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HomeMy WebLinkAboutOrdinance 12445t ~. ORDINANCE NO. ~~~ AN ORDINANCE AMENDING ORDINANCE NO. 10680, GRANTING CONSENT TO THE ASSIGNMENT AND TRANSFER OF A CABLE TELEVISION SYSTEM AND LIMITED FRANCHISE FROM TELECOM SATELLITE SYSTEMS CORPORATION TO TVMAX TELECOMMUNICATIONS, INC.; APPROVING AN AGREEMENT OF ACCEPTANCE OF TERMS AND CONDITIONS TO TRANSFER OF CABLE TELEVISION SYSTEM AND FRANCHISE BETWEEN THE CITY OF FORT WORTH AND TVMAX TELECOMMUNICATIONS, INC.; PROVIDING THAT THIS ORDINANCE IS CUMULATIVE; PROVIDING A SEVERABILITY CLAUSE; PROVIDING FOR PUBLICATION; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Fort Worth (the "City") previously granted a limited franchise for the operation of a cable television system ("Franchise") to Telecom Satellite Systems Corporation ("Telecom") under Ordinance No. 10680 and Telecom accepted the rights and obligations of such Franchise under City Secretary Contract No. 18365 ("Franchise Agreement"); and WHEREAS, on November 1, 1995, Telecom as seller and TVMAX Telecommunications, Inc. ("TVMAX")as buyer entered into an Asset Purchase Agreement pursuant to which Telecom agreed to assign and transfer the Franchise and its cable television system in the City to TVMAX; and WHEREAS, Telecom and TVMAX have requested the City to consent to an assignment and transfer of the Franchise from Telecom to TVMAX pursuant to ~ 17 of Ordinance No. 10680 and § 17.B(1) of the Franchise Agreement; and WHEREAS, at the City's request, Telecom and TVMAX have submitted to the City information and documents relating to the Asset Purchase Agreement between Telecom and TVMAX and the effect such transaction will have on the provision of cable television service within the City; and WHEREAS, the City is relying upon the information and documents submitted by Telecom and TVMAX in acting upon the request by such parties to assign and transfer the Franchise to TVMAX; and WHEREAS, the City, intends to consent to the assignment and transfer, subject to TVMAX's acceptance of the terms and conditions set forth herein, having determined that such consent is in the best interest of and consistent with the public necessity and convenience of the City; NOW, THEREFORE „ BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS: SECTION 1. The City hereby consents to the transfer and assignment of the Franchise and the cable television system in the City from Telecom to TVMAX, subject to the following: A. Execution by TVMAX of an Acceptance Agreement in the form attached hereto and incorporated herein by reference for all purposes as Exhibit "A"; and B. Execution by OpTel, Inc. of an Acceptance Agreement in the form attached hereto and incorporated herein by reference for all purposes as Exhibit "A" under which Optel.unconditionally guarantees TVMAX's performance of the conditions and obligations of the Franchise and the Acceptance Agreement. SECTION 2. To the extent that this ordinance or the attached Acceptance Agreement modifies any of the terms of Ordinance No. 10680 or the Franchise Agreement, such Ordinance and Franchise Agreement are hereby amended. Except as hereby amended, the provisions of Ordinance No. 10680 and the Franchise Agreement shall remain unchanged and in full force and effect. SECTION 3. If any provision of this ordinance shall be held by a court of competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired. SECTION 4. The City Secretary of the City of Fort Worth is hereby directed to publish this ordinance in its entirety once a week for four (4) consecutive weeks within a period of thirty (30) days following its passage in the official newspaper of the City, as required by Section 2 of Chapter XXV of the City Charter of the City of Fort Worth, Texas . TVMAX shall be responsible for the cost of such publication. SECTION 5. This ordinance shall be in full force and effect from and after its passage, publication and written acceptance by TVMAX and Optel, Inc. as specified herein; provided, however, that this 2 ordinance shall expire on July 31, 1996 and shall be of no further force and effect if the transactions described in the Asset Purchase Agreement between Telecom and TVMAX have not closed by that date; and it is so ordained. APPROVED AS TO FORM AND LEGALITY: Assistant Cit Attorney Date: 3~/,~' y,~, ADOPTED • ~ / °"~' ' ~~' EFFECTIVE : ~'- ~ 1 - ~ l0 3 EXHIBIT "A" AGREEMENT OF ACCEPTANCE OF TERMS AND CONDITIONS TO~ TRANSFER OF CABLE TELEVISION SYSTEM AND FRANCHISE This AGREEMENT OF ACCEPTANCE OF TERMS AND CONDITIONS TO TRANSFER OF CABLE TELEVISION SYSTEM AND FRANCHISE ("Acceptance Agreement"j is made and entered into by and between the CITY OF FORT WORTH, TEXAS (the "City"), a home rule municipal corporation situated in Tarrant, Denton and Johnson Counties, Texas acting by and through its duly authorized Assistant City Manager, and TVMAX TELECOMMUNICATIONS, INC. ("TVMAX"), a Delaware corporation acting by and through Michael E. Katzenstein, its