Appendix A -- Franchises

APPENDIX A FRANCHISES*

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*Charter reference--Public utility franchises, ch. 16.

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Article I. Southeastern Michigan Gas Company

Sec. 1-1. Grant.

Sec. 1-2. Extension and care in laying distribution system.

Sec. 1-3. Service required.

Sec. 1-4. Street obstructions.

Sec. 1-5. Replacement of services.

Sec. 1-6. Use and occupation of streets.

Sec. 1-7. Distribution map.

Sec. 1-8. Right to purchase.

Sec. 1-9. Forfeiture.

Sec. 1-10. Transfer of franchise.

Sec. 1-11. Extent and duration of franchise.

Sec. 1-12. Notice of entry upon street.

Sec. 1-13. Rules and regulations.

Sec. 1-14. Limit of franchise.

Article II. Americable Cable Communications

Sec. 1. Purpose and intent.

Sec. 2. Title.

Sec. 3. Definitions.

Sec. 4. Grant of authority.

Sec. 5. Authority not exclusive.

Sec. 6. Previous rights abandoned.

Sec. 7. Agreement, acceptance and incorporation of chapter 26 by reference.

Sec. 8. Right of city to issue franchise.

Sec. 9. Effective date of franchise.

Sec. 10. Time is of the essence to this agreement.

Sec. 11. Taxes.

Sec. 12. Franchise agreement.

Sec. 13. Construction and reconstruction of cable system.

Sec. 14. Relocation and construction costs.

Sec. 15. Cable service.

Sec. 16. Telephone standards.

Sec. 17. System configuration.

Sec. 18. Educational access.

Sec. 19. Transfer of rights.

Sec. 20. Liquidated damages.

Sec. 21. Letter of credit.

Sec. 22. Insurance, bonds, indemnity.

Sec. 23. Reports.

Sec. 24. Character generator.

Sec. 25. Payment of fees and costs.

Sec. 26. Local programming.

Sec. 27. Initial rates.

Sec. 28. Service of notice.

Sec. 29. Successors and assigns.

Sec. 30. Indemnification.

Sec. 31. Interpretation of agreement.

Sec. 32. Force majeure.

Sec. 33. Application.

Sec. 34. Equipment.

Sec. 35. Severability.

Sec. 36. Guarantee.

ARTICLE I. SOUTHEASTERN MICHIGAN GAS COMPANY*

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*Editor's note--Printed herein is the gas company franchise, as adopted by the city council on April 7, 1975, and approved by public referendum on August 5, 1975. The absence of a history note indicates that the provision remains unchanged from the original franchise. Obvious misspellings and punctuation errors have been corrected without notation. For stylistic purposes, a uniform system of headings, catchlines, capitalization, citation to state statutes, and expression of numbers in text has been used to conform to the Code of Ordinances. Additions made for clarity are indicated by brackets.

Charter reference(s)--Public utility franchises, ch. 16.

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Sec. 1-1. Grant.

The Southeastern Michigan Gas Company, its successors and assigns, hereinafter called grantee, is hereby granted the right, privilege, franchise and authority to acquire, own, maintain and operate in said City of Albion, County of Calhoun, State of Michigan, a plant or plants for the production, distribution, transmission and sale of gas for heat, fuel, power, illumination and other purposes and to lay and maintain in, under and along the public streets, avenues, alleys and public places within the said City of Albion, County of Calhoun, State of Michigan, a system of mains, pipes, conductors and other necessary and convenient appurtenances and devices appropriate to and for the purposes of the production, distribution, transmission and sale of gas to the said City of Albion, County of Calhoun, State of Michigan, and the inhabitants thereof, and to persons, firms and corporations beyond the limits thereof and to do a local business therein subject to such reasonable regulations as shall be prescribed from time to time by the said city council.

Sec. 1-2. Extension and care in laying distribution system.

The mains, pipes, conductors and other appurtenances and devices necessary for the carrying on of the business of the grantee herein named, including service pipe connections, shall be so laid, maintained, repaired or renewed that they will not injure or interfere with any sewer, catch basin, drain, culvert, water pipe, conduit and other underground structure now in any public street, avenue, alley or other public place in said City of Albion, County of Calhoun, State of Michigan. The grantee shall make such extension to its system within such City of Albion as shall be reasonably required from time to time, in such manner and location as the city shall determine.

Sec. 1-3. Service required.

