APPENDIX I. GENERAL COMMUNICATION FRANCHISE

Appendix I
GENERAL COMMUNICATION FRANCHISE

WRITTEN ACCEPTANCE OF ORDINANCE NO. 2738

CITY OF COTTAGE GROVE, OREGON

TO THE MAYOR AND COUNCIL OF THE CITY OF COTTAGE GROVE:

WHEREAS, on the 13 day of December, 1993 the Council of the City of Cottage Grove, Oregon, passed Ordinance No. 2738 entitled:

AN ORDINANCE GRANTING TO U S WEST COMMUNICATIONS, INCORPORATED, THE NONEXCLUSIVE RIGHT AND PRIVILEGE TO DO A GENERAL COMMUNICATIONS BUSINESS WITHIN THE CITY OF COTTAGE GROVE AND REPEALING ORDINANCE NO. 1961.

WHEREAS, said ordinance was duly signed and approved on the 13 day of December, 1993 by the Mayor of said City, and attested by the City Recorder:

WHEREAS, said ordinance was granted upon the condition that the said grantee shall, within thirty (30) days of the passage and approval of said ordinance, file with the City Manager of the City of Cottage Grove its written acceptance of all the terms and conditions of said ordinance.

NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, that U S WEST Communications, Inc., does hereby accept Ordinance No. 2738 and all the terms and conditions of said ordinance.

IN WITNESS WHEREOF, U S WEST Communications, Inc., has caused this acceptance to be duly executed this 22 day of December, 1993.

U S WEST COMMUNICATIONS, INC.

_______________________

Vice President - Oregon

____________________________________

Manager of the City of Cottage Grove

ORDINANCE NO. 2738

AN ORDINANCE granting to U S WEST Communications, Incorporated, the nonexclusive right and privilege to do a general communication business within the City of Cottage Grove and repealing Ordinance No. 1961.

THE CITY OF COTTAGE GROVE ORDAINS AS FOLLOWS:

Section 1. Nature of Grant. There is hereby granted by the City of Cottage Grove (City) to U S WEST Communications, Incorporated (Grantee), its successors and assigns, the right and privilege to do a general communication business within the City of Cottage Grove and to place, erect, lay, maintain and operate in, upon, over and under the streets, alleys, avenues, thoroughfares and public highways, places and grounds within the City, poles, wires and other appliances and conductors for all telephone and other communication purposes. Unless a variance from the provisions of the Cottage Grove Municipal Code and Resolutions is first obtained, all new installations of cable for subdivisions, as that term is defined by the Cottage Grove Municipal Code and Resolutions, shall be placed underground. All other new installations or major replacements of cable shall be placed underground if economically and physically feasible, as reasonably determined by the City and grantee.

Section 2. Location of Existing Property. All poles, wires, fixtures, equipment, underground circuits and other property owned or in possession of the grantee now located within the corporate limits of the City shall be deemed to be covered by the terms of this franchise and to be located in accordance therewith, and the location and placement thereof is hereby approved, subject however to the provisions of Section 3 of this ordinance.

Section 3. Reserved Rights. All rights and privileges granted hereunder shall be subject to such reasonable regulations as now or in the future may be prescribed by the City Council.

Section 4. Forfeiture. In the event of the failure, neglect or refusal of grantee to substantially perform any of its obligations under the franchise, the City, after a hearing of which grantee shall be given thirty (30) days written notice, may determine such substantial failure, neglect or refusal; and, after written notice given to grantee of such determination, the City may prescribe a reasonable time period for Grantee to remedy the conditions set forth in said notice. If grantee fails substantially to remedy such conditions within the prescribed time, the City may declare this franchise forfeited.

Section 5. Construction and Operation. It shall be lawful for grantee to make all needful excavations in any streets, alleys, avenues, thoroughfares and public highways, places and grounds in the City for the purpose of placing, erecting, laying and maintaining poles, or other supports or placing or maintaining conduits, pipes or buried communication facilities for said wires and appliances and auxiliary apparatus or repairing, renewing or replacing the same, under the following terms and conditions:

(a) The City reserves the right to reasonably determine the location of any such excavation and construction and the grantee shall not proceed with any excavation or construction without a written permit from the City.

(b) All such activities shall be done in compliance with current and future laws of the State of Oregon, and rules, policies, regulations, resolutions, ordinances and orders of the City.

(d) Whenever grantee shall disturb any street, alley, sidewalk or other public property for the purpose aforesaid, it shall restore the same to good order and condition as soon as practicable without unnecessary delay, and if grantee fails to do so the City shall have the right to fix a reasonable time within which such repairs and restoration shall be completed, and upon failure of such repairs being made by grantee the said City shall cause such repairs to be made at the expense of grantee. Damage to any publicly owned utility facilities (e.g., water, sewer, storm drainage) shall be immediately reported to City. The City shall complete restoration of such facilities at the expense of Grantee.

Section 6. Relocation of Communication Facilities. Nothing in this ordinance shall be construed in any way to prevent the proper authorities of the City from constructing, reconstructing, repairing or otherwise altering its public facilities within any public right of way, places and grounds within the City in or upon which the poles, wires, conductors and other facilities shall be placed, but all such work or improvements shall be done, if possible, so as not to obstruct or prevent the free use of said poles, wires, conductors and other facilities, and the moving of grantee’s facilities, where reasonably required due to such work by the City, will be done by the grantee without cost to the City. Such work by grantee shall be performed within a reasonable period of time. If the grantee fails to comply with any request of the City made pursuant to this section, within a reasonable time designated by the City, the City may remove or relocate the facilities at the expense of the grantee.

The City shall not require Grantee to remove or relocate its facilities or vacate any street, alley or other public way incidental to any public housing or renewal project under ORS Chapters 456 or 457 without reserving Grantee’s right therein or without requiring Grantee to be compensated for the costs thereof. The cost of relocating or removing Grantee’s facilities for the convenience or benefit of a private entity may be borne by such private entity.

Section 7. Passage of Building and Machinery. Whenever it becomes necessary to temporarily rearrange, remove, lower or raise the aerial cables or wires or other apparatus of the grantee to permit the passage of any building, machinery or other object moved over the roads, streets, alleys, avenues, thoroughfares, and public highways within the City, the grantee will perform such rearrangement within a reasonable period after written notice from the owner or contractor-mover desiring to move said building, machinery or other objects. Said notice shall bear the approval of the director of Public Works or his designee, shall detail the route of movement of the building, machinery or other objects, shall provide that the costs incurred by the grantee in making such rearrangement of its aerial facilities will be borne by the person or persons giving said notice, and shall further provide that the person or persons giving said notice will indemnify and save grantee harmless of and from any and all damages or claims of whatsoever kind or nature, caused directly or indirectly from such temporary rearrangement of the aerial plant of the grantee, and, if required by grantee, shall be accompanied by a cash deposit or a good and sufficient bond to pay any and all such costs as estimated by grantee.

Section 8. City Occupancy of Grantee’s Innerduct. Where space is available, as determined by grantee, the City shall be permitted to occupy grantee’s underground innerduct for traffic signal interconnection circuits and other lawful municipal purposes. Such occupancy by the City shall be subject to standard U S WEST innerduct rates as well as all terms and conditions outlined in grantee’s General License Agreement for Innerduct Occupancy.

