HomeMy WebLinkAbout2005-299 Argmt - Fox Sports Net
AFFILIATION AGREEMENT
This Affiliation Agreement (this "Agreement") is entered into by and between FOX SPORTS
NET NORTHWEST, LLC ("Network"), a Delaware limited liability company and ASHLAND
FIBER NETWORK, for itself and on behalf of its controlled affiliates (collectively, "Affiliate"),
as of January 1,2006 (the "Effective Date").
In consideration of the mutual promises and covenants set forth in this Agreement and for
other good and valuable consideration, the receipt and sufficiency of which are acknowledged,
Network and Affiliate agree as follows:
1. DEFINITIONS. The following terms, when used with initial capital letters, will have the
following meanings, applicable to both the singular and the plural as the context requires.
The word "including" and its derivatives are used in an illustrative sense and not in a limiting
sense.
a. "Affiliate System": Each video programming distribution system that distributes
programming services solely by way of methods permitted with respect to distribution of
the Service under Section 2(a) and is, at the time in question, majority-owned" controlled
and managed by Affiliate, including systems that become majority-owned, controlled and
managed by Affiliate after the Effective Date.
b. "Authorized Device": Any electronic device that is authorized by Affiliate for use by a
Service Subscriber to (i) enable the reception or decoding of signals of video
programming for viewing solely on a consumer television set or (ii) store video
programming in a digital format that is intended to be connected to a consumer television
set, in each case, solely for use by a Service Subscriber within such Service Subscriber's
residence and for use by a Commercial Subscriber within such Commercial Subscriber's
premIses.
c. "Commercial Subscriber": Each Service Subscriber that receives the Service for
exhibition in any commercial establishment (including any arena, bar, club, tavern,
restaurant, transportation terminal, store or office).
d. "Distribution Area": For each System, the geographic area within the Territory, as
described by zip code on Schedule 1, where Affiliate may distribute the Service via such
System.
e. "Permissible Tier": For each System, a video programming services tier that at all times is
received by at least 90% of such System's total number of subscribers to any video
programmmg.
f. "Service": The video programming service currently known as "FSN Northwl~st," as that
name may be changed from time to time.
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g. "Service Subscriber": Each person, entity and location, whether residential, commercial
or otherwise, that receives the Service from Affiliate, including each unit in any multi-
unit complex (e.g., hotels, dormitories, hospitals, nursing homes, prisons, apartment
buildings and condominium complexes), each establishment for eating, drinking or
entertainment (e.g., bars, taverns and restaurants), and each office or business location.
h. "Service Tier": For each System, the level, tier or package of video programming services
offered by such System that includes the Service.
1. "System": Each Affiliate System listed on Schedule I, as Schedule 1 may be
supplemented or modified pursuant to Section 2(b).
J. "Territory": Alaska, Washington, Oregon, (Panhandle of) Idaho, and (Western) Montana.
2. LICENSE.
a. Grant of Rights. Subject to the terms of this Agreement, Network hereby grants to
Affiliate, and Affiliate hereby accepts on behalf of itself and each System, the non-
exclusive right and the obligation to exhibit, distribute and authorize the reception of the
Service through each System, within the Distribution Area of such System, by way of any
cable video programming distribution system, as used by Affiliate on the Effective Date
and solely for reception and viewing through an Authorized Device; provided that the
Service signal will travel at all times via closed signal paths and will be available only to
Service Subscribers at authorized locations in the Distribution Area. Affiliate: does not
have the right to exhibit, distribute or authorize reception or use of the Service by any
other technology, including satellite (e.g., medium or high power Ku-Band or C-Band
satellite, DBS or TVRO) and computer and Internet technology (e.g., file sharing or
permanent storage via removable media). Affiliate will not distribute the Service to any
hotel, motel, inn or similar place of accommodation unless the Service is received by all
guestrooms and other television sets in such complex. Affiliate may not distribute the
Service to any commercial establishment if a fee or charge is imposed on any patron of
such establishment for the privilege of receiving or viewing the Service. Affiliate will not
distribute the Service to any subscriber that receives the Service at the offices or facilities
of any radio or television station or programming service or network (e.g., a cable
television programming network or Internet programming or information service).
Affiliate will not distribute the Service pursuant to the terms and conditions of any other
agreement without Network's prior written consent, which consent Network may
withhold in its sole discretion. Network reserves, and may exercise as it chooses, all
rights to the Service not expressly granted to Affiliate under this Agreement.
b. System Launch. Subject to Section 2(a), Affiliate will have the right to launch the Service
on any Affiliate System upon 30 days' prior written notice to and approval by Network.
Upon approval of such launch, Schedule 1 will be deemed amended to include such
Affiliate System and such Affiliate System will be included as a System undeT this
Agreement as of the launch ofthe Service on such Affiliate System. Upon 30 days' prior
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written notice from Affiliate to Network, any System that ceases to be an Affiliate System
will be deemed removed from Schedule 1 and such System will thereupon cease to be a
System under this Agreement.
3. TERM. The term ("Term") of this Agreement commences on the Effective Date and ends
December 31, 2011, unless earlier terminated in accordance with the terms of this
Agreement.
4. DELIVERY AND CONTENT.
a. Delivery System. Network will deliver the Service to each System's headend via
domestic satellite or other means of transmission (including digital or compressed
transmission) then commonly used by cable television networks, which Service delivery
system Network may change from time to time upon reasonable prior notice to Affiliate.