The grantee herein shall save and keep the said City of Albion, County of Calhoun, State of Michigan, harmless from any and all claims for damages to persons or property by reason of the construction, maintenance and operation of said plant and system and the use of the streets, avenues, alleys and public places in said City of Albion, County of Calhoun, State of Michigan, therefor, and shall reimburse the said City of Albion for its reasonable cost or expense for repairing any and all depressions or defects which may exist or develop in any portions of the streets, avenues, alleys or public places over any tunnel or excavation made by the grantee prior to such repairs and which may be caused by such tunnel and excavation, provided that the said City of Albion, shall first have notified the grantee of such depression or defects and the grantee shall have failed to repair the same for the period of ten days after such notice. Provided, however, that if the grantee knows of such conditions as are referred to above, or should have known of same, it shall be liable for such claims for damages irrespective of such notice having been provided by the City of Albion.

Sec. 1-4. Street obstructions.

Whenever the grantee shall begin the laying of mains, pipes, conduits, service pipes or other necessary or convenient appurtenances or devices within any street, avenue, alley or public place in said city, it shall promptly and diligently prosecute the work to completion and leave the streets, avenues, alleys and public places where such work is done in as good condition or repair as before such work was commenced. All laterals shall be laid and maintained by the grantee to the curb line. The grantee may make reasonable charges for furnishing and laying laterals from the curb line to the customer's meter.

Sec. 1-5. Replacement of services.

In case the City of Albion shall determine to make any improvements or repairs in or upon its streets, alleys or other public places, such as the repair or construction of sewers or water pipes or other public works, or any grading, repairing, paving or repaving of any of its streets, alleys or other public places, or any changing of the present customary grades, and it shall become necessary in making such improvements or repairs to temporarily take up or remove or interfere with the mains, drips or laterals of the grantee, or any part thereof, the said grantee hereby obligates itself to pay all costs incident thereto or in connection therewith, including the cost of replacing and refitting such equipment as has been removed or interfered with. The City of Albion agrees to protect the said grantee against any unauthorized interference with any of the property of the grantee by any person or persons now or hereafter in the employ of said city or who shall be doing work or making improvements or alterations in or upon the streets, alleys or other public places with the consent or under the authority of the said city. In the event any pipes and mains laid by the grantee from and after June 4, 1950, under the direction of the said city are thereafter required to be changed at the direction of the said city, then the cost of such change shall be apportioned between the said city and the grantee as follows: The said city shall pay toward such cost an amount equal to the book value of such pipes and/or mains replaced as determined by the grantee, or such other amount as the parties shall agree, with the provision that in determining such book value, the maximum usable life of such mains and pipes is 35 years from and after the date of their original installation.

Sec. 1-6. Use and occupation of streets.

The city may from time to time prescribe such rules and regulations with relation to the use and occupation by the grantee of said streets, alleys and public places as shall not be inconsistent with the provisions of the Charter of the said City of Albion.

Sec. 1-7. Distribution map.

Said grantee shall furnish the city at its request any section maps showing distribution of its gas mains.

Sec. 1-8. Right to purchase.

At any time after the date of acceptance of this ordinance by the said grantee, or at the time of the expiration of this ordinance, the said city may purchase and take over, upon the terms and conditions hereinafter set forth, the properties of said grantee actually used or useful in or inseparably connected with the manufacture, distribution or sale of gas and the residuals thereof within the City of Albion. The city shall not be bound to purchase said properties, unless it shall be decided in manner provided by law that said city shall own or operate facilities for supplying gas to its inhabitants, in which case the said city shall purchase and take over said properties in accordance with the terms and conditions of this section and shall, at least one year prior to the time fixed for completing said purchase notify the grantee of its decision so to purchase. The price to be paid by the said city for said properties, shall be equal to the actual fair value thereof as a going concern at the time of such purchase but shall not include, as an element of intangible value, any value of the original franchise granted to the grantee or of this franchise, and shall not exceed the cost of reproduction now of similar properties at that time plus the established business value which shall then exist. The value of said properties and the price to be paid therefor shall at least 90 days before the time in said notification fixed for completing said purchase, be determined by three appraisers, one of whom shall be chosen by the City of Albion, one by the said grantee, and the third by the two so chosen. The expense of said appraisal and valuation shall be borne by the city. A decision by the city to take over and purchase said properties shall bind said city to complete said purchase price therefor, and such obligation may be enforced in any court of competent jurisdiction.

Sec. 1-9. Forfeiture.