Section 9. Indemnification: Defense of Suits Against the City. Grantee shall indemnify, defend, and save the City, its officers, employees and agents, harmless against and from any and all damage, claims and any and all loss, liability, cost or expense, occasioned by any act or omission of grantee in the construction, maintenance, operation or repair of grantee’s property, any use thereof or any activity or condition done or created in connection with this franchise by grantee or grantee’s agents; and grantee shall at all times comply with any lawful present or future charter provisions, ordinances, resolutions, policies, rules or regulations of the City relating to the manner of occupation or use of publicly owned facilities within all public rights of way and easements.

Section 10. Franchise Fee.

(a) In consideration of the rights, privileges, and franchise hereby granted, the grantee shall pay to the City from and after the date of the acceptance of this franchise, on a calendar quarterly basis, a sum equal to seven percent (7%) per annum of its gross revenues derived from exchange access service as defined in ORS 401.710 within the corporate limits of the City less net uncollectibles. Such payment shall be made on a calendar quarterly basis on or before April 30, July 31, October 31 and January 31.

(b) Except as provided in subsection (c) of this section, such payment made by the grantee shall be accepted by the City in payment of any license, privilege or occupation tax or fee for revenue or regulation or for any other purpose now or hereafter to be imposed by the City upon the grantee during the term of this franchise.

(c) The payments made by grantee pursuant to this section shall not be accepted in lieu of payment of any of the following:

1. Ad valorem property tax now or hereafter levied against real or personal property of the grantee situated within the city.

2. Local improvement assessments.

3. Building permits or permits related thereto imposed pursuant to building electrical or similar regulatory codes of general application in the City; provided however, no fee or charge shall be made for any permit inspection or other service relating to the opening or use of a public street, bridge or public place.

4. Reimbursement or indemnity paid to the City.

5. City income tax hereafter adopted to the extent that such tax is generally applicable within the City and where not inconsistent with state or federal law. Grantee shall not be subject to any such tax on that portion of its gross revenue that is subject to the franchise fee described in this Section nor on any net income earned on such gross revenue.

6. City sales tax hereafter adopted to the extent that such tax is generally applicable within the City and where not inconsistent with state and federal law.

(d) Grantee shall upon written request file with the City’s director of finance a quarterly payments report showing the grantee’s gross revenues subject to the franchise fee, setting forth said revenues according to the type of and source and any deductions claimed for the period which said report covers. Within 30 days from the filing of such report, or such additional time as the director of finance may allow, the director of finance may investigate the report to determine the accuracy of the amounts reported. However, neither said payment or failure to make such investigation shall be deemed to estop the City in any way, or prevent subsequent investigation by any official or agent of the City in collection of any amount due.

Section 11. Duration. The rights, privileges and franchise herein granted shall continue and be in force for the period of ten (10) years from and after the date this ordinance becomes effective, except that is understood and agreed that either party may terminate or renegotiate this Agreement after 180 days advance written notice to the other party of their intent to do so.

Section 12. Successors and Assigns. This franchise, and the terms and conditions herein stated applicable to U S WEST Communications, Incorporated shall extend and apply to said company, its successors and assigns. Upon any assignment or transfer of this franchise or change in control in grantee, grantee shall within thirty (30) days of any assignment or transfer provide written notice to City of the change and such assignment or transfer shall not be effective, as to the City, until such written notice is received by the City.

Section 13. Reservation of Statutory Authority: Incorporation of Charter Provisions. The City reserves the right to exercise, with regard to this franchise and the grantee, all authority now or hereafter granted to the City by state statutes. All rights of the City under the City Charter are reserved to the City and provisions of the City Charter applicable hereto are hereby incorporated by reference and made a part of this franchise.

Section 14. Rights and Obligations After Expiration or Termination of Franchise. Grantee shall upon expiration or termination of the franchise remove its property and equipment in accordance with ORS 221.470.

Section 15. Remedies not Exclusive; When Requirement Waived. All remedies and penalties under this ordinance, including termination of the franchise, are cumulative, and the recovery or enforcement of one penalty or remedy is not a bar to the recovery or enforcement of any other such remedy or penalty. The remedies and penalties contained in this ordinance, including termination of the franchise, are not exclusive, and the City reserves the right to enforce the penal provisions of any ordinance or resolution and to avail itself of any and all remedies available at law or in equity. Failure to enforce shall not be construed as a waiver or a breach of any term, condition or obligation imposed upon the grantee by or pursuant to this ordinance. A specific waiver of a particular breach of any term, condition or obligation imposed upon the Grantee by or pursuant to this ordinance shall not be a waiver of any other or subsequent or future breach of the same or of any other term, condition or obligation, or as a waiver of the term, condition or obligation itself.

Section 16. Effective Date. Inasmuch as the provisions of this ordinance are necessary for the immediate preservation of the peace, health, and safety of the citizens of the City, an emergency is hereby declared to exist and this ordinance shall be in full force and effect immediately upon its passage by the City Council and its approval by the mayor. Grantee shall, within 30 days of the passage and approval of this ordinance, file with the City Manager its written acceptance of all the terms and conditions of this ordinance, and if such written acceptance is not so

filed within said period then this ordinance shall be null and void and no right, privilege, or franchise herein granted shall inure to grantee.

Section 17. Repeal of Prior Franchise. Upon the effective date of this ordinance, Ordinance No. 1961 shall be repealed.

PASSED AND ADOPTED by the City Council this 13TH day of December, 1993.

APPROVED by the Mayor the 13th day of December, 1993.

Jean Sinclair

Mayor

ATTEST: Joan Hoehn

City Recorder

ORDINANCE NO. 3183

AN ORDINANCE GRANTING A NON-EXCLUSIVE TELECOMMUNICATIONS FRANCHISE TO ZIPLY FIBER PACIFIC, LLC

WHEREAS, the City of Cottage Grove has jurisdiction and regulatory management over its public rights-of-way; and

WHEREAS, pursuant to federal law, state statutes, and City Charter and local ordinances, the City is authorized to grant a non-exclusive franchise to occupy public rights-of-way;

WHEREAS, Ziply Fiber Pacific, LLC is a telecommunications provider that desires to construct, operate, and maintain a telecommunications system and facilities within the City's rights-of-way;

WHEREAS, the City finds that Ziply has the financial, legal, and technical abilities to provide telecommunications services, facilities, and equipment necessary to meet the future needs of the community; and

WHEREAS, the City and Ziply have negotiated a franchise agreement with terms agreeable to both parties; and

WHEREAS, the City Council for the City deems that it is in the public interest to now grant franchise to Ziply under the terms and conditions with the Franchise Agreement, attached hereto as Exhibit A.

THE CITY OF COTTAGE GROVE ORDAINS AS FOLLOWS:

Section 1. The foregoing recitals are approved and hereby incorporated into this Ordinance.

Section 2. The Franchise Agreement with Ziply Fiber Pacific, LLC, attached hereto as Exhibit A, is hereby adopted by the City Council. The Mayor is authorized to execute the agreement on behalf of the Council.

Section 3. This Ordinance shall be in full force and effect thirty (30) days after approval, in accordance with the City Charter. The City Recorder shall forward this franchise agreement to Ziply for acceptance.

PASSED BY THE COUNCIL AND APPROVED BY THE MAYOR THIS 28 DAY OF MAY 2024.

