HomeMy WebLinkAbout2017-003 Agrmt - Ashland Home Net - Television Head-End
TELEVISION HEAD-END SYSTEM LEASE AGREEMENT AND CONTRACT
BETWEEN
CITY OF ASHLAND, OREGON
AND
ASHLAND HOME NET
TELEVISION HEAD-END SYSTEM LEASE AGREEMENT AND CONTRACT ("Agreement")
entered this 1 st day of January 2016, between the City of Ashland, Oregon, ("City") by and through its
Ashland Fiber Network division ("AFN"), and Ashland Home Net, a Nevada Corporation, hereinafter
referred to as "Home Net".
WHEREAS, in 2010, pursuant to a Request for Proposal ("RFP") by AFN, Home Net entered into a
lease agreement with AFN for the television head-end (as defined below) and the provision of cable
television services; and
WHEREAS, Home Net must maintain a Franchise Agreement with the City because AFN is not a cable
television operator and will not maintain a cable television franchise; and
WHEREAS, the Parties have had to amend the lease in order to make the enterprise financially
sustainable, the results of which leave a profit margin so small that it is not practical for AFN to reissue
an RFP in today's marketplace, and
WHEREAS, the Parties wish Home Net to continue providing services to the Ashland, Oregon,
community; and
WHEREAS, this Agreement serves to continue an agreement to lease for the television head-end and
contract for services between AFN and Home Net. Material terms and conditions that supplement the
underlying lease are also found within the RFP, which is attached hereto as Exhibit A; and
WHEREAS, AFN and Home Net wish to enter into this Agreement to clarify the lease terms and to
ensure that the Agreement reflects the intent and current practices of the parties;
NOW, THEREFORE, THE CITY AND ASHLAND HOME NET HEREBY AGREE AS FOLLOWS:
1. LEASE OF TELEVISION HEAD-END: AFN hereby leases to Home Net its television head-end
and all the associated equipment located at the City of Ashland Service Center, 90 N. Mountain
Avenue, Ashland, Oregon 97520, as set forth in the RFP and attached hereto, and 450 MHz and 860
MHz WAN bandwidth provided by and through AFN's hybrid fiber-coax network (the "Network")
as required to provide cable television service to residents of the City of Ashland, subject to the
limitations set forth herein (hereinafter referred to as the "television head-end"). The television head-
end does not include the outside plant. Home Net holds and maintains ownership rights to television
subscribers and cable television from the head-end and into the customer premises.
2. LEASE FEES
2.1. BASE OPERATING FEES: Home Net shall pay AFN, as rent and for the cost of basic
operations of the television head-end, a set monthly fee effective retroactive to January 1,
2016. The Base operating fee is one thousand seven hundred and fifty dollars ($1,750 USD)
per month, with an annual charge of $200 for security for a total of $21,200.00.
2.1.1. Payments are due and payable in monthly installments paid no later than the twenty fifth
(25th) of each month and addressed to AFN at the address set forth in this Agreement.
2.1.2. This Base Operating Fee shall be paid in arrears for the previous month period, without
deduction or setoff of any kind.
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2.2. MISCELLANEOUS CHARGES AND FEES: Home Net shall pay AFN for services
rendered per the table in this section. Payments for services are due and payable no later than
thirty (30) days after the billing period, or per date listed on invoices sent by AFN. Payments
shall be made by Home Net without deduction or setoff of any kind, and be addressed to AFN
at the address set forth in this Agreement. Fees, hourly rates, and miscellaneous charges will
apply from the effective date of this Agreement and last through June 30, 2017, after which
they may be amended by AFN provided AFN gives Home Net 60-days prior notice.
2.2.1. Traps. Home Net shall pay for cable television traps ("filters").
2.2.2. Signal Filings. AFN shall pay for annual aeronautical signal leak detection and fly-
over examinations, which shall be filed accordingly with the FCC by AFN.
2.2.3. Waivers. At its discretion, AFN may waive these fees, but waiver shall not be a waiver
of or prejudice the party's right to require strict performance of the same provision in
the future or of any other provision.
Description
Installation Fee In Home
(Additional charges for parts and supplies apply.) $30.00
Disconnect Fee $50.00
Standard Outlet Fee $20.00
Add/Remove Trap Fee $10.00
Field Technician Hourly Rate
(Non-standard work such as advanced troubleshooting, nonstandard $55.00
outlets, wall fishing, etc.)