In case the grantee shall violate any of the provisions of this franchise and shall continue such violation for 30 days, the city council of said city may by ordinance duly passed, declare this franchise forfeited; provided, however, that the said city shall not be entitled to compel a forfeiture of this franchise unless and until the city council shall have given the grantee at least 30 days' notice of the intention of the city to so forfeit this franchise, during which period the grantee shall have the opportunity to void such forfeiture by correcting any failure to comply with the terms hereof.

Sec. 1-10. Transfer of franchise.

The said grantee at any time, by an instrument or instruments in writing, may lease, assign or alienate this franchise upon filing with the clerk of said city, a copy of such lease, assignment or other instruments of alienation subject to the consent of the council. The terms and conditions herein contained and the rights and privileges herein granted, shall have the same binding effect upon the successors and assigns of the Southeastern Michigan Gas Company as they have upon it. Provided, however, that this franchise shall not be leased, assigned or otherwise alienated except to a person or corporation which shall be the lessee, assignee or grantee of grantee's business and gas distribution system within the City of Albion.

Sec. 1-11. Extent and duration of franchise.

The rights, privileges and franchise hereby granted shall be in force and effect for a period of 30 years from the date of the passage of this franchise. The rights, privileges and franchise hereby granted shall not be construed to be exclusive and the city council of the City of Albion hereby reserves the power to grant similar rights, privileges and franchises to any other person or persons, firm or firms, corporation or corporations.

Sec. 1-12. Notice of entry upon street.

The said grantee shall, before entering upon any street, highway, alley, or other public place for the purpose of construction or installing any mains, pipes, gas works or other apparatus, notify the city council in writing of the proposed construction or installation and obtain a permit therefor, and shall, if so required, file with the city a sufficient plan and specifications showing the nature and extent of the proposed construction or installation.

Sec. 1-13. Rules and regulations.

The rules and regulations applicable to the service, the quality of the gas furnished, and the rates charged therefor by the grantee herein, its successors and assigns, shall be as fixed from time to time by the Michigan Public Service Commission or such other state authority as shall then have jurisdiction of the subject matter; or if there be none established by such authorities, then as the City of Albion shall provide.

Sec. 1-14. Limit of franchise.

This franchise shall remain in force for a period of 30 years following its confirmation by the electors of the City of Albion, in accordance with the statute and Charter provisions in such case made and provided.

ARTICLE II. AMERICABLE CABLE COMMUNICATIONS*

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*Editor's note--Printed herein is the contract for cable television, as adopted by the city council on July 17, 1990. Obvious misspellings and punctuation errors have been corrected without notation. For stylistic purposes, headings and catchlines have been made uniform and the same system of capitalization, citation to state statutes, and expression of numbers in text as appears in the Code of Ordinances has been used. Additions made for clarity are indicated by brackets. References to chapter 7 of the 1984 Code have been changed to reference the applicable section of chapter 26 of this Code without notation.

Cross reference(s)--Cable communications, ch. 26.

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Sec. 1. Purpose and intent.

This cable communications franchise agreement (hereinafter sometimes referred to as "franchise" or "agreement") is made and entered into this 17th day of July 1990, by and between the City of Albion (hereinafter referred to as "city") and Americable International-Michigan-Inc., a Florida Corporation with its principal place of business at 17301 Old Cutler Road, Miami, Florida 33157 (hereinafter referred to as "grantee").

Whereas, the city, pursuant to chapter 26 of the Code of the City of Albion, Michigan, as contained in Ordinance No. 1991-3 (hereinafter referred to as "chapter 26"), is authorized to grant one or more nonexclusive franchises to construct, maintain and operate a cable communications system within the city; and

Whereas, pursuant to said chapter and in accordance with the provisions of the Cable Communications Policy Act of 1984, P.L. 98-549, grantee has submitted a request for a franchise to provide cable service, and after evaluation of the request received from grantee the city has determined that it is in the best interest of the city and its residents to grant a franchise to grantee; and

Whereas, the city, after such consideration, analysis and deliberation, has approved and found sufficient the technical ability, financial condition, legal qualification and character of said grantee; and

Whereas, the city has also considered and analyzed the plans of the grantee for the operation of a cable communications system and found the same to be adequate and feasible in view of the needs and requirements of the city; and

Whereas, the city has determined that it is in the best interests of and consistent with the health, safety and welfare of the citizens of the city to grant a cable communications franchise to the grantee to operate a cable communications system within the confines of the city and on the terms and conditions hereinafter set forth; and

Whereas, the grantee has agreed to be bound by the conditions hereinafter set forth;

Now, therefore, in consideration of the granting of a franchise pursuant to this agreement, the grantee hereby promises to comply with the provisions of this agreement and chapter 26. In consideration of the grantee's promises, the city hereby grants to the grantee a franchise as set forth in this agreement.