Affiliate will furnish, at its sole cost and expense, all facilities necessary for each System
to receive, decode (if encrypted) and deliver the Service to its Service Subscribers. The
necessary facilities include, as of the Effective Date, an earth station of at least 3.7 meters
in diameter, appropriate transponder switching gear, a receiver and any other blackout
equipment that Network may specify from time to time. Upon 30 days' prior written
notice to Affiliate from time to time, Network may require Affiliate to install and
maintain (at Network's cost) additional equipment at any System's headend so that
Network is able to provide and incorporate separate programming or advertising elements
into, or otherwise enhance, the Service.
b. Signal Quality. Affiliate will cause each System to distribute to its Service Subscribers a
Service signal of the best technical quality reasonably possible, but in no case of a
technical quality better than the Service signal that is delivered by Network to such
System.
c. VBI. In addition to the primary video and audio signals of the Service (the "Primary
Signals"), Network may use the minimum amount of bandwidth as is reasonably
necessary for Network to transmit closed captioning for the hearing impaired, program
rating information, any other information or data required by law or regulation to be
transmitted with the Service and any programming-related data or enhancements (the
"Required Data"). Each System will deliver the Required Data as part ofthe Service to
each Service Subscriber. All other rights in and to the signal's bandwidth other than the
Primary Signals and the Required Data are reserved to Affiliate and each System for their
sole use and exploitation; provided that no such use or exploitation will matelially
degrade or otherwise materially interfere with the delivery of the Primary Signal or the
Required Data to Service Subscribers.
d. Content. As between Network and Affiliate, the content of the Service (including
selection, scheduling, substitution and withdrawal of any programming or any advertising
on the Service) will at all times remain within the sole discretion and control of Network.
Affiliate acknowledges all rights and title in and to the content of the Service (including
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titles, concepts, ideas, formats, plots and any other creative material) will remain vested
in Network.
5. CARRIAGE.
a. Carriage Commitment. Each System will carry and distribute the Service only on a
Permissible Tier, and on no other level of carriage (including "a la carte," "pay-per-view,"
"pay-per-day" or other similar level of carriage). Network may prohibit Affiliate's
carriage or packaging of the Service with any other programming service that, in
Network's sole discretion, maybe harmful or injurious (e.g., due to "X" or "NC-I?" rated
content) to the Service or Network. In addition to carrying the Service on each System,
Affiliate will use reasonable efforts to carry the Service on each other Affiliatc~ System
that serves any portion of the Territory.
b. Commercial Subscribers. Notwithstanding Section 5(a), each System may distribute the
Service to Commercial Subscribers on any level of carriage except pay-per-vil~w, pay-per-
day or other similar level of carriage.
c. Full Time; Single Channel. Affiliate will cause each System to distribute the Service to
its Service Subscribers so that it is viewed full time, on a single designated channel, in
full screen and in its entirety, without interruption, alteration (including activation or
facilitation of any overlay, squeeze-back or other juxtaposition of audio, textual or video
material of any kind), editing or delay; provided that Affiliate may overlay or shrink the
screen image of the Service to display an electronic programming guide activated by the
viewer if such guide contains no advertisements and solely provides information on
programming available through such System. Affiliate will not employ any means to
tune the set top box of any Service Subscriber (including as the result of turning the set
top box on or oft) to any channel other than that selected and tuned by such Service
Subscriber. Affiliate will cause each System to distribute the Service at all times on a
preferred channel position (i.e., within four channel positions ofESPN, TNT, SpikeTV or
TBS (including, in each case, any successor channel)); provided that the Ashland, OR
System (lithe Channel Position Systemll) will distribute the Service on the channel where
the Service is carried as of the Effective Date. If, after the Effective Date, the Channel
Position System makes any material change in the line-up of the preferred channel
positions on such System, such System shall be obligated to immediately move the
Service to a preferred channel position with prior written notice to Network. Subject to
the preceding sentence, Affiliate will not at any time during the Term move the Service
on any System to any channel position other than the channel position on which the
Service is carried on such System on the Effective Date (or launch date if late:r) without
the prior written consent of Network.
d. No Migration; No Deletion. Affiliate will not at any time during the Term move or
migrate the Service to any less-penetrated package or tier of services, or withdraw or
discontinue distribution of the Service in any System that distributes the Service.
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e. Blackouts. Each System will comply with Network's requests (oral or written) to
blackout any Service programming that, due to contractual restrictions or League
Restrictions, Network may not distribute in such System's Distribution Area. Such
System will be provided, as part of the Service, any alternative Service programming
made available by Network in such Distribution Area in lieu of blacked out Service
programmmg.
f. Security. Affiliate will employ reasonable security practices and procedures to prevent
unauthorized reception of its distribution of the Service. Affiliate will not, and will not
authorize any other person to, copy, tape or otherwise reproduce the Service, in whole or
in part, without Network's prior written authorization, and will use its best efD)rts to assist
Network in preventing the unauthorized or unlawful reception, distribution, copying or
taping by others. Network acknowledges that this Section does not prohibit Affiliate
from connecting subscribers' VCRs or other similar recording devices intended only for
personal use; provided that, as may be modified by Network in accordance with industry
standards, (i) each digital output from an Authorized Device shall be equipped with either
Digital Transmission Copy Protection or High-bandwidth Digital Copy Protection, (ii)
each analog output from an Authorized Device shall pass through, or regenerate, if
applicable, all copy control information, including, without limitation, any audio or video
"watermark" and CGMS-A signaling information, and (iii) an Authorized Device with
permanent storage shall utilize 3DES64 or AES 128 encryption. All control signals for
the digital and analog security will be embedded by the Network.
6. ADVERTISING.
a. Ad Time. Subject to underlying programming restrictions (e.g., commercial advertising
formats) and limitations in underlying programming agreements, Network will make
available to Affiliate, for local market advertising insertion on each System, an average of
two minutes of commercial advertising time per hour of the Service (or, in those
programs where there is less than two minutes per hour of commercial advertising time
available to Network, such lesser amount of time, if any, available in such programs),
allocated on a reasonably even basis among the advertising spots available to Network
(the "Ad Time"). Affiliate is entitled to all proceeds from, and is responsible for all costs
of, its sale of the Ad Time.
b. Restrictions. Ad Time will not include advertising for prohibited categories (as further
detailed in the attached Exhibit A, which may be modified from time to time), including:
tobacco products, distilled liquor, any "900", "976" or similar telephone solicitations that
are sexual or prurient in content or directed at children, or content which is, in whole or in
part, obscene, indecent, lewd or pornographic. Network may notify Affiliate, from time to
time, of restrictions and standards of Network and its Service programming providers
applicable to the sale and use of Ad Time by Affiliate and other distributors of the
Service (including exclusive advertising categories, any League Restriction and
restrictions on the advertising of competitive programming services). These restrictions
and standards may restrict the types of products or services that may be advertised using
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the Ad Time during certain Service programming. Affiliate will comply with such
restrictions and standards immediately upon notice.
c. Advertising Report. Affiliate will submit to Network, within 30 days of the end of each
quarter, a written report with respect to such quarter in a form reasonably acceptable to
Network, containing the percentage of Ad Time sold and the total revenue generated by
the sale of Ad Time.