____________________

Candace Solesbee, Mayor

Dated: May 28, 2024

ATTEST:

____________________

Mindy Roberts, City Recorder

Dated: May 28, 2024

ACCEPTED BY FRANCHISEE:

The Franchise granted to Ziply Fiber Pacific, LLC, is hereby accepted by the Franchisee on this 28 day of May, 2024.

____________________

Mike Sauerwein, City Manager

Dated: 5-28-2024

Exhibit A

TELECOMMUNICATIONS FRANCHISE AGREEMENT BETWEEN CITY OF COTTAGE GROVE AND ZIPLY FIBER PACIFIC, LLC

This Telecommunications Franchise Agreement ("Franchise" or "Agreement") is made and entered into by and between the City of Cottage Grove, an Oregon municipal corporation ("Grantor" or "City"), and Ziply Fiber Pacific, LLC, a limited liability corporation of the state of Delaware ("Grantee" or "Franchisee").

A. Pursuant to federal and state law, and the City Charter and local ordinances, the City is authorized to grant non-exclusive franchises to occupy "public rights of way" as defined under the City of Cottage Grove's Municipal Code ("CGMC") Chapter 12.03, in order to construct, operate, and maintain telecommunication systems within the municipal boundaries of the City.

B. Franchisee desires to install, use, and operate telecommunications facilities within the public rights of way in order to provide telecommunication services within the City.

NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties agree as follows:

1. Definitions. Unless otherwise defined in this Agreement, the terms, phrases, and words used in this Agreement shall have the meanings provided under CGMC Title 12.

1.1 "Facilities" means any conduits, cables, optic fibers, poles, wires, vaults, fixtures, underground lines, and other physical components of Franchisee's Telecommunication System.

1.2 "Gross Revenues" means gross revenues derived by the Franchisee for the provision of telecommunications services within the City utilizing the Telecommunication System located in the City Rights of Way. Gross Revenues shall not include municipal, state, or federal fees or taxes imposed by law or regulation directly on Franchisee's customers and which Franchisee is required to pass through to the entity imposing the fee or tax, and unrecoverable bad debt.

1.3 "Rights of Way" means "Public rights-of-way" as defined under Cottage Grove Municipal Code, Section 12.03.020.

1.4 "Telecommunication System" means all facilities owned, operated, or used by Franchisee to provide telecommunication services and located in the Rights of Way administered and regulated by the City.

2. Grant of Authority. The City hereby grants to the Grantee, a non-exclusive franchise to construct, install, maintain, repair, replace, upgrade, and operate Facilities in and under the City Rights of Way, both within the existing City limits and any additional area acquired by annexation, for the purpose of providing telecommunications services on the terms stated in this Agreement. All Facilities shall be installed and operated underground. Prior to construction or alteration within the Right of Way, the Grantee will in each case request all required permits, pay applicable fees, and receive approval as necessary before proceeding, as further provided for in this Agreement and under Cottage Grove Municipal Code.

2.1 No rights will pass from Grantor to Grantee by implication. Without limiting the foregoing, by way of example and not limitation, this Franchise will not include or be substitute for any other permit, agreement, or authorization required under the Code or other generally applicable ordinances and laws of Grantor for the privilege to transact and carry business within the City, to operate on or within the Rights of Way, including for example, street cut permits, or for occupying any property of the Grantor or private entity to which access is not specifically granted by this Agreement, including without limitation, applicable permits or agreements to place devices on or in poles or wires, conduits, or other structures or railroad easements, whether owned by Grantor or a private entity. The City agrees to use best efforts in its working relationship with Grantee in permitting processes associated with Grantee's permit requests.

2.2 CGMC Title 12 is incorporated into this Franchise as though it were part of it, specifically including but not limited to the requirements for compensation, insurance, performance surety, warranty, and indemnification.

2.3 This Franchise is non-exclusive, and the City reserves the right to grant similar franchise rights to any other person or entity at any time during the Term of this Agreement. This Franchise is subject to all prior rights, interests, agreements, permits, easements, or licenses granted by the City; the public's right to use the Rights of Way, and the City's right to use and administer the Right of Way, including but not limited to any work performed within the Rights of Way that the City deems necessary or desirable for administration of its municipal duties and powers.

2.4 This Franchise does not authorize placement or installation of towers, antennas, poles, or wireless facilities in the Rights of Way, unless otherwise authorized in writing by the City.

2.5 The Grantee is authorized by this Franchise to make reasonable and lawful use of the Rights of Way within the boundaries of the City, both within the existing City limits and any additional area acquired by annexation.

2.6 This Franchise does not authorize or permit the provision of cable services by Franchisee.

3. Term. The term of this Franchise will be for ten (10) years ("Term"), commencing on the date on which the ordinance authorizing this Agreement is effective. This Franchise may be extended for one five (5) year term ("Extended Term") if neither party provides written notice of non-renewal to the other party at least six (6) months prior to expiration of the Term. At the end of the Term, if the City and Franchisee are negotiating another franchise agreement and have not concluded their negotiations, the Franchisee's rights and responsibilities shall be controlled by this Agreement until the City grants a new franchise, and the Franchisee accepts it.

4. Franchise Fee. As consideration for the use of the City's Rights of Ways, Grantee will remit to the City an annual franchise fee of seven percent (7%) ("Franchise Fee") of Franchisee's Gross Revenues derived from the operation of Franchisee's telecommunications Facilities in the City. Grantee's Franchise Fee payments to the City will be due quarterly within thirty (30) days following the end of each quarter, defined as the last day of March, June, September and December. Each payment will be accompanied by a statement as to the manner in which the Franchise Fee is calculated. The Grantee shall provide, and at no cost to the City, any additional reports or information deemed necessary to verify the accuracy of the calculation of the Franchise Fee by the Grantee. Such information may include, but is not limited to: chart of accounts, total revenues by categories and dates, list of products and services, narrative documenting calculations, details on number customer within the City limits, or any other information needed for the City to easily verify compliance.

Within thirty (30) days after the termination of this Franchise, compensation will be paid for the period elapsing since the end of the last quarter for which compensation has been paid. In the event any payment due quarterly is not received within thirty (30) days from the end of the preceding quarter, or is underpaid, Grantee will pay in addition to the payment, or sum due, interest at a rate no higher than the current legal interest rate on judgments in the State of Oregon, calculated from the date the payment was originally due until the date the City receives the payment. Additionally, if any payment becomes ninety (90) days in arrears, a ten (10) percent penalty will be applied.

The City's acceptance of any payments due under this Section shall not be considered a waiver by the City of any breach of this Agreement. Franchisee agrees and covenants that it will not challenge the validity of the Franchise Fee under this Agreement as long as they do not exceed the maximum amounts established by applicable statutes.

5. Performance; Compliance with Law. During the Term of this Agreement, the Franchisee agrees to comply with all lawful terms and conditions of the Cottage Grove Municipal Code, particularly the provisions, standards, and requirements of Title 12, as may be amended from time to time, the provisions of which are incorporated herein as though fully set forth. Franchisee agrees to comply with any other generally applicable ordinances, codes, rules and regulations of the City and applicable provisions of state and federal law.

5.1 Grantee shall conduct its operations under this Franchise, including installation, construction, maintenance, repair, replacement, upgrade, and operation of its Facilities, in a safe and workmanlike manner, so as not to present a danger to the public or City, and subject to all lawful governmental regulations.