duly authorized Vice President and General Counsel. OpTel, Inc. ("OpTel"), a Delaware corporation, joins this Acceptance Agreement for the purpose of guaranteeing TVMAX's performance under this Acceptance Agreement, Ordinance No. 10680, as amended, and City Secretary Contract No. 18365, as amended. WHEREAS, Telecom Satellite Systems Corporation ("Telecom"), a New Jersey corporation, possesses a limited franchise to operate and maintain a cable television system in the City ("Franchise") pursuant to City of Fort Worth Ordinance No. 10680 (the "Ordinance") and City Secretary Contract No. 18365 (the "Franchise Agreement"); and WHEREAS, the Ordinance and the Franchise Agreement provide that Telecom may 'transfer its rights and obligations under the Ordinance and the Franchise Agreement to a third party upon receipt of an application for and upon the consent and approval by the City of a limited franchise to such third party to operate a cable television system in the City; and WHEREAS, Telecom wishes to transfer its rights and obligations under the Ordinance and the Franchise Agreement to TVMAX and TVMAX wishes to assume Telecom's Franchise and the rights and obligations associated with it; and WHEREAS, TVMAX has filed a completed application for a limited franchise to operate a cable television system in the City; NOW, THEREFORE, in consideration of the benefits, promises and mutual covenants contained herein, and for other good and valuable consideration, the City and TVMAX agree as follows: 1. BINDING NATURE OF AGREEMENT. The promises, covenants and conditions contained herein inure to the benefit of the City and are binding on TVMAX. EXHIBIT "A" 2. SUBORDINATION. TVMAX acknowledges that the transactions described in the Asset Purchase Agreement dated November 1, 1995, between TVMAX as Buyer and Telecom and Telecom Master, L.P., a New Jersey limited partnership, as Seller, are expressly subordinate to and will not affect the binding nature of the Ordinance or the Franchise Agreement and the obligations provided therein, and that the consent of the City to transfer the Franchise as a result of such Asset Purchase Agreement does not constitute a waiver or release of any rights of the City. TVMAX assumes and agrees to perform all of the obligations set forth in the Ordinance and the Franchise Agreement, both of which are attached hereto as Exhibits "A" and "B" respectively and incorporated herein for all purposes. 3. RELIANCE UPON REPRESENTATIONS. TVMAX acknowledges that the City has consented to the transfer of the Franchise in reliance upon the representations, documents and information provided by TVMAX and Telecom, all of which are incorporated herein by reference. 4. CUSTOMER SERVICE. A. TVMAX acknowledges that under applicable law the City unilaterally may establish and enforce reasonable customer service regulations that exceed or are not addressed by the standards established by the Federal Communications Commission ("FCC'") or the standards currently established by the Ordinance and the Franchise Agreement. B. TVMAX will provide at a minimum the same quality of customer service that Telecom has provided in the past, but in all events no less than the quality of service required by the Ordinance and the Franchise Agreement, any other applicable City ordinances and all applicable FCC regulations. C. In the event a cable subscriber registers a complaint with the City, the City may contact TVMAX's customer service manager. TVMAX will at all times provide and keep current and on file with the City's Cable Communications Office the name of TVMAX's customer service manager and his or her mailing address and daytime telephone number. TVMAX agrees that it will cooperate with the City and keep the City informed as to any complaint referred to TVMAX by the City. Tn addition, TVMAX agrees to notify the City immediately of any changes in key executives or customer service managers. D. TVMAX agrees to provide the City's Cable Communications Office with no less than thirty-five (35) days' prior written 2 EXHIBIT "A" notice of TVMAX's intent to change or revise its service in the City, including, but not limited to, changes in programming or channel alignment. 5. PRIOR DEFAULTS. A. TVMAX agrees that it will not contend, directly or indirectly, that any defaults or failures to comply with the Ordinance or the Franchise Agreement by Telecom prior to the City's consent to the transfer and assignment of the Franchise, are waived, including, but not limited to, the following: (1) The ability of the City to obtain redress for prior defaults, such as, for example, recovery of any underpayment of franchise fees. (2) The ability of the City to enforce in the future any portion or portions of the Ordinance or the Franchise Agreement that may not have been enforced in the past. B. Notwithstanding the provisions of Section 5.A hereof, the City agrees that it will not ( i ) exercise its right to declare a forfeiture of the