7. FEES AND REPORTS.
a. Monthly Fee. Within 30 days after the last day of each calendar month, Affiliate will pay
Network a monthly license fee (the "Fee"), with respect to each System, equal to the sum
of (i) the Commercial Fee (as defined below) plus (ii) a fee equal to the number of such
System's Service Subscribers (excluding Commercial Subscribers) multiplied by the
applicable Base Rate (as set forth below); provided that the total Fees paid by Affiliate in
any month will equal a minimum of $1 00.00. Base Rates are determined by Zone for
each Service Subscriber, and more than one Base Rate will apply to any System that has
Service Subscribers located in more than one Zone. The Fee will be payable to Network
whether or not Affiliate actually collects or receives payment from the Service
Subscribers.
i. Base Rate. The Base Rates for each Zone are set forth below for the periods indicated:
Zone 2006 2007 2008 2009 2010 20:
(as defined below)
4A $1.62 $1.78 $1.92 $2.08 $2.24 $2..
~
~
The Areas that make up the Zone are as follows:
Zone 4A: The state of Oregon.
11. Commercial Fee. The "Commercial Fee" payable with respect to each Commercial
Subscriber will be determined as follows:
A. For each Commercial Subscriber that is either licensed to serve alcohol on-
premises or derives at least 80% of its revenues from entry fees and/or the sale of
food or beverages (each a "Hospitality Subscriber"), the Commercial Fee will be
(1) for each Hospitality Subscriber that receives the Service a la carte, the greater
of (a) the applicable Base Hospitality Subscriber Fee (as defined below) and (b)
50% of the retail license fee charged to such Hospitality Subscriber for the Service
and (2) for each Hospitality Subscriber that receives the Service other than a la
carte, the applicable Base Hospitality Subscriber Fee.
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B. For each Commercial Subscriber that is not a Hospitality Subscriber, the
Commercial Fee will be twice the Base Rate that would apply if such Service
Subscriber were not a Commercial Subscriber or, if greater and the Service is
received a la carte, 50% of the retail license fee charged to such Commercial
Subscriber.
C. The "Base Hospitality Subscriber Fee" is determined as follows:
ESTIMATED VIEWING AREA * BASE HOSPITALITY SUBSCRIBER FEE
0-50 $ 37.50
51-1 00 $ 50.00
101-150 $ 75.00
151-200 $100.00
201-300 $125.00
301-500 $150.00
501+ $200.00
* The Estimated Viewing Area of each Hospitality Subscriber's commercial
establishment equals the fire code maximum occupancy rating of such
establishment multiplied by the percentage of the total square footage of
such establishment from which a patron could view the Service.
For each calendar year beginning after the Effective Date, Network may, on 60
days' prior written notice, increase the Base Hospitality Subscriber Fe(~ by up to
10% for each year.
b. Number of Service Subscribers. For purposes of calculating the Fee, the number of each
System's Service Subscribers will be determined as of the last day of the applicable
calendar month (or if earlier, the last day on which the Service is distributed by such
System) and will be equal to the number of such System's Service Subscribers (excluding
Commercial Subscribers). Affiliate will have the right to distribute the Service in
accordance with this Agreement to commercial office buildings and multi-unit lodging
complexes (each a "Bulk Facilitv") on a "bulk rate" basis. If any System distributes the
Service to a Bulk Facility on a "bulk rate" basis, the number of Service Subscribers
attributable to such Bulk Facility will equal, in lieu of the number of actual SI~rvice
Subscribers in such Bulk Facility, the greater of (i) such System's bulk-rate charge to such
Bulk Facility for the Service Tier divided by such System's lowest monthly rate to
residential Service Subscribers (other than pursuant to bulk-rate arrangements) for the
Service Tier and (ii) 70% of the actual number of subscribers receiving the Service in
such Bulk Facility. The methodology and customary practice used by Affiliate to
calculate the number of Service Subscribers at Bulk Facilities will be consistent
throughout the Term, and will not deviate from that used on the Effective Date without
the prior written consent of Network. Each unit in each multi-unit lodging complex or
multi-unit commercial establishment (e.g., office building) that is not a Bulk Facility will
be deemed a Service Subscriber.
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c. Monthlv Statement. Within 30 days after the last day of each calendar month, Affiliate
will deliver a statement (in form and substance reasonably acceptable to Network) to
Network containing all information necessary for Network to compute the Fee: due for
such month (including, for each System, the number of Service Subscribers with
identification of Zones, the number of Commercial Subscribers with identification of
Zones, the calculation of the number of Service Subscribers attributable to Bulk Facilities
and the total number of subscribers to any video programming of such System), which
statement shall be certified to be true, correct and complete by an executive officer of
Affiliate.
d. Additional Programming. Network may from time to time offer (each an "Offi~") to
Affiliate, on a surcharge basis, additional programming not included as part of the Service
during the applicable regular season most recently completed by the Effective Date
("Additional Programming"). Each Offer will set forth the Additional Programming to be
offered and the related increase in the Base Rate for each applicable Zone (the:
"Increase"). Affiliate may elect to either accept or reject such Offer by written notice to
Network within 30 days after receipt of such Offer. If Affiliate accepts such Offer,
Affiliate will carry the Additional Programming on its Systems as part of the Service in
accordance with this Agreement, and the Base Rate applicable to its Systems will be
deemed increased by the related Increase. If Affiliate does not deliver to Network written
notice of its acceptance of such Offer within 30 days after receipt of such Offer, Affiliate
will be deemed to have rejected such OtTer. If Affiliate does not accept such Offer,
Affiliate will not distribute the Additional Programming on its Systems and the related
Increase will not apply to its Systems.