5.2 The locations and methods of installation and maintenance of all Facilities shall be subject to regulation by the City. All Facilities shall be constructed and maintained as to interfere as little as practicable with transportation and other uses of the Right of Way, including the public's right to use the Rights of Way. Except as otherwise provided for emergencies by this Agreement, any required permit(s) must be obtained prior to installation or construction of Facilities. In the event of an emergency, Franchisee may undertake work immediately to repair or replace its Facilities, or restore service without a permit; provided that the Franchisee informs the City as soon as possible and applies for a permit, applicable retroactively, within one business day after commencement of work. City shall excuse a late emergency permit application, if Franchisee has good cause for any delay.

5.3 Notwithstanding local code requirements, all Facilities shall be installed and at all times maintained by Franchisee in accordance with telecommunications industry standards, and the City's commercially reasonable satisfaction, in compliance with all City ordinances, rules, standards, and specifications, polices and regulations, as may be amended. Underground conduits shall be installed in utility easements, non-paved portions of City Right of Way, or alleys whenever possible, except when necessary to cross streets or when non-paved portions of the Right of Way are not available. The precise location of Franchisee's conduits shall be determined through the permitting process.

5.4 Franchisee shall at all times keep maps and records showing the locations and sizes of all Facilities and all appurtenant Facilities constructed or owned by it within the City and surrounding urban growth boundary, which shall be defined by the City's Comprehensive Plan. Maps shall be provided in Geographical Information System (GIS) or other digital electronic format used by the City. All maps provided to the City shall be kept confidential to the maximum extent allowed by Oregon law. Franchisee shall provide maps and records to the City upon request by the City.

5.5 Restoration. In case of any disturbance of pavement, sidewalk, driveway, or other surfacing by Franchisee, Franchisee shall, at its own cost and expense and in compliance with the City's pavement restoration policy and standards and specifications, promptly replace and restore all paving, sidewalk, driveway, landscaping, or surface of any street or alley disturbed. Franchisee warrants all restoration work for a period of one year from completion of work. If Franchisee fails to restore, as required by this section, or if restoration fails within the one (1) year warranty period, the City may, after notice to Franchisee, cause the repairs to be made at the expense of Franchisee. If Franchisee fails to reimburse the City for any costs incurred under this Section within 45 (forty-five) days of demand for reimbursement, the City may refuse to issue additional permits, and may elect to terminate this Franchise pursuant to section 9 below.

5.6 Notification. Franchisee shall comply with all requirements of the Oregon Utility Notification Law and implementing rules and regulations.

5.7 Relocation. The City may require Franchisee to relocate its Facilities. If removal or relocation of Facilities is caused directly by development of private property or other third-party project, including projects by other public entities, and removal or relocation of Facilities occurs within the area to be developed, or is made for the convenience of a third-party, Franchisee may charge the expense of removal or relocation to the developer or third-party. Franchisee shall be solely responsible for enforcing collection from the developer or other third-party, but Franchisee shall not be required to remove or relocate Facilities for the benefit of third parties until it receives payment for the removal or relocation. If the removal or relocation of Facilities is caused by City's need to provide public facilities, a City project, or is otherwise requested by the City and is made for the purpose of improving a street to City standards or other improvement by a public governmental entity for the benefit of the public, Franchisee will remove or relocate its Facilities at Franchisee's sole expense within a reasonable time after notification by the City. Franchisee shall reimburse City for the actual cost incurred as a result of any delays in City projects resulting from Franchisee's failure to relocate Facilities in an expeditious and timely manner. City will make a reasonable effort to provide Franchisee with an alternate location for its Facilities within the Right of Way. If Franchisee refuses to relocate its Facilities as required by this Franchise, City may cause such Facilities to be relocated and Franchisee shall reimburse the City for its actual costs in doing so.

5.8 Right of Way Vacation. City shall retain public utility easements if it vacates any Right of Way where Franchisee has Facilities. If Franchisee's Facilities must be relocated from a vacated Right of Way, the petitioner of the vacation will bear the expense of moving the Facilities, except if the City is the petitioner of the vacation.

5.9 Placement of Facilities.

5.9.1 Franchisee shall not knowingly place its Facilities where they will interfere with any existing or known future city utility, gas, electric, or telephone fixture, power, sanitary sewer, storm sewer, or water facility.

5.9.2 Franchisee will consult with the City Engineer prior to placement of Facilities, and will comply with all City ordinances, policies, rules and regulations in connection with its placement of Facilities.

5.9.3 Franchisee shall also comply with all co-location and joint use requirements as set forth in state and local law, including the Cottage Grove Municipal Development Code and applicable standards, as may be amended. Franchisee shall offer the City the opportunity to co-locate City conduit and lines in trenches dug by Franchisee in Right of Way and shall charge the City only any incremental additional costs incurred in making the trenches available for City Use.

5.9.4 Franchisee shall employ best engineering practices in all installation, construction, operation, and maintenance of its Facilities under this Agreement.

5.9.5 Under no circumstances will Franchisee be permitted or authorized to install any new utility poles without prior approval from the City.

5.10 Undergrounding.

5.10.1 While it is the policy of the City to encourage all utility providers, including Franchisee, to place Facilities underground, in certain instances and locations, enumerated in this Section 5.10, Franchisee shall be required to install and maintain its Facilities underground.

5.10.2 Franchisee shall be required to place Facilities underground in the following circumstances:

5.10.2.1 In locations where all existing telecommunications utilities are already underground;

5.10.2.2 In any instance where statute or City ordinance requires utilities to be placed underground, including in the case of new construction or issuance of any building permit, in accordance with the standards of the Cottage Grove Municipal Code;

5.10.2.3 In the instance that appropriate levels of funding, by City or Franchisee, or conduit, whether owned or maintained by the City or Franchisee, are available at mutually agreeable cost, suitable for Franchisee's Facilities, and ready for Franchisee's placement and installation of underground Facilities;

5.10.2.4 In any location or instance where another utility using aerial or overhead distribution lines that Grantee currently occupies, or has installed Facilities thereto, are moved underground, Grantee shall likewise move Facilities underground; or

5.10.2.5 In the instance that the City determines, in its sole discretion, that there are immediate public health or safety concerns that necessitate the conversion of overhead Facilities to underground.

5.10.3 In cases of capital improvement projects undertaken by the City, Grantee shall convert existing overhead distribution facilities to underground. Grantee may collect costs associated with the conversion from overhead to underground consistent with state law and Oregon Public Utility Commission regulations.

6. Insurance.

6.1 Grantee shall maintain in full force and effect the following liability insurance policies that protect Grantee and the City, as well as the City's officers, agents, and employees:

6.1.1 Comprehensive general liability insurance with limits not less than:

6.1.1.1 Five million dollars ($5,000,000.) for bodily injury or death to each person;

6.1.1.2 Five million dollars ($5,000,000) aggregate including collapse, explosions, underground hazards and products completed operations.

6.1.2 Commercial automobile liability insurance for owned, non-owned and hired vehicles with a limit of three million dollars ($3,000,000) combined single limit.

6.1.3 Worker's compensation within statutory limits and employer's liability with limits of not less than one million dollars ($1,000,000).