Consulting and Technical Support- Hourly Rate
(Charge applies to support for issues not related to AFN infrastructure $85.00
performance and reliability.)
Staff Screening Fee
(Charge for each employee submitted for authorization to access AFN and $150.00
City Service Center facilities.)
2.3. REVENUE SHARING: Revenue sharing payments shall be due and paid monthly no later
than the twenty fifth (25th) day of the following month. Revenue sharing shall be for the
following services and calculated in the following manner:
2.3.1. Non-Advertising Revenues are revenues from all services other than advertising sales.
Revenue share shall be paid by Home Net to AFN as a percentage of all Non-
Advertising Revenues, calculated from overall average revenue per customer.
2.3.1.1. For customers 1 to 3000, Home Net shall pay AFN a Non-Advertising Revenues
payment of $4,750 per month.
2.3.1.2. For customers 3001 to 3500, Home Net shall pay AFN 5% of Non-Advertising
Revenues.
2.3.1.3. For customers 3501 to 4000, Home Net shall pay AFN 3% of Non-Advertising
Revenues.
2.3.1.4. For customers 4001 and above, Home Net shall pay AFN I% of Non-Advertising
Revenues.
2.3.2. Advertising Revenues are those revenues generated from the sale of advertising time
and/or services. Home Net shall pay AFN 0% of its Advertising-related Revenues.
3. SPECIAL EXAMINATIONS: Home Net agrees that the City may initiate a special examination of
its finances to confirm accuracy of payments at any time after giving reasonable notice to Home Net.
Special examination shall not exceed one per year. In the event of a special examination, Home Net
must and shall make all files, materials, and staff fully available to AFN, or its assigned independent
contractors or agents.
3.1. Reporting. At least annually, Home Net shall submit a current financial report reviewing the
financial status of the company and its operations.
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3.2. Scope. The scope of any special examinations will be limited to services contracted and/or
proposed in Home Net's response to the RFP.
3.3. Selection. AFN shall select contractors or agents with the necessary qualifications to review
Home Net's financial report.
3.4. Cost. Special examinations shall be paid for equally by Home Net and the City if the selected
contractor determines payments by Home Net do not exceed three percent (<3%) less than was
due to AFN. If payments to AFN by Home Net exceed three percent (>3%) less than was due
to AFN and the errors were not inadvertent, Home Net agrees to pay the full cost of the special
examination.
4. TERM OF AGREEMENT: The initial term of this Agreement shall commence on the date noted
above and continue through the following dates (with other term rioted):
Dates Term Base Operating Fee Minimum Revenue Minimum Payment
Sharing
January 1, 2o16, through 18 months $1750 / month $4750 / month $6,500 / month
June 30,20-17
4.1. AFN may, at its sole discretion, extend the term of this Agreement for one additional one year
term. The extension shall be communicated in writing by AFN and sent to Home Net at least
ninety (90) days prior to the end date of this Agreement.
5. USE OF PROPERTY: Home Net shall be granted use of and access to the AFN television head-end
for the provision of television services to residents of Ashland, OR, pursuant to the RFP, Proposal,
and Cable Franchise. As used herein, "television services" means: (A) the transmission to subscribers
of analog video programming, and (B) the one-way transmission to subscribers of digital video
programming. Home Net is not permitted under this Agreement to use the television head-end to
provide any non-television services or use the television head-end to provide any other services or
for any other purposes except as specifically granted under this Agreement.
6. STORE-FRONT LOCATION: Home Net will maintain a commercial storefront location within
the City of Ashland's urban growth boundary throughout the term of this Agreement. Said offices
shall be assessable to the public during normal business hours and will be equipped and staffed to
handle walk-in customer and premise visits for connects, disconnects, and equipments and parts
pick-up.
6.1. Hours of Operation. Store-front facility shall be open to the public standard business days
and hours, except for national and State of Oregon holidays.
6.2. Service Standard. Customer support staff must be courteous and professional.
7. WHOLESALE TELEVISION PRODUCTS: Home Net agrees to make its television products
available to AFN and its partners at reduced wholesale prices.
7.1. Packages and Prices. Home Net agrees to make available for resale its television packages
for at least a 10% discount from its retail prices. These packages will be made available only
to AFN and its designated partners.
7.2. Management of Wholesale Purchases. Vendors shall be able to purchase television services
directly from Home Net by a process Home Net defines and manages.