e. Outer Market Fees. Upon at least 30 days' prior written notice to Affiliate, Network may
increase the Base Rate to reflect fees required by Major League Baseball, the National
Basketball Association, the National Hockey League or the National Football League for
each Service Subscriber that receives such league's events as part of the Service outside
the home territories of anyone or more member teams.
f. Information Updates. At the time of launch of the Service and upon any change which
may affect the accuracy of the following information, Affiliate will provide to Network
the following for each System: (i) such System's channel line-up for all video
programming carried by such System, including the Service's channel position, (ii) the
retail price and a description ofthe Service Tier, (iii) the retail price and a description of
all other tiers (including broadcast basic, basic and expanded basic) offered by such
System and (iv) all information required under Schedule 1.
g. Books and Records. Affiliate will maintain complete and accurate books and records
relating to the subject matter of this Agreement, and will cooperate fully with Network
and its agents in connection with any audit by Network and its agents conducted in
accordance with this Agreement. Upon 10 days' prior written notice to Affiliate, Network
and its agents may inspect, copy and audit Affiliate's books and records at Affiliate's
offices or at any other location where relevant records necessary to complete the audit are
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maintained during regular business hours. Network will not audit Affiliate more than
once in any 12-month period unless Affiliate fails to cooperate fully with such audit. If
Network discovers an underpayment of 5% or more as a result of any audit, then Affiliate
will reimburse Network upon demand for the cost of such audit. Network's right to audit
will survive for 12 months after termination or expiration of this Agreement.
h. Payment Terms. Affiliate will pay any amounts due under this Agreement by delivering
immediately available funds to Network at P.O. Box 55652, Los Angeles, California
90074-5652 (or any other location as Network may designate). Affiliate shall have no
right to make any deduction from or offset against any amounts due under this Agreement
for any reason. Amounts past due from Affiliate will accrue interest, from due date until
paid, at 1.5% per month or the maximum lawful rate, whichever is less. Affiliate will
reimburse Network for all of Network's reasonable costs and expenses (including court
costs and reasonable attorneys' fees) of collecting any overdue amounts. This Section
7(h) will survive the termination or expiration of this Agreement.
1. Limitation of Actions. No party may commence any action to offset or reCOVt:r any
overpayment or underpayment of Fees more than three years after such Fees were due or
paid. This Section 7(i) will survive the termination or expiration of this Agreement.
8. MARKETING AND PROMOTION.
a. Advertising and Promotion. Within 30 days after the launch of the Service on any
System, Affiliate will notify the subscribers to such System of such launch. Throughout
the Term, Affiliate will promote the Service as part of its promotion of the Service Tier,
and in a manner substantially as prominent and extensive as the promotion of every other
advertiser-supported television service carried on the Service Tier. Affiliate will use and
distribute, at no cost to Network, promotional and sales materials relating to the Service
that may be provided by Network (including promotional inserts for subscribt:r bills).
Affiliate will include the Service in all channel listings, program guides and other
subscriber materials in substantially the same manner as other advertiser-supported
programming services distributed on its Systems. The prior sentence will not apply to
special incentives or temporary, short-term promotional programs provided by other
advertiser-supported programming services. Affiliate will not sell the Service (or any
Service programming) for sponsorship without the express prior written consl~nt of
Network.
b. Market Research. Network may undertake marketing tests and surveys, rating polls and
other research relating to the Service from time to time at its own cost and expense.
Affiliate will provide promptly to Network all available data regarding the marketing and
promotion of the Service by Affiliate upon Network's request, and will provide promptly
such other assistance reasonably requested by Network in connection with any such
marketing test, survey, poll or other research. Network will treat as confidential any
subscriber names and addresses received from Affiliate, and will utilize any such
information only in connection with Network's research relating to the Service. Network
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need not seek the consent of Affiliate or any Affiliate System to conduct such marketing
tests or surveys if Network does not seek any assistance from Affiliate or such Affiliate
System, respectively.
c. Service Marks and Promotional Materials. Affiliate will use the logos most recently
provided by Network on all related Service Subscriber notices and correspondence
(including channel lineups using channel logos), advertisements, promotional materials
and on-screen graphics (including electronic programming guides). Affiliate
acknowledges that the name of the Service, Service logos, Service programming names
and all other Service-related marks are valid service marks (collectively, "Marks") and,
together with any associated goodwill, the exclusive property of Network. By reason of
this Agreement or Affiliate's carriage of the Service, Affiliate has not and will not acquire
any proprietary rights or interests in any Mark (or any use of any Mark that is not
expressly permitted under this Agreement). When Affiliate uses any Mark, Affiliate will
protect Network's interest in such Mark by taking all reasonable steps necessary to
prevent such Mark from falling into the public domain (including appropriate service
mark notices). Before Affiliate may use any promotional or advertising material which
mentions or uses any Mark, Affiliate will deliver an accurate, representative sample of
such material to Network for Network's prior review and approval. Network may
withdraw consent to Affiliate's use of any or all Marks immediately upon breach by
Affiliate of any term or condition of this Agreement or if Network, in its sole discretion,
deems such termination necessary or advisable.
9. REPRESENT A TIONS AND WARRANTIES.
a. Network Representations and Warranties. Network represents and warrants to Affiliate
that (i) Network is an entity duly organized and validly existing under the laws of its state
of organization, (ii) Network has the power and authority to enter into this Agreement and
to perform fully its obligations under this Agreement; (iii) Network is under no
contractual or other legal obligation which might interfere in any way with its prompt and
complete performance under this Agreement; and (iv) the person executing this
Agreement on behalf of Network has been duly authorized to do so and such execution is
binding upon Network.
b. Affiliate Representations and Warranties. Affiliate represents and warrants to Network
that (i) Affiliate is an entity duly organized and validly existing under the laws of its state
of organization; (ii) Affiliate has the power and authority to enter into this Agreement and
to perform fully its obligations under this Agreement; (iii) Affiliate is under no
contractual or other legal obligation which might interfere in any way with its prompt and
complete performance under this Agreement; (iv) Affiliate has obtained, and will
maintain in full force during the Term, all federal, state and local authorizations needed to
exhibit and distribute the Service via its Systems; and (v) the person executing this
Agreement on behalf of Affiliate has been duly authorized to do so and such execution is
binding upon Affiliate.
