Synopsis of Verizon FIOS Franchise

Synopsis of Verizon FIOS Franchise
       1.     The Town and Verizon recognize that Verizon’s Fiber to the Premises
Telecommunications Network (“FTTP Network”) is being constructed for the
transmission of non-cable services pursuant to authority granted by the Commonwealth
of Virginia and will be operated and maintained as an upgrade to and/or extension of its
existing Telecommunications Facilities.

       2.     The Network will occupy the Public Rights-of-Way within the Town and a
portion of the Network once installed will be used to provide Cable Services in the
Town.

        3.    The Town recognizes that Verizon is financially, technically and legally
qualified to operate a cable system and that it is in the best interests of the Town to
award a nonexclusive franchise to Verizon for that purpose.

       4.     Section 3.1 of the Franchise designates the Service Area where Verizon
shall make Cable Service available. Verizon is required under the Franchise to make
service available to the Initial Service Area within three (3) years of the Effective Date of
this Franchise. The Initial Service Area is defined in the Franchise as an area of no less
than one thousand (1,000) occupied residential dwelling units that are in the Franchise
Area (the incorporated area of the Town and such additional areas as may be included
in the corporate limits of the Town during the term of this Franchise) and capable of
being served by Verizon’s FTTP Network. In addition, Verizon is required under the
Franchise to make service available to no less than sixty-five percent (65%) of the
residential dwelling units in the Franchise Area within seven (7) years of the Effective
Date of the Franchise (the “Year Seven (7) Threshold”) and to no less than eighty
percent (80%) of the residential dwelling units in the Franchise Area within ten (10)
years of the Effective Date of this Franchise (the “Ten (10) Year Threshold”).

         Verizon may make Cable Service available to businesses in the Service Area.
Notwithstanding the foregoing; however, Verizon shall not be required to make Cable
Service available: (a) for periods of Force Majeure; (b) for periods of delay caused by
the Town; (c) for periods of delay resulting from Verizon’s inability to obtain authority to
access Public Rights-of-Way in the Service Area; (d) in areas where developments or
buildings are subject to claimed exclusive arrangements; (e) in developments or
buildings that the Franchisee cannot access under industry standard terms and
conditions after good faith negotiation; (f) in developments or buildings that the
Franchisee is unable to provide Cable Service for technical reasons or that require
facilities that are not available or cannot be deployed on a commercially reasonable
basis; (g) in areas where it is not technically feasible to provide Cable Service due to the
technology used by Verizon to provide Cable Service; (h) in areas where the average
occupied residential household density is less than thirty (30) occupied residential
dwelling units per mile as measured in strand footage from the nearest technically
feasible point on Verizon’s active FTTP Network trunk or feeder line; and (i) when
Verizon’s prior service, payment, or theft of Service history with a Subscriber or

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potential Subscriber has been unfavorable. The limitations in this paragraph are as
required by the Code of Virginia (1950), as amended.

       Except for the Initial Service Area and any portions of the Service Area serviced
pursuant to the Year Seven (7) Threshold and the Year Ten (10) Threshold, Verizon
shall have the right but not the obligation to extend its Cable System or to provide Cable
Services to any other areas within the Franchise Area during the term of this Franchise
or any renewals thereof.

       5.    Subject to the terms and conditions of the Franchise Agreement and the
Federal Communications Act of 1934, the Town grants, a nonexclusive franchise, to
Verizon Virginia Inc. the right to own, construct, operate and maintain a Cable System
along the Public Rights-of-Way within the Town of Culpeper to provide Cable Service.

       6.    The term of the Franchise is fifteen (15) years, unless earlier surrendered
or revoked

        7.     The Town recognizes that, pursuant to federal law (Title VI of the
Communications Act of 1934), the Franchise does not regulate Verizon’s construction,
installation, maintenance or operation of the “FTTP Network” to the extent the FTTP
Network is constructed, installed, maintained or operated for the purpose of upgrading
and/or extending Verizon’s existing Telecommunications Facilities for the provision of
Non-Cable Services.

       8.    Verizon has agreed to build its Cable System facilities for meet or exceed
certain standards (technical construction standards) provided for in Section V of the
Franchise.

