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Ordinance 2005-05 ORDINANCE NO. 2005-05 AN ORDINANCE OF THE CITY OF WYLIE, TEXAS GRANTING A CABLE FRANCHISE GRANTED TO GTE SOUHWEST, INC. D/B/A VERIZON SOUTHWEST SETTING FORTH THE TERMS AND CONDITIONS TO CONSTRUCT, OPERATE, AND MAINTAIN A CABLE SYSTEM IN THE CITY OF WYLIE; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City Council has conducted a public hearing in regards to the adoption of this Ordinance; and WHEREAS, the City Council of the City of Wylie has investigated and determined that it will be advantageous, beneficial and in the best interest of the citizens of Wylie to provide free competition and to provide citizens a choice of cable service providers; and WHEREAS, the City Council desires to grant, and GTE Southwest, Inc d/b/a Verizon Southwest ("Verizon") desires to accept the Cable Franchise Agreement adopted by this Ordinance; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WYLIE, TEXAS: SECTION 1: Findings Incorporated. The findings set forth above are incorporated into the body of this Ordinance as if fully set forth herein. SECTION 2: Franchise Granted. A cable franchise is hereby granted to Verizon subject to, and in accordance with, all of the terms and conditions set forth in the Cable Franchise Agreement attached hereto as Exhibit 1 and incorporated as if fully set forth herein for all purposes. SECTION 3: Effective Date. This Ordinance shall become effective on the Effective Date, as defined in Exhibit 1, which shall be a date after the adoption and publication of this Ordinance as required by the City Charter and by law. Ordinance No. 2005-05 Verizon Cable Franchise DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF WYLIE, TEXAS on this 25th day of January, 2005. ATTESTED TO AND CORRECTLY RECORDED BY: ~L~~ CAROLE EH ICH City Secretary \ \ \ \ \" "F'" 111I1 ...,\\\_1 0 ~1I'II// " ^'-, ~.fQo..... r /,. .:...' 1""......., .._oJ III .... < ~ ~':"- ~...,~),/ "0 ..~~ .: ~"'~,;~'- ~ .... \ .. . ~ ;: . !,..",\ L ~ : = l:{" : = ; t'~"_.. ~~...fj :::: ~ ... $ .~;,."; .~;,,./'~'~'~~<l9."$e..~~ ,,$" /~', ',,';:- Tt..1-' "", '1'1 '-, I \\\ , i/IlH!\\\~\\ Date ofoublication in The Wylie News- February 2. 2005 Ordinance No. 2005-05 Verizon Cable Franchise 2 ~' . ver'70fl 6665 N. Mac Arthur Blvd. HQK02BI8 Irving, TX 75039 " February 14,2006 City of Wylie Mark Roath City Manager 2000 Highway 78 North Wylie, TX 75098 RE C""'.,,",,(, .-.> ~ ~;.: ~ \/ FEB 1 7 2006 OFFICE OF Tf-:E CiTY //L4W,Gi::H Re: Notice ofBegimling Service Date Dear Mr. Roath, Pursuant to Section 2.3 "Term" ofVerizon's Franchise Agreement with the City of Wylie, TX, we hereby notify the City of Wylie that the "Beginning Service Date" of the Agreement was January 5, 2006. If you should have any questions, please contact me at 972-465-4442. Sincerely, ?f(lek{& j1 ,--y t)lauva~ Michelle Lawson Franchise Service Manager - West Region ~ ver'7ofl 6665 N. Mac Arthur Blvd. HQK02BI8 Irving, TX 75039 February 23,2006 City of Wylie 2000 Highway 78 North Wylie, Texas 75098 Attention: City Manager VIA CERTIFIED MAIL Subject: Notice Pursuant to Section 14.5 of the Cable Franchise Agreement between Verizon Southwest, Inc. and the City of Wylie, Texas Dear Mr. Roath: Pursuant to Section 14.5 of the Agreement, the City is required to send copies of notices to Randal Milch. Effective immediately, such copies of notices should be instead sent to: Jack White Senior VP and General Counse1- Verizon Telecom One Verizon Way Room VC243E010 Basking Ridge, NJ 07920-1097 Please continue to mail original notices to: Steve Banta Verizon - Group President, NW and SW 600 Hidden Ridge HQE04GO Irving, TX 75038 If you have any questions, please do not hesitate to contact me at 972-465-4442. Sincerely, ~ 1t1L;;~~m Franchise Service Manager - West Region Cable Franchise A2reement by and between City of Wylie, Texas and GTE Southwest, Inc. d/b/a Verizon Southwest Dated: January 25. 2005 TABLE OF CONTENTS ARTICLE PAGE 1. DEFINITIONS................................................................................................................... 4 2. GRANT OF AUTHORITY; LIMITS AND RESERVATIONS ....................................... 9 3. PROVISION OF CABLE SERVICE .............................................................................. 11 4. S YSTEM OPERATION.................................. ......................................................... ....... 13 5. CABLE SySTEM............................................................................................................ 13 6. EG S ER VI C E S ................................................................................................................ 14 7. FRANCHISE FEES.. ................... .............. ............. ...... ...... .................. ........... ......... ....... 15 8. CUSTOMER SERVICE.................................................................................................. 16 9 . REPORTS AND RECORDS....................................... .................................................... 