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10. INDEMNIFICATION.
a. Network Indemnities. Network will indemnify, defend and hold harmless Affiliate from
and against all liabilities, claims, losses, costs, damages and expenses (including
reasonable attorneys' fees and court costs) (collectively, "Claims") relating to or arising
out of (i) Network's breach of this Agreement, and (ii) the content of the Service (if such
Claim alleges libel, slander, defamation, invasion of privacy or copyright infringement) as
furnished by Network to, and distributed by, Affiliate in accordance with this Agreement.
b. Affiliate's Indemnities. Affiliate will indemnify, defend and hold harmless Network from
and against all Claims relating to or arising out of (i) Affiliate's breach of this Agreement;
(ii) Affiliate's marketing of the Service; (iii) any claim by any of Affiliate's subscribers
(except for content claims described in Section 10(a)(ii) above); (iv) Affiliate's or any
System's alteration or delay of, or insertion of material (including commercial
advertisements) in, the Service; and (v) any use of the Service by Affiliate or any System
in violation of this Agreement.
c. Indemnification Procedure. A party seeking indemnification will give the other party
prompt notice of a Claim. Failure to give such prompt notification will relieve the
indemnifying party of its indemnification obligations to the extent that such failure has
prejudiced the indemnifying party's defense of such Claim. The indemnifying party may
assume the defense of each Claim to which its indemnity applies. The indemnified party
will cooperate fully (at the expense of the indemnifying party) with the indemnifying
party in defending and settling the Claim in question. If the indemnified party desires to
settle a Claim, it will obtain the prior written consent of the indemnifying party, which
consent will not be unreasonably withheld or delayed. Failure to obtain such consent
shall relieve the indemnifying party of its indemnification obligations with respect to such
Claim. This Section 10 will survive termination or expiration of this Agreement for a
period of five years.
11. TERMINATION.
a. By Network. In addition to its other rights under this Agreement or at law or in equity,
Network may terminate this Agreement or discontinue distribution of the Service on
notice to Affiliate if: (i) Affiliate breaches any material term of this Agreement, provided
that Affiliate shall have 30 days following such notice of breach to cure such breach
(limited to 10 days in the case of a payment breach); (ii) Affiliate breaches any material
term of any other agreement with Network or Network's affiliates, provided that any cure
period set forth therein has expired; (iii) Affiliate files a petition in bankruptcy, is
insolvent or seeks relief under any similar law related to its financial condition; or (iv) if
any person files an involuntary petition in bankruptcy against Affiliate or seeks relief
under any similar law related to Affiliate's financial condition, unless such involuntary
petition is dismissed or relief is denied within 30 days after it has been filed or sought.t
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b. By Affiliate. In addition to its other rights under this Agreement or at law or in equity,
Affiliate may terminate this Agreement on notice to Network if: (i) Network breaches any
material term of this Agreement, provided that Network shall have 30 days following
such notice of breach to cure such breach (limited to 10 days in the case of a payment
breach); (ii) Network files a petition in bankruptcy, is insolvent or seeks relief under any
similar law related to its financial condition; or (iii) if any person files an involuntary
petition in bankruptcy against Network or seeks relief under any similar law related to
Network's financial condition, unless such involuntary petition is dismissed or relief is
denied within 30 days after it has been filed or sought.
c. Carriage Requirements. The parties acknowledge that, among other provisions, the
carriage requirements in Section 5 of this Agreement comprise an essential elc;:ment of the
consideration to Network such that, if one or more of such carriage requirements were
held to be invalid, illegal or unenforceable, Network, in its sole discretion, may elect to
terminate this Agreement with respect to one or more Systems upon 60 days' written
notice to Affiliate.
d. Discontinuance of Service. If Network completely discontinues the delivery of the
Service in all or any portion of the Territory, this Agreement will automatically expire
with respect to each System operating within the Territory or such portion of the
Territory, as the case may be.
e. Accrued Obligations. Termination of this Agreement in accordance with its tl~rms by
either Network or Affiliate will not relieve the other party from payment obligations for
amounts accrued before or accruing after the date of such termination, including any
amounts owed by Affiliate for Fees for the Service provided prior to such temlination.
This Section 11 ( e) will survive the termination or expiration of this Agreement.
12. CONFIDENTIALITY. Neither Affiliate nor Network may disclose to any third party (other
than each party's respective officers, directors and employees, in their capacities as such, and
their respective auditors and attorneys) any information relating to this Agreement, except to
the extent necessary in the following situations: (a) to comply with governmental rule,
regulation or law (including disclosures required by local franchise authorities) or with a
valid court order, in which event the disclosing party will request confidential treatment of,
and redact to the greatest extent possible, the information disclosed; (b) to comply with its
normal reporting or review procedure of its parent company or other owners, or its auditors or
its attorneys; (c) to enforce its rights or perform its obligations under this Agreement; and (d)
to its lenders that are financial institutions, in which event the disclosing party will require
confidential treatment of the information disclosed. The disclosing party is responsible to the
other party for any breach of this Section by any of its owners, officers, directors, employees,
auditors, attorneys, lenders or assignees. Notwithstanding the foregoing, Network may
release, from time to time, press statements regarding carriage of the Service by Affiliate.
This Section 12 will survive the termination or expiration of this Agreement.
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Page 12
13. MISCELLANEOUS.
a. Force Maieure. Network will not be liable to Affiliate for Network's failure to provide the
Service (or any particular programming that would have otherwise been part of the
Service) to Affiliate pursuant to this Agreement, and Affiliate will not be liable to
Network for Affiliate's failure to distribute the Service to Service Subscribers pursuant to
this Agreement, if such failure is due to any cause, except financial inability, beyond
either Network's or Affiliate's reasonable control (including any act of God, act of the
public enemy, governmental prohibition or restraint, force of nature, military action, civil
disturbance, strike, lockout or labor stoppage, satellite failure or preemption, damage to
or restriction on use of stadiums or their broadcasting facilities) (each a "F orc(~ Maieure").