       9.     Verizon has agreed to comply with all applicable requirements of the
provisions of Virginia’s “Communications Sales and Use Tax Act,” Section 58.1-645, et
seq. of the Code of Virginia in its current form and as it may be amended. This requires
a payment of five percent (5%) of the gross revenues for Cable Services (not telephone)
from Verizon to the Town. The tax is itemized and collected from cable subscribers.
This tax equals that which is collected from your current cable provider.

      10.    Verizon has also agreed to pay the Town a PEG Capital Grant Surcharge
Fee (again recovered from subscribers) in the amount of fifteen cents ($0.15) per
month, per subscriber to Verizon’s Basic Service Tier. The PEG Surcharge Fee shall be
used only by the Town to support the capital costs.

      In addition, the Town agrees that beginning December 16, 2009, the date on
which the current cable provider’s Franchise expires, the Town will require a similar
PEG Capital Grant Surcharge Fee (“PEG Capital Fee”) from all other cable operators in
the Town to support the capital costs of the PEG Access Channel facilities. In the event
the Town accepts a lower “PEG Capital Fee” from another cable operator, the Town
agrees that Verizon shall provide a “PEG Capital Fee” in an amount equal to the lowest

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per month, per subscriber amount paid by any other cable operator in the Town, up to a
maximum of fifteen cents ($0.15), per month, per Basic Service Tier subscriber.
      11.     Verizon has agreed to provide one PEG (Public, Education and
Government) channel and, initially, up to two (2) additional PEG Access Channels,
subject to certain conditions.

      12.   Verizon has agreed to provide for interconnection capability with other
Cable Systems.

       13.   Verizon has agreed to comply with the Emergency Alert System (“EAS”)
requirements of the FCC in order that emergency messages may be distributed over the
cable System.

       14.    Verizon has agreed to provide, without charge to the Town, one service
outlet activated for Basic Service at eight (8) locations chosen by the Town and
indicated in Exhibit B to the Franchise. A copy of Exhibit B is attached hereto.

       15.     Verizon has agreed to provide the Town, initially, with two points of
origination for programming broadcast (origination location to be 105 North Main Street
and an auxiliary path fiber connection at 302 North Main Street) with an additional point
(at one of the 3 other requested locations) to be made available within 180 days of the
request therefore; however, the Town may not make the request any sooner than 180
days from the Service Date.

      16.    Customer Service Requirements are set forth in Exhibit C to the
Franchise, which shall be binding unless amended by written consent of the parties.

       17.    Verizon is required file certain reports with the Town and open its books
and records for Town inspection as their cable services. Certain records of complaints,
outages, service calls for repairs and maintenance, installation, reconnections and
requests for services must be maintained, generally for a three year period. A map
showing the area of coverage for the provisioning of Cable Services and estimated
timetable to commence providing Cable Service must be maintained.

      18.   Verizon is required to maintain in full force and effect, at its own costs and
expense during the Franchise term, the following insurance:

      (a) Commercial General Liability Insurance in the amount of two million dollars
      ($2,000,000.00) combined single limit for property damage and bodily injury.

      (b) Automobile Liability Insurance in the amount of one million dollars
      ($1,000,000.00) combined single limit for bodily injury and property damage.

      (c) Workers’ Compensation Insurance meeting all legal requirements of the
      Commonwealth of Virginia.

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(d) Employers’ Liability Insurance in the following amounts: (A) Bodily Injury by
      Accident: one hundred thousand dollars ($100,000.00); (B) Bodily Injury by
      Disease: one hundred thousand dollars ($100,000.00) employee limit; and (C)
      Bodily Injury by Disease: five hundred thousand dollars ($500,000.00) policy
      limit.

       19.    The Town shall be included as an additional insured under each of the
insurance policies required except Workers’ Compensation and Employers’ Liability
Insurance. Each of the required insurance policies shall be with insurers qualified to do
business in the Commonwealth of Virginia, with an A.M. Best Financial Strength rating
of A- or better. The Town may require Verizon to deliver to the Town Certificates of
Insurance showing evidence of the required coverage.