16 10. INSURAN CE AND INDEMNIFI CA TI ON.......... .......................................................... 17 11. TRANSFER OF FRANCHISE........................................................................................ 20 12 . RENEWAL OF FltA.NCHISE............................................................................... .......... 20 13. ENFORCEMENT AND TERMINATION OF FRANCHISE ........................................ 20 14. MISCELLANEOUS PROVISIONS ..... ............................................ ...............................22 15 PU C W..t\IVER................................................................................................................. 25 EXHIBITS Exhibit A: Initial Service Area, Extended Service Area and Additional Service Areas Exhibit B: Municipal Buildings to be Provided Free Cable Service Exhibit C: EG Channels Exhibit D: Customer Service Standards Exhibit E: Franchise Fee SchedulelReport 2 THIS CABLE FRANCHISE AGREEMENT (the "Franchise" or "Agreement") is entered into by and between the City of Wylie, a duly organized city under the applicable laws of the State of Texas (the Local Franchising Authority or "LF A") and GTE Southwest, Inc. d/b/a V erizon Southwest, ("Verizon Southwest") a corporation duly organized under the applicable laws of the State of Texas (the "Franchisee"). WHEREAS, LF A wishes to grant Franchisee a nonexclusive franchise to construct, install, maintain, extend and operate a Cable System in the Franchise Area as designated in this Franchise; and WHEREAS, LF A is a "franchising authority" and, following the installation of the FTTP Network (defined below), Franchisee will become a "cable operator" in accordance with Title VI ofthe Communications Act (see 47 D.S.C. S 522(10) and S 522(5)) and is authorized to grant one or more nonexclusive cable franchises; and WHEREAS, Franchisee is in the process of installing a Fiber to the Premise Network ("FTTP Network" as further defined below) in the Franchise Area for the transmission of Telecommunication Services pursuant to authority granted by the State of Texas under Chapter 283 of the Texas Local Government Code and Information Services pursuant to federal law; and WHEREAS, the FTTP Network will occupy the Public Rights-of-Way within LFA, and Franchisee desires to use portions of the FTTP Network once installed to provide Cable Services (as hereinafter defined), for which a franchise is required pursuant to 47 D.S.C. S 541(b)(1), in the Franchise Area; and WHER BAS, LF A has identified the future cable-related needs and interests of LF A and its citizens and has determined that Franchisee's plans for its Cable System are adequate, in a full public proceeding affording due process to all parties; and WHEREAS, LFA has found Franchisee to provide assurances as set forth in 47 D.S.C. s541(a) to operate the Cable System; and WHEREAS, LF A has determined that the grant of a nonexclusive franchise to Franchisee is consistent with the public interest; and WHEREAS, LF A and Franchisee have reached agreement on the terms and conditions set forth herein and the parties have agreed to be bound by those terms and conditions. NOW, THEREFORE, in consideration of LFA's grant of a franchise to Franchisee, Franchisee's promise to provide Cable Service to residents of the Franchise/Service Area of LF A pursuant to the terms and conditions set forth herein, the promises and undertakings herein, and other good and valuable consideration, the receipt and the adequacy of which are hereby acknowledged, THE SIGNATORIES DO HEREBY AGREE AS FOLLOWS: 3 1. DEFINITIONS Except as otherwise provided herein, the definitions and word usages set forth herein shall apply in this Agreement. In addition, the following definitions shall apply: 1.1. Access Channel: A video Channel, which Franchisee shall make available to LF A without charge for public, educational, or governmental use for the transmission of video programming as directed by LF A. 1.2. Affiliate: Any Person who, directly or indirectly, owns or controls, is owned or controlled by, or is under common ownership or control with, Franchisee. 1.3. Basic Service: Any service tier, which includes the retransmISSIOn of television broadcast signals within the Dallas-Fort Worth Metroplex as well as the EG Channels required by this Franchise. 1.4. Cable Service or Cable Services: Shall be defined herein as it is defined under Section 602 of the Communications Act, 47 D.S.C. S 522(6). 1.5. Cable System or System: Shall be defined herein as it is defined under Section 602 of the Communications Act, 47 D.S.C. S 522(7), which shall be controlling, meaning Franchisee's facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide Cable Service which includes Video Programming and which is provided to multiple Subscribers within the Service Area. The Cable System shall consist solely of the optical spectrum wavelength(s), bandwidth or future technolC\gical capacity used for the transmission of Cable Services directly to Subscribers within the Franchise/Service Area. 1.6. Channel: Shall be defined herein as it is defined under Section 602 of the Communications Act, 47 D.S.C. S 522(4). 