The URL can be used to link to this page

Home My WebLink AboutOrdinance 15760ORDINANCE NO. ~ ~ ~ °' AN ORDINANCE GRANTING A FRANCHISE TO STRATEGIC CABLE TEGHNOL.OGIES, L.P. FOR USE OF PUBf.IC RIGHTS-OF-WAY IN THE CITY OF FORT WORTH FOR THE PURPOSE OF CONSTRUCTING, MAINTAINING AND OPERATING A GABLE TELEVISION SYSTEM; REQUIRING EXECUTION OF A FRANCHISE AGREEMENT BETWEEN THE CITY OF FORT WORTH AND STRATEGIC CABLE TECHNOLOGIES, L.P. REGARDING CONDITIONS AND REQUIREMENTS RELATED TO THE USE OF PUBLIC RIGHTS-OF- WAY IN THE CITY OF FORT WORTH AND TO THE CONSTRUCTION, MAINTENANCE AND OPERATION OF A CABLE TELEVISION SYSTEM AND TO THE PROVISION OF CABLE SERVICES TO RESIDENTS OF THE CITY OF FORT WORTH AND TO REASONABLE COMPENSATION TO THE CITY OF FORT WORTH FOR THE USE OF THE PUBLIC RIGHTS-OF-WAY; PROVIDING FOR PU6~ICATION; AND PROVIDING AN EFFECTIVE DATE. The following statements are true and correct and constitute the basis upon which the City Council of the City of Fort Worth ("City") has adopted this ©rdinance: A. Strategic Gable Technologies, L.P. ("Company"} wishes to construct a cable television system and to provide cable television services in the City of Fort Worth. In accordance with the City Charter and ordinances of the City, Company has applied for a franchise from the City in order to carry out those purposes. B. Company is a Texas limited partnership, the general partner of which is Strategic Technologies, Inc., a Florida corporation and a wholly owned subsidiary of Lennar Corporation ("~ennar"), a publicly traded Delaware corporation. C. The City has reviewed Company's franchise application and determined that the granting of a franchise, on the terms and conditions set forth herein, will assist the cable-related needs and interests of the community, including, but not limited to, the provision of necessary competition in cable services and participation in the provision of valuable public, educational and governmental programming. NOW, THEREFORE, BE 1T ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS: Ordinance Section 1. The City hereby grants Company a franchise to erect, construct, install and maintain a cable television system in, over, under, along and across the public rights-of--way and to transact business related to the provision of cable services over such cable television system subject to the execution by Company and Lennar of a Franchise Agreement in the form attached hereto as Exhibit 1, which is hereby made a part of this Ordinance for all purposes. Sec#ian 2. In accordance with and as required by Section 2 of Ghapter ~4~XV of the City's Charter, the Gity Secretary is hereby directed to publish this Ordinance in i#s entirety once each week for four {4} consecutive weeks within a period of thirty (30} calendar days following adoption by the City Council in the official newspapers of the City. Company shall pay for or reimburse the City for all expenses incurred from such publication. Section 3. This Ordinance shall bern full force and effect following (i} its adoption; and {ii} its publication in accordance with Section 2; and (iii} in accordance with Section 1, the execution of the Franchise Agreement attached hereto as Exhibit 1. ADOPTED: Qate M & C Number EFFECTIVE DATE: APPROVED AS TO FORM AND LEGALITY: By: Peter Vaky Assistant City Attorney City of Fort Worth __ uA~~AS i ao~ ~ ,,,. - Exhibit 1 FRANCHISE AGREEMENT The following statements are true and correct and constitute the basis upon which the City of Fort Worth has executed this Franchise Agreement, A. The City Council of the City of Fort Worth has adopted an ordinance that grants Strategic Cable Technologies, L.P. a franchise to erect, construct, install and maintain a cable television system in, over, under, along and across the public rights-of- way in the City of Fort Worth and to transact business related to the provision of cable services over such cable television system {"Franchise Ordinance"~, subject to the execution by Company and Lennar Corporation {``Lennar"), a publicly traded Delaware corporation, of this Franchise. B. In accordance with the Franchise Qrdinance, Strategic Cable Technologies, L.P. desires to enter into this Franchise. Lennar desires to execute this Franchise solely for the purpose of guaranteeing the performance by Strategic Cable Technologies, L.P. of certain of its duties and obligations under this Franchise. AGREEMENT 1. DEFINITIONS. Capitalized terms used in this Franchise and not otherwise defined within this Franchise shall have the following meanings: Act shall mean the federal Communications Act of 1934, as amended. Activation Date shall mean the date specified in a written notice from the Company to the City that Cable Service is available in the Authorized Area. Affiliate shall mean any individual, partnership, association, joint stock company, limited liability company, trust, corporation, or other Person or entity who owns or controls, or is owned or controlled by, or is under common ownership or control with, the entity in question. Applicable Laws shall mean FCC haws and all ~;ity ordinances. rules and re~uCations, any amendments thereto, and any other applicable federal or state law that is existing or hereafter adopted Authorized Area shall have the rr#eanirrg set forth in Section 2.2.1 herein, Cable Business shall mean the provision by Company of Cable Services solely .r ~~':irl5 t;f (.....~(1'~i=3fi`~ ~, 3;~it' _rF~t'„ ,~(!fl ~vSlf'~r~~, ..' ,. 35~ ~ ~. .~- ~ 13Gt~,.,.. Cable Services shall mean only. • The one-way transmission to Subscribers of {i} Video Programming or {ii} other programming services, such as digital audio, by which is meant information which Company makes available generally to all Subscribers, such as digital cable radio service; and • Subscriber interaction, if any, including, but not limited to, that which is used for the selection or use of {i} Video Programming or other programming services; {ii} various on-screen options; {iii} Enhanced Cable Services; {iv} game channels; and {v} interactive services, such as the ordering of merchandise and the downloading of programs or data access; and • Enhanced Cable Services; and • institutional Network Services. Cable Television System or System shall mean a facility consisting of a set of closed transmission paths and associated signal generation, reception and control equipment that is designed to provide Cable Services which are provided to multiple Subscribers within the City Area, but shall not include {i} a facility that serves only to re- transmit the television signals of one or more television broadcast stations; {ii} a facility that serves Subscribers without using any Public Right-of-Way; {iii} a facility of a common carrier which is subject, in whale or in part, to the provisions of Title II of the Act, except that, other than for purposes of Section 621 {c} of the Act, such a facility shall be considered a Cable Television System to the extent that such facility is used in the transmission of Video Programming directly to Subscribers, unless the exten# of such use is solely to provide interactive on-demand services; {iv} an open video system that complies with Section 653 of the Act; or {v} any facilities of any electric utility used solely for operating its electric utility systems. City shall mean the City of Fort Worth, Texas. City Area shall mean the area within the corporate limits of the City of Fort Worth, Texas. Company shall mean Strategic Cable Technologies, t .P., a Texas limited h~,~ ,~ ,~;rship Complaint shall mean a telephone call or written commun~cat~on from a customer notifying Company of a problem relating to Company s billing or billing practices, Company's equipment, picture quality, failure to receive one or more channels, a change in Company~s practice or policy, Company advertising or other business practice, the conduct of a Company employee or contractor, or the failure of ~7~p~3n~ ~>r ~~ SE',rV~c: ~ ~ ,,~~~nt,i`, `~~~ :'~~rrl~)ly with ~~ ~ ~r~ ,,,;~~~I;i`.~~ , -- Confidential Informatiion shall mean all confidential and proprietary books, papers, accounts, documents, maps, plans and other records of Company furnished to the City pursuant to the terms of this Franchise Agreement. Drop shall mean the cable or wire that connects the distribution portion of Company's Cable Television System to a Subscriber's premises or to a TCD. Effective Date shall mean the date as of which the Franchise Ordinance takes effect in accordance with the terms and conditions of the Franchise Ordinance and the City's Charter. Enhanced Gable Services shall mean {i} information services; {ii} Internet protocol {IP} telephony; {iii} high speed data service; and {iv} Internet access and Internet service, such as that of an Internet service provider. Facilities shall mean all duct spaces, manholes, poles, conduits, underground and overhead passageways, and other equipmen#, structures and appurtenances, and all associated transmission media in the Public Rights-of-Way, used by Company in the provision of Cable Services. Franchise shall mean the authorization issued to Company by the City for the construction and operation of Company's Cable Television System, as provided by Title VI of the Act and pursuant to and in accordance with the Franchise Ordinance and this Franchise Agreement. FGG shall mean the Federal Communications Commission, FGG Decisions shall mean decisions by the FCC or the courts interpreting the FCC Laws, FCG Laws shall mean the Act, the FCC Decisions and the FCC Rules, collectively. FGG Rules shall mean the rules and regulations promulgated by the FCC pursuant to the Act. Gross Revenue shall mean all revenue received by Company or by an Affiliate which is directly attributable to ((} the operation of the Cable Television System within the Authorized Area (as defined in Section 2.2.1 below) and (ii) Company's provision of Cable Services within the Authorized Area Grass Revenue shall include. but not be ~~rT~ited to, all Subscriber revenues received net of bad debts. including revenues or fees for (i) bask Cable Services; (ii) additional tiers of Cable Service; (iii) premium Cable Services; (iv) pay-per-view programs and services; (v) program guides; (vi) Enhanced Cable Services; (vii) the installation or disconnection of Cable Services; (viii) service calls; (ix) the provision, sale, rental or lease of converters, remote controls, additional outlets and other Subscriber premises equipment; (x) the use of leased access }!;~'1'1H~~i, tXll ~j(~`df'rtl5lr?q rE"ditf?i1E'S afl(~ ?XIl! (:O1?!pE'nS~3t1Orl f7UfTl f1U!'rlE' S~1~)~ipl~l(~ 1'.,'~~ I,~ <1'. il~ i.. _ i,..t ~, f ~; 1~ ~ ...x'.7'1 ~. ~ ~ ,~.. ~~ ~it'~~~ '1 .v .. ~ ,f _~_ UaL'~i~S i.3U< " . DALLAS 13C~'~-~.>~ revenues and other revenues that are not received directly from a specific Subscriber in the AuthorizPrl Area shall be afl~r_.atgd to ih? ~ihr hacPrf upon the percentage of Subscribers residing in the Authorized Area compared toVthe number of Subscribers served from the head-end serving the Authorized Area. In calculating Gross Revenue, revenue received from Subscribers shall be allocated to the City based solely upon whether the location where Cable Services are provided is located in the Authorized Area and not by any other method of allocation. Industry Standards shall mean the National Electrical Code and the National Electrical Safety Code. Institutional Network or I-NET shall mean the network described in Section 5.3 consisting of transmission media including, but not limited to, usable bandwidth capacity for up to eight {8} dark optical fibers, wireless communications systems, and Internet facilities, to be constructed and operated by Company for providing Institutional Network Services to I-NET Users, Institutional Network Facilities or 1-NET Facilities shall mean the fiber optic communications, wireless, Internet, and any other facilities used in the I-NET for transmission of I-NET Services. Institutional Network Services or 1-NET Services shall mean services available over the I-NET to I-NET Users including, but not limited to, {i}two-way dedicated voice, data, video and telephony channels connecting and interconnecting facilities owned, leased or used by the City, public schools, counties, road commissions or other units of state or local government; {ii} Supervisory Control and Qata Acquisition {SCADA} systems for municipally owned water, sewer, gas and electric systems {including street lighting systems}; {iii} interconnection of facilities serving police, fire and other public safety systems; {iv} interconnection of public libraries and other government buildings for the one-way or two-way interchange of video signals; and {v} local area networks or wide-area networks connecting governmental buildings, such as for geographical informational systems. 1-NET User shall mean the City and any public school or unit of state or local government designated by the City to receive Institutional Network Services under this Franchise Agreement. Material Adverse Effect. shall mean any significant change or changes in, or effect on, the operations or facilities of a Person. that ~s indiwdually or are in the aggregate, reasonably )~kely to be rnater~ally adverse tc~ such operations or fac~l~ties taken as a whole. Normal Operating Conditions shall mean those service conditions which are within the control of Company. Those conditions which are riot within the control of Company include, but are not limited to (i) natural disasters; (ii) civil disturbances; (iii) power outages to Com;~any~s Facilities of mere than two f2) hours in duration that ~,.~, f, ,~ ~3f1.r t, .,. ,rC)„li;stltj ~.,~3:'~" ~~~~. ,;i( t'ti `. ,, ,..'r' if X11; ~ ,7ti1111~ (if ti`1' ,.„* _~S 302 ~~~uAs 1302 "~~;: Authorized Area {and not power outages at a Subscriber's premises where Gable Serr~ces c~c~Id be rer_.eived by such Subscriber but for the po:~:er outage}; {~v} cuts sn the System's fiber optic cable resulting in outages in the Authorized Area; {v} telephone network outages that prevent Company from providing Gable Services to some or all portions of the Authorized Area or telephone network outages to the customer service telephone number or numbers provided pursuant to Section 7.6.1; and {vi} severe or unusual weather conditions. Those conditions which are within the control of Company include, but are not limited to, special promotions, pay-per-view events, rate increases, regular or seasonal demand periods, changes in the billing cycle, changes in the form of bills and other billing matters, changes in channel lineups or services that are within Company's control, and repairs, rebuilds, maintenance and upgrades of the System, including computer software and hardware. Party shall mean Company or the City and "Parties" shall mean Company and the Gity, collectively. PEG Channel shall mean non-commercial public access, education and government channels. PEG Channel User shall mean the City, any public school, any unit of sta#e or local governmental entity and any other Person or entity authorized to provide Video Programming on or othernrise use a PEG Channel. Person shall mean any corporation, partnership, proprietorship, limited liability company, association, individual, organization, or any governmental entity. Public Right-af-Way shall mean all dedicated public streets, highways, alleys and rights-of--way in the Gity Area, but shall not include any property of the Gity that is not a dedicated public street, highway, alley or right-of-way. Subscriber shall mean a Person lawfully receiving the Gable Service from Company. Where Company bills for the Gable Service on a "bulk basis," each individual household, office or other entity lawfully receiving the Gable Service shall be deemed a Subscriber herein, regardless of whether it is billed directly by Company. TCD shall mean City-owned or operated traffic signals, school flashers, cameras used for traffic flow management, and electronic signs used for directions or traffic information. TCD Network shall mean the Cat~ie Telev~s~on Syst~rn. al( TCDs and ether City- owned equipment used to control and rrion~tor traffic signals in the Authorized Area and outside the City Area (to the extent required m Section 5.6.1), and the TMC Technically Feasible shall mean reasonably capable of being implemented technically, based upon the circumstances and the Person involved. oa~~~s ~)A~LAS 1.w~ i Iwo _6_ Telecommunica#ions Service shall mean the offering of any type of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used. TIC shall mean the City's Traffic 11~anagement Center located at the Public Safety Building, 1004 Throckmorton Street, Fort Worth, Texas 76102. Transfer or Transferred shall mean, in addition to supplements set forth in Section 14 of this Franchise, {i} any form of sale, conveyance, assignment {except as otherwise provided in Section 14.2}, lease, sublease or merger involving Company as to this Franchise or the Cable Television System or {ii}any change in the effective control of Company {except as otherwise provided in Section 14.2}, such as, by way of example only, that described in 47 C.F.R. § 76.501 and the notes thereto. User shall mean an I-NET User and a PEG Channel User, collectively. Videa Programming shall mean any video programming or other services available to Subscribers or Users on the System. 2. GRANT OF RIGHTS. 2,1. General Use of Public Rights-of-Way far Provision of Cable Services. Subject to the terms and conditions set forth in this Franchise and the City Charter and ordinances, the City hereby grants Company the right to erect, construct, install and maintain a Cable Television System in, over, under, along and across the Public Rights-of--Way, to provide Cable Services, and to transact a Cable Business in the City Area. Company hereby acknowledges and agrees that this Franchise does not allow Company to provide any Telecommunications Service in or through the City Area. If Company or an Affiliate of Company contends that Company or an Affiliate of Company is permitted or intends to provide any Telecommunications Service in or through the City Area, Company shall first notify the City in writing and shall obtain a franchise or other permit or agreement for the use of the Public Rights-of-Way if required by the City. 2.2. Scope. 2.2.1. initial Service Area. On the Effective Date of this Franct~~se, Gor7ipany will be authorized to make its Cable Services available within the City Area outlined in the map attached hereto as Exhibit "A" and made a part of this Franchise for all purposes ("Initial Service Area"). The Initial Service Area and any other portion of the City Area in which Company, in accordance with Section 2.2.2 of this Franchise, is authorized to provide Cable Service are referred to herein collectively as the Authorized Area ~~ C~~r~~,)ar~v sh~311 ~~r~~vitjE~ tf~E~ (;~tv tivrittE~r~ n~~ti~ f~ ~;f thE~ ..i c~ii:, ~ ~<1,~' ., <7~t' 1~. ~i.~' i. ~ .'..t„~'~ :~j y". c1~~f u., i ~,~i~ _~_ i)i1'~LA`.