Sec. 2. Title.

This agreement may be referred to as the "City of Albion, Michigan/Americable Cable Communications Franchise Agreement."

Sec. 3. Definitions.

The definitions set forth in section 26-1 of chapter 26 shall be applicable to the same terms as used in this agreement.

Sec. 4. Grant of authority.

(A) There is hereby granted by the city to the grantee, for a period of ten years from and after July 17, 1990, the right, privilege and franchise to have, acquire, construct, reconstruct, use, operate, own and maintain a cable system for the entire area of the city, subject to applicable law, to the terms and provisions of chapter 26 and to the conditions and restrictions as hereinafter provided. No privilege or power of eminent domain is bestowed by this grant of authority.

(B) The city hereby grants to grantee the authority to use the city's public streets, sidewalks, easements and other rights-of-way for the purposes of this agreement.

Sec. 5. Authority not exclusive.

The grant of authority for use of the city's public streets, sidewalks, easements and other rights-of-way, as conferred in section 4 of this agreement, is not exclusive and does not establish priority for use over other franchise holders, permit holders and the city's own use of public property. Additionally, the grantee shall respect the rights and property of the city and other authorized users of public streets, sidewalks, easements and rights-of-way. Disputes between the grantee and other parties over the use, pursuant to this agreement, of the public streets, sidewalks, easements and other rights-of-way shall be submitted to the director of public works for resolution, provided that grantee may appeal adverse decisions first to the city manager and subsequently to the circuit court for Calhoun County. Grantee shall reimburse the city's costs incurred in resolving an appeal subsequent to a decision by the city manager.

Sec. 6. Previous rights abandoned.

This agreement, upon its effective date, is in lieu of and shall operate as an abandonment of any and all other previous rights, privileges, powers, immunities and authorities owned, possessed, controlled or exercisable by grantee or any successor pertaining to the construction, operation, modification or maintenance of a cable system in the city. All construction, operation, modification and maintenance by the grantee of any cable system in the city shall thereafter be under this agreement and not under any other right, privilege, power, immunity or authority.

Sec. 7. Agreement, acceptance and incorporation of chapter 26 by reference.

(A) As a condition of this agreement, grantee agrees to be bound by all the terms and conditions contained herein and contained in chapter 26, as evidenced by filing with the city an executed copy of this agreement.

Grantee also agrees to provide all services and meet all requirements of grantee's application (and written supplements thereto) for cable communications service. By its acceptance of the franchise, the grantee specifically agrees that the requirements in chapter 26 and its application (and written supplements) are hereby incorporated by reference and made part of this franchise agreement. In consideration for the grant of a franchise, under which grantee will receive substantial benefits, grantee covenants that it will not, at any time, proceed against the city in any claim or proceeding challenging any term or provision of chapter 26 or this agreement as unreasonable or arbitrary, or argue that the city did not have the authority to impose such terms or conditions; and grantee further waives any and all legal rights, constitutional, statutory or otherwise, that would have the effect of avoiding or reducing grantee's obligations under this agreement or chapter 26 other than as may be specifically provided herein; and hereby agrees and acknowledges that this agreement is in accordance with state and federal law; and forever releases and discharges the city from any liability whatsoever based upon any claim by grantee that this agreement is unlawful or unenforceable; provided, however, that consistent with section 26-106(e) of chapter 26, grantee retains the right to challenge the city's interpretation or implementation of the terms or provisions of chapter 26 or this agreement or a termination of the franchise, in state or federal court.

(B) The city and the grantee acknowledge and agree that this agreement was negotiated by the parties and that each party was represented by counsel of their choosing in the negotiations which led to this agreement. In the case of any ambiguity in the meaning of any term or provision of this agreement, or in the case of any justifiable dispute as to the meaning, application or interpretation of any term or provision of this agreement, no presumption shall arise against either the city or grantee regarding which party drafted the agreement.

