise term are set forth in Exhibit []. Franchisee warrants that its insurance policies comply in all respects with the requirements of Exhibit []. Copies of the policies will be provided upon request.

14.1.3. The insurance requirements are material terms of this Franchise.

14.2. Indemnification.

14.2.1. To the extent permitted by Applicable Law, Franchisee will, at its sole cost and expense, fully indemnify, hold harmless, and faithfully defend the City, its officials, boards, commissions, commissioners, agents, and employees, against any and all claims, suits, causes of action, proceedings, and judgments for damages or equitable relief in any way arising out of :

14.2.1.1. Construction, repair, or operation of the Franchisee’s Cable System;

14.2.1.2. Any claim against the Franchisee for invasion of the right of privacy, defamation of any Person, firm or corporation;

14.2.1.3. Violation or infringement of any copyright, trade mark, trade name, service mark, or patent, or of any other right of any Person, firm, or corporation, including a failure by the Franchisee to secure consents from the owners, authorized distributors, or licensees of programs to be delivered by the Cable System;

14.2.1.4. The conduct of the Franchisee’s business in the City; or

14.2.1.5. The Franchisee’s enjoyment or exercise of its Franchise, regardless of whether the act or omission complained of is authorized, allowed, or prohibited by Applicable Law or this Franchise.

14.2.2. Notwithstanding the foregoing Section 14.2.1, the Franchisee need not indemnify the City in cases where liability is:

14.2.2.1. Solely caused by the gross and active negligence or willful misconduct of the person or persons covered by the indemnity;

14.2.2.2. Results from communications contributed or produced by the City and transmitted over the Cable System; or

14.2.2.3. Results from communications carried on any Channel set-aside for PEG Use, or Channels leased pursuant to 47 U.S.C. § 532, except for communications contributed or produced by the Franchisee.

14.2.3. The City will notify the Franchisee in writing of its duty to indemnify in any case subject to the indemnity in which the Franchisee is not a named defendant or plaintiff. The Franchisee will employ competent counsel, reasonably acceptable to the City Attorney.

14.3. No Limit of Liability. The provisions of this Section 14 shall not be construed to limit the liability of Franchisee for damages.

14.4. Governmental Immunities. Nothing in this Section 14 is intended to waive or limit any of the City’s governmental immunities.

Section 15. Performance Guarantees and Remedies.

15.1. Security Fund.

15.1.1. In satisfaction of the security fund requirements of the Cable Ordinance, Sec. 15.28.430, as the same existed on the Effective Date of this Franchise, the Franchisee shall provide a letter of credit in the amount of One Hundred Thousand Dollars ($100,000). The letter of credit may be drawn upon in accordance with the Cable Ordinance as it existed on the Effective Date of this Franchise. The City may require the Franchisee to increase the amount of the letter of credit once every three (3) years to reflect increases in the U.S. City Average of the Consumer Price Index.

15.1.2. Franchisee shall provide proof that the letter of credit complies with this Franchise and with all other requirements of the Cable Ordinance.

15.1.3. Upon termination of the Franchise, the City shall authorize the Franchisee to terminate the letter of credit within one hundred eighty (180) days of Franchise termination, provided that there is then no outstanding obligation secured by the letter of credit; provided that the letter of credit shall be deemed forfeited if the Franchise is revoked or the Cable System is abandoned.

15.2. Performance Bond.

15.2.1. Before undertaking the Cable System upgrade required by this Franchise, Franchisee shall obtain a performance bond in the amount of Three Hundred Thousand Dollars ($300,000).

15.2.2. The performance bond shall:

15.2.2.1. Secure the faithful performance of all work required by the Franchise, including, but not limited to, completion of the I-NET;

15.2.2.2. Provide for restoration of the Public Rights-of-Way and other property that may be affected by the construction, operation or repair of the Cable System.

15.2.3. The bond shall state that the City may also recover against the bond any amount recoverable against the Security Fund where such amount exceeds that available under the Security Fund.

15.2.4. The bond shall provide that, in the event Franchisee fails to complete the Cable System construction, upgrade, other work in the Public Rights-of-Way, or work required by the Franchise, in a safe, timely, and competent manner, or otherwise fails to comply with its obligations under the Franchise or Applicable Law, there shall be recoverable, jointly and severally from the principal and surety of the bond, any damages or loss suffered by the City as a result, including the full amount of any compensation, indemnification, or cost of removal or abandonment of any property of the Franchisee, or the cost of completing or repairing the Cable System construction, upgrade, or other work in the Public Rights-of-Way, plus a reasonable allowance for attorneys’ fees, up to the full amount of the bond.

15.2.5. The performance bond shall provide that it shall be forfeited to the City under following conditions:

15.2.5.1. the Franchisee abandons the Cable System; or

15.2.5.2. the Franchise is revoked for cause.