6.1.4 Liability insurance will name as additional insured the City and its officers, agents, and employees. Additional insured coverage will be for both on-going operations and products and completed operations, on forms acceptable to the City. Coverage will be Primary and Non-Contributory. Waiver of Subrogation endorsement, in a form acceptable to the City, will be provided for general liability and worker's compensation. Grantee shall furnish acceptable insurance certificates to City with original endorsements for each insurance policy signed by a person authorized by that insurer to bind coverage on its behalf.

6.2 The limits of the insurance will be subject to statutory changes as to maximum limits of liability imposed on municipalities of the State of Oregon. The insurance will be without prejudice to coverage otherwise existing. The coverage must apply as to claims between insureds on the policy. The insurance will not be canceled or materially altered without thirty (30) days' prior written notice first being given to the City. If the insurance is canceled or materially altered, the Franchisee will obtain a replacement policy that complies with the terms of this section and provide the City with a replacement certificate of insurance. The Franchisee will maintain continuous uninterrupted coverage, in the terms and amounts required. City may terminate this Agreement for failure to maintain the required insurance.

6.3 The Franchisee will maintain on file with the City a certificate of insurance certifying the coverage required above.

7. Performance Bond. Upon the effective date of this Agreement, the Franchisee will furnish proof of the posting of a faithful performance bond running to the City, with good and sufficient surety approved by the City, in the sum of One Hundred Thousand Dollars ($100,000) ("Bond"), conditioned that the Franchisee will well and truly observe, fulfill, and being sufficient to assure proper restoration of any street, sidewalk or other surface disturbed by Franchisee, their representative or contractor. Franchisee will pay all premiums charged for the Bond, and will keep the Bond in full force and effect at all times throughout the term of the Agreement, including, if necessary, the time required for removal of all of Franchisee's Facilities installed in the Public Rights of Way.

Thirty (30) days after the completion of construction of Franchisee's Facilities, the Bond may be partially released, and Franchisee shall thereafter furnish proof of the posting of a faithful performance bond running to the City in the sum of Fifty Thousand Dollars ($50,000). The Bond may be released after one (1) year from the completion of construction of the Franchisee's Facilities and inspections by the City, if applicable, provided that Grantee has demonstrated the ability to comply with utility construction requirements under this Agreement, applicable permits, and other pertinent state law and regulation. The Bond will contain a provision that it will not be terminated or otherwise allowed to expire without thirty (30) days' prior written notice first being given to the City. The Bond will be reviewed and approved as to form by the City Attorney.

City may, in the event of any construction which is likely to be substantially greater than $100,000, or in the event the City's cost to complete or repair such construction upon Franchisee's failure to perform the same would be greater than $100,000, as reasonably determined by the City, require the amount of the Bond to be increased. The Bond is subject to increase each time Grantee applies for permits to perform work within the City. Franchisee will provide to City all necessary documentation demonstrating Franchisee cost estimation in a format reasonable acceptable to the City.

8. Indemnification. Franchisee shall defend, indemnify, and hold the city, its officers, agents, employees and volunteers harmless against all liability, claims, losses, demands, suits, fees and judgments that may be based on or arise out of damage or injury (including death) to persons or property caused by or resulting from any act or omission sustained in connection with the performance of this Agreement, or based upon violation of any statute, ordinance, regulation by Franchisee. Notwithstanding any provision hereof to the contrary, Franchisee shall not be obligated to indemnify the City for any damages, liability, or claims resulting directly from the willful misconduct or sole negligence of the City. Franchisee agrees that it is not an agent of the City and is not entitled to indemnification and defense under OSR 30.285 or 30.287.

9. Transfer, Revocation, and Termination.

9.1 Transfer. This Franchise may be sold, assigned, or transferred by Franchisee without any approval or consent of the city to any entity which acquires all or substantially all of Franchisee's assets by reason of a merger, acquisition, or other business reorganization. In all other circumstances, Franchisee shall not sell, assign, dispose of, lease, or transfer in any manner whatsoever any interest in this Agreement, or in the Facilities authorized by this Agreement, or any part of the Facilities, without prior written consent of the city. In the event such a transfer, assignment, or disposal of franchisee's ownership is approved by the Oregon Public Utilities Commission ("OPUC"), the City will be deemed to have consented to such transfer. Grantee will provide City with a copy of any such approval. City may impose reasonable conditions on its approval of any transfer, including but not limited to the requirement that transferee acknowledge in writing and agree to be bound by the terms of this Agreement. City shall have the right to collect from Franchisee City's actual administrative costs associated with processing a transfer request, including the cost of ascertaining the financial responsibility of the proposed transferee.

9.2 Revocation and Termination. The City may, upon sixty (60) days' prior written notice, terminate or revoke this Franchise for any of the following reasons ("Default"):

9.2.1 Violation of any of the material provisions of this Franchise;

9.2.2 Misrepresentation in the Franchise application or a Right of Way construction application;

9.2.3 The Franchisee is found by a court of competent jurisdiction to have practiced any fraud or deceit upon the City.

9.2.4 Failure to pay taxes, compensation, fees or costs due to the City after final determination by the City of the taxes, compensation, fees, or costs;

9.2.5 Failure to restore the ROW as required by this Agreement or CGMC Title 12, or other applicable State and local laws, ordinances, rules, and regulations;

9.2.6 Failure to comply with technical, safety and engineering standards related Franchisee's work within the Right of Way; or

9.2.7 Failure to obtain or maintain any and all licenses, permits, certifications and other authorizations required by State or federal law for the placement, maintenance or operation of the Utility Facilities.

If, within the sixty (60) day notice period, Franchisee cures the Default or commences to cure a Default that cannot reasonably be cured within sixty days of the notice, the notice of Default shall be deemed withdrawn and the Franchise shall not terminate. Any termination or revocation of this Franchise shall not restrict or modify Franchisee's ability to provide telecommunications services under applicable federal or state law.

9.3 Remedies.

9.3.1 Upon any termination of this Agreement, if the Parties are not engaged in efforts to renew or renegotiate this Agreement, or any later ordinance is so adopted that would be applicable to and control the performance and operation of Franchisee's Facilities within the City's Rights of Way, all Facilities installed or used by Franchisee shall be (a) removed by Franchisee at Franchisee's sole expense, with the Right of Way restored by Franchisee to the condition before installation, less reasonable wear and tear; or (b) abandoned in place by approval of the City. If Facilities are not removed within one (1) year after termination or expiration of this Agreement, the Facilities shall be considered forfeited and abandoned, and reverts to the City, in which case the City may cause the Facilities to be removed and may recover from Franchisee the cost of such removal or restoration of the Right of Way.

9.3.2 Remedies contained in this Agreement, including revocation and termination, are cumulative and not exclusive, and the City reserves the right to enforce other ordinances and remedies available at law or in equity. Failure to enforce any provision of this Agreement shall not be construed as a waiver of a breach of any other term, condition, or obligation of this Agreement. The right is preserved to the City to adopt, in addition to existing ordinances and reservations contained herein, such additional regulations as it shall find necessary for regulation of the public Right of Way, provided that such regulations shall be reasonable and not in conflict with the rights granted herein.

10. City Rights in Franchise.

10.1 City shall have the right to inspect all construction, installation, and operation of Franchisee's Facilities to ensure compliance with governing laws, ordinances, rules, and regulations.

10.2 To the extent not inconsistent with applicable law, City may adopt and enforce generally applicable, non-discriminatory, and competitively neutral local ordinances and regulations as may be determined by the City to be in the best interest of public health, safety, and welfare, and the Franchisee shall be subject to the same.