~ 1,jU~ ~' vb7 C)ALLAS 130:: ~ ~~,v8 2.2.2. Extensions of Systern. The City believes that competition between providers of Cable Services will benefit its citizens and desires Company to provide Cable Service in the Initial Service Area and any other portion of the City Area for which Company receives authorization to provide Cable Services pursuant to this Section 2,2.2. The City cannot endorse or condone any plan by Company to provide Cable Service in geographically disparate areas of the City Area that might be favored by Company. At the same time, the City understands Company's financial inability to construct a City Area-wide cable system in a short amount of time. Therefore, the City is willing to allow Company to provide Cable Service immediately in the Initial Service Area and beyond the Initial Service Area as follows: 2.2.2.1. If Company wishes to provide Cable Service to an area of the City Area beyond the Initial Service Area {"New Service Area"}, Company shall provide the City with a written request to extend the Authorized Area and a detailed map that specifically depicts the New Service Area {the "New Service Area Request"}. Company may not provide Cable Service or engage in construction work on or to the System outside the then-current Authorized Area without the advance written consent of the City Council, The City shall act upon Company's New Service Area Request within ninety {9fl} calendar days following receipt thereof. Upon approval of the New Service Area Request by the Gity, the New Service Area shall became part of the Authorized Area. 2.2.2.2. If the New Service Area is not completely geographically adjacent to the existing Authorized Area {"Non-Adjacent New Service Area"}, Company must provide the City with a plan {the "In-fill Plan"} to extend the System to the City Area between the then-current Authorized Area and the Non-Adjacent New Service Area {"In-fill Area"} only if, at the time the New Service Area Request is filed, the In-fill Area has a density of fifty {50} occupied residences, whether within single-family homes, duplexes or multi- familydwellings, per square mile {regardless of whether the residents of the In-fill Area have personally requested Cable Service from Company}. The In-fi11 Plan must include the estimated date when System construction would commence in the In-fill Area, the proposed parameters of the In-fill Area. the location of potential I-NET Sites (as defined in Section 5.3) and TCDs in the In-fill Area, the deadline for offering Cable Service in the In-fill Area. and Company~s con~~rl~itrT~ent to satisfy all its obiigat~ons hereunder Within ninety (90) calendar days following the filing of the In-Fill Plan, the Parties shall commence to negotiate in good faith the final terms and conditions thereof. In the event of a disagreement as to the final terms and conditions of such In-fill Plan, except as set forth below in Section 2.2.2.3, the City's sole decision shall be final and binding. Except as otherwise provided in Section 2.2.2.3, the City shall not consE~nt tea ~3n extF~nsion of the tht~n-current Authon< <~~,', 1re~~ unl~:ss Company ~~~~~~~ '„ .. ~~ -fi. I~`, (.)~ ~ , -~ '.f~~. fit' c~ppii~ ~i~~i i f I; F~,<3~` ~.j~~~ii <1~1~ ~t~ n - '. }i.~ .. .. 1 3U~ ~)AL'~h5 130:. ,. obligations hereunder with respect to the In-fill Area and to the Non-Adjacent New Service Area, including, without limitation, the provision of Cable Services in accordance with this Franchise Agreement. 2.2.2.3. Company shall not be obligated to satisfy the requirements set forth in Section 2.2.2.2 as to the In-fill Area {the "In-fill Requirements"} before it can provide Cable Service in aNan-Adjacent New Service Area if it can demonstrate, in accordance with the procedures set forth in this Section 2.2.2.3, that meeting such obligation: {i} would have a Material Adverse Effect on Company's ability to provide the Cable Service in the then existing Authorized Area; or {ii) would not be Technically Feasible for Company to implement. Company must make this demonstration by filing a petition {the "Petition") with the City Council describing, with clear and convincing information, the manner in which compliance with the In-fill Requirements would cause a Material Adverse Effect or would not be Technically Feasible. The City Council promptly shall hold a hearing providing due process on Company's Petition in accordance with procedures and deadlines established by the City and reasonably agreed to by Company. If the City Council finds that, based upon Company's showing at such hearing and based upon any other information deemed to be relevant, compliance with the In-fill Requirements would have a Material Adverse Effect on Company or would not be Technically Feasible for Company, then the City Council may {i} authorize Company to provide Cable Service in the Non-Adjacent New Service Area without complying with any of the In-III Requirements, in which case such Non-Adjacent New Service Area shall become park of the Authorized Area, or {ii} authorize Company to provide Cable Service in the Non-Adjacent New Service Area by complying with City Council- modified In-fill Requirements that are found by the City Council to not have a Material Adverse Effect on Company ar that are found to be Technically Feasible for Company, in which case such Non-Adjacent New Service Area shall become part of the Authorized Area. 2.3. Nonexclusive. This Franchise and all rights granted to Company herein are strictly nonexclusive. The City reserves the right to grant other and future Cable Television System franchises to other Persons as the City deems appropriate. This Franchise does not establish any priority for the use of the Public Rights-of- Way by Company or by any present or future franchisees or other permit holders In the event of any dispute as to the pnor~ty of use of the Public Rights-of-Way, the first prior+ty shall be to the public generally, the second priority to the City in the performance of its various functions. and thereafter, as between franchisees and other permit holders, as determined by the City in the exercise of its powers, including the police power and other powers reserved to and conferred on it by the State of Texas. -3- 2,4. Other Permits. This Franchise does not relieve Gompany of any obligation to obtain permits, licenses and other approvals from the Gity necessary for the construction, repair or maintenance of the System or the provision of Gable Services. 2.5. Bonds. 2.5.1. During Initial Construction of System. For the period from the Effective Date to the date when the head-end searing the Authorized Area is installed {the "Initial Gonstruction Period"}= Gompany, at Company's sole cost and expense, shall obtain, deliver to the Gity and maintain the following bonds, executed by a corporate surety authorized to do business in the State of Texas and acceptable to the City: {i} a perFormance bond in an amount equal to the greater of Two Hundred Thousand Dollars {$200,000.00} or ten percent {10°l0) of the cost of work under the construction contract to be completed during the Initial Gonstruction Period that guarantees satisfactory compliance by Gompany with all requirements, terms and conditions of this Franchise, including, but not limited to, recovery by the Gity of any damages, losses, costs and expenses sustained or suffered by the Gity due to Company's failure to construct and activate its Gable Television System in a satisfactory and timely manner and in accordance with this Franchise; and {ii} a payment bond that guarantees full payments to all persons, firms, corporations or other entities with whom Gompany has a direct or indirect relationship pertaining to the construction of its Gable Television System {including Company's contractors and any sub-contractors to these contractors} {collectively, the "Bonded Entities"}. Upon full completion of all construction to be completed during the Initial Gonstruction Period and complete payments to all Bonded Entities, Gompany shall notify the City in writing and, after receiving the City's written approval, which shall not be unreasonably denied or withheld, Gompany shall no longer be required to maintain these bonds. 2.5.2. A#ter Initial Construction Period. For construction work related to the System in the Public Rights-of-Way commencing after the Initial Construction Period (the "Subsequent Construction"), Company shall be required to obtain, deliver to the City and maintain bonds as follows Pnor to the commencement of any Subsequent Construction rn the Public Rights-of-Way that requires a cut, opening or other excavation, Company shall deliver to the City bonds executed by a corporate surety authorized to do business in the State of Texas and acceptable to the City in the same amount as the full cost of work under the construction contract or construction project that will be performed in the City Area. The bonds shall guarantee fi) satisfactory compliance by Company with all requirements. terms -9- 130< '~. ,,.~.,,,~ 130- and conditions of this Franchise Agreement and {ii} full payments to all Banded Entities for the performance of such construction, maintenance or repaers. ~. FEES AND PAYMENTS TD CITY. 3.1. Franchise Fee. Company shall pay the City throughout the Temp {as defined in Section 4} an amount equal to five percent {5°la} of Gompany's Gross Revenue {"Franchise Fee"}. 3.1.1. When Due. Company shall pay the Franchise Fee to the City on a calendar quarterly basis. The Franchise Fee shall be due within forty-five {45} calendar days following the last day of each quarter. 3.1.2. Accompanyinq Report. Company shall submit, with its Franchise Fee payment, a written report in a form reasonably acceptable to the City and verified by an officer of Company that summarizes Company's Gross Revenue for the previous quarter and computes the amount of the Franchise Fee due the City for that quarter. 3.1.3. Audits. Upon thirty {30} calendar days prior written notice, the City, at its expense, may audit Gompany at any time {but no mare than a reasonable number of times each year} to verify the accuracy of Franchise Fees paid to the Gity. Any audit conducted by the City pursuant to this Section 3.1.3 shall be limited to years that have not been audited previously by the City for such purpose. Gompany shall pay any additional amounts due the Gity as reported in any Gity audit within thirty {30} calendar days following the Gity's submission to Company of an invoice for such sum {the "Claim Notice"}. Upon receipt by Company of a Claim Notice, Gompany shall have ten {14} calendar days in which to dispute such claim by providing written notice thereof {"Dispute Notice"} to the City. The Dispute Notice steal( be accompanied by full documentation showing the basis on which Company is disputing the City's claim. If Company fails to provide the Dispute Notice to the City within such ten-day period, Company shall pay any additional Franchise Fees due the City. as reported in the C~ty~s audit. within thirty (30) calendar days following the City~s submission to Company of the Claim Notice- If this amount exceeds ten percent (10°~oj of the Franchise Fee which the audit shows should have been paid to the City for the period in which the audit covered, Company shall pay the City's costs for the audit. Otherwise, the City shall pay its own costs for the audit. If Company provides the Dispute Notice to the City within the time period specified herein. the City and Company shall each ::jE'SI(~r1~3"~ i" <3U~` ~l(F'SE',r?tatlvt? ~l i ~?lE~f,j -f~;tflir? t~li(ty ~:3~~ i C;a~f'rldar CiaVS -10- :.. .:, 130 , ., ~e following Company's submission of the Dispute Notice for the purpose of negotiating in good faith a rese~lution tee such dispute. 3,1.4. Allocation for Bundled Services. if Company bundles, ties or combines Cable Services {which are subject to the Franchise Fee under this Franchise} with non-Cable Services {which are not subject to the Franchise Fee under this Franchise} and assesses a Subscriber only one fee, the combined revenue therefrom shall be allocated to Cable Services to the full extent which would have been charged by Company if the Subscriber had received only Cable Services. By way of example only, assume that a Subscriber's monthly charge far Cable Services alone would be $40; far local telephone service alone would be $30; and for land-distance telephone service alone would be $30, far a total single charge of $100. The revenue allocated to Cable Services for purposes of calculating the Franchise Fees would be $40. In no event shall the amount allocated to Cable Services under the foregoing calculation exceed {i} the total amount of combined revenue actually received by Company {in which case Section 3.1.5 shall apply} or {ii} the ne# revenue derived when mandatary tariff rates {if any} imposed by a governmental authar7ty far components of the bundled, tied or combined services are deducted from the combined revenue. Notwithstanding any interpre#ation to the contrary, this Franchise does not authorize Company to vary ar alter any payments or amounts of compensation to the City which may be dictated by another franchise, ordinance, agreement or Applicable Law and which are related to use of the Public Rights-of--Way in the provision of non-Cable Services in the City. 3.1.5. Allocation for Discounted Services. If Company offers its Subscribers any kind of discount if such Subscribers receive both Cable Services {which are subject to the Franchise Fee under this Franchise} and non-Cable Services {which are not subject to the Franchise Fee under this Franchise}, the discount shall be applied proportionately to Cable Services and non-Cable Services. By way of example only, assume that a Subscriber's monthfiy charge for Cable Services alone would be $40; for local telephone service alone, $30; and for long-distance telephone service alone, $30, for a totafi of $100. If Company offers a single rate to the Subscriber for taking all three services from Company that, in effect, amounts to a twenty percent (20°~0) discount from the rates that would apply to the services if purchased individually. the aggregate discount m this example ~s $20 For computation of the Franchise Fee, that $20 discount would be applied pro rata so that Gross Revenue hereunder would be deemed to be $32 (a 20% discount from the $40 fee for Cable Services). The result would be the same if Company offers a specific dollar discount for any services provided, such as, by way of example only, a $20 discount for local telephone services offered on the condition that the SubscnbF~r ~3 ~,~ ~.~bscnbe to Cable Services at the standard ~.1i `, ~atE~ -~_ U~_LAS 7302 ~ .. 3.2. Other Payments. In addition to the Franchise Fee, Company shall pay the City all sums which may be due the City for property taxes, license fees, permit fees, or other taxes, charges or fees that the City may from time to time impose. Company shall reimburse the City for publication of this Franchise as required by the City's Charter. 3.3. Interest. All sums not paid when due shall bear interest at the rate of ten percent {10%} per annum or the maximum amoun# allowed by law, whichever is less, computed monthly. If such outstanding sums are paid with interest within thirty {30} calendar days following their respective due dates, Company's failure to pay such sums by their respective due dates shall not, in and of itself, constitute an Event of Default under Section 15 of this Franchise. 3.4. Letter of Credit. Within thirty {30} calendar days following the Effective Date of this Franchise, Company shall provide the City with a Letter of Credit in favor of the City in the amount of Five Thousand Dollars {$5,000.00} issued by a financial institution in the City Area and in a form acceptable to the City. Company shall increase the amount of this Letter of Credit to $10,000 once Company has two thousand {2,000} or more Subscribers in the City; $25,000.00 once Company has fifteen thousand {15,000} or more Subscribers in the City; $50,000.00 once Company has thirty thousand {30,000} or more Subscribers in the City; and $100,000.00 once Company has sixty thousand {50,000} or mare Subscribers in the City. This Letter of Credit shall serve as security to the City for the faithful performance by Company of the provisions of this Franchise. The Letter of Credit shall provide that, in the event Company defaults in the payment of any amount due to the City under the provisions of this Franchise Agreement or Applicable Law, and such default is not cured within thirty {30} calendar days from the date Company receives written notice of such default from the City, the City may draw down the amount in default by presenting the issuer with {i} a written statement, signed by the City Manager, that sets forth the basis of the City's demand and contains an appropriate reference to the Applicable Law or Franchise provision under which the City is due the sum demanded, (ii) a copy of the written notice of default provided by the City to Company with respect to such amount, and (~~~) a copy of the Letter of Credit. Company shall keep in effect and maintain this Letter of Credit at the amount specified herein at all times during the Term (as defined in Section 4). The Letter of Credit shall provide that the Letter of Credit shall not expire and that the issuer shall not cancel the Letter of Credit unless the issuer provides written notice to the City in advance of such expiration or termination. The exercise by the City of its right to draw down the Letter of Credit shall be ~n lieu of any remed;es available t~ the City under Section 16 2 -12- c, ~. .~.~ ?302796v8 4. TERM. 4.1. Initial Term. This Franchise shall became effective on the Effective Date, as established in the Franchise Qrdinance, and shall expire at 11:59 P.M. CDT on December 31, 2C?23 {the "Term°'}. This Franchise and all rights of Company hereunder shall automatically terminate upon the expiration of this Franchise. The City or Company, at either Party's option, may reopen this Franchise within six {6} months following the date of adoption of any Applicable Law that affects the City's ability to {i} regulate rates for any Cable Services provided by Company or {ii} protect Subscribers within the Authorized Area on matters such as customer service or consumer protection. This Franchise may not be reopened for any reason other than as set forth in the immediately preceding sentence. 4.2. Renewal. Franchise renewal proceedings shall be governed by the FCC Laws. 5. ACCESS T4 THE SYSTEM. 5.1. PEG Channels. Company shall provide PEG Channels on its System in the basic or lowest tier of service as follows: 5.1.1. Public Access Channel. Company shall designate Channel 28 on the System as a public access channel for use by members of the general public residing or working in the City Area. Such channel will be administered by the City or by an institution or institutions designated by the City in the City's reasonable discretion. 