(C) If the city grants any other cable communications franchise agreement, and such agreement is deemed by grantee not to obligate such franchisee to comply with reasonably comparable obligations as contained in this agreement, or is deemed by grantee to provide material benefits to such franchisee not afforded to grantee hereunder, grantee may petition the city to waive or amend certain requirements of this agreement or to adopt certain provisions of the other franchise agreement. Such petition shall be granted by the city if grantee reasonably demonstrates that the other franchise agreement, taken as a whole, either does not impose reasonably comparable obligations on the franchisee or grants material benefits to the franchisee not afforded to grantee hereunder.

Sec. 8. Right of city to issue franchise.

Nothing in this agreement shall affect the right of the city to grant to any other person a franchise, license or right to occupy and use the streets, public ways or public places or any part thereof for the erection, installation, construction, reconstruction, operation, maintenance, dismantling, testing, repair or use of a cable television system within the city. Grantee hereby acknowledges and accepts the city's right to make such grants and grantee hereby releases city, now and at any time hereafter grantee's right, if any, to contest or impair in any state or federal court, the city's right or decision to grant such other franchises, licenses or rights or to authorize use of such streets, highways, public ways or public places or any part thereof.

Sec. 9. Effective date of franchise.

Subject to the provisions of section 26-84 of chapter 26 and the execution of this agreement and identical facsimiles of this agreement by grantee and the city, this agreement shall be effective July 17, 1990.

Sec. 10. Time is of the essence to this agreement.

Whenever this agreement shall set forth any time for an act to be performed by or on behalf of the grantee, such time shall be deemed of the essence. Any failure of the grantee to perform any material covenant or provision within the time allotted including any applicable cure periods shall always be sufficient grounds for the city to invoke any appropriate remedy, including, without limitation, termination of this agreement pursuant to section 26-106 of chapter 26.

Sec. 11. Taxes.

Nothing contained in this agreement shall be construed to except the grantee from any tax, liability or assessment which may be hereinafter authorized by law.

Sec. 12. Franchise agreement.

(A) This agreement is a contract between the city and the grantee, binding upon both parties. It is the intent of the parties that the agreement (or any renewal hereof) shall be subject to amendment from time to time to allow the grantee to innovate and implement new services and developments, or to agree to any terms allowed by law and for which each party agrees to bargain in good faith with the other party, upon the initiation of any proposed amendment.

(B) Notwithstanding subsection (A) above, it is understood that nothing in this agreement shall preclude or prohibit the city from enacting any ordinance, from time to time, in the interest of public health and safety, which may impact the grantee in its operation of the cable system, which is a lawful, necessary and proper exercise of the city's police power. Grantee's rights hereunder are subject to such police power and in the event of any conflict between the provisions of this agreement and any such present or future lawful exercise of the city's police power, such conflict shall be resolved in favor of such police power.

(C) Grantee recognizes and agrees that, except as may be required by law, the city shall in no way be bound to renew or extend a franchise at the end of any franchise term.

Sec. 13. Construction and reconstruction of cable system.

(A) (1) The grantee shall, pursuant to section 26-203, provide cable service to all areas of the city.

(A) (2) Grantee shall begin to construct its system to provide a minimum bandwidth of 450 Mhz and a minimum of 54 available channels by September 1, 1990, and shall complete the construction of its system to provide a minimum bandwidth of 450 Mhz and a minimum of 54 available channels by January 1, 1991.

(B) All construction and reconstruction undertaken pursuant to this section shall be done in accordance with chapter 26 and all other applicable law. In addition, the cable system shall be engineered, constructed and maintained to provide for an audio alert system. This audio alert system shall allow authorized officials of the city or its designated representatives to override automatically the "audio" signal on all channels and to transmit and report emergency information. Grantee shall, in the case of any bona fide emergency or disaster, make its entire system available without charge to the city or any other governmental or civil defense agency that the city shall designate for the duration of such emergency or disaster.

(C) The grantee shall keep accurate, complete and current maps and records of its system and facilities. Grantee shall furnish one complete set of "as-built" maps and a description of system design to the city. Such maps and description shall be available for inspection by the public during normal business hours at the local office of the grantee and at a designated city office.

(D) Any interruption in service shall be done, as far as is practicable, outside of prime time (i.e., 7:00 p.m. to 11:00 p.m. local time).

(E) Grantee shall not be required by the city to place its cables underground except for public housing projects, Maple Grove Apartments, Locust Lane Subdivision and land immediately adjacent to the north and east, Haven Lane (that portion having underground electric and telephone utilities), Cram Subdivision, Oak Meadows Housing Project, Lincolnshire Housing Project, Huntington Hills Subdivision, Urban Renewal Replat No. 1 except that Dalrymple Street, Urban Renewal Project No. 2 (that portion having underground electric and telephone utilities), Elliott Road (that portion having underground electric and telephone utilities) and any new developments which require all utilities to place their wires underground.