10.3 City shall have the right to require periodic reports from Franchisee relating to its operation within the City, including but not limited to Franchisee's books of financial accounts and other books and records directly concerning Franchisee's Gross Revenues. During the Term of this Agreement, or within 180 (one hundred and eighty) days after expiration or termination of this Agreement, City shall have the right to audit Franchisee's records for a period of three (3) years prior to audit. City may expand the audit, if audit reveal underpayment of the Franchise Fee by five percent (5%) or more.

11. Sale of subscriber lists prohibited. Except as otherwise expressly permitted by law, the Franchisee will not sell, or otherwise make available any list which identifies subscribers by name or address, to any person, agency, or entity, except as needed to maintain current services or implement new services to subscribers in connection with Franchisee's services.

12. Franchise Acceptance. Within thirty (30) days of City Council's passage of the ordinance adopting this Agreement, Franchisee shall file with the City certificates of insurance and furnish proof of posting the requisite Bond, as provided for herein, and file an unconditional written statement accepting the terms and conditions of this Franchise grant. Failure to fulfill this requirement will nullify and void Agreement, and any and all rights of Franchisee to own or operate a telecommunications facility within the Rights of Way under Agreement shall be of no force or effect.

13. Taxes. Nothing contained in this Agreement shall be construed to exempt the Franchisee from any license, occupation, franchise, or excise tax or assessment which is or may be hereafter lawfully imposed on all entities engaged in the same business as Franchisee.

14. Change of Law; Severability. The Parties intend that this Agreement may be amended from time to time to conform to changes in controlling federal, state, or local law. Each party agrees to bargain in good faith with the other party concerning such proposed amendments. This Agreement may be amended or terminated by the mutual consent of the parties and their successors in interest. To the extent that any lawful City rule, ordinance, or regulation, including any amendment to the provisions of CGMC Title 12 is adopted on a jurisdiction-wide basis and is generally imposed on similarly situated persons or entities, such rule, ordinance, or regulation shall apply without need for amendment of this Agreement. The City shall provide Franchisee notice of any such change in law, prior to its adoption. If any clause, sentence, or any other portion of this Agreement becomes illegal, null, or void, the remaining portions will remain in full force and effect to the fullest extent permitted by law.

15. Notice. Unless specifically provided otherwise herein, all notices shall be mailed, postage prepaid, to the following addresses or to such other addresses as Franchisee or the City may designate in writing:

To Franchisee:	Ziply Fiber Pacific, LLC
	Attn: Legal Department
	135 Lake Street South, Suite 155
	Kirkland, WA 98033
	legal@ziply.com

To the City:	Office of City Manager
	City of Cottage Grove
	400 E. Main St.
	Cottage Grove, OR 97424

CITY OF COTTAGE GROVE ZIPLY FIBER, INC.

By: _________________ By: ______________

Attest: __________

ORDINANCE NO. 3187

AN ORDINANCE GRANTING A NON-EXCLUSIVE TELECOMMUNICATIONS FRANCHISE TO DOUGLAS FAST NET

WHEREAS, the City of Cottage Grove has jurisdiction and regulatory management over its public rights-of-way; and

WHEREAS, pursuant to federal law, state statutes, and City Charter and local ordinances, the City is authorized to grant a non-exclusive franchise to occupy public rights-of-way; and

WHEREAS, Douglas Fast Net is a telecommunications provider that desires to construct, operate, and maintain a telecommunications system and facilities within the City’s rights-of-way; and

WHEREAS, the City finds that Douglas Fast Net has the financial, legal, and technical abilities to provide telecommunications services, facilities, and equipment necessary to meet the future needs of the community; and

WHEREAS, the City and Douglas Fast Net have negotiated a franchise agreement with terms agreeable to both parties; and

WHEREAS, the City Council from the City deems that it is in the public interest to now grant franchise to Douglas Fast Net under the terms and conditions with the Franchise Agreement, attached hereto as Exhibit A.

THE CITY OF COTTAGE GROVE ORDAINS AS FOLLOWS:

Section 1. The foregoing recitals are approved and hereby incorporated into this Ordinance.

Section 2. The Franchise Agreement with Douglas Fast Net, attached hereto as Exhibit A, is hereby adopted by the City Council. The Mayor is authorized to execute the agreement on behalf of the Council.

PASSED BY THE COUNCIL AND APPROVED BY THE MAYOR THIS 8TH DAY OF JULY, 2024.

ATTEST:

____________________

Candace Solesbee, Mayor

Dated: July 8, 2024

____________________

Mindy Roberts, City Recorder

Dated: July 8, 2024

TELECOMMUNICATIONS FRANCHISE AGREEMENT BETWEEN CITY OF COTTAGE GROVE AND DOUGLAS SERVICES, INC., dba DOUGLAS FAST NET

This Telecommunications Franchise Agreement ("Franchise" or "Agreement") is made and entered into by and between the City of Cottage Grove, an Oregon municipal corporation ("Grantor" or "City"), and DOUGLAS SERVICES, INC., dba DOUGLAS FAST NET, an Oregon Corporation ("Grantee" or "Franchisee").

A. Pursuant to federal and state law, and the City Charter and local ordinances, the City is authorized to grant non-exclusive franchises to occupy "public rights of way" as defined under the City of Cottage Grove’s Municipal Code ("CGMC") Chapter 12.03, in order to construct, operate, and maintain telecommunication systems within the municipal boundaries of the City.

B. Franchisee desires to install, use, and operate telecommunications facilities within the public rights of way in order to provide telecommunication services within the City.

NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties agree as follows:

1. Definitions. Unless otherwise defined in this Agreement, the terms, phrases, and words used in this Agreement shall have the meanings provided under CGMC Title 12.

1.1 "Facilities" means any conduits, cables, optic fibers, poles, wires, vaults, fixtures, underground lines, and other physical components of Franchisee’s Telecommunication System.

1.2 "Gross Revenues" means gross revenues derived by the Franchisee for the provision of telecommunications services within the City utilizing the Telecommunication System located in the City Rights of Way. Gross Revenues shall not include municipal, state, or federal fees or taxes imposed by law or regulation directly on Franchisee’s customers and which Franchisee is required to pass through to the entity imposing the fee or tax, and unrecoverable bad debt.

1.3 "Rights of Way" means "Public rights-of-way" as defined under Cottage Grove Municipal Code, Section 12.03.020.

2. Grant of Authority. The City hereby grants to the Grantee, a non-exclusive franchise to construct, install, maintain, repair, replace, upgrade, and operate Facilities in and under the City Rights of Way, both within the existing City limits and any additional area acquired by annexation, for the purpose of providing telecommunications services on the terms stated in this Agreement. Prior to construction or alteration within the Right of Way, the Grantee will in each case request all required permits, pay applicable fees, and receive approval as necessary before proceeding, as further provided for in this Agreement and under Cottage Grove Municipal Code.

2.3 This Franchise is non-exclusive, and the City reserves the right to grant similar franchise rights to any other person or entity at any time during the Term of this Agreement. This Franchise is subject to all prior rights, interests, agreements, permits, easements, or licenses granted by the City; the public’s right to use the Rights of Way, and the City’s right to use and administer the Right of Way, including but not limited to any work performed within the Rights of Way that the City deems necessary or desirable for administration of its municipal duties and powers.