5.1.2. Educational Channels. Company shall designate Channels 30 and 32 on the System as educational channels for use by educations( entities located in the Dallas-Fort Worth metropolitan area designated by the City in the City's sole discretion. Such channels wi-I be administered by the City or an institution or institutions designated by the City ~n its sole discretion 5.1.3. Government Channels. Company shall designate Channels 7 and 31 on the System as government channels for use by government entities serving, in whole or in part, the City Area. Such channels will be administered by the City for programming provided by the City. a designee of the City or such other units of state or local ,_~~~vF~tn~nt3rii ~-~~; thE° ~~;if~~ rr~j~ apG>r~~nt fr~~r?,, UritEr t~; f~rnF, -13- ~;._~~,~ ~,io~ ~ ., , ; 5,'1.4, PEG Programming Support. The City already owns and operates its own community access studio and produces programming for all PEG Channels on its own or on its behalf. Although the FCC Laws allow the City to require a cable operator to provide facilities for PEG programming, the City is willing to forgo any such requirement in return for Company's assistance in the City's production of and administration over PEG programming as provided in this Section 5.1.4, In order for the City to continue its production of and administration over PEG programming, Company shall pay to the City, each month during the Term, a payment equal to ane Dollar {$1.00} for each Subscriber who resides in the Authorized Area {"PEG Fee"}. Company shall pay the PEG Fee to the City within fifteen {15} calendar days following the end of each month. Upon thirty {30} calendar days prior written notice, the City has the right #o increase the PEG Fee, effective August 1, 2045, to One Dollar Fifty Cents {$1.50} {the "increased PEG Fee"}. Thereafter, upon thirty {30} calendar days prior written notice, the City has the right, at its option, to further increase the Increased PEG Fee each January, beginning in January 2007, to reflect the percentage increase in the Consumer Price Index for All Urban Consumers in Dallas-Fort Worth, Texas, for the prior twelve {12} months, as published by the United States Department of Labor, Bureau of Labor Statistics {the "CPI Increase"), {i} for the first such increase requested by the City, since August 1, 2006, and {ii} for each subsequent increase, since the effective date of the last such increase. In accordance with the FCC Laws, Company may elect, but is not required, to pass through the PEG Fee to its Subscribers in the Authorized Area. In the event that Company does elect to pass through the PEG Fee to its Subscribers in the Authorized Area, Company shall lis# the PEG Fee as a separate line charge on its Subscribers' monthly bills. 5.'1.5. Allocation of PEG Channels. Upon at least six {6} months advance written notice to Company, the City may allocate or reallocate the usage of the PEG Channels among and between different uses and users of such PEG Channels, including, but not limited to, the City's removing a PEG Channel or a user of a PEG Channel; replacing a PEG Channel or a user of a PEG Channel; requiring several different users to share or jointly use a given PEG Channel; or allowing one or more PEG Channel Users currently sharing a PEG Channel to have a PEG Channel in which they are the sole PEG Channel User. If a PEG Channel is replaced or re-designated by Company to comply with applicable FCC haws or is replaced or re-designated by the City, Company shall not be responsible for any costs incurred with respect to such replacement or re-designation. If, however, after receiving any requisite approvals by the City, a PEG Channel is voluntarily replaced or re-designated by Company, then Company shall pay the City X3,000 per PEG Channel as reimbursement for any expenses incurred to implement such change. _14_ ~.~._~ ~,~~ ,~ 30~ ;)HL~AS 130~i~~." 5.1.fi. Additional PEG Channels. After the date on which Company begins to provide at least fifty {5~) channels in a high definition television format {or technological successor thereof) {"HDTV"), Company, upon written request by the City, shall provide one {1} additional PEG Channel and shaii convert all other PEG Channels required under Section 5.1 so that all such PEG Channels can simulcast in both a 6 MHz analog NTSC format and an HDTV format. Company shall be required to include only programming on PEG Channels in the HDTV format tha# has been property prepared for such transmission {the "HDTV Format Requirement"). The City shall be responsible for ensuring that the HDTV Format Requirement has been satisfied to Company's sole satisfaction and the City shall be responsible for payment of all related costs. If Company ceases to provide any channel of programming on its System in 6 MHz NTSC analog format, Company shall not be required to provide such additional PEG Channel. 5,2. Interconnection. 5.2.1. Interconnection Required. Company shall interconnect access channels of the System with any or all other Systems adjacent to the Authorized Area and within the City Area upon the written directive of the City. Interconnection of Systems may be done by direct fiber optic cable. 5.2.2. Interconnection Procedure. Upon receiving the written directive of the Gity to interconnect, Company immediately shall initiate negotiations with the other affected System or Systems in order that all costs may be shared equally among such companies for both construction and operation of the interconnection link. 5.2,3. Relief. Company may be granted reasonable extensions of time to interconnect or the City may rescind its order to interconnect upon petition by Company to the City. The City shall grant said request if it finds that Company has negotiated in good faith and has faded to obtain an approval regarding cost of the interconnection that would not cause an unreasonable or unacceptable increase in Subscriber rates. 5.2.4. Cooperation Required. Company shall cooperate with any interconnection corporation, regional irl~t'((_Oflnt'(;tlOn aathnnty ~)r ~::it~ i:~>unty ~t~;?~ ~ i'1(_~ f~~dE~ral rE>qulatorv agency ~ J- ~,'.. .. which may be hereafter established far the purpose of regulating, financing, or otherwise providing the interconnection of Systems beyond the City Area. 5.2.5. Initial Technical Requirements to Assure Future Interconnection Capability. {i} All Systems receiving franchises to operate in the City Area shall use the standard frequency allacatians for television signals; {ii} all Systems are required to use signal processors at the head-end far each television signal; and {iii all System franchisees are urged to provide local origination equipment that is compatible throughout the City Area so that program materials can be shared by various Systems. 5.3. Institutional Network. 5.3.1. Construction of 1-NET. 5.3.1.1. Company, at no cast to the City, 1-NET Users or Subscribers, na sooner than five {5} years after the Effective Date {except as otherwise provided in Section 5.3.1.4} {the "I-NET Initiation Date"}, shall provide, construct, operate and maintain an Institutional Network {excluding codersl decoders, interface and other terminal equipment which will be supplied by f-NET Users} that will provide I-NET Users with Institutional Network Services serving City facilities andlor buildings within the Authorized Area {"I-NET Sites"} described in and in accordance with Sections 5.3.1.2 and 5.3.1.3. Unless the Parties otherwise agree in writing, the I-NET, including all I-NET Facilities, shall be owned and maintained by Company but provided far the sale and exclusive use of 1-NET Users. Company shall purchase and install termination hardware at each I-NET Site, including standard connectors designated by the City and appropriately labeled. Company shall terminate the I-NET Facilities on the termination hardware. Site equipment other than termination hardware shall be provided and maintained by the City far I-NET Users. 5,3.1.2. The I-NET Sites shall be limited to: {i} a single existing I-NET hub that is boated within a five {5} mile radius of the Authorized Area or at such other site that is mutually agreeable to the Parties as determined under the procedures set forth in Section 5.3.1.3 herein, and that will permit each I-Net User in the Authorized Area to receive all I-NET Services and PEG Channels ("I-NET Interconnection Site°). and (ii) sites within the Authorized Area. other than the I-NET Interconnection Site. that are mutually agreeable to the Parties. Company shall not be obligated to activate the I-NET Interconnection Site until the I-NET Initiation Date. Company shall not be obligated to activate any other I-NET Site until its System passes such I-Net Site (i.e., the I-Net Site is within 200 cable feet of the System). Company shall pay (i) the costs of the actual I-NET Facilities; (ii) all costs and expenses associated with the ~ ~~nnection of the I-NET Fac~liUes from Companys he<:3d end to the I-NET ,~, 'h~ ~ii 7f' ~Ijf' ;9'•i; ,. tF`f' ~(tl~.j' ~ir,5~~3 ~3~ i n `~~ :f `.~ r`y~_ _ ~ r1(,IItit'S -16- located within the first five hundred {540) feet from the I-NET Interconnection Site to any I-NET bite that ~~smpany i~ ~~Sligaterf herai rnder firs in~fall, ~i~b}g~t t~ satisfaction of the Funds Requirement {as defined below in this Section 5.3.1.2}, the City shall reimburse Company only for the installation of 1-NET Facilities no# paid for by Company hereunder. Such reimbursement shall be based on a written final cost estimate provided to the City by Company. Company shall not be required to install I-NET Facilities for a given I-NET Site until the City has provided Company written notice that it has appropriated sufficient funds from its then-current operating revenues or Other legally available sources of revenue to reimburse Company for the City's share of the costs of such installation {the "Funds Requirement"} and until the City has provided Company written notice that i# will reimburse Company for such construction. 5.3.1.3. Between the Effective Date and the I-NET Initiation Da#e, the Parties, at least every three {3} months, shall consult with each other regarding the design, architecture, construction, and activation of the I-NET in the Authorized Area and shall provide each other the following information, as then applicable: {i} the anticipated timing for the 1-NET Initiation Date; {ii} potential location{s} of the 1-NET Interconnection Site; {iii} potential location{s} of, and anticipated activation date{s} for, each 1-NET Site; {iv} the requisite design, architectural and technical specifications for the 1-NET; and {v} building plans for the residential communities in the Authorized Area {collectively, the `°i-NET Specifications"}. At least three {3} months prior to the I-NET Initiation Date, consistent with the I-NET Specifications, the Parties shall develop a plan {the "i-NET Plan"} detailing how Company and the City shall satisfy their respective obligations under Section 5.3. The I-NET Plan shall include, but not be limited to, the final version of all 1-NET Specifications. 5.3.1.4. The City shall have the right to require that Company meet its obligations under Section 5.3 before the fifth anniversary of the Effective Date only if: {i} the City demonstrates, based upon clear and convincing evidence, that there is a need for I-NET Services in the Authorized Area on such earlier date; (ii} the City notifies Company, in writing, that the I-NET Initiation Date shall be earlier than five (5) years from the Effective Date, at least twelve (12} months prior to such earlier date; (iii} the City has provided Company the I-NET Specifications as required under Section 5.3.1.3; and {iv} the City provides Company a proposed I-NET Plan. 5.3.1.5. The City and Company shall negotiate in good faith the final terms and conditions of the written I-NET Plan required under Sections 5.3.1.3 and 5.3.1.4. In the event of a disagreement as to such terms and conditions of the I-NET Plan, except as set forth below in Section 5.3.1,5, the City's sole decision shall be final and binding. 5.3.1.6. Company shall not be obligated to satisfy the 1- NET Plan ~pprovE~d h~ the City under Section `~ 3 1 ~> >f it can demonstrate to the L~It'y tC'c3? fT'=.t!t.'~I(~lj SU(.fl '};)~I.~<3~1~i(1 ~~ wf)t11(~ fl<j'wf' <~ ~1<3tt~n<3i Hd. ~ ,_ EffE'ct C)n ;~,~~r,S 13027y6v6i JA~LAS '302796v8 -17- Company's ability to provide the Cable Service in the then existing Authorized Area' nr (iil wniilc~ not hP TPChnirally Fpa~ihla i^.mm~anv mrrct matcA Chic --., _. ~..i ---_._ -- -- --. ...._~..~ _...._._.._. _......r,.....~ ......... .......... .,.,., demonstration by filing a Petition with the City Council describing, with clear and convincing information, the manner in which compliance with the proposed I-NET Plan would cause a Material Adverse Effect or would not be Technically Feasible. The City Council promptly shall hold a hearing providing due process on Company's Petition in accordance with procedures and deadlines established by the City and reasonably agreed to by Company. If the City Council finds that, based upon Company's showing at such hearing and based upon any other information deemed to be relevant, compliance with the proposed I-NET Plan would have a Material Adverse Effect on Company or would not be Technically Feasible far Gompany, then. the City Council will make such modifications to the proposed I-NET Plan so that compliance therewith would not have a Material Adverse Effect on, or would be Technically Feasible for, Company. 5.3.1.7. The City agrees to use its best efforts to negotiate an arrangement with other carriers and cable franchisees under which such carrier{s} or franchisee{s} will allow Company to use a portion of its fiber optic system at no charge to the City or Company for purposes of the 1-NET. In the event that the City cannot negotiate such an agreement with a carrier or franchisee, or if a material provision of any agreement between the City and a carrier or franchisee is lawfully terminated by such carrier or franchisee, or is preempted by Applicable t_aw, the City and Company shall use their best efforts to negotiate a mutually satisfactory remedy. 5.3.2. Ci#v's Payment Resp,ansibitities. To the extent that the City is obligated to reimburse Company for any costs and expenses associated with {i} installation of I-NET Facilities under Section 5.3 or under Section 5.4 herein, or {ii} connection of TCDs to the Cable Television System under Section 5.6 herein, the City shall make such payments as follows; 5.3.2.1. Company shall provide the City an invoice for all costs incurred in satisfaction of its requirements under Sections 5.3, ~.4, or 5.6 herein (the "Installation Invoice"). The Installation Invoice shall be accompanied by full documentation showing the basis for such costs. 5.3.2.2. Upon receipt by the City of an Installation Invoke given in accordance with Section 5.3.2.1, the City shall have ten (10) business days in which to dispute such claim by providing a Dispute Notice to Company. The Dispute Notice shall be accompanied by full documentation showing the basis on which the City is disputing Company's claim. If the City fails to provide the Dispute Notice within such ten-day period, the City shall pay the full amount shown on the Installation Invoice to Company within forty-five (45) calE~ndar days following Cc~1~~~~any~s submissi~~n to the City of the Installation >l;vL9'~Ct' ~I7 tii~fTl~, f1U1 Fi~jlil ., ~r'(' ~IJE' ;rldi ~,,, i` f~tE'rE_'.`~t tj~ Lf7F'. Batt' "~t ten ~r=r; ~"1t =18_ ,,.:;:~ 'ao~7~,~sti~7 LA~LAS t 3027~itw8 {10°l0) per annum or the maximum amount allowed by Applicable Law, whichever is less, computed monthly. 5.3.2.3. if the City provides the Dispute Notice to Company within the time period specit'ted in Section 5.3.2.2, the City and Company shall each designate an authorized representative to meet within thirty {34) calendar days following the City's submission of the Dispute Notice for the purpose of negotiating in good faith a resolution to such dispute. 5.4. Incremental I-NET Faciilities. Consistent with the requirements set forth in Section 5.3 regarding activation of the I-NET in the Authorized Area, Company shall install and terminate additional I-NET Facilities for use as an I-NET in the following manner: 5.4.1. Additiianal Facilities. The City will inform Company in writing from time to time of new I- NET Facilities it would like to have added to the I-NET within the Authorized Area. Company will use such information in its plans for future installation of I- NET Facilities, where, for example, one routing will pass a facility the City would like to have served and another routing of comparable cost would not pass such facility. 5.4.2. Annual Reports. By January 31 of each year after the I-NET Initiation Date, Company will provide the Ci#y wi#h its conceptual plans for new and replacement construction of I-NET Facilities for that calendar year. Company also will provide the City from time to time with written notice of conceptual plans for additional construction of I-NET Facilities as soon as is feasible, but not less than thirty {30} calendar days prior to the initiation of such construction. 5.4.3. Cast Estimates. Upon written request by the City, Company will provide the City with a conceptual cost estimate, and other information that the City may reasonably require, for installing additional I-NET Facilities along all or any portion of a route or routes that are part of Company s conceptual plans. Such estimates shall be prov+ded as soon as possible after the C~tys written request so that the City may have time to obtain City Council approval or to amend its budget. 5.4.4. Notice to Proceed. As to any route where the City has requested a conceptual cost estimate, Company shall provide the City with the final cost estimate for installing ~~t~~iiti«n~31 I-NET Facil~tif~s <~s calcul~3tt~d ~n ac~~.~~r~iance with SE~ction 5 4 5 "e''~;'Yf! ~'~ ~~'i `1fUrt7lcjtll:f'~ ~I~?~31 rt't' ~,Ily ?1'td_y FC~~SE~ric3t)~y =E'~~~111Ck;. dS SUGfT ~~5 -19- ;~f,._ Company's design of the 1-NET Facilities for such route is reasonably complete. Company shall not be required to install such I-Net Facilities until the City has providedrt written notice that the Funds Requirement for such construction has been satisfied and that it will reimburse Company for such construction. The City shall have sixty (64} calendar days from receipt of the final cost figure for the additional I-Net Facilities to meet the Funds Requirement for such construction, All 1-NET Sites served by such additional 1-NET Facilities shall be defined and treated as part of the I-NET under this Franchise Agreement for all purposes. 5.4.5. Installation Costs. The cost of the installation of additional I-NET Facilities shall be computed on an incremental basis, meaning the cost to Company of constructing and installing such facilities on a given route with the additional 1-NET Facilities less the cost to Company of constructing and installing such facilities on a given route without the additional I-NET Facilities {the "Net Incremental 1-NET Cost"). The City shall reimburse Company for any Net Incremental I-NET Gost for additional I-NET Facilities it orders pursuant to Section 5.4.4 herein. 5.5. 1-NET Maintenance. Effective as of the I-NET initiation Date, Company shall provide 1-NET Users with a reliable level of service, repair and maintenance that, at a minimum, meets the following performance standards: 5.5.1. Service Availability. Company shall maintain a 99.5 percent service availability to I-NET Users measured over a period of twelve {12} months. Consistent with its obligations under Section 7.1(} herein, Company shall notify the City in writing regarding the duration of any such service interruption. 