15.2.6. The performance bond shall be issued by a surety with an A-1 or better rating of insurance in Best’s Key Rating Guide, Property/Casualty Edition; shall be subject to the approval of the City; and shall contain the following endorsement: “This bond may not be canceled, or allowed to lapse, until sixty (60) days after receipt by the City, by certified mail, return receipt requested, of a written notice from the issuer of the bond of intent to cancel or not to renew.”

15.2.7. In addition to the performance bond required by Section 15.2.1, Franchisee shall obtain, prior to any Cable System construction, or other work in Public Rights-of-Way, bonds in the amounts and subject to such terms established by the City consistent with its normal practices, based upon the work to be performed. The City will respond to the application to reduce such bonds in accordance with its ordinary practices for bond reduction.

15.3. Material Term. The required performance bond and letter of credit are material terms of this Franchise.

15.4. Liquidated Damages.

15.4.1. Because the Franchisee’s failure to comply with provisions of its Franchise will result in injury to the City, and because it will be difficult to estimate the extent of such injury, the City and the Franchisee agree to the following liquidated damages for the following violations, which represent both parties’ best estimate of the damages to the City resulting from the specified injury. To maintain that estimate, the parties agree that the liquidated damage amounts are in 2000 dollars and shall be increased once every three (3) years by the increase in the U.S. City Average of the Consumer Price Index. Thus, treating 2000 as the base year, indexed as 100, and assuming that by 2003 the index had increased a total of 15%, liquidated damages amounts would be increased by 15%. The parties further agree that the damages specified are to the City, and are recoverable by the City. Damages accrue from the date of the violation; provided that, nothing herein prevents Franchisee from raising a defense to the imposition of liquidated damages from the date of violation based upon laches, waiver, statute of limitations, or any other similar defense. Franchisee expressly acknowledges and agrees that Liquidated damages are not, and shall not be treated by Franchisee as, Franchise Fees.

15.4.1.1. For failure to complete construction of the Subscriber Network in accordance with the Franchise: One Dollar ($1.00)/day for each affected subscriber for each day the violation continues.

15.4.1.2. For transferring the Franchise without required approval: One Thousand Dollars ($1,000)/day for each violation for each day the violation continues.

15.4.1.3. For failure to comply with requirements for PEG Use of the Cable System for which damages to the City are not readily ascertainable: Five Hundred Dollars ($500)/day for each violation for each day the violation continues.

15.4.1.4. For violation of customer service standards: Two Hundred Dollars ($200) per violation, except for violations of customer service standards, such as telephone answering standards, where the operator’s compliance is not measured in terms of its response to individual customers, Two Thousand Dollars ($2,000) a month for any period during which it fails to meet applicable performance standards; and

15.4.1.5. For all other material violations of the Franchise for which actual damages may not be ascertainable: Five Hundred ($500)/day for each violation for each day the violation continues.

15.4.2. The City may order Franchisee to pay liquidated damages, and Franchisee shall make full payment of the liquidated damages amount to City within thirty (30) days of the date of the City’s order for the payment of those liquidated damages. Before doing so, the City must provide the Franchisee notice of the alleged violation, and provide the Franchisee with an opportunity to be heard, to show either that a violation has not occurred or that damages should not be imposed.

15.5. Revocation or Termination of Franchise. In addition to all other rights of the City under this Franchise, the City shall have the right to revoke or shorten the term of the Franchise for the reasons specified in the Cable Ordinance as of the Effective Date of this Franchise, pursuant to the revocation procedures specified in the Cable Ordinance. Provided that, any amendments to the Cable Ordinance must provide the same level of due process as is provided under the procedures provided for under the Cable Ordinance as the same existed on the Effective Date of this Franchise.

15.6. Remedies Cumulative. All remedies under the Cable Ordinance and this Franchise are cumulative unless otherwise expressly stated. The exercise of one remedy shall not foreclose use of another, nor shall the exercise of a remedy or the payment of liquidated damages or penalties relieve the Franchisee of its obligations to comply with its Franchise. Remedies may be used singly or in combination; in addition, the City may exercise any rights it has at law or equity. Except that, the City is not entitled to recover damages for the same act or omission under multiple remedies where doing so would result in a double recovery of damages.

15.7. Relation to Insurance and Indemnity Requirements. Recovery by the City of any amounts under insurance, the construction/performance bond, the letter of credit, or otherwise does not limit the Franchisee’s duty to indemnify the City in any way; nor shall such recovery relieve the Franchisee of its obligations under the Franchise, limit the amounts owed to the City, or in any respect prevent the City from exercising any other right or remedy it may have.

Section 16. Rights of Individuals Protected.