7.3. Notification. Home Net shall notify AFN, customers of its services, and vendors purchasing
its products at wholesale rates of any related prices or product changes. Notifications must be
sent at least sixty (60) days prior to price and product changes taking effect, unless required in
a shorter timeframe by law.
8. BILLING, ACCOUNTING, AND CONTRACTS: Home Net shall independently manage its
commitments and operations as they relate to the services under this contract. Home Net agrees it
carries complete and sole liability for its billing, accounting, contracts, and related processes.
9. CONDITIONS OF USE:
9.1. Disposition of Customers. Without exception, Home Net agrees it and AFN share mutual
interest in all customers obtained under the duration of this Agreement and for the services
specified.
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9.1.1. Home Net shall share customer data openly, fully, and exclusively with AFN.
Customer data shall be maintained in a secure fashion and shall not be shared,
transmitted, or otherwise revealed to third parties without the written consent of AFN.
9.1.2. Home Net agrees not to sell, transfer, exchange, grant an option to purchase, or
otherwise dispose of customer accounts or any part of, or interest in, its customer accounts
without first offering these accounts to AFN on the terms and conditions set forth in this
Section.
9.1.2.1. Home Net must give AFN written notice (the "Notice") of the price, terms, and
conditions of any third party offer and deliver a copy of the executed contract
evidencing the offer (the "Offer") to AFN.
9.1.2.2. AFN will have 15 days from the date that it receives the Notice and a copy of the
Offer to notify Home Net whether AFN elects to purchase the customer accounts
under the terms of the Offer.
9.2. Cable Franchise. Without exception, Home Net must obtain and maintain a valid Cable
Franchise Agreement with the City of Ashland for the duration of this Agreement. Further,
Home Net agrees to fully accept revisions to the City Code affecting administration of the
City's rights-of-way and telecommunications franchise agreements. Failure to comply with
these requirements and obligations may result in termination of this Agreement pursuant to the
termination provisions set forth herein.
9.3. Business License. Without exception, Home Net must obtain and maintain a valid Business
License with the City of Ashland for the duration of this Agreement, as well as any extensions.
Failure to comply with these requirements and obligations may result in termination of this
Agreement pursuant to the termination provisions set forth herein.
9.4. Co-Marketing. Home Net agrees to cooperatively market all services and products under this
Agreement with AFN. This includes inclusion of the AFN logo and brand in all marketing
efforts and providing AFN management opportunity to review and control use of its logo and
brand. Failure to comply with these requirements and obligations may result in termination of
this Agreement pursuant to the termination provisions set forth herein.
9.5. Use of Facilities. Home Net's use of the television head-end shall be conditioned upon its
compliance with the requirements and obligations set forth in the RFP, Proposal, Agreement,
and Cable Franchise Agreement. Failure to comply with these requirements and obligations
may result in termination of this Agreement pursuant to the termination provisions set forth
herein. AFN agrees to provide all information, documents, materials and services that are
within its possession or control and are required by Home Net for performance of the
requirements and obligations set forth in the RFP, Proposal and Cable Franchise.
9.6. Reliability. Home Net's lease and contract (Agreement) shall be conditioned upon maintaining
access for subscribers to channels and content at least 99.90/'0 of all available hours.
9.7. Compliance. Home Net's lease and contract (Agreement) shall be conditioned upon receiving
no more than thirty-six notices of violation from the Federal Communications Commission
(FCC), Public Utilities Commission (PUC), or other regulating bodies.
9.8. Maintenance of Assets. Home Net shall, at its own expense, operate, maintain, and repair the
television head-end and equipment in proper operating condition during the term of this
Agreement.
9.9. Customer Service Surveys. Home Net shall conduct at least one (1) periodic customer
service survey per year, which shall be reviewed and approved by AFN prior to sending to
subscribers. Home Net's Lease Agreement and Contract shall be conditioned upon maintaining
a customer satisfaction rating of at least 75% good to excellent.
9.10. Taxes. Home Net shall be responsible for all applicable taxes including, but not limited to,
franchise fees and PEG fees due pursuant to the Cable Franchise. Home Net shall not deduct
from Lease Fees due under this Agreement any such taxes or fees paid by Home Net.
9.11. Permits and Licenses. Home Net shall be responsible to obtain all necessary permits and
licenses required to operate the television head-end and to provide cable television services
over the television head-end.