5.5.2. Re airs. Company shall respond to repair requests from I-NET Users for circuits identified as critical pursuant to Section 5.5.4 within two {2} hours of the request. Company shalt respond to other repair requests within four (4} hours of the request. 5.5.3. Routine Maintenance. Company shall provide ongoing maintenance of the 1-NET at its discretion and as it deems necessary. Except in emergency situations, Company shall provide at least a one (1) week advance notice to any affected l-NET User of any maintenance requiring temporary interruption of services. -20- . ~H~ ~~~u< ~ .. ~; U~LL,rS '.30~ ~ ° v8 ;5.5.4. Critical Network Components. Company and the City shall develop a mutually agreeable written priority listing of critical circuits and their terminal bcations. When notifying Company of service complaints, an 1-NET User shall identify critical circuits requiring priority repair. Company shall escalate the repair of critical circuits to the extent reasonable under the circumstances. 5.5.5. Compliance With Applicable Laws. Company shall not be responsible for the failure of any I-NET User or any designees of the City appointed to administer one or more government channels on the System to comply with Applicable Laws in the opera#ion andlor use of the PEG Channels or the 1-NET. The City shall be responsible for preparing a set of guidelines for use of the PEG Channels and the 1-NET {the "Guidelines"}. Company must approve the Guidelines {such approval not to be unreasonably withheld or delayed}. The City shall be obligated to provide a current copy of the Guidelines to each PEG Channel User and I-NET User. 5.6. TCD Obligations. 5.6.1. Activation of TCDs. During the Term, Company, as part of the TCD Network and at no cost to the City or to Subscribers, shall provide capacity on the Cable System for the City to operate TCDs in the Authorized Area from the TMC. In addition, subject to Section 5.6.1.6 below, Company shall provide capacity on the Cable System for the operation of TCDs outside the City Area {each an "External TCD"}. Consistent with the technical specifications for the TCD Network set forth in Exhibit "S" attached hereto and made a part of this Franchise for all purposes {the "TCD Specifications"}, the City shall be capable of transmitting all traffic on the TCD Network, including, but not limited to, two-way voice, data and video signals, necessary to operate the TCDs. 5.6.1.1. Unless the Parties otherwise agree in writing, all equipment provided by Company to operate the TCD Network (the "Company TCD Equipment") shall be owned and maintained by Company but provided for the sole and exclusive use of the City. 5.6.1.2. Company shall connect each TCD subjecf to the requirements rn Section 5.6.1 to the Cable Television System via coaxial cable that meets the TCD Specifications. Company shall pay all costs and expenses associated with the connection of each such TCD for the first one hundred fifty (150) feet of Drop between the Cable Television System and such TCD. The City shall reimburse Company for those costs and expenses associated with the connection of each such TCD to the Cable Television System nr~t p~3i~i f~~r by Cc>r7ip~~ny ~E~<3ch ~~ ~~City TCDi hE~rE~unr~F~r h~~5f~tj ors <3 wntten fin~~l >>~t t~~tirti~3tE~ pruvi~~t~~, t« tht~ Litr :~y C~~r7~p~3r:y <~n~; ,3~~~r~~.;Fscj :~y thE~ City -21- Company shall not be required to install any City TCD until the Ci#y has provided it with written notice that the Funds Requirement for such construction has been satisfied and that it will reimburse Company for such construction. The City shall have sixty {60} calendar days from receipt of the final cost estimate for construction of the City TCDs to meet the Funds Requirement for such construction. To the extent applicable, the City shall reimburse Company for such costs and expenses pursuant to the procedures set forth in Section 5.3.2 herein. 5.6.1.3. Company shall connect the Cable Television System to the TMC via a T-1 connection so that the City can operate the TCDs to the extent required under Section 5.6.1. To provide this T-1 connection, Company shall use excess bandwidth from its Cable Television System that supports its Enhanced Cable Services. As of the Effective Date, Company shall provide enough capacity on this T-1 connection to ensure that it can satisfy the then applicable TCD Requirement {as defined in Section 5.6.1.8 below} and bandwidth requirement under Section 5.fi.2.4. The City shall notify Company in writing if additional T-1 capacity is required for operation of the TCDs in the Authorized Area {"Additional T•1 Capacity"}. Such notice shall contain the amount of T-1 Capacity needed and full documentation supporting the reasons for the requested increase. tUo later than thirty {30} calendar days after the date of such notice, the Parties shall commence to negotiate, in good faith, under the procedures established in Section 5.6.1.7, specific requirements with respect to activation of the Additional T-1 Capacity, including, but not limi#ed to, the specific amount of additional capacity actually required, the date{s} when such capacity must be available to the City, and each Party's respective payment obligations for the agreed upon capacity increase. 5.6.1.4. Company shall not be obligated to provide the Additional T-1 Capacity required by the City under Section 5.6.1.3 if it can demonstrate to the City that meeting such obligation: {i} would have a Material Adverse Effect on Company's ability to provide the Cable Service in the then existing Authorized Area; or {ii} would not be Technically Feasible. Company must make this demonstration by filing a Petition with the City Manager describing, with clear and convincing information, the manner in which providing the required Additional T-1 Capacity would cause a Material Adverse Effect or would not be Technically Feasible. The City Manager promptly shall hold a meeting so that both Parties can present their positions with respect to the Company's Pent+on in accordance with procedures and deadlines established by the City and reasonably agreed to by Company. If the City Manager finds that, based upon Company s showing at such meeting and based upon any other information deemed to be relevant, satisfaction of the Additional T-1 Capacity requirement would have a Material Adverse Effect on Company or would not be Technically Feasible for Company, then the City Manager will make such modifications to this requirement so that compliance therewith would ',.;~e a ~~~atE~na( Ad~ersE~ EffE,ct c~r~ r~r wr~ulr, ~~~~° rF~~.hn~cally feasible for, _~~_ U~~L~hS ?30Z; ~u~~~ 5.6.1.5. For the T-1 interconnection required under Section 5.6.1.$, the City shall provide Data CJver Cable System Interface Specification {"DC>CSIS"} compliant modems at the TCM and at each TCD {the "TCD Modems"}. Each TCD Modem shall meet the specifications set forth in Exhibit "B" {the "Modem Specifications"}. Company has the right to approve or disapprove the Modem Specifications and specific TCD Modem models. Further, Company has the right to inspect, at its sole cost, any TCD Modem prior to its connection to the Cable Television System. Further, Company shall provide a Fixed Dynamic lP for each TCD Modem. 5.6.1.6. Company is not obligated to operate any External TCD until it has received all requisite authorizations from the appropriate governmental entities or private parties outside the City Area. The City shall reimburse Company for each External TCD to the same extent it is obligated to reimburse Company for any City TCD under Section 5.6.1,2 herein. 5.6.1.7. The Parties shall consult with each other, at least every six {6} months, regarding the construction and activation of TCDs in the Authorized Area and shall provide each other the following information, as then applicable: {i} potential location{s} of, and anticipated activation date{s} for, each TCD; {ii} potential changes in the TCD Specifications andlor the Modem Specifications including, but not limited to, any changes to, or upgrades in, the technology used for transmitting traffic on the TCD Network; {iii} building plans for the residential communities in the Authorized Area; and {iv} requirements for interconnecting External TCDs. Any changes in TCD Specifications andlor Modem Specifications must be agreed to in writing by both Parties and Exhibit "B" thereupon shall be amended accordingly. 5.6.1.8. The City and Company shall negotiate in good faith the number of TCDs that Company must operate hereunder {the "TCD Requirement"}. In the event of a disagreement as to the TCD Requirement, except as set forth below in this Section 5.6.1.$, the City's sole decision shall be final and binding, Company shall not be obligated to satisfy the TCD Requirement approved by the City under this Section 5.6.1.$ if it can demonstrate to the City that meeting such obligation: (i) would have a Material Adverse Effect on Company's ability to provide the Cable Service in the then existing Authorized Area; or (ii) would not be Technically Feasible. Company must make this demonstration by filing a Petition with the City Council descnbing. with clear and convincing information, the manner in which compliance with the proposed TCD Requirer7~ent would cause a Material Adverse Effect or would not be Technically Feasible. The City Council promptly shall hold a hearing providing due process on Company s Petition in accordance with procedures and deadlines established by the City and reasonably agreed to by Company. If the City Council finds that, based upon Company's showing at such hearing and based upon any other information deemed to be relevant, c~~mpliance with the ,~ropnsed TCD Rec~u~rement would h~=~ve ~~ Material Adverse +{~' ~ ', ,"l~ ,3' , r wti'%1,~.; ,1 !;~~ ' Ft tl(lIC<j~~'y ! f'~3~It)~E' fO( ~~ ~ ~ ;~Ily ihE'n trle -~.3- .,.~ 0. ,,, ,~_AS '30: City Council will make such modifccations to the proposed TCD Requirement sa that compliance therewith would not have a Material Adverse Effect an, or would be Technically Feasible for, Company. 5.6,2. Interconnection of TCDs. 5.6.2.1. Company shall install ali IP and other connections between each TCD and the Cable Television System and between the TMC and the Cable Television System necessary to comply with Section 5.6.1 herein. Company shall complete such installation at each TCD site within thirty {30} calendar days after receiving written notice from the City. However, if the City requests installation of more than ten {1(}) TCD sites, Company shall complete such installation within sixty (60) calendar days after receiving written notice. These deadlines can be extended upon written agreement of the Porkies, and the City's consent thereto shall not be unreasonably denied or delayed. 5.6.2.2. Consistent with the TCD Specifications, Company shall purchase and install termination hardware at each TCD site and at the TMC, including standard connectors designated by the City and appropriately labeled. Company shall terminate any equipment used to operate the TCDs on such termination hardware. Equipment, other than such termination equipment provided by Company at each TCD and at the TMC, shall be provided and maintained by the City. To the extent Company is obligated to operate any equipmen# at the TMC, including, but not limited to, routers or other cable termination equipment, the City shall have access to such equipment in order to observe equipment configuration settings. 5.6.2.3. The City shall provide a point of entry {e.c~., a pull box} into each TCD cabinet. Upon the City's prior written consent, Company, at no cost, can collocate its cable for interconnecting TCDs with the City's own cable or power circuit in an existing City-owned or operated conduit. Such collocated circuits shall be fused and their combined voltage shall not exceed the specifications set forth in Exhibit "B." Company shall terminate its cable inside the TCD cabinet or other enclosure with the fitting specified in Exhibit "B." 5.6.2.4. As of the Effective Date, Company shall provide bandwidth not to exceed 256k upstream and 256k downstream for purposes of meeting its obligations under Section 5.6. The City shall notify CorT~pany in writing if additional bandwidth is required for operation of the TCDs in the Authonzed Area ("Additional TCD Bandwidth")- Such notice shall contain the amount of bandwidth needed and full documentation supporting the reasons for the requested increase. No later than thirty (30) calendar days after the date of such notice, the Parties shall commence to negotiate, in good faith, under the procedures established in Section 5.6.1.7, specific requirements with respect to activation of the Additional TCD Bandwidth, including, but not limited k~~ the specific amount of additional bandwidth actually required, the date(s) -24- ~;-~ _ _ ~ s~~. ~~„~~A~ ~30~; ~.~ when such bandwidth must be available to the City, and each Party's respective payment obligations for the agreed upon bandwidth increase. 5.6.2.5. Company shall not be obligated to provide the Additional TCD Bandwidth required by the City under Section 5.6.2.4 if it can demonstrate to the City that meeting such obligation: {i} would have a Material Adverse Effect on Company's ability to provide the Cable Service in the then existing Authorized Area; or {ii} would not be Technically Feasible. Company must make this demonstration by filing a Petition with the City Manager describing, with clear and convincing information, the manner in which providing the required Additional TCD Bandwidth would cause a Material Adverse Effect or would not be Technically Feasible. The City Manager promptly shat( hold a meeting so that both Parties can present their positions with respect to Company's Petition in accordance with procedures and deadlines established by the City and reasonably agreed to by Company. If the City Manager finds that, based upon Company's showing at such meeting and based upon any other information deemed to be relevant, satisfaction of the Additional TCD Bandwidth requirement would have a Material Adverse Effect on Company or would not be Technically Feasible... for Company, then the City Manager will make such modifications to this requirement so that compliance therewith would not have a Material Adverse Effect on, or would be Technically Feasible for, Company. 5.6.2.6. The City shall furnish all TCD Modems at its sole cost. The City shall provide Company at least thirty {3fl} calendar days prior written notice of each TCD activation {the "TGD Activation Period"}. Company shall automatically provision each TCD Modem used by the City as it becomes activated with the settings listed in Exhibit "B." However, to the extent Company must satisfy either the Additional T-1 Capacity requirement set forth in Section 5.6.1,3 or the Additional TCD Bandwidth requirement set forth in Section 5.6.2.4 by obtaining capacity from a third party, the TCD Activation Period shall be extended so that Company can obtain such capacity or bandwidth from the appropriate third party. 5.6.3. TGD Maintenance. 5.6.3.1, Service Availability. The Company TCD Equipment shall marntain a 99.5 percent service availability measured for each Drop over a penod of twelve (12) months and a 99.0 percent service availability combined for all Drops over a penod of twelve X12) months. Consistent with its obligations under Section 7.10 herein, Company shall notify the City in writing regarding the duration of any such service interruption. -25- . , ,.~ ~c: ilAl_t.ti<> 1~30~~~~.~ 5.6.3.2. Repairs. The Gi#y has the responsibility to determine the cause of any technical problems with a TGD in the Authorized Area. If the Gity determines that such problems are attributable to Company, it shall notify Company in writing as soon as practicable and shall provide details describing the problem with such notice. Company shall respond to such notice within four {4~ hours of receipt thereof and must restore service to each affected TGD. The City shall cooperate with Company personnel in correcting any technical problems subject to this Section 5.6.3.2. If the cause of the TGD service failure is a cable cut or other incident, Company must provide the Gity an estimated time of service restoration. Company technical personnel shall be available to perform such repairs twenty- four hours (24} per day, seven (7) days per week, at the number required under Section 7.6.1. 5.6.3.3. Routine Maintenance. Company shall provide ongoing maintenance of the Company TGD Equipment located at TGDs in the Authorized Area at its discretion and as it deems necessary. The Gity shall provide ongoing maintenance of all other equipment or facilities used as part of the TGD Network including, but not limited to, the TGD Modems, at its discretion and as it deems necessary. Except in emergency situations, each Party shall provide the other Party at least a one (1) week advance written notice of any maintenance requiring temporary interruption of TGD Network operations. 5.6.3.4. Critical Network Components. Company and the Gity shall develop a mutually agreeable written priority listing of critical circuits and their terminal locations on the TCD Network. When notifying Company of technical problems, the City shall identify critical circuits requiring priority repair. Company shall escalate the repair of critical circuits to the extent reasonable under the circumstances. 5.6.3.5. Software. To the extent it is permitted to da so under any applicable software license or other agreement, Company, at its own cost, shall provide cable modem management software using SNMP-type equipment to the City. The City shall be allowe<~ to use such software only for accessing TCD Modems Further, Company shall configure the software used rn the TCDs so that it can identity the percent of service availability for each DOCSIS Modem. 5.6.3.6. Training. No more than once each year. Company shall provide up to two (2) days -~f training ft~r City st~~ff with res~>F~~1 try TCD Network operations Such training ~i~.~~;rf?55 gill n~ ~_~5s~3rv funct~r;r~. ,,~ ~~ iCD NF~tw~~rk_ int:~,~~j~n~;. ;gut n~>( -2fj- 3i': ' 3C: " limited to, informing City staff how to identify and diagnose problems related to TCC~ Network and related Cable Television System architecture and design. 5.6.3,7. InterFerence. In the event that City's operation of the TCD Network causes any interference to Gornpany's delivery of Cable Services to its Subscribers, the City shall have thirty (30} calendar days from the date it is notified in writing of such interference to cure the problem to Company's sole satisfaction. 6. USE 4F PUBLIC RIGHTS-4F-WAY. 6.1. No Undue Burden. The System shall not be erected, installed, constructed, repaired, replaced or maintained in any manner that places an undue burden on the present or future use of the Public Rights-of-Way by the City and the public. If the City, in its sole but reasonable judgment, determines that any portion of the System places an undue burden on a portion of the Public Rights-of-Way, Company, at Company's sole cost and expense and within a reasonable time period after receipt of written notice thereof from the City, shall modify the System or take such o#her action as shall be reasonably necessary to remove or alleviate the burden. 