16.1. General Obligations. Franchisee shall comply with all provisions of the Cable Ordinance and Applicable Law regarding nondiscrimination, privacy and protection from exposure to indecent or obscene programming.

16.2. Respect for Property. No cable, line, wire, amplifier, converter or other piece of equipment owned or controlled by the Franchisee shall be installed by the Franchisee inside a dwelling or other occupied structure without first securing the written permission of the owner or the lawful occupant of the property involved (except in those cases where the Franchisee is permitted by Federal or State law or regulations to install such facilities and equipment inside the structure without permission).

16.3. Non-discrimination. Without limiting Section 16.1, Franchisee agrees as follows:

16.3.1. Franchisee will not deny service, deny access, or otherwise discriminate against Subscribers, PEG programmers, or residents of the City on the basis of race, color, creed, national origin, sex, age, conditions of physical handicap, religion, ethnic background, marital status, or sexual orientation. Franchisee will comply at all times with all Applicable Law relating to non-discrimination.

16.3.2. Franchisee will not discriminate among Persons or the City or take any retaliatory action against a Person or the City because of the exercise of any right the Person or the City may have under Applicable Law, nor may the Franchisee require a Person or the City to waive such rights as a condition of taking service.

16.3.3. Franchisee will not deny access or levy different rates and charges on any group of potential residential cable Subscribers because of the income of the residents of the local area in which such group resides.

16.3.4. Except to the extent the City may not enforce such a requirement, a Franchisee is prohibited from discriminating in its rates or charges or from granting undue preferences to any Subscriber, potential Subscriber, or group of Subscribers or potential Subscribers.

16.3.4.1. Franchisee may, however, offer temporary, bona fide promotional discounts in order to attract or maintain Subscribers, so long as such discounts are offered on a non-discriminatory basis to similar classes of Subscribers throughout the Franchise Area.

16.3.4.2. Franchisee may, however, offer such other discounts as it is expressly entitled to provide under Applicable Law.

16.3.5. Franchisee will not refuse to employ, discharge from employment, or discriminate against any Person in compensation or in terms, conditions, or privileges of employment because of race, color, creed, national origin, sex, age, conditions of physical handicap, religion, ethnic background, marital status, or sexual orientation. Franchisee will comply with all Applicable Law governing equal employment opportunities.

Section 17. Continuity of Service.

17.1. It is the right of each Subscriber in the Franchisee’s Franchise Area to receive all available Cable Services from the Franchisee as long as the Subscriber’s financial and other obligations to the Franchisee are satisfied.

17.2. The Franchisee shall ensure that all Subscribers receive continuous uninterrupted Cable Service. At the City’s request, the Franchisee shall operate its System for a temporary period (the “transition period”) following the termination of its Franchise or any transfer as necessary to maintain Cable Service to Subscribers, and shall cooperate with the City to assure an orderly transition from it to another entity. The transition period shall be no longer than the reasonable period required to select another entity and to build a replacement Cable System, and shall not be longer than sixty (60) months, unless extended by the City for good cause. During the transition period, the Franchisee will continue to be obligated to comply with the terms and conditions of this Franchise and Applicable Laws and regulations, and will be deemed to have the necessary authorization required from the City to enable it to provide Cable Service.

17.3. If the Franchisee abandons its Cable System during the Franchise term or any transition period, or fails to operate its Cable System in accordance with the terms set forth in Section 17.4 below, the City, at its option, may operate the Cable System or designate another entity to operate the Cable System temporarily until the Franchisee agrees to restore and restores continuous Cable Service in compliance with the Franchise and the Cable Ordinance or until the Franchise is revoked and a new entity selected by the City is providing Cable Service.

17.4. The City shall be entitled to exercise its rights under Section 17.3 if the:

17.4.1. Franchisee fails to provide Cable Service in accordance with its Franchise over a substantial portion of the Franchise Area for ninety-six (96) consecutive hours, unless such failure is due to force majeure or the City authorizes a longer interruption of service; or

17.4.2. The Franchisee, for any period, willfully and without cause refuses to provide Cable Service in accordance with its Franchise over a substantial portion of the Franchise Area.

17.5. Rights Upon Franchise Termination or Revocation. If the City revokes the Franchise or the Franchise otherwise terminates, the City shall have the following rights, in addition to the rights specified in this Franchise or under Applicable Law:

17.5.1. The City may require the former Franchisee to remove its facilities and equipment at the former Franchisee’s expense. If the former Franchisee fails to do so within a reasonable period of time, the City may have the removal done at the former Franchisee’s and/or surety’s expense, subject to any right of abandonment that may be provided for under Applicable Law.