2.4 This Franchise does not authorize placement or installation of towers, antennas, poles, or wireless facilities in the Rights of Way, unless otherwise authorized in writing by the City.

2.6 This Franchise does not authorize or permit the provision of cable services by Franchisee.

3. Term. The term of this Franchise will be for ten (10) years ("Term"), commencing on the date on which the ordinance authorizing this Agreement is effective. This Franchise may be extended for one five (5) year term ("Extended Term") if neither party provides written notice of non-renewal to the other party at least six (6) months prior to expiration of the Term. At the end of the Term, if the City and Franchisee are negotiating another franchise agreement and have not concluded their negotiations, the Franchisee’s rights and responsibilities shall be controlled by this Agreement until the City grants a new franchise, and the Franchisee accepts it.

4. Franchise Fee. As consideration for the use of the City’s Rights of Ways, Grantee will remit to the City an annual franchise fee of seven percent (7%) ("Franchise Fee") of Franchisee’s Gross Revenues derived from the operation of Franchisee’s telecommunications Facilities in the City. Grantee’s Franchise Fee payments to the City will be due quarterly within thirty (30) days following the end of each quarter, defined as the last day of March, June, September and December. Each payment will be accompanied by a statement as to the manner in which the Franchise Fee is calculated. The Grantee shall provide, and at no cost to the City, any additional reports or information deemed necessary to verify the accuracy of the calculation of the Franchise Fee by the Grantee. Such information may include, but is not limited to: chart of accounts, total revenues by categories and dates, list of products and services, narrative documenting calculations, details on number customer within the City limits, or any other information needed for the City to easily verify compliance.

The City’s acceptance of any payments due under this Section shall not be considered a waiver by the City of any breach of this Agreement. Franchisee agrees and covenants that it will not challenge the validity of the Franchise Fee under this Agreement as long as they do not exceed the maximum amounts established by applicable statutes.

5. Performance: Compliance with Law. During the Term of this Agreement, the Franchisee agrees to comply with all lawful terms and conditions of the Cottage Grove Municipal Code, particularly the provisions, standards, and requirements of Title 12, as may be amended from time to time, the provisions of which are incorporated herein as though fully set forth. Franchisee agrees to comply with any other generally applicable ordinances, codes, rules and regulations of the City and applicable provisions of state and federal law.

5.2 The locations and methods of installation and maintenance of all Facilities shall be subject to regulation by the City. All Facilities shall be constructed and maintained as to interfere as little as practicable with transportation and other uses of the Right of Way, including the public’s right to use the Rights of Way. Except as otherwise provided for emergencies by this Agreement, any required permit(s) must be obtained prior to installation or construction of Facilities. In the event of an emergency, Franchisee may undertake work immediately to repair or replace its Facilities, or restore service without a permit; provided that the Franchisee informs the City as soon as possible and applies for a permit, applicable retroactively, within one business day after commencement of work. City shall excuse a late emergency permit application, if Franchisee has good cause for any delay.

5.3 Notwithstanding local code requirements, all Facilities shall be installed and at all times maintained by Franchisee in accordance with telecommunications industry standards, and the City’s commercially reasonable satisfaction, in compliance with all City ordinances, rules, standards, and specifications, polices and regulations, as may be amended. Underground conduits shall be installed in utility easements, non-paved portions of City Right of Way, or alleys whenever possible, except when necessary to cross streets or when non-paved portions of the Right of Way are not available. The precise location of Franchisee’s conduits shall be determined through the permitting process.

5.5 Restoration. In case of any disturbance of pavement, sidewalk, driveway, or other surfacing by Franchisee, Franchisee shall, at its own cost and expense and in compliance with the City’s pavement restoration policy and standards and specifications, promptly replace and restore all paving, sidewalk, driveway, landscaping, or surface of any street or alley disturbed. Franchisee warrants all restoration work for a period of one year from completion of work. If Franchisee fails to restore, as required by this section, or if restoration fails within the one (1) year warranty period, the City may, after notice to Franchisee, cause the repairs to be made at the expense of Franchisee. If Franchisee fails to reimburse the City for any costs incurred under this Section within 45 (forty-five) days of demand for reimbursement, the City may refuse to issue additional permits, and may elect to terminate this Franchise pursuant to section 9 below.

5.6 Notification. Franchisee shall comply with all requirements of the Oregon Utility Notification Law and implementing rules and regulations.

5.7 Relocation. The City may require Franchisee to relocate its Facilities. If removal or relocation of Facilities is caused directly by development of private property or other third-party project, including projects by other public entities, and removal or relocation of Facilities occurs within the area to be developed, or is made for the convenience of a third-party, Franchisee may charge the expense of removal or relocation to the developer or third party. Franchisee shall be solely responsible for enforcing collection from the developer or other third-party, but Franchisee shall not be required to remove or relocate Facilities for the benefit of third parties until it receives payment for the removal or relocation. If the removal or relocation of Facilities is caused by City's need to provide public facilities, a City project, or is otherwise requested by the City and is made for the purpose of improving a street to City standards or other improvement by a public governmental entity for the benefit of the public, Franchisee will remove or relocate its Facilities at Franchisee’s sole expense within a reasonable time after notification by the City. Franchisee shall reimburse City for the actual cost incurred as a result of any delays in City projects resulting from Franchisee’s failure to relocate Facilities in an expeditious and timely manner. City will make a reasonable effort to provide Franchisee with an alternate location for its Facilities within the Right of Way. If Franchisee refuses to relocate its Facilities as required by this Franchise, City may cause such Facilities to be relocated and Franchisee shall reimburse the City for its actual costs in doing so.

5.8 Right of Way Vacation. City shall retain public utility easements if it vacates any Right of Way where Franchisee has Facilities. If Franchisee’s Facilities must be relocated from a vacated Right of Way, the petitioner of the vacation will bear the expense of moving the Facilities, except if the City is the petitioner of the vacation.

5.9 Placement of Facilities.

5.9.4 Franchisee shall employ best engineering practices in all installation, construction, operation, and maintenance of its Facilities under this Agreement.

5.9.5 Under no circumstances will Franchisee be permitted or authorized to install any new utility poles without prior approval from the City.

5.10 Undergrounding.

5.10.2 Franchisee shall be required to place Facilities underground in the following circumstances:

5.10.2.1 In locations where all existing telecommunications utilities are already underground;

5.10.2.3 In the instance that appropriate levels of funding, by City or Franchisee, or conduit, whether owned or maintained by the City or Franchisee, are available at mutually agreeable cost, suitable for Franchisee’s Facilities, and ready for Franchisee’s placement and installation of underground Facilities;

6. Insurance.

6.1 Grantee shall maintain in full force and effect the following liability insurance policies that protect Grantee and the City, as well as the City’s officers, agents, and employees:

6.1.1 Comprehensive general liability insurance with limits not less than:

6.1.1.1 Five million dollars ($5,000,000) for bodily injury or death to each person;

6.1.1.2 Five million dollars ($5,000,000) aggregate including collapse, explosions, underground hazards and products completed operations.

6.1.2 Commercial automobile liability insurance for owned, non-owned and hired vehicles with a limit of three million dollars ($3,000,000) combined single limit.

6.1.3 Worker’s compensation within statutory limits and employer's liability with limits of not less than one million dollars ($1,000,000).