6,2. Minimal Interference. The System shall be erected and maintained in a manner that causes minimal-interference with the public's use of the Public Rights-of-Way and with the rights or reasonable convenience of the owners of property which adjoins any of the Public Rights-of-Way. 6.3. Paraitellnstallation. All cables, wires and other similar Facilities shall be installed parallel with existing telephone and electric utility wires whenever possible. Multiple cable configurations shall be in parallel arrangement and bundled in accordance with engineering and safety considerations and all Applicable Laws. 6,4, Underground Facilities. At the time that Company ~nstails its System, Company shall place its Facilities and other equipment underground m any area of the Authorized Area where the City at that time requires public utilities to place their cables, wires or other equipment underground. If, in the future, the City requires public utilities to place their cables, wires or other equipment underground in an Authorized Area where Company has existing Facilities above ground, Company shall install its F~~cil~t~e~~ ~inc~ other e~~uipment underc~rounc~ within ~;ix (6l months followin~.; ^rr~t?E~~ , `ic~3iit~~~~ from tht~ City ~~n,: ~3t r~ ~_~x~iE nsf~_ ~;~;~,t r.>r 1~~3hilft~ to thE° City r~ -27- ~ _i: i 130~i~wo such event, Company shall coordinate with other uti{hies searing such por#ion of the Ac~thc~rized Area so that only one or as few pnssihfe trenches as necessary are utilized for the underground installation of Facilities and other equipment. 6.5. Marking of Facilities. Company shall mark its aerial Facilities in the Public Rights-of-Way with a marker on its lines or alternate poles which shall state Company's name and provide atoll-free telephone number that a party may call for assistance. Company's underground Facilities shall have a conducting wire placed in the ground at least several inches above Company's cable if such cable is non- conductive and shall be marked, as practicable, with the Company's name and toll-free number. 6.6. Pavement Cut Coordination. In order to preserve the integrity of the Public Rights-of--Way infrastructure, Company shall coordinate its construction of the System and all other work in the Public Rights-of--Way with the City's program for street construction, rebuilding and resurfacing. Company shall not cut, excavate or otherwise breach or damage the surface of any paved Public Right-of-Way within ninety-six (9fi} months following the construction or resurfacing of such Public Right-of--Way unless {i} Company obtains written consent from the Director of the City's TransportationlPublic Works Department and {ii) pays the City the sum of One Thousand Two Hundred Fifty Dollars {$1,258.00} for each fifty linear feet {50'} of a cut, excavation or breach of any Public Right-of--Way or portion thereof. This fee {i} shall be in addition to, and not in lieu of, Company's obligations to restore the Public Rights-of--Way in accordance with this Franchise and {ii} shall not be allocated or otherwise counted as part of any Franchise Fee to the City. 6.7. Use of Easements. In using utility easements that cross privately-owned property, Company shall, without limitation, {i} ensure the safety, functioning and appearance of the property and the convenience and safety of other persons are not adversely affected by the installation or construction of Facilities necessary for the System; (ii) pay all costs and expenses incurred in or related to the installation, construction, operation or removal of such Facilities; and (iiij justly compensate property owners for any docur-nented damages caused by the installation. construction, operation or rer7~oval of such Facilities 6.8. Restoration of Property. Company, at Company's sale cost and expense, and in a manner approved by the City in writing, shall promptly restore any portion of the Public Rights-of-Way or privately-owned property that is in any way disturbed or ;~~'11,i~.,f1(i !)v 't1F' ;;C;nSt(U(aiUf~. OG)t'r<3tiOf? t~l<i~rltf.'11~3f1C:E' Ur rf°fTIUV'<~~ U' "~r~ SyStE'.IT? '(%. ~1~ ~~l)fTlpc~[ly 5 i.if)lliifl. <3S :~(.JUC; ';.if :lf:'~!" ~~ )fl(i111U(1 ;95 5UCC1 j.'~.)pE:~`', WcjS .(1 -28- ,__. ',i027~bvb7 ;i%;C._r~5 130279hv8 immediately prior to the disturbance or damage. Company shall diligently commence such restoration within fifteen {15} calendar days following the date that Company first became aware of the disturbance or damage ar, if the System is being removed, within fifteen {15} calendar days fallowing removal of the System. 6.9. Joint Use. Company shall permit the joint use of its poles, conduits and Facilities located in the Public Rights-of-Way by other utilities and by the City or other governmental entities; provided that {i}the I-NET shall be for the exclusive use, free of charge, by I-NET Users and {ii) for Facilities other than the I-NET, Company may require such users to enter into a reasonable agreement with Company for such use in compliance with Section 5.2. 6.10. Tree Trimming. Company shall have the authority to trim trees or other natural growth in ar overhanging the Public Rights-af-Way sa as to prevent branches from coming in contact with Company's Facilities. Company shall not trim portions of trees or other natural growth an ar aver privately owned property unless it has first obtained the consent of the property's owner. Company shall reasonably compensate the City ar property owner far any documented damages caused by such trimming or shall, in its sale discretion and at its awn cast and expense, reasonably replace all trees ar shrubs damaged as a result of any construction of the Cable System undertaken by Company. Company, at Company's sale cost and expense, shall have aII trimmed branches or debris removed from the Public Righ#s-af-Way and any privately-awned property immediately following the completion of any such project. 6.11. Relocation of Facilities. Company, at Company's sole cast and expense and within a reasonable time frame prescribed by the City, shall protect, support, disconnect, relocate ar remove from the Public Rights-of-Way any portion of its System when required by the City due to street or other public excavation, construction, repair, grading, regrading or traffic conditions; the installation of sewers, drains, water pipes or municipally-owned facilities of any kind; the vacation, construction or relocation of streets or any other type of structure or improvement of a public agency; or any other type of improvement necessary for the public health. safety or welfare (each reason for relocation of the Facilities set forth in this Section 6.11 shall be referred to herein as a "System Event"). 6.12. Temporary Relocation of Facilities. ~_7pon advance notice of at least thirty {30) b~isiness days, Company shall try„ ~~3n1~ ~~~3isE, ~~r i~~wf~r its vvir~rs ~:.<j:rif~s fir ~ r Est.aui,ar?tin'; u;.>~~n thE~ -2~- ,. ~~~.,s , 30~ ~ ~ . . reasonable request of any Person, including, but not limited to, a Person with a huil~}inn mwinn Hermit issuers by the C:ity_ C~mnanv may r.harep ~ reasonable -_ _... _. _ . u . - - _ . .. - ~ r_ _ _ .... _ . _ _ - _ _. _ ~ - - - _ - - _ ~ _ _ _ _ _ r _ _ _ _ ~ _ .. __ ~ _ _ _ _ _ o _ _. _ _ _ _ - fee for this service, but such fee shall not exceed the actual and direct costs incurred by Company in the temporary relocation of such Facilities. 6.13. Removal of Qbsolete Facllitles. Upon the occurrence of a System Event and after receiving a directive from the City, Company shall promptly remove all of its obsolete or unused Facilities in the City. When Company opens a trench, accesses a conduit or boring ar is working on aerial locations, it shall remove or have removed all unusable andlor inactive Facilities from those locations unless otherwise approved by the City. When Company opens a trench or access to borings, it shall notify all other owners of facilities in or at such locations so that they may remove their obsolete facilities or install new facilities while the trench or access to borings is open. If Company receives notification from another entity tha# the entity is opening a trench or access to borings, Company shall remove all of its obsolete Facilities from such location while the trench or access to borings is open. 6.14. Removal of System. Upon the revocation, termination or expiration without extension or renewal of this Franchise, Company's right to use Public Rights-of--Way under this Franchise shall cease and Company shall immediately discontinue the provision of Cable Services in the Authorized Area and shall immediately discontinue use of the System. Within the six (~i} month period following such revocation, termination or expiration, and in accordance with written directions from the City, which only can be made upon the occurrence of a System Event, Company shall remove the System, including, but no# limited to, all Facilities from the Public Rights-of-Way. If Company is required hereunder to remove all Facilities from the Public Rights-of-Way within six ~6) months following revocation, termination or expiration of this Franchise and has not done so, the City may deem all Company's Facilities remaining in the Public Rights-of-Way abandoned and, at the City's sole option, (i) take possession of and title to such property or (ii) take any and all legal action necessary to compel Company to remove such property. Within six (6) months following revocation, termination or expiration of this Franchise and in accordance with Section 6 8 of this Franchise. Company shall also restore any property, public or private. that is disturbed or damaged by removal of the System. If Company has not restored all such property within this time, the City, at the City's sole option, may perform or have performed any necessary restoration work, in which case Company shall immediately reimburse the City for any and all reasonably documented costs incurred in performing or having performed such restoration wr>rk, -30- _~_,1s ~3oz~~~e~e~ `-`~1302796v8 6.15. Work by Gity. Any work conducted by the City on a Public Right-of--Way occupied by Company under this Franchise shall be performed in compliance with all Applicable taws and Industry Standards and shall be performed in a manner that, to the maximum extent possible, minimizes any interference to Company's operation of the Cable System and provision of Cable Service. The City shall promptly restore any portion of the Public Rights-cif-Way that is in any way disturbed or damaged as the result of such work. The City also shall be responsible for compliance with this Section 6.15 by any City employee or City contractor conduc#ing work on a Public Right-of--Way. 6.1 fi. Special Rights. If, as a result of the City exercising any of its rights under this Section 6, Company must take action that would have a Material Adverse Effect on its ability to comply with the obligations set forth in Section 2.2 with respect to the In- fill Requirements or with the obligations set forth in Section 5.3 with respect to the I-Net, or if Company must take action in compliance with such obligations that would not be Technically Feasible, the Parties shall use their best efforts to negotiate a mutually satisfactory remedy. 7. CUSTOMER SERVICE AND CUNSUMER PRQTECTIt~N. 7,1. General S#andards. Company shall comply with the more stringent of the customer service and consumer protection provisions of (i}this Franchise or (ii) the FCC Rules. 7.2. ScramblinglBlacking. If, at any time the System operates at 860 11~Hz, Company shall, at all times, scramble both the audio and video portions of all channels with predominately adult-oriented programming. Upon request by a Subscriber, Company shall entirely block such Subscriber from receiving both the audio and video portion of any channel with predominantly adult-oriented programming with devices, such as, by way of example, notch filters, which prevent the frequencies containing a specific channel or channels from being transmitted into the Subscriber's premises. 7.3. Pay Per View Options. Subscribers shall be given the option of (i) not having pay per view or per program service available at all or (ii) only having such services provided upon the Subscribers provision of a security number selected by an adult representative of the Subscriber. _1_ ~~ ~h~ ,;_~ , ~;,~; ~~ws 7.~6. Customer No#ifica#ions. Gompany shall provide all Subscribers with written information on at least each of the following matters: {i} products and services offered; {ii}prices {rates} and options for Gable Services and the conditions of a subscription to such Gable Services, including, but not limited to, prices for programming, special promotions, equipment rental, program guides, installation, disconnection, processing charges for late payment and other fees charged by Gompany; {iii} Gompany's installation and service maintenance policies; {iv} instructions on how to use the Gable Services, including procedures and options for pay per view, premium channels and connection to a VGFt; {v} channel positions of programming carried on the System, including a listing specific to the City showing the channel names and numbers actually available to Subscribers in the Authorized Area; {vi} billing and Complaint procedures with a notice for a Subscriber to contact Gompany initially with Complaints and questions; {vii} applicable privacy requirements as set forth in this Franchise or provided for by Applicable Law; {viii} the availability of lockout devices and the ability to have a channel entirely blocked or trapped; and {ix} the procedure for resolving signal quality problems as set forth in Section 10.3 herein. Gompany shall provide such written information to Subscribers {i} at the time of installation or re- installation of Gable Service, {ii} annually to all Subscribers, and {iii} at any time upon request of a Subscriber or the City. The information shah be dated with the printing, revision, or effective date. In addition to the foregoing requirements, for all special promotions during which the Gompany shall charge a discounted rate for specific Gable Services, the Gompany shall provide written information to Subscribers concerning such discounted rates and the date when the discount no longer is applicable {i} in all written materials related thereto and {ii} thirty {30} calendar days prior to the expiration thereof if such special discount lasts for a period tha# is no less than ninety {90} calendar days. _~~_ ~;;;~ ~.~.:~, ~ :3u_ Ur'~'..~_A5'130:''~ 7.5. Notifications Pertaining to Cable Service-related Changes. Company shall notify Subscribers of any changes in rates, Cable Services or channel positions as soon as possible through announcements on the Cable System or in writing. Company will provide written notice of such changes to the City in advance of its notifying Subscribers and will make every effort to notify the City forty-five (45) calendar days in advance of any such change. Unless a longer time period is required by Applicable Law, written notice must be given to Subscribers a minimum of thirty (30) calendar days in advance of the implementation of any such change if the change is within the control of Company and as soon as possible if the change is not within the control of Company. In addition, Company shall notify Subscribers and the City at least thirty (30) calendar days in advance of any significant changes in the matters covered in Section 7.4 herein, 7.6. Telephone Service Standards. 7.6.1. Customer Service Telephone Number. Company shall have a local or toll-free telephone number available for use by the City and by Subscribers in the Authorized Area twenty-four {24} hours per day, seven {7) days per week. The local or toll-free numbers shall be listed, with appropriate explanations, in the directory published by each local telephone company and in any significant directories published by others. 7.6.2. Customer Service Representatives. Qnce Company has 2,000 Subscribers located in the Authorized Area, Company shall ensure that Trained Company Representatives will be available to respond to Subscriber #elephone inquiries twenty-four {24} hours per day, seven {7} days per week. As to video service matters, the term "Trained Company Representatives" shall mean employees of Company who have the authority and capability while speaking with a Subscriber to, among other things, answer billing questions, adjust bills, and schedule service and installation calls. 7.6.3. Response Time. Under Normal Operating Conditions,. a Trained Company Representative shall personally answer a telephone call within thirty (30) seconds from the time chat the telephone connection ~s made If the telephone call needs to be transferred, the time to complete the transfer shall not exceed thirty (30) seconds. These standards shall be met no less than ninety percent (90°io) of the time under Normal Operating Conditions, measured on a quarterly basis. 7.6.4. Busy Signals. Un~1F~r Nr~rrr<al O,~E~r~~tin~; C~~r~~~=ti~~r~s thE~ Suk~s~ n'~f~r sh ~ r,~; ~~.~~ ~, :~USy ~~,~' .f: It'`~S trlr]~~ iri~i~t- ~~t'!i H'ij c ~ '~'C !iI'itt (Tlt~,~5u(Cli UIl c3 ~~,;1~'~ ~ ~f~, -33- ?.7. Company QfFice. Company shall maintain a physical office within the Authorized Area or within ten {10} miles of the Authorized Area, which shall include a place where Subscribers may pay their bills, pickup and return converter boxes and comparable items and receive information on Company and its services. Until such time as Company provides Cable Services to at least 250 Subscribers in the Authorized Area, this office shall be open at least from 9:00 A.M. to 5:00 P.M. Monday through Friday. C}nce Company provides Cable Services to 250 Subscribers in the Authorized Area, the office shall be open at least from 8:00 A.M. to 6:00 P.M. Monday through Friday, and from 9:00 A.M. to 1:00 P.M. on Saturdays. 7.8. Standards for Installations and Service Calls. Company shall meet the following standards for installations and service calls not less than ninety-five percent {95°l0) of the time, measured on a quarterly basis: ?.8.1. Installations IVlade within Seven Business Days, Under Normal Operating Conditions, installations located up to one hundred fifty {150} aerial feet from the existing cable distribution system shall be perFormed within seven {7) business days after an order has been placed. 7.8.2. Scheduling. Installations and service calls shall be available at a minimum from 8:00 A.M. to 6:00 P.M. Monday through Friday and 9:00 A.M. to 1:00 P.M. on Saturdays. Company shall, at the Subscriber's option, either {i} schedule the Subscriber to be the first call of the day or last call of the day on a first come, first served basis; {ii} schedule the appointment for a date certain on a "call to meet" basis where, as the service technician finishes his/her prior task, the technician calls the Subscriber and arranges to meet the Subscriber shortly thereafter; or {iii} establish an appointment window of no more than three {3} hours with the Subscriber {or adult representative of the Subscriber} or another appointment window mutually agreed upon between the Subscriber and Company. 