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9.12. Coordination of Use. Home Net acknowledges that the television head-end is located in the
same facility as AFN's network and that the network capacity provided to Home Net under this
Agreement is also used by AFN to provide internet access services over its Network. Home
Net acknowledges and agrees that the terms of this Agreement do not limit AFN's access to
that facility for any purpose associated with the operation, maintenance, repair or use of the
Network, nor does it grant Home Net the exclusive use of the Network or otherwise place any
limitations on AFN's use of the Network.
9.13. Other Conditions. ,Home Net further agrees to the following conditions on access to and use
of the television head-end:
9.13.1. The City of Ashland and its agents shall at all times (upon reasonable notice to Home
Net) have access to television head-end equipment for the purposes of inspecting and
assessing its condition and state of repair.
9.13.2. Home Net may not operate the television head-end in a manner that fails to maintain
the signal integrity of AFN's network or to meet ingress and signal to noise
specifications set by AFN.
9.13.3. Notwithstanding the grant of use, Home Net shall not be permitted to erect, install,
construct, repair, replace, reconstruct and retain the television head-end, or any part
thereof, without AFN's written permission.
9.13.4. Home Net may upgrade the television head-end pursuant to the RFP, provided that any
alteration, improvement, or addition(s) to the television head-end shall be conducted by
Home Net with AFN's prior written permission. Such changes, additions or alterations
shall be at the sole expense of Home Net. All alterations, improvements, or additions
to the television head-end shall become property of AFN after installation.
9.13.5. Home Net shall only allow access to the television head-end by designated staff who
have passed background checks by the City of Ashland or other entities as deemed
necessary by the City's Information Technology Department.
9.13.6. Home Net shall not store any equipment or supplies on City property without prior
approval by the City's Information Technology Department, and shall not park vehicles
on City property other than in authorized parking spaces.
9.13.7. Home Net shall not access the network equipment or any other area within City's
property, or use City property for any reason other than as permitted herein or in the
RFP.
10. ADDITIONAL SERVICES: Ashland Home Net will render the following value-added services at
the stipulated revenue sharing.
10.1. Internet Connectivity-Home Net shall purchase its Internet services products exclusively
from AFN for customers in Ashland's urban growth boundary. Home Net agrees to purchase
AFN connectivity products at the rates approved by City Council and shall resell those
products to the community at retail prices it deems appropriate. AFN shall have no additional
revenue share from this service above its revenue from Home Net's purchases of internet
services.
11. EFFECT ON PREVIOUS AGREEMENTS: Upon execution of this Agreement by both parties,
this Agreement shall supersede and render null and void all previous leases, agreements, and
contracts between AFN and Home Net for television services.
12. COMPLIANCE WITH LAWS:
12.1. This Agreement will be governed by and construed in accordance with the laws of the State of
Oregon. Home Net shall promptly observe and comply with all present and future laws, orders,
regulations, rules and ordinances of federal, state and local governments with respect to the
lease of the television head-end and the requirements and obligations of the RFP and Proposal,
including but not limited to provisions of ORS 27913.220, 27913.230 and 27913.235.
12.2. Home Net is a "subject employer" as defined in ORS 656.005 and shall comply with ORS
656.017. If it has not already done so as required by the Cable Services Agreement, within 10
business days of the execution of this Agreement, Home Net shall certify to City that it has
workers' compensation coverage required by ORS Chapter 656. If Home Net is a carrier
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insured employer, Home Net shall provide City with a certificate of insurance. If Home Net is
a self-insured employer, Home Net shall provide City with a certification from the Oregon
Department of Insurance and Finance as evidence of Home Net's status.
13. INSURANCE:
13.1. Home Net shall, at its own expense, and at all times during the term of this Agreement,
maintain in force:
13.1.1. A comprehensive general liability policy including coverage for contractual liability for
obligations assumed under this contract, blanket contractual liability, products and
completed operations and owner's and contractor's protective insurance.
13.1.2. A comprehensive automobile liability policy including owned and non-owned
automobiles.
13.2. The coverage under each liability insurance policy shall be equal to or greater than the limits
for claims made under the Oregon Tort Claims Act with minimum coverage of $2,000,000, or
higher, per occurrence (combined single limit for bodily injury and property damage claims) or
$1,000,000, or higher, per occurrence for bodily injury and $500,000, or higher, per occurrence
for property damage. Liability coverage shall be provided on an "occurrence" basis. "Claims
made" coverage is not acceptable, except for the automobile liability policy coverage required
by paragraph 12.1.2.