1. 7. Communications Act: The Communications Act of 1934, as amended. 1.8. Control: The ability to exercise de facto or de jure control over day-to-day policies and operations or the management of corporate affairs. 1.9.Educational Access Channel: An Access Channel available for the use solely of all local public schools in Wylie, Texas that are part of an independent school district which is a political subdivision of the State of Texas and higher education institutions located within the Franchise Area. 1.10. EG Channels: The Educational Access Channel and the Government Access Channel. - 1.11. Expanded Service: The Basic Service tier plus the addition of one or more clusters of video programming services which may or may not be offered for an additional monthly charge. 4 1.12. Extended Service Area: The portion of the Franchise Area as set forth in Exhibit A. 1.13. FCC: The United States Federal Communications Commission, or successor governmental entity thereto. 1.14. FTTP Network: Franchisee's communications network which utilizes fiber optic technology to deliver a variety of nanometer frequencies for services originating or terminating over fiber facilities placed to residential premises or other locations using like network facilities. 1.15. Force Majeure: Acts of God, incidences of terrorism, war or riots, labor strikes or civil disturbances, floods, earthquakes, fire, explosions, epidemics, hurricanes, tornadoes, governmental actions and restrictions and other like events. To the extent not reasonably avoidable by Franchisee, Force Majeure also includes work delays caused by waiting for utility providers to service or monitor utility poles to which Franchisee's Cable System is attached, as well as the unavailability of materials and/or qualified labor to perform the work necessary, so long as Franchisee can upon request present written evidence in good faith attesting to the length of such delay and that such delay was reasonably unavoidable. 1.16. Franchise Area: The incorporated area (entire existing territorial limits ) of LF A as of the Effective Date of this Franchise, excluding Additional Service Areas reflected on Exhibit A suhject to Section 3.1.3 below. 1.17. Franchisee: Verizon Southwest, and its lawful and permitted successors, assigns and transferees. 1.18. Government Access Channel: An Access Channel available for the use solely of LF A, or as provided herein, including the Dedicated Government Access Channel and the Reserved Government Access Channel, as defined herein. 1.19. Gross Revenue: All revenue that Franchisee and its Affiliates (to the extent that either is acting as a provider of Cable Service authorized by this Franchise) derives from the operation of Franchisee's Cable System to provide Cable Service in the Service Area, including but not limited to all Subscriber and customer revenues earned or accrued net of bad debts including revenue for: (i) Basic Service; (ii) Expanded Service; (iii) Pay Television Service; (iv) all fees charged to any Subscribers for any and all Cable Service provided by Franchisee, including without limitation Cable Service related program guides, the installation, disconnection or reconnection of Cable Service; revenues from late or delinquent charge fees; Cable Service related service or repair calls; the provision of converters, remote controls, additional outlets and/or other Cable Service related Subscriber premises equipment, whether by sale, lease or otherwise; (v) revenues from the sale or lease of access channel(s) or channel capacity; (vi) advertising revenues (as described below); and (vii) revenues from home shopping channel providers. Gross Revenue also includes franchise fees imposed on Franchisee by LF A that are passed through from Franchisee as a line item paid by Subscribers. Revenue of an Affiliate derived from the Affiliate's provision of Cable Services shall be Gross Revenue to the extent the treatment of such revenue as revenue of the Affiliate and not of Franchisee has the intentional or unintentional effect of evading 5 the payment of Franchise fees that would otherwise be payable to LF A hereunder. In no event shall revenue of an Affiliate be Gross Revenue of Franchisee if such revenue is subject to franchise fees to be paid to LF A for Cable Services. Advertising revenue is based upon the ratio of the number of Subscribers as of the last day of the period for which Gross Revenue is being calculated to the number of Franchisee's subscribers within all areas covered by the particular advertising source as of the last day of such period, e.g., Franchisee sells two ads: Ad "A" is broadcast nationwide; Ad "B" is broadcast only within Texas. Franchisee has 1 00 Subscribers in LF A, 500 subscribers in Texas, and 1000 subscribers nationwide. Gross Revenue as to LF A from Ad "A" is 10% of Franchisee' s revenue therefrom. Gross Revenue as to LF A from Ad "B" is 20% of Franchisee's revenue therefrom. Gross Revenue shall not include: 1.19.1. Revenues received by any Affiliate or other Person in exchange for