7.9. Operating Procedures for Installations and Service Calls Company shall cor7~ply with the following operating procedures for all installations and service calls. If Company fails to comply with any operating procedure set forth in this Section 7.9, Company shall provide an affected Subscriber with (i) a free installation if the call is for a Cable Service installation or (ii) at least twenty dollars 020.00), which may be in the form of a credit, if the call is for any matter other than a Cable Service installation. -34- .~ 30~ ~~i~L~ 130, , . 7.9.1. Nature of Response. company shall respond to the request for service in accordance with the option set forth in Section 7.$.2 that is selected by the Subscriber. 7.9.2. Cancellations or Rescheduling Requests by Comp-any. Company shall not cancel or request the rescheduling of an appointment with a Subscriber after 5:(}0 P.M. on the business day prior to the Scheduled appointment, If, on the day of a given appointment with a Subscriber, Company's technician is running late for such appointment and will not be able to keep the appointment as scheduled, the Subscriber shall promptly be contacted. The appointment shall be rescheduled, as necessary, at a time, which is convenient for the Subscriber. 7.9.3. Cancellations or Rescheduling Requests by Customers. In the event access to the Subscriber's premises is not made available to Company's technician when the technician arrives during the established appointment window, the technician shall leave written notification stating the time of arrival and requesting that company be contacted again to establish a new appointment window. Notwithstanding the foregoing, if Company's technician or service representative telephones the Subscriber during or prior to the appointment window and is advised that the technician will not be given access to the Subscriber's premises during the appointmen# window, then the technician shall not be obliged to travel to the Subscriber's premises or to leave the written notification referred to above, and the burden shall again be upon the Subscriber (or adult representative of the Subscriber) to contact Company to arrange for a new appointment. 7.9.4, length of Service Calls. Company's service technicians and service representatives shall take adequate time on each service call to address or correct the problem in question and shall not be held to a quota of calls per day or an established limitation on time invested per call. 7.9.5. Charges for Service to Company Equipment. Company shall not charge a Subscriber for any service call relating to Company owned and Company maintained equipment after the initial installation of Cable Services unless the problem giving rise to the service request can be demonstrated by Company to have been caused by the negligence or intentional misconduct of the Subscriber. -35- UA:_l_AS t30275Ew8 7.90. Service Interruptions and Signal Quality Impairments. Company shall meet the standards set forth in Sections 7.10.1 and 7.10.2 not less than ninety-five percent {95°l0} of the time, measured on a quarterly basis. In addition, Company shall comply with the conditions of Section 7.1C}.3 at all times. 7.90.9. Service interruptions. Under Normal Qperating Conditions, Company shall diligently begin working on a Service Interruption {as defined below} promptly and in no event later than twenty-four {24} hours after the Service Interruption becomes known to Company. "Service Interruption" shall mean the loss of picture or sound on one or more cable channels that affects ane or more Subscribers. 7.90.2. Signal Quality Impairments. Under Normal Operating Conditions, Company diligently shall begin working on Subscriber Complaints involving impairment or degradation of signal quality {other than a Service Interruption} promptly and in no event later than the next business day after the problem becomes known to Company. 7.10.3. Redress for Service Interruptions and Signal Quality .Impairments. Company shall offer and, upon written request by the City or upon the request of a Subscriber, provide an affected Subscriber with one day's free service {equivalent to the service they were receiving at the time of the interruption} for each day or portion thereof of Service Interruption, provided, however, affected Subscribers shall not be entitled to such free service with respect to any Service Interruption caused by actions or negligence of the City or any third party e.c ., cutting, damaging or destroying of Company's equipment by the City or a third party}. 7.9 9. coq of Customer Complaints. Company shall maintain a written (og, or an equivalent stored in computer memory and capable of access and reproduction in printed form, of all Cable Service-related customer Complaints originating within the Authorized Area. Such log shall be ~n form and substance reasonably acceptable to the City and at minimum list the date and time of each such Complaint, identify the customer to the extent allowed by Applicable Law. and describe the nature of the Complaint and when and what actions were taken by Company in response thereto. The (og shall be organized so that Complaints from Subscribers in the Authorized Area are shown separately. The log shall be kept at Company's office in or near the Authorized Area for a period of at least two (2) years and shall be available t;>r ~~~~,lt~{ai~~r~ r;~nnt; rf~r;ul~~r ~~usuif~~,~ hr ,, t,~E, City u~x>n rf~r~uE~ste -36- ~,:, ~, ~s .,.," _,~. 7.12. Bills. 7.12.1. Format. Company's bills to customers for Cable Services shall be issued. man#hly to each Subscriber with a balance due or change of service. Bills shall be clear, concise and understandable. Bills shall be fully itemized, with itemizations including, but not limited to, basic service, cable programming service, premium service charges, Enhanced Cable Service charges, equipment charges and processing fees for late payments as further specified in Section 7.14. Bills shall also clearly delineate all activi#y during the billing period, including optional charges, rebates, credits, and late charges. The City shall be given thirty {30} calendar days advance notice of any change in the format of bills. Each bill shall prominently display Company's local or toll-free telephone numbers available for use by Subscribers. If a bill has more than one portion {for example, one portion that is kept by the customer and one portion that is sent to Company}, such telephone numbers shall prominently appear on the front side of the portion of the bill retained by the customer. 7.12.2. Complaints and Disputes. Company shall respond in writing to all written Complaints from Subscribers regarding billing matters within thirty {30} calendar days of receipt. Company shall not disconnect a Subscriber for failure to pay legitimately contested charges during a billing dispute. However, during a billing dispute, Company may disconnect a Subscriber for failure to pay charges that are not contested. 7.12.3. Payment Options. Company shall provide Subscribers in the City with the option of paying for Cable Services by {i} cash; {ii} check; {iii} an automatic payment plan under which the amount of the bill is automatically deducted from a checking account designated by the Subscriber; or {iv} by major credit card on a preauthorized basis. 7.13. Refunds and Credits. Any refund alecks due to Subscnbers for Cable Service shall be issued to Subscribers promptly, but in any event no later than either O Subscnbers next billing cycle following a determination that a refund is warranted, or (ii) if service ~s terminated, thirty (30) calendar days after return of equipment owned by Company or at the time of the next billing cycle, whichever is earlier. Credits for Cable Service shall be issued no later than the Subscriber's next billing cycle following a determination that a credit is warranted -37- 7.14. Late Payments. 7.14.1. Na#ifrcation of Additional Fee on Bills. Each bill shall specify on its face in a fashion emphasizing same {such as bold face type, underlined type or a larger font}: "For payments received after [date], a $ processing fee for late payment may be charged." 7.14.2. Process for Assessment of Additional Fee. No processing fee for a late payment, however denominated, shall be assessed or added to a Subscriber's bill less than twenty-one {21 }calendar days after the mailing of the bill to the Subscriber. In the event any such fee is assessed or added, Company shall separately state the charge on the Subscriber's bill and shall include the word "late" in the description of such fee. 7.15. Disconnection of Cable Services. Company shall comply with the following standards and procedures pertaining to the disconnection of Cable Services to any of Company's Subscribers in the Authorized Area: 7.15.1. Disconnection for Non-Payment. Company shall not disconnect a Subscriber for failure to pay until at least forty-five {45} calendar days have elapsed after the due date far payment of the Subscriber's bill and Company has provided at least ten {1p} calendar days' written notice separate from the monthly bill to the Subscriber prior to disconnection, specifying the effective date after which Cable Services are subject to disconnection. 7.15.2. Disconnection for Illegal Practices. Company may disconnect a Subscriber at any time if Company in good faith believes that the Subscriber has tampered with or abused Company's equipment, that there is a signal leakage problem {or other non-compliance with applicable FCC Rules or Industry Standards which poses a risk to lives or property} on the Subscriber's premises, or that the Subscriber is or may be engaged in the theft of Cable Services. 7.15.3. Disconnection at Subscriber's Request. Company shall promptly disconnect any Subscriber who so requests disconnection, including those Subscribers who elect to cease receiving Cable Services from Company in order to receive Cable Services or other multi-channel video services from another person or entity. No period of notice prior to requE~sted term~nat~on of service shall hF~ rec,u~~ed of Subscnhers by C~~mpany v r?~3i'-~f, r, ~ ,if' '1~)OsE'(~ lJ})(>fl lilt' ~ll~ ~ ~. 'E'I<3tt.'(: i(J 'i~51. .,. , -38- 1!1'~ Lr'.S 1301 vE3 or for any Cable Service delivered after the effective date of the disconnect request {~mlpss there iG a rielay by the ~i rh~~rihPr irk the ret!!C`r! of ~ompaC3y equipment). If the Subscriber fails to specify an effective date for disconnection, the effective date shall be deemed to be the first business day following the date the disconnect request is received by Company provided that Company equipment has. been returned by the Subscriber, 7.16. Truth In Advertising. Company's bills, advertising and communications to its current or potential Subscribers shall be truthful and shall not contain any false or misleading statement. For the purposes of the preceding sentence, a statement is false or misleading if it contains an untrue statement of any material fact or omits to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading. 7.17. DrOpS. Company's standard installation charge shall include at least a one hundred fifty {1 bt}} foot Drop from its Cable Television System, such that current or potential Subscribers shall only be charged for a Drop to the extent the Drop serving such Subscribers exceeds one hundred fifty {150} feet, measured from the tap on the distribution portion of the System to the Subscriber's premises. Company shall notify in advance any potential Subscriber who is requesting Cable Service from Company of snot-to-exceed Drop charge that Company intends to assess in order to extend Cable Service to tha# potential Subscriber. Drops shall be made from a pole and no# from midspan whenever possible. Upon termination of Cable Services to a Subscriber, Company shall either remove its Drop entirely {which only can be required upon the occurrence of a System Event} or secure the Drop in a method reasonably acceptable to the City. 7.18. Underground Facilities Requested by Customer. If a Subscriber requests Company to install Cable Services to a Subscriber's property through underground facilities, Company shall comply with the Subscriber's request but may charge the Subscriber the actual difference in cost between the aerial installation of the Drop and the underground installation of the Drop. This provision shall not apply if the Subscriber lives in an Authorized Area where underground utilities and facilities are required, in which case Company may only charge the Subscriber its normal installation charge. 7.19. Identification of Company Personnel. All service personnel of Company, including contractors anet subcontractors, whose normal duties involve contact with the general public, shall wear nn their clothing a clearly visible identification card bearing their name jr?,~ pll_;!t)(~(a~i!'~ ~.iiRipa('v 5f1a~~ ai i.OU~lt fU~ a~~ cv'f1tlflcatlUfl CafC~S at a~~ II(TlE',S .. ~~.. 5~°r~~icf~ vf~r<<.E~ ~~f (~;c~nopar~y ~h~;~ ~~.~i~ly itjentif~at>le t~~,, thy: }>>ulJlic ~3a ~,~. ~ ~ . ~., Vehicles used by any contractors or subcontractors of Company shall display the contractor's or subcontractor's name, marl<in~rs indicating that such contractor or subcontractor is working for Company, and the local telephone number of bath Company and the contractor or subcontractor. 7.20. Subscriber Information. Company shall not record or retain any information as to the programming actually watched by a Subscriber. Company shall destroy all Subscriber information of a personally identifiable nature after a reasonable period of time unless otherwise requested by the affected Subscriber. This Section 7.24 shall not prohibit Company from conducting system wide or individually addressed "sweeps" solely for the purpose of {i}verifying system integrity, {ii}checking for illegal taps or {iii} billing. 7.21. Converters. Company shall make available far rent by Subscribers all converter equipment necessary for Subscribers {such as those whose television sets are not "cable ready„} to receive all Gable Services offered by Company. ?.22. Negative Options. Gompany shall not engage in the practice of "negative option" marketing and shall not charge any Subscriber for any service that the Subscriber has not affirmatively requested. 8. REPORTS TO CITY. 8.1. Service-Related Reports. Except as set forth in Section 8.1.1, Gompany shall provide the following reports to the City monthly {by the 15th business day of the following month} and quarterly {by the 15th business day of the following quarter}. These reports shall be in forms currently used by Gompany or otherwise in form and substance reasonably acceptable to the City, showing on a consistent basis, fairly applied, Company's compliance with the customer service standards set forth in this Franchise. Number of Subscrbers; • Report of Monthly Report of Service Calls by Reason,. which shall include an explanation of the categories of reported reasons; Monthly Outage Summary by Franchise. Once Company has 2,000 Subscribers located in the Authorized Area, the City may require Company, upon written notice, to provide the following additional rt~,)Urt~ -40- ~Jr,_L ~~ 130279bv8 • System Statistics Report; • Mnnthl~i ~F?n~irra Call Availability Analyses and tn~tuttution Call Availability Analysis; • Monthly Customer Call Sample Report, showing the results of a random sampling of Complaints; and Monthly Call Center Performance Report. 8,1.1. Quarterly Reports. Until Company provides Cable Service to 2,C}00 Subscribers in the Authorized Area, the monthly reports required under Section 8.1 shall be submitted to the City on a quarterly basis. 8.2. Format of Reports. Company's service-related reports to the City shall show Company's performance for the respective time period, excluding periods that were not Normal C}perating Conditions {"Abnormal Operating Conditions"} and, if Company contends any Abnormal Operating Conditions occurred during the period in question, it shall describe the nature and extent of such Abnormal Operating Conditions and show Company's performance, both including and excluding the time periods Company contends such conditions were in effect. Within twenty {24} business days after the City's written request, Company will provide additional information and existing reports reasonably related to the measurement and evaluation of Company's compliance with the customer service requirements set forth in this Franchise. 8.3. Audits Pertaining to Service-Related Reports. The City, by itself or in combination with other municipalities with which Company has a franchise or other agreement to use public rights-of-way for the provision of Cable Services, reserves the right, upon thirty {30) calendar days prior written notice, to audit Company or any Affiliate to verify the accuracy of the service-related reports required under this Section $. Such audit shall take place no more than once per calendar year. In the event of any such audit, Company shall make available at a location in Tarrant County, Texas, that is convenient to the City all records of Company or the identified Affiliate reasonably necessary to conduct such audit. All such records shall be Confidential Information subject to Section 31 herein If the audit discloses performance that is three (3) percentage points worse than any of the standards of the referenced Sections (such as compliance 92°~0 of the time versus 95°io of the time), Company shall pay the City's documented costs in connection with the audit within thirty (30) calendar days of submission of an invoice, Otherwise, the City shall pay the costs of such audit.: -41- 8.4. Construction-Related Reports. Company shall provide the City with a written quarterly report that outlines Company's plans for construction of the System and for expansion of the System into areas of the City beyond the Initial Service Area and other areas of the City previously approved by the City Council for service by Company. This report shall be a public document and kept on file in the City Secretary°s Office for inspection by the public. $.5. Annual Financial Report. In consideration of the City's allowing Company to self-insure in accordance with Section 13 hereof and to carry a deductible of up to $5,064,000 under any insurance coverage carried in accordance with Section 13 hereof, as allowed under Section 13.5, Company shall provide the City with an annual financial report far review by the City's Risk Manager in order to ascertain that then-current self-insurance limits and insurance deductible allowances authorized under this Franchise are appropriate under the circumstances existing at that time. Such reports shall be provided to the City not later than April 1 of each year during the Term. 9. E.IC2UIDATED DAMAGES FOR VIOLATIONS OF CUSTOMER SERVICE STANDARDS. 