17.5.2. The City, by the City Council resolution, may acquire ownership or effect a Transfer of the Cable System at fair market value, or, if the Franchise terminates or is revoked for cause in accordance with the Cable Ordinance, at an equitable price. The terms “equitable price” and “fair market value” shall be interpreted in accordance with 47 U.S.C. § 547.

17.5.3. Section 17.5.2 does not apply to an abandonment. If a Cable System or any part thereof is abandoned by Franchisee, the City may require the Franchisee to transfer title to the abandoned portions to it at no charge, free and clear of encumbrances, and the same will become the City’s property and the City may keep, sell, assign, or transfer all or part of the assets of the Cable System, or otherwise dispose of those assets as it sees fit.

Section 18. Miscellaneous Provisions.

18.1. Compliance With Laws. The Franchisee shall comply with all applicable Federal, State and local laws and regulations as they become effective, unless otherwise stated herein.

18.2. Governing Law. This Franchise shall be governed and construed in accordance with the statutes and laws of the State of California.

18.3. No Pledging of City’s Credit. Under no circumstances shall Franchisee have the authority or power to pledge the credit of City or incur any obligation in the name of City. Franchisee shall save and hold harmless the City, its City Council, its officers, employees, boards and commissions for expenses arising out of any unauthorized pledges of City’s credit by Franchisee under this Franchise.

18.4. Venue. In the event that suit shall be brought by either Party, the Parties agree that venue shall be exclusively vested in the Santa Clara County Superior Court, or, where otherwise appropriate, exclusively in the United States District Court for the Northern District of California.

18.5. Conflict of Interest. Franchisee certifies that to the best of its knowledge, no City employee or officer of any public agency has any pecuniary interest in the business of Franchisee and that no person associated with Franchisee has any interest that would conflict in any manner or degree with the performance of this Franchise. Franchisee represents that it presently has no interest and shall not acquire an interest, direct or indirect, which could conflict in any manner or degree with the provisions of California Government Code Section 87100 et seq., and certifies that it does not know of any facts which constitute a violation of said provisions. Franchisee will advise City if a conflict arises; provided, however, nothing herein shall be deemed to create a duty for Franchisee to disclose any publicly traded securities of Franchisee which may be held by any such City employee or officer and which are obtained through ordinary public market transactions, without any financial or special assistance from Franchisee.

18.6. Force Majeure. The Franchisee shall not be deemed in default with provisions of its Franchise where performance was rendered impossible by war or riots, civil disturbances, floods or other natural catastrophes beyond the Franchisee’s control or the unforeseeable unavailability of labor or materials. The acts or omissions of Affiliates are not beyond the Franchisee’s control, and the knowledge of Affiliates shall be imputed to Franchisee. The Franchise shall not be revoked nor shall Franchisee be required to pay liquidated damages for such noncompliance, provided that the Franchisee takes immediate and diligent steps to bring itself back into compliance and to comply as soon as possible under the circumstances with its Franchise without unduly endangering the health, safety and integrity of the Franchisee’s employees or property, or the health, safety and integrity of the public, Public Rights-of-Way, public property, or private property.

18.7. Notices. Unless otherwise expressly stated herein, notices required under this Franchise shall be mailed first class, postage prepaid, or sent overnight delivery to the addressees below. Each party may change its designee by providing written notice to the other party, but each party may only designate one entity to receive notice.

18.7.1. Notices to the Franchisee shall be mailed to:

19.7.2. Notices to the City shall be mailed to:

City Manager

City of San Jose

801 North First Street

San Jose, CA 95110

18.8. Calculation of Time. Unless otherwise indicated, when the performance or doing of any act, duty, matter or payment is required hereunder and a period of time or duration for the completion thereof is prescribed and is fixed herein, the time shall be computed so as to exclude the first and include the last day of the prescribed or fixed period of duration/time.

18.9. Time of Essence; Maintenance of Records of Essence. In determining whether the Franchisee has substantially complied with its Franchise, the parties agree that time is of the essence to this Franchise. The maintenance of records and provision of reports in accordance with the Franchise is also of the essence to this Franchise.

18.10. Captions. The captions and headings of this Franchise are for convenience and reference purposes only and shall not affect in any way the meaning and interpretation of any provisions of this Franchise.

PASSED FOR PUBLICATION OF TITLE this _________ day of _______, 2001.

AYES:

NOES:

ABSENT:

DISQUALIFIED:

RON GONZALES, Mayor

ATTEST:

PATRICIA L. O’HEARN, City Clerk

EXHIBIT []

ACCEPTANCE

[NAME], [TITLE] [COMPANY][ADDRESS], hereby accepts unconditionally and agrees to be bound fully by all the terms and conditions of the Franchise granted by Ordinance No. _____, as adopted by the San Jose City Council.

[Signatures]