supplying goods or services used by Franchisee to provide Cable Service over the Cable System; 1.19.2. Refunds, rebates or discounts made to Subscribers, leased access providers, advertisers, or any party receiving Cable Service pursuant to Section 3.3 below; 1.19.3. Any revenues classified, in whole or in part, as Non-Cable Services revenue under federal or state law including without limitation revenue received from Telecommunications Services; revenue received from Information Services, including without limitation Internet Access service, electronic mail service, electronic bulletin board service, or similar online computer services; charges made to the public for two-way communication; and any other revenues attributed by Franchisee to Non-Cable Services in accordance with FCC or state public utility regulatory commission rules, regulations, standards or orders except that any revenues listed in this paragraph 1.19.3 that are later determined not to be Non-Cable Service revenues pursuant to case law and FCC or state public utility regulatory commission rules, regulations, standards or orders shall be considered Cable Services shall be included in gross revenues accordingly; 1.19.4. Any revenue of Franchisee or any other Person that is received directly from the Subscriber for the sale of merchandise through any Cable Service distributed over the Cable System, notwithstanding that portion of such revenue which represents or can be attributed to a Subscriber fee or a payment for the use of the Cable System for the sale of such merchandise, which portion shall be included in Gross Revenue of Franchisee; 1.19.5. The sale of Cable Service for resale in which the purchaser is required to collect cable franchise fees from purchaser's customer; 1.19.6. The provision of Cable Service to customers at no cost to the extent required or allowed by LF A including without limitation the provision of Cable Services to public institutions as required or permitted in Section 3.3 herein; 1.19.7. Any tax that is imposed upon Franchisee, any Subscriber and/or user of the Cable Service by any governmental unit and collected by Franchisee for such governmental unit including without limitation sales/use tax, gross receipts tax, excise tax, utility users tax, public service tax and communication taxes; 6 1.19.8. Any foregone revenue which Franchisee chooses not to receive in exchange for its provision of free or reduced cost cable services to any Person, including without limitation, employees of Franchisee and public institutions or other institutions designated in the Franchise; provided, however, that such foregone revenue which Franchisee chooses not to receive in exchange for trades, barters, services or other items of value shall be included in Gross Revenue; 1.19.9. Sales of capital assets or sales of surplus equipment; 1.19.10. Reimbursement by programmers to Franchisee of marketing costs incurred by Franchisee for the introduction of new programming; and 1.19.11. Any fees or charges collected from Subscribers or leased access providers for an EG grant, pursuant to Section 6.3 herein, or INET payments, pursuant to Section 3.4 herein. 1.20. Initial Service Area: The portion of the Franchise Area as set forth in Exhibit A. 1.21. Information Services: Shall be defined herein as it is defined under Section 3 of the Communications Act, 47 V.S.C. 9153(20) and shall include without limitation any service that provides Subscribers with access to the world wide web. 1.22. Interconnect: When Franchisee's FTTP Network is physically connected to an adj acent cable system or cable systems to provide capacity for carriage of EG Channels and to meet EAS requirements set forth in Section 5.3.1 below. 1.23. Internet Access: Dial-up or broadband access servIce that enables Subscribers to access the Internet. 1.24. Local Franchise Authority (LFA): The City of Wylie, Texas or the lawful successor, transferee, or assignee thereof. 1.25. Non-Cable Service: Any service that does not constitute the provision of Cable Service to multiple Subscribers in the Service Area over the Cable System. 1.26. Pay Television Service: Video programming at predetermined times to Subscribers for a fee or charge on a per program or per channel basis, which charge is over and above the charge for Basic Service or Expanded Service. 1.27. Person: An individual, partnership, association, entity, limited liability company, joint stock company, trust, corporation, or governmental entity. 1.28. Public Rights-ol-Way: The surface and the area across, in, over, along, upon and below the surface of the public streets, roads, bridges, sidewalks, lanes, courts, ways, alleys, and boulevards, including, public utility easements and public lands and waterways used as Public Rights-of-Way, as the same now or may thereafter exist, which are under the jurisdiction or 7 control of LFA. Public Rights-of-Way do not include the airwaves above a right-of-way with regard to cellular or other nonwire communications or broadcast services. 