9.1. Telephone Service. Company acknowledges and agrees that its failure to comply with the telephone service standards set forth in Sections 7.6.2, 7.6.3, and/or 7.6.4 of this Franchise will harm Subscribers and the City and that the amounts of actual damages will be difficult or impassible to ascertain. Therefore, for each quarter following the Activation Date, the City, sub}ect to the procedures set forth in Section 9.7 herein, may assess the following liquidated damages against Company for non-compliance with the customer service standards set forth in Sections 7.6.2, 7.6.3, and 7.6.4 {measured on a quarterly basis}. Company acknowledges and agrees that the liquidated damages set forth below are a reasonable approximation of actual damages and that this Section 9.1 is intended to provide compensation and is not a penalty. Subject to Section 9 3 of this Franchise, the damages for non-compliance with cane or more of the standards rn Sections 7 6 2, 7 6 3. andior 7 6 4 during a calendar quarter are as follows. • First quarter of non-compliance: 5t.t70 per Subscriber or 55,000.00, whichever is more. -42- • Second quarter of non-compliance within three {3} consecutive calendar quarters: X2.00 per Subscriber or X5,000.00, whichever is more. • Third quarter of non-compliance within six {fl} consecutive calendar quarters and each subsequent non-compliance: $3.00 per Subscriber or $5,000.00, whichever is more. 9,2. Installations, Service Calls and Service Interruptions. Company acknowledges and agrees that its failure to comply with the standards for installations, service calls and service interruptions set forth in Sections 5.6.3, 7.8.1, 7.8.2, 7.10.1, andlor 7.10.2 of this Franchise will harm Subscribers and the City and that the amounts of actual damages will be difficult or impassible to ascertain. Therefore, for each quarter following the Activation Date, the City, subject to the procedures set forth in Section 9.7 herein, may assess the following liquidated damages against Company for nan-compliance with the standards set forth in Sections 5.6.3, 7.8.1, 7.8.2, 7.10.1, and/or 7.10.2 {measured on a quarterly basis}. Company acknowledges and agrees that the liquidated damages set forth below are a reasonable approximation of actual damages and that this Section 9.2 is intended to provide compensation and is not a penalty. Subject to Section 9.3, the damages far non-compliance with one or more of the standards in Sections 5.6.3, 7.8.1, 7.8.2, 7.10.1, andlor 7.10.2 during a calendar quarter are as follows: First quarter of nan-compliance: $1.00 per Subscriber or $5,000.00, whichever is more. • Second quarter of non-compliance within three {3} consecutive calendar quarters: $2.00 per Subscriber or $S,OOfl.00, whichever is more. Third quarter of non-compliance within six {6} consecutive calendar quarters and each subsequent non-compliance: $3,00 per Subscriber or $5,000.00, whichever is more. 9.3. Effect of Extended Periods of Compliance. If Company complies with all the standards identified in Sections 9.1 and 9.2 for eight (8) consecutive calendar quarters, the damages for the first subsequent non-compliance with any and each of those standards will be $0.25 per Subscriber or $3,000, whichever is more. Thereafter, the damages provided in Sections 9.1 and 9.2 will again be applicable so that the next non-compliance ~wifh~n three (3; <3n~i ~>r six ~, ~~nsec:utive c~3lend<3r ~,uartE~rs. ~~s the c~~se m~3v be. -43- '3U<' v8 will be subject t© the damages set forth for such quarters in Sections 9.1 andlor 9.2, respectively. 9.4. Calculation. of Number of Subscribers. For purposes of calculating liquidated damages under Sec#ions 9.1 or 9.2, the number of Subscribers shall be that reflected on Company's report to the City pertaining to Subscriber numbers for the quarter in which liquidated damages are subject to assessment or, if Company fails to provide such report, as reasonably calculated by the City. 9.5. Failure to Submit Reports. Company acknowledges and agrees that its failure to submit quarterly or monthly reports {as applicable} to the City as required by Sections 8.1 and 8.2 will harm the City and its ability to serve its citizens who subscribe to Company's Cable Services, and that the amounts of actual damages will be difficult or impossible to ascertain. Therefore, for each quarter following the Activation Date, the City may assess liquidated damages against Company for Company's failure to submit quarterly or monthly reports (as applicable} as required by Sections 8.1 and 8.2 in the amount of $1.00 per Subscriber or $5,000.00, whichever is more; provided, however, no damages shall be assessed against Company if it submi#s such reports to the City within five (5} business days after receipt of written notice of such failure from the City. Company acknowledges and agrees that such liquidated damages are a reasonable approximation of actual damages and that this Section 9.5 is intended to provide compensation and is not a penalty. 9.6. No Waiver. An event of non-compliance will be taken into account in determining whether a later event of non-compliance is a second, third or subsequent event without regard to whether City has assessed liquidated damages or taken any other action with respect to the event of non-compliance. 9.7. Procedure for Assessment. Liquidated damages shall be assessed by the City Manager or his or her designee. Company may obtain a review of the assessment by the City Council by making a written request within ten (10) business days after receipt of notice ~n writing of the assessment and its bans. Company shall have an opportunity to be heard at a meeting of the City Council or by a person designated by the City Council as a hearing officer prior to the actual assessment of liquidated damages by the City Manager or his or her designee. The City Council may adopt additional procedures, including appointment of a City official or other person to act as a hearing officer. The City Council's decision shall be based upon the rF~~;orrj of ~~roceE~d~n~;~ .:or ;.,~t~~ ; '~y'hf~ he~~nn~~ ~~fficF>r or ~~ propos~~i for decision S~iF~~Tlitif;C~ Uy IhE' hE:~l'f'r,; ~-~(i !'~, ~44- !30<iS6v67 _ AS ' 302796v8 9,8. Payment and Classifrcation of ~iguidated Damages. t_iquidated damages shall be paid on or before the tenth {10th} business day following assessment. Company acknowledges and agrees that liquidated damages paid under this Franchise do not constitute Franchise Fees, do not reduce the amounts otherwise payable as Franchise Fees and will not be passed through to Subscribers in the Authorized Area. 10. TECHNICAL. STANDARDS. The following provisions shall apply to Company's implemen#ation of and compliance with the FCC Rules relating to cable television technical standards for signal quality, currently set forth at 47 C.F.R. §§ 76.601 and following, and subsequent amendments thereto {"FCC Technical Standards"}. '10.1. Testing by Company. Company shall provide written notification to the City at least thirty {30} business days in advance of testing for compliance with all FCC Technical Standards. The City may have a representative present to observe such tests and may designs#e one location to be tested. Within thirty {30} business days after receip# of the City's written request {but not more than twice a year}, Company shall provide the City with a report of testing for compliance with FCC Technical Standards. Such report to City shall state, in pertinent part, that the person doing the testing has reviewed the applicable FCC Technical Standards, and that such testing was done fairly and either shows full compliance with such rules and regulations or sets forth with specificity and in detail all areas of non- compliance, their ac#ual or likely scope and causes, and Company's professional recommendation of the best corrective measures to immediately and permanently correct the non-compliance. 10.2. Testing by City. The City at its expense {no more than twice per year, barring unusual circumstances}, upon thirty {30} calendar days written notice to Company, may test the System for compliance with the FCC Technical Standards. Company shall cooperate in such tests and provide access to the System. if the City determines that the System is not in material compliance with the FCC Technical Standards, it shall provide written notice to Company with a detailed. documented descnption of the bans for such determination (the "Technical Noncompliance Notice") Such Technical Noncompliance Notice also shall document the costs incurred by the City to conduct such tests. Company shall have ten (10) calendar days in which to dispute the claims in the Technical Noncompliance Notice by providing a Dispute Notice to the City. The Dispute Notice shall be accompanied by full documentation showing the basis on which Company is disputing the City~s claim If Company fails to provide the Dispute N=>t~~.~= witii,n s~~~:>",'f~n ~;.;, ;~~~n~~~', C,~r~,~~~~ny shell ~~~3; thE~ full ~3mount sh~~wn on -45- ,_ . , s ~ ~~,__Ns ~ .. the Technical Noncompliance Native to the City within thirty {30} calendar days following the City's subrnissiort to Company of the Technical Noncompliance Native invoice. All sums not paid when due shall bear interest at the rate of ten percent {90°/a} per annum or the maximum amount allowed by law, whichever is less, computed monthly. If Company provides the Dispute Notice to the City within the time period specified in this Section 10.2, the City and Company shall each designate an authorized representative to meet within thirty {30} calendar days following Company's submission of the Dispute Notice f©r the purpose of negotiating in good faith a resolution to such dispute. 10.3. Subscriber Complaints Reaardin~ Signal Gtuality. Company shat! establish and notify Subscribers of the following procedure for the resolution of Gomplaints from Subscribers about the quality of the television signal delivered to them: {i} all Complaints shall go initially to Company; {ii} all matters not resolved by Company shall, at Company's or the Subscriber's option, be referred to the City for the City to resolve; and {iii} all matters not resolved by the City may be referred to the FCC for the FGC to resolve. 11. RATES AND REGU<rATIL?N. 11.1. General Rights of the City. To the extent permitted under FCC Law, the Gity shall be empowered to regulate, by ordinance, Company's rates for any and all Gable Services {including related installations and equipment}. In such event, the Gity shall first prescribe by ordinance the procedure and standards to be followed and the extent and scope of such rate regulations, and all such matters shall be consistent with due process and shall conform to all FGG Laws. Company shall provide the City with written notice of its rates and charges for all Gable Services {including related installations and equipment} in compliance with any timing requirements prescribed in the FGG Laws. 11.2. Frequency of Rate Increases. Company will not increase or file any form or notification with the FCG related to an increase in Company's rates for basic cable service, equipment, service calls or other services over which the City has regulatory authority under Applicable Laws more than once in each calendar year 11.3. Rate Orders. Unless a final order of the FCC, affirmed on appeal if an appeal is taken, determines that a rate order of the City, as a franchise authority, is automatically stayed by the filing of an appeal by Company to the FCC, Company will ~~~r1~,;lt>r1~rnt E,~~cr~ r<3if> r~rrjf~r ~~~.inptE~rj t;~ thk~ C~tv unlr~ss <~n~± ~_~nt~l C~~rT~panv t~;>t~~ms <in ; ~r!1t,'( l1' itlE' r l1L lit <i C,Uurt ,_?f CUf~i~;f.'ttiflj ju(I~,~;i( tlOrl St~~yi(1(~ Ur c)Vt;r(Uil71y tht -~b- ~. X302%w~o effectiveness of the rate order. Company will reimburse the City for all reasonable attorneys' fees and other expenses incurred by the City as a r?s~~lt of Company's violation of this Section 11.3. 11.4. Notice of Certain Costs. On at least an annual basis and at any other time when requested by the Ci#y, Company shall identify to the City in writing the costs, which Company claims are external costs that Company potentially may pass through to Subscribers under applicable FCC taws. Company's notice to the City shall state the individual amounts of such costs and the approximate amount that Subscribers may be billed as a result and shall contain a calculation to justify such amount. Such written notice shall be provided within thirty {30) calendar days after the anniversary of the Effective Date and or within thirty {3Q} calendar days after Company receives a written request for such information from City, whichever is applicable. 12. LIABIt_ITY AND INDEMNIFICATION. 12.1. Disclaimer of Liability. THE CITY SHALL NOT AT ANY T/ME BE LIABLE FOR ANY INJURY OR DAMAGE OCCURRING TO ANY PERSC?N OR PROPERTY FROM ANY CAUSE WHATSOEVER THAT ARISES QUT OF THE CONSTRUCTION, MAINTENANCE, REPAIR, USE, OPERATION, CONDITION OR DISMANTLING OF THE SYSTEM BY COMPANY OR COMPANY'S PROVISION OF CABLE SERVICES. 12.2. Indemnification by Company. COMPANY, A7 COMPANY'S SOLE COST AND EXPENSE, SHALL INDEMNIFY AND HOLD HARMLESS THE CITY, ITS OFFICERS, BOARDS, COMMISSIONS, AGENTS, EMPLOYEES AND VOLUNTEERS ("CITY INDEMNITEES"~, FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, DAMAGES, PENALTIES, CLAIMS, LIENS, CASTS, CHARGES, LOSSES AND EXPENSES, WHETHER LEGAL OR EQUITABLE, WHICH MAYBE IMPOSED UPON, INCURRED BY OR ASSERTED AGAINST ANY CITY INDEMNITEES BY REASON OF ANY PERSONAL INJURY OR PROPERTY DAMAGE ARISING FROM OR RELATING TO ANY ACT OR OMISSION OF COMPANY, ITS PERSONNEL, EMPLOYEES, AGENTS, CONTRACTORS OR SUBCONTRACTORS, INCLUDING (I) THE CONSTRUCTION, INSTALLATION, OPERATION, MAINTENANCE OR CONDITION OF THE SYSTEM; (ll) THE TRANSMISSION OF ANY PROGRAMMING OVER THE SYSTEM; (Ill) ANY CLAIM OR LIEN ARISING OUT OF WORK, LABOR, MATERIALS OR SUPPLIES PROVIDED OR SUPPLIED TO COMPANY, ITS CONTRACTORS OR SUBCONTRACTORS; -47- .,, _. ao~,<,F~h~ ~.;~~L~AS 1302796v8 (IY) THE PR4VIS/QN QF CABLE SERVICES; ta-R ~~ CQMPANY'S FAILURE TC} CUMPLY WITN ANY APPLICABLE LAW. 12.3. Assumation of Risk. Company hereby undertakes and assumes, for and on behalf of Company, its officers, agents, contractors, subcontractors, agents and employees, all risk of dangerous conditions, if any, on or about any City-owned or -controlled property, including, but not limited to, the Public Rights-of--Way. In addition, Company hereby agrees to and shall indemnify and hold harmless any City Indemnitee against and from any claim asserted or liability imposed upon any City Indemnitee for any personal injury or property damage incurred or asserted by Company or any of its employees, agents, servants, contractors or subcontractors, and arising from the installation, operation, maintenance or condition of the System. '12.4. Defense of City Indemnitees. In the event any action, lawsuit or other proceeding is brought against any City Indemnitee by reason of any matter for which the City Indemnitees are indemnified under Sections 12.2 or 12.3, the City shall give Company prompt written notice of the making of any claim or commencement of any such action, lawsuit or other proceeding, and Company, at Company's sole cast and expense, shall resist and defend the same with legal counsel selected by Company and reasonably acceptable to the City and with reasonable participation by the City. The City shall at all times cooperate in all reasonable ways with, make relevant files and records of the City available for inspection and copying by, and make its employees available or otherwise render reasonable assistance to, Company in connection with the defense of such action, lawsuit or other proceeding. In such an event, Company shall not admit liability in any matter on behalf of any City Indemnitee without the advance written consent of the City. 13. INSURANCE. Company shall procure and maintain at all times, in full force and effect, a policy or policies of insurance to provide coverages as specified herein, naming the City as an additional insured and covering all public risks related to the use, occupancy, condition, maintenance, existence or location of the Public Rights-of- Way and the construction, installation, operation, maintenance or condition of the System Company shall have the nght to self insure for up to $1,000,000. The insurance requirements set forth ~n this Section 13 may be met by acceptable evidence of self-insurance backed by assets sufficient to provide the same levels of coverage, as evidenced in annual reports provided to the City in accordance with Section 8.5 hereof. -48- ~ 3o2~et~, . 13.1. Primary liability Insurance Goverage. • Gommereial General Liability: $1,000,000 per occurrence • Property Damage Liability: $1,000,000 per occurrence • Automobile Liability: $1,00{},000 per accident, including, but not limited to, vehicles used in conjunction Franchise • Worker's Compensation: As required by law all owned, hired or non-owned motor wi#h the rights granted under this 13.2. Excess Liability Insurance Umbrella. $10,000,000, including Primary Coverage, for each coverage listed in Section 13.1. 13.3. Revisions to Required Goverage. The City may at any time revise insurance coverage requirements and limits required by this Franchise based on a reasonable recommendation for such revision by the City's Risk Manager. Company agrees that within thirty {30} business days of receipt of written notice from the City, Company will implement all such revisions requested by the City. The policy or policies of insurance shall be endorsed to provide that no material changes in coverage, including, but not limited to, cancellation, termination, non-renewal or amendment, shall be made without thirty {30} business days' prior written notice to the City. 13.4. Underwriters and Certificates. Company shall procure and maintain its insurance with underwriters authorized to do business in the State of Texas and who are reasonably acceptable to the City in terms of solvency and financial strength. Within thirty (30) business days following adoption of this Franchise by the City Council, Company shall furnish the City with certificates of insurance signed by the respective companies or documentation of self-insurance as proof that it has obtained the types and amounts of insurance coverage required herein. In addition. Company shall, on demand, provide the pity with evidence that it has maintained such coverage in full force and effect. -49- ~, ~ 3CsZ; y~,v~s7 :;L'.HS 13079E>v8 13.5. Deductibles. Deductible limits on any line of insurance coverage required and provided herein shall not exceed $5,OQf1,000 in the annual aggregate unless the limit per occurrence, or per line of coverage, or aggregate is otherwise approved by the City. 13,6. No Limitation of Liability. The insurance requirements set forth in this Section 13 and any recovery by the City of any sum by reason of any insurance policy required under this Franchise shall in no way be construed or effected to limit or in any way affect Company's liability to the City or other Persons as provided by this Franchise or by Applicable Law. 14. TRAPISFERS, OWNERSHIP AND CONTROL. 14.1. Management of Gable Television System. Company shall personally manage the Cable Television System and the provision of Cable Services within the Authorized Area, Company shall not, directly or indirectly, contract for, subcontract or assign, in whole or in part, the management of the Cable Television System or the provision of Cable Services within the Authorized Area unless the City provides advance written consent (such consent not to be unreasonably withheld}. 