If a Force Maj eure interrupts Network's delivery of the Service (with the understanding
that the change in the availability or scheduling of any particular Service programming
will not be considered non-delivery of the Service) to any System in any month for more
than 12 hours such that the System is thereby prevented from delivering the Service to its
Service Subscribers, then Network will reduce the System's monthly fee per Service
Subscriber payable under this Agreement for such month by the lesser of (1) the same
percentage, if any, by which that System has reduced, due to the interruption, its monthly
fees charged to its Service Subscribers for the Service and (2) the percentage that the
number of hours of Service interruption bears to the total number of hours of the Service
that the System would have distributed absent the Service interruption.
b. Notice. Any notice or report given under this Agreement must be in writing (unless
otherwise expressly provided) and must be sent registered or certified mail, postage
prepaid, return receipt requested, or by hand or messenger delivery, or by Federal Express
or similar overnight delivery service, or by facsimile with receipt confirmed, to the other
party at its contact information set forth on the signature page to this Agreement (or such
other contact information designated by such party in accordance with this Section). Any
notice or report delivered in accordance with this Section will be deemed given on the
date actually delivered; provided that any notice or report deemed given or due on a
Saturday, Sunday or legal holiday will be deemed given or due on the next business day.
If any notice or report is delivered to any party in a manner that does not comply with this
Section l3(b), such notice or report will be deemed delivered on the date, if any, such
notice or report is received by the other party.
c. Taxes. Etc. All fees under this Agreement are net of taxes. Affiliate is responsible for all
taxes, franchise fees and similar charges (i) levied on Affiliate, or (ii) related to any
System or its sale or use of the Service. This Section l3( c) will survive the termination or
expiration of this Agreement.
d. League Restrictions. This Agreement and the rights granted by Network to Affiliate
under this Agreement are limited by, and subject to, all limitations, covenants, standards
and restrictions applicable to either Network (including restrictions included in Network's
agreements with each Service program supplier or withdrawal of consent to Network
distribution of programming by any Service program supplier) or any Servic(: program
C:\TEMP\Ashland Fiber Network-FSNNW.vl.doc
Page 13
supplier (including such supplier's constitutions, bylaws, rules, regulations, directives and
agreements and those of each league, conference, association or individual athletic team),
as any of the same may be amended, supplemented, restated, interpreted, enacted or
entered into or enforced from time to time (collectively, "League Restrictions").
e. Assignment. This Agreement is binding upon each party's assignees, transfere:es and
successors; provided that, no party may assign or otherwise transfer, by operation of law
or otherwise, this Agreement in whole or in part, without the other party's prior written
consent. Notwithstanding the prior sentence, either party may assign this Agr(~ement in
its entirety without the other party's consent to any of the following: (i) the assignor's
successor in a consolidation or merger, (ii) the assignor's successor in an acquisition of
all or substantially all of the assets, equity or beneficial interests of the assignor
(provided, in the case of Affiliate as assignor, this Agreement may be assigned only with
respect to the assigned Systems and, notwithstanding any provision to the contrary, no
other system of assignee may be added to this Agreement without Network's prior written
consent), (iii) an entity under common control with, controlled by or in control of the
assignor, or (iv) a lender, as an assignment of collateral to secure credit extended to the
assignor. The assignor will give the other party written notice within 30 days of any
assignment described in the immediately preceding sentence.
f. Choice of Law; Venue. This Agreement and the rights and obligations of the parties
under this Agreement will be governed by and construed in accordance with the internal
laws of the state of California, without reference to conflict of laws provisions. Each
party, to the extent permitted by applicable law, hereby irrevocably and unconditionally
(i) submits to the general jurisdiction of the federal and state courts located in Los
Angeles County, California; (ii) agrees that any action or proceeding concerning this
Agreement will be brought exclusively in such courts; and (iii) waives any objection that
it may now or hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding in any such court was brought in an inconvenient
court and agrees not to claim or plead the same.
g. Counterparts. This Agreement may be executed in counterparts, each of which is an
original and together will constitute one and the same agreement. Any signature
delivered by facsimile will be deemed an original signature for all purposes and will be
binding on the signing party.
h. Entire Agreement. This Agreement, including its Schedules and Exhibits, constitutes the
entire understanding between Network and Affiliate concerning the subject matter ofthis
Agreement. Each party acknowledges that it is not entering into this Agreement in
reliance upon any term, condition, representation or warranty not stated in this
Agreement. This Agreement supersedes any and all other prior and contemporaneous
agreements, whether oral or written, pertaining to the subject matter of this Agreement.
1. Waiver and Amendment. This Agreement may not be modified or amended, and no
provision of this Agreement may be waived, except in writing executed by each of the
C:\TEMP\Ashland Fiber Network-FSNNW.vl.doc
Page 14
parties. No failure to exercise or delay in the exercise of, a party's rights under this
Agreement will constitute a waiver of such rights. No waiver of a provision of this
Agreement will constitute a waiver of the same or any other provision of this Agreement
other than as specifically set forth in such waiver.
J. Severability. If any provision of this Agreement, or the application of such provision to
any party or circumstance, is found to be illegal or unenforceable for any reason under
law, regulation or court order, such provision will be modified or severed from this
Agreement to the extent necessary to make such provision enforceable against such party
or in such circumstance. Such modification or severance will be accomplished through a
binding order from a court of competent jurisdiction or prior written notice from either
party (which notice will attach the supporting law, regulation or court order). Neither the
unenforceability of such provision nor the modification or severance of such provision
will affect the enforceability of any other provision of this Agreement. Notwithstanding
the foregoing, if such modification or severance would render the remaining provisions of
this Agreement inadequate to accomplish the basic purposes and mutual intent of the
parties, then either party may terminate this Agreement upon written notice within 30
days of such court order or notice effecting modification or severance.
k. Interpretation. No provision of this Agreement may be interpreted against any party
because such party or its counsel drafted the provision. Headings used in this Agreement
are provided for convenience only, and will not be interpreted to have independent
meaning or to modify any provision of this Agreement. All references to Sections,
Schedules, Exhibits and other attachments will be references to each such item as
contained in, or attached to, this Agreement and to each such item as may be amended,
modified or supplemented in accordance with this Agreement, unless otherwise expressly
provided.