Sec. 14. Relocation and construction costs.

Grantee shall comply with the provisions of section 26-172(g) of chapter 26. Failure to comply with the provisions of section 26-172(g) of chapter 26 shall constitute a material breach of this agreement.

Sec. 15. Cable service.

Schedule A, attached to and incorporated by reference into this agreement, represents grantee's promise regarding its service at the commencement of operation of a franchise. Grantee, in accordance with the authority granted the city by P.L. 98-549, agrees that it will not in any way whatsoever alter the mix, level or quality of services promised without first obtaining the approval of the city, which approval shall not be unreasonably withheld. Nothing in this section shall give the city the right to require or disapprove the carriage of any particular channel of programming or the location of a particular channel on a particular service tier provided by grantee, with the exception that the city has the right, in accordance with the authority granted the city by P.L. 98-549, to prevent the elimination of a category of programming. Nothing herein shall require grantee to act contrary to federal law. Should the city deny any approval sought by grantee under this section, grantee shall be entitled to seek any relief provided by P.L. 98-549, where applicable.

Charter reference(s)--Schedule A, referred to in this section, has not been included in this Code, but is on file in the city clerk's office.

Sec. 16. Telephone standards.

The city reserves the right, without limitation, to impose reasonable telephone answering standards on the grantee.

Sec. 17. System configuration.

Grantee shall obtain the approval of the city prior to making any technical modification to its cable system which degrades the signal or materially and adversely alters the operation of the cable system from a subscriber standpoint which approval shall not be unreasonably withheld.

Sec. 18. Educational access.

Grantee shall designate one channel for educational access programming. The educational access channel shall be made available free of charge for the transmission of local educational programming. Grantee shall make available free of charge its local origination equipment for use on such channel. Grantee shall not exercise editorial control over educational access programming.

Sec. 19. Transfer of rights.

(A) Any unauthorized transfer in violation of section 26-110 of chapter 26 shall be deemed a material breach in default of this agreement and shall subject the grantee to all applicable penalties and remedies prescribed in this agreement and chapter 26 and to all other remedies, legal and equitable, which are available to the city.

(B) Grantee shall notify the city of any occurrence which constitutes an unauthorized transfer under the provisions of section 26-110 of chapter 26, or of the entry of any judgment, petition or order as provided in section 26-108 of chapter 26, within four days of the occurrence of such event.

Sec. 20. Liquidated damages.

Grantee shall comply with the liquidated damages provisions of section 26-105 of chapter 26. Failure to comply with the provisions of section 26-105 of chapter 26 shall constitute a material breach of this agreement.

Sec. 21. Letter of credit.

(A) In accordance with section 26-104 of chapter 26, grantee shall maintain a letter of credit of $10,000.00 with a national bank located in Calhoun County, Michigan. The city reserves the right if it reasonably deems itself insecure to increase the amount of the letter of credit to an amount consistent with section 26-104 of chapter 26.

(B) Failure to deposit said letter of credit as required above, or the failure to maintain said letter of credit, in the full amount required hereby in effect during the entire term of this agreement, and of any renewal or extension thereof, shall constitute a material breach of this agreement.

Sec. 22. Insurance, bonds, indemnity.

(A) Grantee shall maintain comprehensive public liability policies, and property damage insurance policies, in accordance with the provisions of section 26-103 of chapter 26.

(B) (1) Grantee shall maintain a construction bond in accordance with section 26-103(b) of chapter 26. For purposes of determining the amount of the bond, consistent with section 26-103(b) of chapter 26, the cost of the initial construction of the system shall be deemed to be $1,000,000.00.

[(B)] (2) The city may fine the grantee in forfeiture of a sum equal to 1/12 of the construction bond for each month construction was completed late, unless such delay is due to force majeure. This shall be measured with respect to the date construction was due to be completed; however, this provision may not take effect until construction is six months overdue. The procedure for the assessment of this forfeiture shall be consistent with the procedure outlined in section 26-106(c) of chapter 26.

(C) Failure to comply with the provisions of section 26-103 of chapter 26 shall constitute a material breach of this agreement.

Sec. 23. Reports.

Grantee shall comply with the provisions of section 26-133 of chapter 26. Failure to comply with the provisions of section 26-133 of chapter 26 shall constitute a material breach of this agreement.