14.2. Transfers. This Franchise and the Cable Television System shall not be sold, Transferred, assigned or otherwise encumbered without the prior written consent of the City {such consent not to be unreasonably withheld}. For purposes of this Franchise, in addition to the definition provided in Section 1, a "Transfer" shall specifically include (i} any change in limited partnership interests, non-managing limited liability company interests, or non voting stock representing thirty percent (30%} or more of the equity interests in the entity in question, and {ii} any option, right of conversion or similar right to acquire interests constituting control without substantial additional consideration, If Company seeks to obtain the consent of the City for any kind of Transfer, sale, assignment or other encumbrance, Company shall submit an application for such consent in the form requested by the City {provided such form ~s consistent with FCC Laws) and shall submit or cause to be submitted to the City all such documents and information that the City may reasonably need for its consideration of the application. Company shall pay on the City's behalf, or reimburse the City, for all costs reasonably incurred by the City due to any proposed sale, Transfer, assignment or other encumbrance.. -50- ~~.;_. 3i~ ~~ UAL - 130 ~~ 15. DEFAULTS. The occurrence at any time during the term of this Franchise of one or more of the following events shall constitute an "Event of Default" under this Franchise: 15.1. Failure to Pav Franchise Fees. An Event of Default shall occur if Company fails to pay any Franchise Fee on or before the respective due date {except as otherwise provided in Section 3.3}. 15.2. Failure to Commence Provision of Gable Services. An Event of Default shall occur if the Activation Date does not occur on or before May 1, 2fJ04. 15.3. Breach. An Event of Default shall occur if Company materially breaches or violates any of the terms, covenants, representations or warranties set forth in this Franchise or fails to perform any of its material obligations required by this Franchise {other than a failure to pay the Franchise Fee}. 15.4. Bankruptcy, Insolvency or Receivership. An Event of Default shall occur if Company {i} files a voluntary petition in bankruptcy; {ii} is adjudicated insolvent; {iii} files any petition or fails to contest any petition filed against it seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relie€ for itself under any laws relating to bankruptcy, insolvency or other relief for debtors; {iv} seeks, consents to or acquiesces in the appointment of any trustee, receiver, master, custodian or liquidator of Company, any of Company's property, franchises, or any revenues, issues, earnings or profits thereof; {v} makes an assignment for the benefit of creditors; or {vi} fails to pay Company's debts generally as they become due. -51- 1i1 L.~r.;~ ~ _jGl i ebVFi7 ~„)f~~L L./75 ~3t~27 ~E7V~ 15.5. Violations of Applicable Laws. An Event of Default shat! occur if Company violates any material existing or future Applicable Laws connected with, related to or otherwise in the performance of its obligations under this Franchise. 16. UNCURED DEFAULTS AND REMEDIES. 16,1. Notice of Default and Ctpportunity to Cure. If an Event of Default occurs under Section 15 hereof, the City shall provide Company with written notice and shall give Company the opportunity to cure such Event of Default. For an Event of Default which can be cured by the immediate payment of money to the City, Company shall have thirty {30} calendar days from the date it receives written notice from the City to cure such Event of Default. For any other Event of Default, Company shall have sixty {60} calendar days from the date it receives written notice from the City to cure such Event of Default. If the nature of the breach is such that it cannot reasonably be fully cured within the specified period due to circumstances not under Company's control, the period of time in which Company must cure the breach shall be extended in writing by the City (upon proof of such circumstances being presented to the City} for such additional time reasonably necessary to complete the cure, provided that {i} Company shall have promptly commenced to cure and {ii} Company is diligently pursuing its efforts to cure. If any Event of Default is riot cured within the time period specified or as otherwise set forth herein, such Event of Default shall, without further notice from the City, become a "Company Uncured Default" and the City immediately may exercise the remedies provided in Section 16.2. 16.2. Remedies for Company Uncured Defaults. Upon the occurrence of an Uncured Default, the City shall be entitled to exercise, at the same time or at different times, any of the following remedies, all of which shall be cumulative of and without limitation to any other rights or remedies the City may have: 16.2.1. Termination of Franchise. In compliance with the FCC Laws, upon the occurrence of an Uncured Default, the City may terminate this Franchise Upon such termination, Company shall forfeit all rights granted to it under this Franchise, and, except as to Company's unperformed obliga#ions and existing liabilities as of the date of termination, this Franchise shall automatically be deemed null and void and shall have no further force or effect. Company shall remain obligated to pay and the City shall retain the right to receive Franchise Fees and any other payments due up to the date of termination. In addition. the System shall be subject to removal ~r? ~jr;c~~ri;~~ru.E~ with t3n~{ ,~ursu<int to SE~ctiC~n f~ 1~ ~~f thGS ~ r~~r~chi~F~ ThE~ City s ~IC;h~ t~~ tr:rm~;~atf~ this F rari~l~~~ ~~~~ uinler this Section lt~~ ~' ' d~_~es not, and shall n~~t -52- 30~ ~~ _ w 1302 ' _~~ : ; be construed to, constitute any kind of limitation on the City's right to terminate this Franchise for other reasons as provided by and in accordance with this Franchise. 16.2.2. ~egai Action Against Company. Upon the occurrence of an Uncured default, the City may commence against Company an action for monetary damages or seek injunctive relief or specific performance of any of the provisions of this Franchise, which, as a matter of equity, are specifically enforceable. 17. RIGHTS AND RESERVATiCI-NS OF THE CITY. In addition to the rights reserved to the City under this Franchise, the City shall have the following rights and reservations: 17.1. System Extensians. To require that any extensions of the System and Cable Services are proper and adequate, are made in full compliance with this Franchise, and are operated and maintained at the highest practicable standards of efficiency; and 17.2. Standards of Service. To establish reasonable standards of Cable Service and product quality and to prevent unjust discrimination in Company's provision of Cable Services andlor rates for Cable Services; and 17.3. Continuous Service. To require continuous and uninterrupted service to the public in accordance with the terms and conditions of this Franchise throughout the entire Term; and 17.4. Use of Public-Rights-of-Way. To control and regulate the use of the City's Public Rights-of-Way, public places and other City-owned property and the spaces above and beneath them; and 17.5. Maintain City Equipment. To install and maintain, without charge, City equipment upon Company's poles and in Company's conduit upon the condition that such equipment does not actually and unreasonably interfere with Company's provision of Cable Services and is not used by the City to provide services in competition with Company: and -53- Li~i_i. -",S 130279t~v8 17,6, Inspection of Construction. Through representatives designated by the City, to inspect, upon at least ten {1Q} calendar days' prior written notice, all construction, Facility-installation or other work performed by Company in the City, and to make any inspections that the City reasonably finds necessary to ensure compliance with the terms of this Franchise and all Applicable Laws. 18, PRflVISIC?Id C?F INFC?RMATI4N, 18,1. Filings, Company shall provide copies of all documents that Company files wi#h or sends to the FCC and, upon the City's request, copies of records that Company is required to maintain under the FCC Rules. 18.2. Lawsuits. Company shall provide the City with copies of all pleadings in all lawsuits to which Company is a party and that pertain to the granting of this Franchise andlor the operation of the Cable Television System within thirty {30} calendar days of Company's receipt of same. ~: -Books and Records. From time to time, during normal business hours and on anon-disruptive basis, the City may review those portions of Company's books and records that are necessary to monitor compliance by Company with the terms and conditions of this Franchise. Such records shah include, but shall not be limited to, records that Company is required to maintain under FCC Rules and financial information underlying reports provided to the City in accordance with this Franchise. However, Company shall not be required to release {i} personally identifiable Subscriber information if prohibited by Applicable Law {such as § 631 of the Cable Act, codified at 47 U.S.C. ~ 551 } or {ii} Company's income tax returns or information directly underlying the preparation of any such returns. To the extent permitted by Applicable Laws, the City shall treat any information released to it by Company on a confidential basis in accordance with Section 31 hereof. fig. COMPANY AS INDEPENDENT CONTRACTOR. it is expressly understood and agreed that Company shall operate as an independent contractor as to all rights and privileges granted by this Franchise, and not as an agent, representative or employee of the City. Company shall have the exclusive right to control the details of its Cable Business and operation, in accordance with the terms and conditions of this Franchise, and shall be solely responsible for the acts and omissions of its officers, agents, servants. E~ni,~lovees contract~~rs and suhcontr~ctors C~~m~~any at:knowledges that thE~ ;;n~.i'i'~~~ f rf~sE~~>nilt?~3; >u~if~ri~~i 5C'a( n~~i ,i;.; ..~°t:n tr~. Cit, -54- .>a'~l ,~ , i 30< ~, Company, its officers, agents, employees, contractors and subcontractors. Company further agrees that nothing herein shall be Gonstr ueu as the creation of a partnership or joint enterprise between the City and Company. 20. NOTICES. No#ices required pursuant to the provisions of this Franchise shall be conclusively determined to have been delivered when {i} hand-delivered to the other Party, its agents, employees, servants or representatives, or {ii} received by the other Party by United States Mail, postage prepaid, return receipt requested, addressed as follows: To THE CITY: City of Fort Worth Cable Communications Qffice Attn: Director 401 W. Second St. Fort Worth, TX 76102 with a copy to: City of Fort Worth Department of l-aw Attn: Attorney for Telecommunications 1000 Throckmorton Fort Worth, TX 76102 To COMPANY: clo Strategic Technologies, Inc. Craig M. Johnson, President 10707 Clay Road Houston, TX 77041 Phone: {713} 877-2311 Fax: {713} 877-2387 with a copy to: Rick Bowen, Vice President Strategic Technologies, Inc 3902 Corporex Pk. Drive, Suite 60Q Tampa, FL 33619 Phone: (813) 626-2266 Fax: (813) 626-0346 -55- ~~ _ _ _~e~ ~:~~ ~~~ ~ ~~~ ~ ye~~ Strategic Technologies, Inc. -Legal Department 79(~ ~W 107' Avenue Suite # 230 Miami, Florida 33172 Phone: (305) 485-2070 Fax: {305} 229-6650 Robert J. Miller Darcy C. Blossfeld Gardere Wynne Sewell LLP 1601 Elm Street, Suite 3000 Dallas, Texas 75201-4761 Phone: (214} 999-3000 Fax: (214) 999-4667 21. NON_-DISCRIMINATION COVENANT. Company shall not discriminate against any person on the basis of race, solar, national origin, religion, handicap, sex, sexual orientation or familial status in the provision of Cable Services, in the receipt of benefits from Company's Cable Business, in any opportunities for employment with Company that Company may offer or in the construction or installation of Company's Cable Television System ar other Facilities. 22. NO WAIVER. The failure of the City to insist upon the performance of any term or provision of this Franchise or to exercise any rights that the City may have, either under this Franchise or under Applicable Laws, shall not constitute a waiver of the City's right to insist upon appropriate performance or to assert any such right on any future occasion. 23. GOVERNING LAW AND VENUE. This Franchise shall be construed pursuant to and in accordance with the laws of the United States of America and the State of Texas. if any action, whether real or asserted, at law or in equity, arise out of tf~e terms of this Franchise, Company's provision of Cable Services or Company's use of the Public Rights-of-Way, venue for such action shall lie exclusively in state courts located in Tarrant County, Texas. or the United States Distnct Court for the Northern District of Texas, Fort Worth Division. 24. CONFERENCES. At the written request of either the City or Company, the City and Company shall meet at reasonable i~mes and upon reasonable notice to discuss -56- ~ i r; ~ ~~ ~;,; v~ ~, ~,,,:~_r..~ ?302796v8 any aspect of this Franchise, Company's provision of Cable Services, Company's Systems or Cable Business or Company's use of Public Rights-of-may. 25. SEVERABILITY. If any provision of this Franchise is held to be invalid, illegal or unenforceable by a final order entered by a court of competent jurisdiction, the validity, legality and enforceability of the remaining provisions shall nat in any way be affected or impaired. For purposes of this Franchise, a court order shall be final only to the extent that all available legal rights and remedies pertaining to such order, including, without limitation, all available appeals, have been exhausted. In such an event, the City and Company agree that they shall amend or have amended this Franchise to comply with such final order entered by a court of competent jurisdiction. 26. FORGE MAJEURE. In the event Company's performance of any of the terms, conditions or obligations required by this Franchise is prevented by a cause or event that is not within Company's reasonable control, Company's non-performance shall be deemed excused far the period of such inability. Causes or events that are not within the Company's control shall include, but not be limited to, acts of God, strikes, sabotage, riots or civil disturbances, failure ar loss of utilities, explosions and natural disasters. 27. HEADINGS NOT GONTRO~t_ING. Headings and titles, other than those captions in Section 1, that are used in this Franchise are for reference purposes only and shall not be deemed a part of this Franchise. 28. ENTIRETY OF AGREEMENT. This Franchise, including the schedule of exhibits attached hereto and any documents incorporated herein by reference, contains the entire understanding and agreement between the City and Company as to the matters contained herein. Any prior or contemporaneous oral or written agreement is hereby declared null and void to the extent in conflict with the terms and conditions of this Agreement. This Franchise shall not be amended unless such amendment ~s in compliance with the FCC Laws, is agreed to in writing by both Parties and is approved by the City Council of the City. 29. GUARANTEE OF PERFORMANCE. Company hereby acknowledges that it carefully has read the terms and conditions of this Franchise and accepts and agrees to perform the duties and i'~' r15 SF?1 fl)rtrl 1~1 (fll~i ~ f<3(1C~1(SE.' ~ f?~1f1~3r ~lf',(E.'t)V gUi3r~3n',t'r-~, tflE? -5 7- performance of Company's duties and obligations under this Franchise, subject to the terrns hereof. 30. GOUNTERPARTS. This Franchise may be executed in counterpart originals, in which case the effect shall be the same as if both Parties had executed the same document. 31. GONFIDENTIALITY. Except as otherwise required by Applicable Law, the City shall, and shall cause each of its representatives, employees, officers, elected officials, attorneys, accountants, and agents to, hold in strict confidence all Confidential Information received from Company and shall not disclose, reveal, or communicate any such Confidential Information to any Person or entity except authorized employees or representatives of the City who need such information for the purposes set forth herein. The City shall, and shall cause each of its representatives, employees, officers, elected officials, attorneys, accountants, and agents to not, directly or indirectly, use Confidential Information in any manner or for any purpose not specifically contemplated by this Franchise Agreement or required by Applicable Law. Company: STRATEGIC CABLE TECHNOLOGIES, L.P. By: STRATEGIC TECHNOLOGIES, INC., its General Partner __ By: Name: Rick Bowen Title: Vice President Guarantor: LENNAR CORPORATION .~.~.:' ~. .~ E N~~il~e~ Cr~~ig (~~~ Johnson ~" ~ ~~ r~~E:~;~~~_;n! ~- pity of Fort Vllorth, Texas Mayor and Council Communication COUNCIL ACTION: Approved on 12/2/2003 -Ord. 15760 DATE: Tuesday, December 02, 2003 LOG NAME: 02ST! REFERENCE NO.: **G-14't66 SUBJECT: Adopt Ordinance Granting a Franchise to Strategic Cable Technologies, L.P. for Use of Certain Public Rights-of-Way for the Purpose of Constructing, Maintaining and Operating a Cable Television System and Related Franchise Agreement RECOMMENDATION: It is recommended that the City Council adapt the attached ordinance granting a franchise to Strategic Cable Technologies, L. P. for use of certain public rights-of-way for the purpose of maintaining and operating a cable television system in the City of Fort Worth. DISCUSSION: Strategic Cable Technologies, L.P. {STI}, a cable company awned by homebuilder Lennar Corporation, has applied to the City of Fort Worth {City) for a cable franchise to serve the Senders Ranch area of the City. After extensive negotiations with the City, City staff recommends adoption of the attached ordinance that grants STI a cable franchise and governs the manner in which STI will operate in the City. The franchise will be for a period of 24 years, expiring December 31, 2023, and allows STI to operate in a limited area of the City and to expand only in a manner results in additional service to a geographically coherent area of the City instead of to various pockets of the City. STI will pay the City a quarterly franchise fee equal to 5°l0 of its gross revenue derived from the portion of its cable system that is located in the City. STI will also construct an institutional network for the City that will enable the City to expand its communications system to future sites in this now relatively undeveloped area. STI will have materially the same customer service requirements as Charter does under its cable franchise and will be subject to the assessment by the City of liquidated damages, calculated in the same manner as with Charter, for violation of those customer service requirements. STI will also set aside five {5) channels for local programming and will collect a subscriber fee for local cable programming. Peformance under the franchise will be guaranteed by STI's parent company, Lennar CC7r~or~tiorl. FISCAL INFORMATIONICERTIFICATION: T~lr r I~c3'~,.., ~I(C_}Jf .,t-'r~lfl<_?S tf.a: {t11S c`l~if.l' lNll i a _ ~llif _ ;lily ~„-`r~~r?l:~l~~ E_ .:f ~I;J ~Ul:._ `d ~ }11a} I`l t c: L.: t v ~~~I~!,;3yZ~ ),ti'il i)~ rE'S~OflSih~ {Of ihC= COII2CtiC`n O{ t'c3f~Cf1.SC f~GS ii!~;~tC {JTI S C~t)c~ {'dnCf1 Se ~_~)'~~uu~1c: U~SII Pti~~~ 1 oft TfZ Gr~nrIll-C~©_'c~u~W'~i3i~Y~