1. Surviving Provisions. The following provisions shall survive the expiration or
termination of this Agreement: Sections 7(g), 7(h), 7(i), 10, 11(e), 12, 13(c), 13(1), 13(m)
and any other provision expressly stating the same.
m. Remedies. The several rights and remedies of each party under this Agreement will be
cumulative, and the exercise of one or more of those rights or remedies will not preclude
the exercise of any other right or remedy under this Agreement at law or in equity.
Notwithstanding anything to the contrary in this Agreement, neither party is entitled to
recover any lost profits or incidental or consequential damages or loss of revenues,
whether foreseeable or not, resulting from a breach or failure by the other party, and,
except as expressly provided in this Agreement to the contrary, neither Network nor
Affiliate will have any right against the other with respect to claims by a third party. This
Section 13(m) will survive the termination or expiration of this Agreement.
n. Specific Performance. Each party acknowledges that the obligations to be fulfilled by
Affiliate under this Agreement are specific and unique in character, and that any failure
by Affiliate to fulfill its obligations under this Agreement (including distribution and
C:\TEMP\Ashland Fiber Network-FSNNW.vl.doc
Page 15
carriage commitments) will cause irreparable damage to Network that cannot be rectified
by monetary damages. Accordingly, Affiliate agrees that Network will be entitled to
obtain specific performance of Affiliate's obligations under this Agreement as an
appropriate remedy in the event of Affiliate's breach of this Agreement.
o. Review. Each party acknowledges that it has had ample time and opportunity to review
carefully this Agreement. Each party further acknowledges that it has the right to seek
independent legal counsel with respect to this Agreement, and hereby represents and
warrants that it has either sought such counselor determined after careful review of the
Agreement that it chooses freely and judiciously to waive such right.
C:\TEMP\Ashland Fiber Network-FSNNW.vl.doc
Page 16
p. No Relationship. This Agreement does not create any partnership or joint venture
between Affiliate and Network. Neither Affiliate nor Network will be, or hold itself out
as, the agent of the other party in connection with, or as a result of, this Agreement. No
subscriber of Affiliate will be deemed to have any privity of contract, contractual
relationship or other relationship with Network by virtue of Network's execution or
performance ofthis Agreement (including Network's delivery of the Service to Affiliate
under this Agreement).
IN WITNESS WHEREOF, the parties have caused this Affiliation Agreement to be duly
executed as of the Effective Date.
FOX SPORTS NET NORTHWEST, LLC
ASHLAND FIBER NETWORK
~bvv
By:
Name:
Title:
Jonathan J Sarrow
Vice President, Affiliate Business Affairs
By: .iN. ~
J.
Name: LE.F: /UAlE./?rL/_
Title: ADMIN S'-ItJ//cltj );tJ/{ ;JIP6c-/lIr.2..
.
Attention: Affiliate Sales and Marketing,
SVP Affiliate Relations
Facsimile: 310-969-2620
Address:
90 North Mountain Avenue
Ashland, Oregon 97520
Attention: l}ick \1/ lludt:rscheld,
Direetor rowel & Tdecljm
Telephone: 541-488-~ $$0(.1
Facsimile: 541-488-5320
Address:
Fox Cable Networks Group
10201 West Pico Boulevard, Bldg. 103
Los Angeles, California 90035
With a copy to:
Fox Cable Networks Group
10201 West Pico Boulevard, Bldg. 103
Los Angeles, California 90035
Attention: Business and Legal Affairs,
SVP Affiliation Matters
Facsimile: 310-969-5678
With a copy to:
Fox Sports Net Northwest, LLC
3626 156th Avenue, SE
Bellevue, Washington 98006
Attention: General Manager
C:\TEMP\Ashland Fiber Network-FSNNW.vl.doc
Page 17
EXHIBIT A
Standard Local Ad Sales Restrictions
Affiliate will ensure that the following standard restrictions are observed with respect to all local
commercial advertising inserted on any Network. In addition, Affiliate will ensure that all
commercial material is lawful. Specifically, there shall be:
. No false or unwarranted claims for any product or service.
. No advertising of any tobacco products or distilled liquor.
. No advertising of handguns, handgun ammunition, weapons, or weapon accessories.
. No material constituting or relating to a lottery, or contest of any kind in which the public is
unfairly treated, or any enterprise or service that encourages, solicits, aids, abets, assists,
facilitates or promotes gambling (whether illegal or legal), except advertising of the official
state lottery of the state in which the relevant System operates (provided that such lottery is in
no way dependent on the outcome of any sporting event).
. No appeal for funds.
. No commercial or material that is obscene, indecent, lewd or pornographic, whether in whole
or in part, including any promotion of products, services, or programming of explicitly adult
nature.
. No promotion of any bar, club, or other establishment featuring performers that appear
partially or totally nude.
. No commercial or material that is defamatory or that violates the privacy rights of any person
or that constitutes infringement of any trademarks or copyrights.
. No 900, 976 or similar telephone solicitation that is sexual or prurient in content lOr directed
at children.
. No infringement of another advertiser's rights through plagiarism or unfair imitation of either
program idea or copy.
. No disparagement of competitors or competitive products.
. No testimonials that cannot be authenticated.
. No commercial that may be injurious or prejudicial to the interests of the public, Network, or
truthful advertising and reputable business in general.
. No advertising of programming services or networks competitive with Network.
C:\TEMP\Ashland Fiber Network-FSNNW.vl .doc
Page 18
. No advertising for any other programming service that includes any information about the
day, date or time that a program will be airing on such programming service (also known as
"tune-ins").
. No time for presentation of views on controversial issues.