Franchise pursuant to Section i8.A(4) of the Franchise Agreement in the event that Telecom is found by a court of competent jurisdiction to have practiced any fraud or deceit upon the City; (ii) impose on TVMA,X a financial penalty pursuant to Section 18.B(1) of the Franchise Agreement for any contract violation by Telecom; or (iii) suspend TVMAX's franchise rights pursuant to Section 18.B(2) for any violation by Telecom which TVMAX has initiated reasonable efforts to correct or remedy as provided in Section 18.D of the Franchise Agreement. C. Notwithstanding the provisions of Section 5.A hereof, and Section 3.B of the Franchise Agreement, the City agrees that, in its discretion, it will exercise no later than within nine (9} months following the date of execution of this Agreement (or forfeit ) its right to review and audit pursuant to Section 3.B of the Franchise Agreement Telecom's income records with respect to Telecom's operations prior to the date hereof. 6. VALIDITY OF FRANCHISE. TVMAX accepts and agrees to be bound by the terms and conditions of the City's Charter, the Ordinance, the Franchise Agreement and all other ordinances applicable to TVMAX's operations after the City's consent to the transfer and assignment of the Franchise. TVMAX does not contend that any provision of either the 3 EXHIBIT "A" Ordinance or the Franchise Agreement is unlawful or unenforceable, nor does it contend that any other ordinance or provision of the City's Charter is unlawful or unenforceable. The City acknowledges that the provisions of both the Ordinance and the Franchise Agreement are in full force and effect. 7. FRANCHISE REQUIREMENTS. A. TVMAX will not allow any Telecommunications Entity, as defined herein, other than TVMAX, to use or lease its facilities in the City subject to this Agreement or capacity thereon; provided, however, that TVMAX may allow an affiliate entity to use or lease such facilities provided that the City receives written notice not less than thirty (30) days in advance of such an arrangement. B. As of the execution date of this Acceptance Agreement, TVMAX specifically covenants and represents to the City that it does not have any existing agreements with any Telecommunications Entity regarding in any way the Franchise or facilities subject to this Agreement. TVMAX further covenants and represents to the City that it has exercised due diligence to ensure that Telecom does not have any such agreements with any Telecommunications Entity and that, to the best of its knowledge, Telecom does not have any existing agreements with any Telecommunications Entity other than TVMAX regarding i:n any way the Franchise or facilities subject to this Agreement. For purposes of this Acceptance Agreement, "Telecommunications Entity" shall mean any entity subject to the jurisdiction of or regulated by the FCC or the Texas Public Utility Commission, or their successors, including, but not limited to, telephone, alternative access and cable companies. TVMAX agrees to provide the City with any and all documents relating to the foregoing as the City may reasonably request, including, but not limited to, copies of the agreements themselves. C. TVMAX acknowledges that the Ordinance and the Franchise Agreement do not allow for the provision of Telecommunications Services, as defined herein, and that TVMA.X is not entitled to provide such services within the City or to make its wires available to others for that purpose until and unless it first applies for and is granted a franchise for such services from the City. For purposes of this Acceptance Agreement, "Telecommunications Services" shall mean conventional telephone service, including, but not limited to, switched local exchange service and non-switched services, such as alternative access service which connects user locations and connects users to long distance companies. 4 EXHIBIT "A" 8. TRANSACTION TRANSPARENT TO RATES. TVMAX acknowledges that the transfer of the Franchise, the consent process, the City's action in granting its consent thereof and this Acceptance Agreement do not provide any basis for an increase in the amounts paid by subscribers to services provided under the Franchise through cost pass-through as so-called "external costs," as new franchise requirements or in any other manner. 9. GOVERNMENTAL POWERS. It is understood and agreed that by execution of this Acceptance Agreement, the City does not waive or surrender any of its governmental powers. 10. NO WAIVER. The failure of the City to insist upon the performance of any provision of the Ordinance, the Contract or this Acceptance Agreement, or to exercise any right granted thereby, 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. 