6.2 The limits of the insurance will be subject to statutory changes as to maximum limits of liability imposed on municipalities of the State of Oregon. The insurance will be without prejudice to coverage otherwise existing. The coverage must apply as to claims between insureds on the policy. The insurance will not be canceled or materially altered without thirty (30) days’ prior written notice first being given to the City. If the insurance is canceled or materially altered, the Franchisee will obtain a replacement policy that complies with the terms of this section and provide the City with a replacement certificate of insurance. The Franchisee will maintain continuous uninterrupted coverage, in the terms and amounts required. City may terminate this Agreement for failure to maintain the required insurance.

6.3 The Franchisee will maintain on file with the City a certificate of insurance certifying the coverage required above.

7. Performance Bond. Upon the effective date of this Agreement, the Franchisee will furnish proof of the posting of a faithful performance bond running to the City, with good and sufficient surety approved by the City, in the sum of One Hundred Thousand Dollars ($100,000) ("Bond"), conditioned that the Franchisee will well and truly observe, fulfill, and being sufficient to assure proper restoration of any street, sidewalk or other surface disturbed by Franchisee, their representative or contractor. Franchisee will pay all premiums charged for the Bond, and will keep the Bond in full force and effect at all times throughout the term of the Agreement, including, if necessary, the time required for removal of all of Franchisee’s Facilities installed in the Public Rights of Way.

Thirty (30) days after the completion of construction of Franchisee’s Facilities, the Bond may be partially released, and Franchisee shall thereafter furnish proof of the posting of a faithful performance bond running to the City in the sum of Fifty Thousand Dollars ($50,000). The Bond may be released after one (1) year from the completion of construction of the Franchisee’s Facilities and inspections by the City, if applicable, provided that Grantee has demonstrated the ability to comply with utility construction requirements under this Agreement, appliable permits, and other pertinent state law and regulation. The Bond will contain a provision that it will not be terminated or otherwise allowed to expire without thirty (30) days’ prior written notice first being given to the City. The Bond will be reviewed and approved as to form by the City Attorney.

City may, in the event of any construction which is likely to be substantially greater than $100,000, or in the event the City’s cost to complete or repair such construction upon Franchisee’s failure to perform the same would be greater than $100,000, as reasonably determined by the City, require the amount of the Bond to be increased. The Bond is subject to increase each time Grantee applies for permits to perform work within the City. Franchisee will provide to City all necessary documentation demonstrating Franchisee cost estimation in a format reasonable acceptable to the City.

9. Transfer, Revocation, and Termination.

9.1 Transfer. This Franchise may be sold, assigned, or transferred by Franchisee without any approval or consent of the city to any entity which acquires all or substantially all of Franchisee’s assets by reason of a merger, acquisition, or other business reorganization. In all other circumstances, Franchisee shall not sell, assign, dispose of, lease, or transfer in any manner whatsoever any interest in this Agreement, or in the Facilities authorized by this Agreement, or any part of the Facilities, without prior written consent of the city. In the event such a transfer, assignment, or disposal of franchisee’s ownership is approved by the Oregon Public Utilities Commission ("OPUC"), the City will be deemed to have consented to such transfer. Grantee will provide City with a copy of any such approval. City may impose reasonable conditions on its approval of any transfer, including but not limited to the requirement that transferee acknowledge in writing and agree to be bound by the terms of this Agreement. City shall have the right to collect from Franchisee City’s actual administrative costs associated with processing a transfer request, including the cost of ascertaining the financial responsibility of the proposed transferee.

9.2 Revocation and Termination. The City may, upon sixty (60) days' prior written notice, terminate or revoke this Franchise for any of the following reasons ("Default"):

9.2.1 Violation of any of the material provisions of this Franchise;

9.2.2 Misrepresentation in the Franchise application or a Right of Way construction application;

9.2.3 The Franchisee is found by a court of competent jurisdiction to have practiced any fraud or deceit upon the City.

9.2.4 Failure to pay taxes, compensation, fees or costs due to the City after final determination by the City of the taxes, compensation, fees, or costs;

9.2.5 Failure to restore the ROW as required by this Agreement or CGMC Title 12, or other applicable State and local laws, ordinances, rules, and regulations;

9.2.6 Failure to comply with technical, safety and engineering standards related Franchisee’s work within the Right of Way; or

If, within the sixty (60) day notice period, Franchisee cures the Default or commences to cure a Default that cannot reasonably be cured within sixty days of the notice, the notice of Default shall be deemed withdrawn and the Franchise shall not terminate. Any termination or revocation of this Franchise shall not restrict or modify Franchisee’s ability to provide telecommunications services under applicable federal or state law.

9.3 Remedies.

9.3.1 Upon any termination of this Agreement, if the Parties are not engaged in efforts to renew or renegotiate this Agreement, or any later ordinance is so adopted that would be applicable to and control the performance and operation of Franchisee’s Facilities within the City’s Rights of Way, all Facilities installed or used by Franchisee shall be (a) removed by Franchisee at Franchisee’s sole expense, with the Right of Way restored by Franchisee to the condition before installation, less reasonable wear and tear; or (b) abandoned in place by approval of the City. If Facilities are not removed within one (1) year after termination or expiration of this Agreement, the Facilities shall be considered forfeited and abandoned, and reverts to the City, in which case the City may cause the Facilities to be removed and may recover from Franchisee the cost of such removal or restoration of the Right of Way.

10. City Rights in Franchise.

10.1 City shall have the right to inspect all construction, installation, and operation of Franchisee’s Facilities to ensure compliance with governing laws, ordinances, rules, and regulations.

10.3 City shall have the right to require periodic reports from Franchisee relating to its operation within the City, including but not limited to Franchisee’s books of financial accounts and other books and records directly concerning Franchisee’s Gross Revenues. During the Term of this Agreement, or within 180 (one hundred and eighty) days after expiration or termination of this Agreement, City shall have the right to audit Franchisee’s records for a period of three (3) years prior to audit. City may expand the audit, if audit reveal underpayment of the Franchise Fee by five percent (5%) or more.

14. Change of Law: Severability. The Parties intend that this Agreement may be amended from time to time to conform to changes in controlling federal, state, or local law. Each party agrees to bargain in good faith with the other party concerning such proposed amendments. This Agreement may be amended or terminated by the mutual consent of the parties and their successors in interest. To the extent that any lawful City rule, ordinance, or regulation, including any amendment to the provisions of CGMC Title 12 is adopted on a jurisdiction-wide basis and is generally imposed on similarly situated persons or entities, such rule, ordinance, or regulation shall apply without need for amendment of this Agreement. The City shall provide Franchisee notice of any such change in law, prior to its adoption. If any clause, sentence, or any other portion of this Agreement becomes illegal, null, or void, the remaining portions will remain in full force and effect to the fullest extent permitted by law.

To Franchisee:	DOUGLAS SERVICES, INC., dba
	DOUGLAS FAST NET
	Attn: Todd Way, CEO
	2350 NW Aviation Dr.
	Roseburg, OR 97470

To the City:	Office of City Manager
	City of Cottage Grove
	400 E. Main St.
	Cottage Grove, OR 97424

CITY OF COTTAGE GROVE DOUGLAS SERVICES, INC., dba

DOUGLAS FAST NET

By: __________ By: __________

Attest: __________

Appendix IGENERAL COMMUNICATION FRANCHISE

Appendix I
GENERAL COMMUNICATION FRANCHISE