13.3. Certificates of insurance acceptable to City shall be filed with City within 10 business days of
the execution of this Agreement, if not already on file with City. Each certificate shall state that
coverage afforded under the policy cannot be cancelled or reduced in coverage until at least
thirty (30) days prior written notice has been given to City. A certificate that states merely that
the issuing company "will endeavor to mail" written notice is unacceptable.
14. INDEMNIFICATION: Home Net shall defend, indemnify and hold City, its officers, agents, and
employees harmless from any and all claims, actions, costs, judgments, damages or other expenses
resulting from injury to any person (including injury resulting in death), or damage to property
(including loss or destruction), of whatsoever nature arising out of, or incident to, the negligent
performance of this Agreement by Home Net. Home Net's indemnification of the City and AFN
includes, but is not limited to, the negligent acts or omissions of Home Net's employees, agents and
others designated by Home Net to access the television head-end, provide cable television services,
perform work or services attendant to this Agreement, and/or maintain the security of customer data.
Home Net shall not be held responsible for any claims, actions, costs, judgments, damages or other
expenses, directly and proximately caused by the direct negligence of City.
15. DEFAULT:
15.1. There shall be a default under this Agreement if either party fails to perform any act or
obligation required by this Agreement within ten (10) days after the other party gives written
notice specifying the nature of the breach with reasonable particularity. If the breach specified
in the notice is of such a nature that it cannot be completely cured within the 10 day period, no
default shall occur if the party receiving the notice begins performance of the act or obligation
within the 10 day period and thereafter proceeds with reasonable diligence and in good faith to
effect the remedy as soon as practicable.
15.2. Misrepresentations of experience, staff, references, or other qualification of material
importance to accurately rating the ability of proposers in the RFP process shall be considered
a default and shall constitute grounds for terminating this Agreement.
15.3. Notwithstanding Section 12. 1, either party may declare a default by written notice to the other
party, without allowing an opportunity to cure, if the other party repeatedly breaches the terms
of this Agreement.
15.4. If a default occurs, the party injured by the default may elect to terminate this Agreement and
pursue any equitable or legal rights and remedies available under Oregon law. All remedies
shall be cumulative.
15.5. Any litigation arising out of this Agreement shall be conducted in Circuit Court of the State of
Oregon for Jackson County.
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16. TERMINATION FOR PUBLIC INTEREST: In addition to the right to terminate this
Agreement under Section 15, City may terminate this Agreement and Contract by giving Home Net
sixty (60) days prior written notice if it determines termination is required for the interests of the
community. If City terminates under this Section, Home Net shall be paid all fees earned and costs
incurred prior to the termination date set forth in the notice. Home Net shall not be entitled to be
compensated for lost profits.
17. WAIVER: Failure of City or Home Net in any one or more instances to insist upon the performance
of any of the terms of this Agreement, or to exercise any right or privilege conferred herein, or the
waiver of any breach of any term of this Agreement should not thereafter be construed as a waiver of
such term, which shall continue in force as if no waiver had occurred.
18. NOTICES: Any notice required to be given under this Agreement or any notice required to be given
by law shall be in writing and may be given by personal delivery or by registered or certified mail, or
by any other manner prescribed by law.
18.1. Notices to City shall be sent to:
Director of Information Technology
City of Ashland
90 N. Mountain Avenue
Ashland, Oregon 97520
With a copy to:
City Administrator
City of Ashland
20 East Main Street
Ashland, Oregon 97520.
18.2. Notices to Ashland Home Net shall be sent to:
Ashland Home Net
c/o Jim Teece
485 East Main Street
Ashland, OR 97520
19. ASSIGNMENT: City and Home Net and the respective successors, administrators, assigns and legal
representatives of each are bound by this Agreement to the other party and to the partners,
successors, administrators, assigns and legal representatives of the other party. Home Net shall not
assign or subcontract Home Net's rights or obligations under this Agreement without prior written
consent of City. Except as stated in this Section, nothing in this Agreement shall be construed to give
any rights or benefits to anyone other than City or Home Net.
20. MODIFICATION: No modification of this Agreement shall be valid unless in writing and signed
by the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement at Ashland, Oregon, on this
day of 2016. AP ~ AS TO FORM
Ashland sst. City Attorney
Dat
By: City of Ashland By: Ashland Home Net
J , City Administrator Jim Teece, resident & CEO
C jn; lE' 0b r\ Kc.r,n s
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