Sec. 24. Character generator.

(A) Grantee shall provide at no cost to the city the facilities, equipment and assistance necessary to permit the city to transmit automated information 24 hours a day and shall make available one video channel for the exclusive purpose of transmitting such information. It is within the sole discretion of the city to determine whether the facilities, equipment, advice and other items needed to provide automated information are reasonably sufficient to meet the needs of the city.

(B) Notwithstanding any other provision of this agreement, the city agrees to indemnify and hold harmless grantee in any action against grantee regarding the content of messages inserted by the city on the character generator and cablecast over the cable system.

(C) Grantee, at no cost to the city, shall promptly respond to and rectify reasonable complaints by the city that the facilities, equipment, advice and other items needed to provide automated information are insufficient or inadequate to meet the reasonable needs of the city. Failure to comply with this section shall constitute a material breach of the agreement and shall subject the grantee to all measures, legal or equitable, whether available to the city under this agreement or otherwise.

Sec. 25. Payment of fees and costs.

(A) From and after the effective date of this agreement and throughout the full term of the franchise, the grantee shall pay to the city a franchise fee of five percent of annual gross revenues derived directly or indirectly from the operation of the cable communications system within the city, with payment due in accordance with the provisions of section 26-102 of chapter 26.

(B) As a grant fee, grantee, within 60 days after receipt from the city of written itemization, shall reimburse the city for the reasonable cost of all outside consultants incurred during the franchise process to the extent not recovered by application fees. Such payment shall be deemed to be a charge incidental to the award of a franchise and shall not be subject to the limitations on franchise fees contained in P.L. 98-549. Grantee shall not be required to pay a grant fee in excess of $30,000.00.

(C) Grantee shall, within 30 days after receipt from the city of written itemization, reimburse the city for the costs of publication of chapter 26 and this agreement.

(D) After the effective date of the agreement, the city shall be entitled to employ the services of technical, financial or legal consultants and advisors. Except as otherwise expressly provided in chapter 26 or this agreement, all reasonable fees of any such consultants or advisors as may be reasonably necessary for the reasonable analysis of all matters relative to the grantee's performance under its franchise, incurred by the city in this regard shall be equally borne by the grantee and the city, regardless of the outcome of any specific matter under consideration, unless the city's employment of the consultant or advisor is deemed to be frivolous by a court of competent jurisdiction. Such payment shall be deemed to be a charge incidental to the enforcement of a franchise and shall not be subject to the limitations on franchise fees contained in P.L. 98-549. Grantee shall make its 50 percent reimbursement within 30 days of receiving a written itemization from the city.

(E) No acceptance of any payment shall be construed as an accord that the amount paid is in fact the correct amount, nor shall such acceptance of payment be construed as a release of any claim the city may have for further or additional sums payable under the provisions of this agreement. All amounts paid shall be subject to auditing and recomputation by the city. Grantee shall have the right to contest the accuracy thereof.

(F) The city and grantee agree that P.L. 98-549, which authorizes franchising authorities to collect franchise fees in an amount equal to five percent of grantee's annual gross revenues, supersedes any inconsistent state or local law by virtue of the supremacy clause of the United States Constitution. Grantee agrees that it will continue to pay a franchise fee equal to five percent of its annual gross revenues even if a change in the law or a future judicial or administrative decision makes such a franchise fee provision legally unenforceable, unless the payment of such franchise fee would subject grantee to an administrative or judicial fine or penalty, or unless grantee is prohibited by the city or by law from passing same on to subscribers.

(G) In the event the collection of a franchise fee of five percent of annual gross revenues is unenforceable, the city has the absolute right to declare a franchise null and void and to solicit proposals for a new franchise, except that the city may not declare a franchise null and void in the event grantee continues to pay to the city voluntarily a five percent franchise fee, or in the event the payment of such franchise fee would subject grantee to an administrative or judicial fine or penalty, or in the event grantee is prohibited by the city or by law from passing same on to subscribers.

(H) Pursuant to section 26-131 of chapter 26, the city reserves the right to reasonably regulate rates for any service and to reasonably regulate tiers of service, pursuant to changes in federal or state law which would authorize such regulation.

(I) Failure to comply with this section shall constitute a material breach of the agreement and shall subject the grantee all measures, legal or equitable, whether available to the city under this agreement or otherwise.

Sec. 26. Local programming.