       20.    Verizon agrees to indemnify, save and hold harmless, and defend the
Town, its officers, agents, boards and employees, from and against any liability for
damages or claims resulting from tangible property damage or bodily injury (including
accidental death), to the extent proximately caused by Verizon’s negligent construction,
operation, or maintenance of its Cable System, provided that the Town shall give
Verizon written notice of its obligation to indemnify the Town within ten (10) days of
receipt of a claim or action.. Notwithstanding the foregoing, Verizon shall not indemnify
the Town, for any damages, liability or claims resulting from the willful misconduct or
negligence of the Town, its officers, agents, employees, attorneys, consultants,
independent contractors or third parties or for any activity or function conducted by any
Person other than Verizon in connection with PEG Access or EAS, or the distribution of
any Cable Service over the Cable System.

       21.   No transfer of the Franchise shall occur without the prior consent of the
Town, provided that such consent shall not be unreasonably withheld, delayed or
conditioned. However no such consent shall be required for transactions excluded
under Section 1.33 of the Franchise dealing with certain types (“in house”) of transfers.

       22.   If at any time the Town believes that Verizon has not substantially
complied with the terms of the Franchise, the Town shall informally discuss the matter
with Verizon. If these discussions do not lead to resolution of the problem in a
reasonable time, the Town shall then notify Verizon in writing (“written notice”) of the
exact nature of the alleged noncompliance in a reasonable time.

      23.    Verizon shall have thirty (30) days from receipt of the written notice to: (i)
respond to the Town, if Verizon contests (in whole or in part) the assertion of
noncompliance; (ii) cure such noncompliance; or (iii) in the event that, by its nature,
such noncompliance cannot be cured within such thirty (30) day period, initiate
reasonable steps to remedy such noncompliance and notify the Town of the steps being
taken and the date by which cure is projected to be complete.

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24.    The Franchise provides for liquidated damages, subject to a $2,000.00
annual cap, for certain violations of the Franchise. These include Verizon’s failure to
comply with reporting requirements and meeting Customer Service Standards

       25.    The Franchise provides, subject to applicable federal and State law, for a
means to revoke the Franchise after a Public Hearing and finding that Verizon is in
default of any provision of the Franchise.

       26.    Verizon is required to obtain within thirty (30) days of executing the
Franchise an irrevocable letter of credit in the amount of five thousand dollars ($5,000)
(the “Letter of Credit”) from a federally insured lending institution licensed to do
business in Virginia (“Lending Institution”). The Letter of Credit shall be in a form
substantially the same as the form attached hereto as Exhibit D of the Franchise. The
Letter of Credit shall be used to ensure Verizon’s substantial compliance with the
material terms and conditions of the Franchise. A copy shall be filed with the Town at all
times during the term of the Agreement.

       27.     The Town upon notification to Verizon of any amounts lawfully due to the
Town pursuant to the terms of the Franchise and the Verizon does not make such
payment within thirty (30) days, the Town may draw upon the Letter of Credit by
presentation of a draft at sight drawn on the Lending Institution, accompanied by a
written certificate signed by the Town Manager certifying that Verizon has failed to
comply with the Franchise Agreement and citing the specific provision of the Franchise
Agreement at issue and the specific basis for the amount being withdrawn.

        28.   In the event the Lending Institution serves notice to the Town that it elects
not to renew the Letter of Credit, the Town may withdraw the entire amount of the Letter
of Credit, unless Verizon provides, before the effective Letter of Credit expires, a
substitute Letter of Credit from a Lending Institution in substantially the same form.

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EXHIBIT B

          MUNICIPAL BUILDINGS ELIGIBLE FOR FREE CABLE SERVICE

1.   Town Hall, 400 South Main Street, Culpeper, VA 22701
2.   County Administration Building, 302 North Main Street, Culpeper, VA 22701
3.   Culpeper Volunteer Fire Department, 151-153 West Davis St., Culpeper, VA 22701
4.   Channel 21 Offices, 105 North Main St., Culpeper, VA 22701
5.   Culpeper County Volunteer Rescue Squad, 1121 North Main St., Culpeper, VA 22701
6.   Town of Culpeper Water Treatment Plant, 816 Woodview Road, Culpeper, VA 22701
7.   Town of Culpeper Light and Power, 500 East Chandler Street, Culpeper, VA 22701
8.   Police Department, 130 W. Cameron Street, Culpeper, VA 22701

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