Gambling Information
Generally, Affiliates may not advertise on any Network for any product or service relating to or
aiding, assisting or otherwise facilitating gambling or sports betting. This prohibition includes
any advertising from a sports book, or from a "tout" service, a line service, or any other "sports
information service" whose activities are predominantly geared towards betting. Even though
such services may not violate any law (and sports betting is not universally illegal), these services
certainly aid or assist gambling and are unacceptable for telecast on any Network. Affiliate
should contact its Fox Cable Networks representative if it has any particular questions relating to
gambling or sports betting.
If Affiliate desires to accept any gambling, casino or betting related products or services, please
contact your Fox Cable Networks representative to verify whether such advertisement is
permissible under the terms and conditions of the applicable affiliation agreement.
Professional and Collegiate Team and League Restrictions
Affiliate will not insert commercial advertising for anything that is prohibited by any sports
league, team or conference during (or adj acent to) any telecast of any game of any such league,
team or conference.
For example, the following prohibitions apply to Affiliate's use of commercial announcement
time for any National Collegiate Athletic Association ("NCAA") game:
. Use of Professional Athletes. Advertisements featuring active professional athletes in a sport
not being televised are acceptable. Advertisements featuring active professional athletes from
the sport being televised may appear in commercials that solely promote the product being
advertised or a positive "public service" announcement, and not the sport; provided that
these spots must be approved by the NCAA on a case-by-case basis.
. Affiliation with NCAA, Participating Teams. No commercial advertisement may relate,
directly or indirectly, to any participating institution or its athletes, or the NCAA itself, unless
prior written approval has been granted by the NCAA president.
. Drug Advertisement. No advertisement of drugs and patent medicine; provided that
analgesics, cold remedies, antacids and athletic training aids in general use, and institutional
advertising by pharmaceutical firms are acceptable.
C:\TEMP\Ashland Fiber Network-FSNNW.vl.doc
Page 19
This list is by no means exhaustive of the restrictions or prohibitions that apply to the use of
advertising time during any NCAA game telecast or the telecast of any game or event of any
other collegiate team, league, or conference. As always, if Affiliate has any question as to
whether it is permissible under the terms and conditions of its affiliation agreement to insert
commercial announcement time for specific products or services on any Network, please contact
your Fox Cable Networks representative.
Exclusive Advertising Categories
Network may notify Affiliate, from time to time, of exclusive advertising categories reserved by
Network or its service programming providers applicable to the sale and use of advertising time
by Affiliate. These restrictions and standards may restrict the types of products or services that
may be advertised during certain programming being telecast on a Network. Affiliate must
comply with such restrictions and standards in accordance with their respective affiliation
agreement. Typically, Network will reserve several exclusive advertising categories during the
telecast of a particular team or sports league (e.g., "Automotive after-market" during all Lakers
games in the 2002-2003 season). If Affiliate has any question about the scope of any particular
advertising category reserved by Network, or if Affiliate has not received notice of any exclusive
advertising categories reserved by Network, please contact your Fox Cable Networks
representative.
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Page 20
I i'): t
CABLE NETWORKS..
MEMORANDUM
To: Michael Ainsworth
From: Carlos Gutierrez & Kim Pendergraft
Date: December 28, 2005
Subject: Ashland Fiber Network - FSNNW Affiliation Agreement
Enclosed please find one original copy of the above-named Affiliation Agreement. The
Agreement is fully executed and may be kept for your files.
Thank you.
h.7!F~76 /?~
V~L~~ 7963
3626 156th Avenue SE+Sellevue, WA + 98006 + Ph. (425) 641-0104 + Fax (425) 641-9811
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CITY RECORDER'S COpy
CITY OF
ASHLAND
20 E MAIN S1.
ASHLAND, OR 97520
(541) 488-5300
Page 1 / 1
---.,
I .7/29/2005 I L
VENDOR: 005963
FOX SPORTS NET NORTHWEST
FILE #55652
LOS ANGELES, CA 90074-5652
SHIP TO: Ashland Fiber Network
(541) 488-5354
90 N. MOUNTAIN
ASHLAND, OR 97520
FOB Point:
Terms: Net
Req. Del. Date:
Speclallnst:
Req. No.:
Dept.: IT
Contact: Michael Ainsworth
Confirming? No
BILL TO: Account Payable
20 EAST MAIN ST
541-552-2028
ASHLAND, OR 97520
VENDOR COpy
r� ("- ITY OF
rr-,quPst for a Purcl�iase Order -A5 H LAN D
REQUISITION FORM
Date of Request: JWY 13,2005
THIS REQUEST IS A:
❑ Change Order(existing PO# ) Required Date of Delivery/Service: 1!Y_05_06
Vendor Name
Address: FOX SPORTS NET NORTHWEST City,State,Zip: File#55652 I,,os Angeles,
Telephone Number CA 90074-5652
Fax Number
Contact Name
SOLICITATION PROCESS
Small P El Sole Source Invitation to Bid
❑ Less than$5,000 ❑ Written findings attached
El Quotes(Not required) (Copies on file)
Cooperative Procurement Request for Proiposal
❑ State of ORMA contract (Copies on file)
Intermediate Procurement ❑ Other government agency contract X Special/Exempt AMC 2.50.070 S
❑ (3)Written Quotes ( )
(Copies attached) ❑ Copy of contract attached ❑ Written findings attached
El Emero
❑ Contract# encv
❑ Written findings attached
Description of SERVICES Total Cost
Per attached PROPOSAL
Cable TV Programming- Tier 3
Fox Sports Northwest
Item# Quantity Unit Description of MATERIALS Unit Pricey Total Cost
❑ Per attached QUOTE
Project Number -
Account Number 691.02.45.00.606900
"Items and services must be charged to the appropriate account numbers for the financials to reflect the actual expenditures accurately.
By signing this requisition form, I certify that the information provided above meets the City of Ashland public contracting requirements,
and the documentation can be provided upon request
Employee Signatu /` �
SupervlsorMept.Head Signature: /o ;
Michael Ainsworth
G:Finance\ProoedureWPTorms\05 06 PO Req Fox Sports NW Updated on:7/15/2005