(A) Grantee agrees to provide the city the necessary equipment to permit the production of up to 32 hours of local programming per month. Grantee may produce local programming itself or shall cablecast local programming produced by others in the city. Grantee may utilize the channel capacity designated for educational access under section 18 for such programming. Grantee shall train up to 25 persons in the use of its equipment and studio for persons interested in creating such local programming. Such training requirements shall enable the trainees to produce local programming of at least a basic level of sophistication.

(B) In addition to the requirements of subsection (A) above, upon completion of the upgrade described in section 13(A)(2) of this agreement, grantee shall provide live or taped cablecasts of meetings of the city council two times each month.

Sec. 27. Initial rates.

The initial rates which the grantee shall charge to subscribers for cable services hereunder are set forth in grantee's appendix [schedule] A attached hereto. Any regulation of rates by the city will be in accordance with section 26-131 of chapter 26.

Charter reference(s)--Schedule A, referred to in this section, has not been included in this Code, but is on file in the city clerk's office.

Sec. 28. Service of notice.

(A) All notices required to be given to the city under any provision of this agreement shall be in writing and shall be deemed served:

(1) When delivered by hand to the city clerk during normal business hours; or

(2) When delivered by hand or mailed by certified mail, return receipt requested, to any other person designated herein to receive such notice.

(B) All notices required to be given to the grantee under any provision of this agreement shall be in writing and shall be deemed served:

(1) When delivered by hand or mailed by certified mail, return receipt requested, to grantee's address for service of notice; or

(2) When mailed by certified mail, return receipt requested, to any other person designated herein in writing to receive such notice on behalf of grantee.

(C) Grantee shall maintain within the county, throughout the term of this agreement, an address for service of notice by mail.

Sec. 29. Successors and assigns.

Subject to the requirements contained in section 19 of this agreement, this agreement shall be binding on any successors or assigns of grantee.

Sec. 30. Indemnification.

Grantee covenants that it will indemnify the city in accordance with section 26-103(d) of chapter 26. Failure to comply with the provisions of section 26-103(d) of chapter 26 shall constitute a material breach of this agreement.

Sec. 31. Interpretation of agreement.

(A) Except as otherwise expressly provided herein this agreement may be amended only by a written instrument executed by both parties and adopted by the city in accordance with law.

(B) This agreement and all rights and obligations hereunder shall not be assignable except as permitted under chapter 26. This agreement has been executed in the State of Michigan and shall be governed by Michigan law, except to the extent such law is lawfully preempted by applicable federal statutes, rules or regulations. The waiver by any party hereto of a breach or violation of any provision of this agreement shall not be a waiver of any subsequent breach of the same or any other provision of this agreement. This agreement shall be enforceable only by the parties hereto and their successors in interest by virtue of an assignment which is not prohibited under the terms of this agreement and no other person shall have the right to enforce any of the provisions contained herein. References herein to "material breaches" of this agreement are for purposes of emphasis only and shall not be deemed exclusive or to preclude other breaches from being deemed material consistent with chapter 26.

Sec. 32. Force majeure.

Grantee will exercise reasonable diligence and care to avoid any breaches of chapter 26 or this agreement, including any interruptions in the provision of required service, but it will not be a breach of either nor will grantee be liable for any damage or loss to the city occasioned by any breaches, failures or interruptions caused by force majeure as defined in chapter 26.

Sec. 33. Application.

The information submitted by grantee on May 1, 1990, as supplemented by information submitted on June 20, 1990, shall be deemed by the city to be in full compliance with the requirements of section 26-82 of chapter 26.

Sec. 34. Equipment.

With respect to new equipment required to be supplied by grantee pursuant to the provisions of sections 18 and 24, grantee shall not be required to spend more than $25,000.00.

Sec. 35. Severability.

Should any section of this agreement, or any portion thereof, be held invalid, unconstitutional, preempted or otherwise rendered unenforceable by any court of competent jurisdiction, legislation or administrative agency, any such partial invalidity of this report shall not affect remaining portions hereof.

Sec. 36. Guarantee.

In consideration of the grant of the franchise to grantee, grantee and the individuals or entities with ownership interests in grantee, and their parents, subsidiaries and affiliates, jointly and severally guarantee, absolutely and unconditionally, the performance by grantee of all the obligations of grantee pursuant to and in accordance with all of the terms, provisions and conditions of the franchise. This guarantee shall continue in full force and effect until all obligations of the grantee under the franchise shall have been fully satisfied and discharged.

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