11. VENUE. Should any action, whether real or asserted, at law or in equity, arise out of the terms of this Acceptance .Agreement or the ordinance under which the City has consented to the transfer and assignment of the Franchise to TVMAX, venue for such action shall lie exclusively in Tarrant County, Texas or in the United States District Court for the Northern District of Texas, Fort Worth Division. This Acceptance Agreement, as well as the Ordinance and the Contract, shall be construed in accordance with the laws of the State of Texas. 12. SEVERABILITY. If any provision of this Acceptance Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired. 13. ENTIRETY OF AGREEMENT. This written instrument, including any documents incorporated herein by reference, contains the entire understanding and 5 EXHIBIT "A" agreement between the City and TVMAX, its assigns and successors in interest, 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 any provisions of this Acceptance Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Acceptance Agreement in multiples to become effective upon the filing with and assignment of a contract number by the City Secretary's Office of the City of Fort Worth, Texas this day of 1996. CITY OF FORT WORTH: By: Assistant City Manager ATTEST: By: City Secretary APPROVED AS TO FORM AND LEGALITY: Assistant City Attorney Date: TVMAX TELECOMMUNICATIONS, INC. By: Its: ATTEST: By: OpTel, Tnc. hereby unconditionally guarantees performance of the obligations of TVMAX under this Acceptance Agreement, the Ordinance, as amended, and the Franchise Agreement, as amended. OPTEL, INC.: ATTEST: By: By: Its: 6 City of Fort Worth, Texas Mayor and Council Communication DATE REFERENCE NUMBER LOG NAME PAGE 03/14/96 ~~f _~ ~Z~~ 12ORD1 1 of 2 SUBJECT ORDINANCE AMENDING ORDINANCE NO 10680 BY CONSENTING TO TRANSFER OF CABLE TELEVISION LIMITED FRANCHISE FROM TELECOM SATELLITE SYSTEMS CORPORATION TO TVMAX TELECOMMUNICATIONS, INC AND AGREEMENT OF ACCEPTANCE BETWEEN CITY AND TVMAX TELECOMMUNICATIONS, INC GOVERNING SUCH TRANSFER RECOMMENDATION It is recommended that the City Council 1 Adopt the attached ordinance amending Ordinance No 10680 to provide for the assignment and transfer of a cable television system and limited franchise from Telecom Satellite Systems Corporation ("Telecom") to TVMAX Telecommunications, Inc ("TVMAX"), and 2 Authorize the City Manager to execute an Acceptance Agreement between the City and TVMAX conditioning the City's consent and governing the respective rights of the parties regarding the transfer DISCUSSION On September 25, 1990 the City Council adopted Ordinance No 10680 (the "Ordinance"), granting Telecom a limited franchise to operate a cable television system in the City of Fort Worth until March 15, 2001 Pursuant to the Ordinance, the City and Telecom entered into City Secretary Contract No 20060 (the "Contract"), which fully incorporated and effectuated the Ordinance On November 1, 1995 Telecom and TVMAX executed an Asset Purchase Agreement under which TVMAX acquired all of Telecom's assets in the State of Texas Telecom is now requesting the City to consent to a transfer of its limited franchise to TVMAX based upon Section 17 of the Ordinance and the Contract, which allows for such a transfer City staff and TVMAX have negotiated an Acceptance Agreement that establishes certain terms and conditions for the transfer from Telecom to TVMAX Under this Agreement, TVMAX has agreed, among other things, to provide certain customer service levels, to honor any defaults that Telecom may have committed, including payment of past due franchise fees,~and to not pass on to subscribers any of its costs arising either from the transfer or under the Asset Purchase Agreement Furthermore, TVMAX's parent company, Optel, Inc , has agreed to guarantee TVMAX's performance under the Ordinance, the Contract, the attached ordinance and the Acceptance Agreement Printed on Recyded Paper City of Fort Worth, Texas Mayor and Council Communication DATE REFERENCE NUMBER LOG NAME PAGE 03/14/96 ~,~ 120RD1 2 of 2 SUBJECT ORDINANCE AMENDING ORDINANCE NO 10680 BY CONSENTING TO TRANSFER OF CABLE TELEVISION LIMITED FRANCHISE FROM TELECOM SATELLITE SYSTEMS CORPORATION TO TVMAX TELECOMMUNICATIONS, INC AND AGREEMENT OF ACCEPTANCE BETWEEN CITY AND TVMAX TELECOMMUNICATIONS, INC GOVERNING SUCH TRANSFER The attached ordinance formally gives the City's consent to the transfer and assignment of Telecom's franchise and cable television system to TVMAX The City's consent is subject to the execution by TVMAX and Optel, Inc of the Acceptance Agreement The ordinance further provides that if Telecom and TVMAX have not closed on the Asset Purchase Agreement by July 31, 1996, the consent expires FISCAL INFORMATION/CERTIFICATION The Director of Fiscal Services certifies that no expenditure of City funds is required for this action CB a Submitted for City Manager's FUND ACCOUNT CENTER AMOUNT CITY SECRETARY Office by: (to) ~PPRO~ jC® CC Y CITY Cor u NCIL Charles Boswell 8511 Originating Department Head: ~Ap ''~` 14 ~9~~ Wade Adkins 7623 (from) /~1~_ ~ _ o ~~~ ' City $ecrttary of fire For Additional Information city Al ~®at VVOrth,'texaa Contact: Pete Vaky 7601 Printed on Recyded Paper /~i/~2~ /~,~~JC~--