1.29. Service Area: All portions of the Franchise Area where Cable Service must be provided pursuant to this Agreement, including the Initial Service Area, the Extended Service Area and Additional Service Areas subject to Section 3.1.3 below. 1.30. Subscriber: A Person who lawfully receives Cable Service with Franchisee's express permission within the City of Wylie, Texas. 1.31. Telecommunications Facilities: Franchisee's existing Telecommunications Services facilities and Information Services facilities including the FTTP Network facilities to the extent not used for the Cable System. 1.32. Telecommunication Services: Shall be defined herein as it is defined under Section 3 of the Communications Act, 47 US.c. S 153(46). 1.33. Title II: Title II of the Communications Act. 1.34. Title VI: Title VI of the Communications Act. 1.35. Tran4er of the Franchise: 1.35.1. Any transaction in which: 1.35.1.1. an ownership or other interest in Franchisee is transferred, directly or indirectly, from one Person or group of Persons to another Person or group of Persons, so that control of Franchisee is transferred; or the rights held by Franchisee under the Franchise are transferred or assigned to another Person or group of Persons. 1.35.1.2. However, notwithstanding subsection 1.35.1.1 above, a Transfer of the Franchise shall not include (i) transfer of an ownership or other interest in Franchisee to the Parent of Franchisee or to another Affiliate of Franchisee when such Affiliate is Controlled by Franchisee or the Parent of Franchisee; (ii) transfer of an interest in the Franchise or the rights held by Franchisee under the Franchise to the Parent of Franchisee or to another Affiliate of Franchisee when such Affiliate is Controlled by Franchisee or the Parent of Franchisee; (iii) any action which is the result of a merger of the Parent of Franchisee; or (iv) any action which is the result of a merger of another Affiliate of Franchisee when such Affiliate is Controlled by Franchisee or the Parent of Franchisee. For purposes of this subsection, "Parent" shall mean any corporation that directly or indirectly owns or Controls Franchisee or Franchisee and the Affiliate. 1.36 Video Programming: Shall be defined herein as it is defined under Section 602 of the Communications. Act, 47 D.S.C. S 522(20). 2. GRANT OF AUTHORITY; LIMITS AND RESERVATIONS 8 2.1. Grant of Authority: Subject to the terms and conditions of this Agreement, LF A hereby grants Franchisee the right to own, construct, operate and maintain a Cable System along the Public Rights-of-Way within the Franchise Area in order to provide Cable Service. No privilege or power of eminent domain is bestowed by this grant; nor is such a privilege or power bestowed by this Agreement. 2.2. Additional Compensation; FTTP Network (Title II); Title VI. 2.2.1. Additional Compensation. By granting this Franchise, LF A does not waive and specifically retains any right to regulate and receive compensation as allowed by state and federal law for all services offered over the FTTP Network that are Non-Cable Services including without limitation access line fees on Telecommunication Services pursuant to Chapter 283 of the Texas Local Government Code. Nothing in this Franchise shall be construed to limit any lawful authority of LF A to impose a tax, fee, or other assessment of any kind on any Person (other than the Franchisee or its Affiliates) with respect to cable service provided by such Person over Franchisee's FTTP Network for which charges are assessed to Subscribers but not received by the Franchisee and/or its Affiliates. The parties agree that no term in this Franchise shall preempt or prevent LF A's right to bring a claim under Chapter 283 of the Texas Local Government Code, the Communication Act or other applicable federal or state law. 2.2.2. FTTP Network. Notwithstanding LFA's reservation of rights pursuant to Section 2.2.1 above, the parties recognize that Franchisee elected to construct the FTTP Network prior to seeking this Franchise from LF A for Cable Services, and that the FTTP Network will be operated as an upgrade to and/or extension of Franchisee's existing Telecommunications Facilities, pursuant to Chapter 283 of the Texas Local Government Code and Title II, it will be used to provide Information Services, and it will also be used to provide Cable Services as permitted by this Franchise. The FTTP Network includes the tangible facilities of a common carrier subject in whole or in part to Title II of the Communications Act or of an Information Services provider. Notwithstanding the definition of Cable Service in Section 1.5 herein, in the event that the FTTP Network is used solely for the provision of Cable Service, the FTTP Network shall be deemed a "Cable System" as defined under Section 602 of the Communications Act, 47 V.S.C. S 522(7). 2.2.3. LFA Does Not Regulate Telecommunications. LFA acknowledges that its jurisdiction over Telecommunications Facilities is restricted by federal and state law, and LF A does not assert jurisdiction over Franchisee's FTTP Network in contravention of these limitations, but may assert jurisdiction as allowed by law. LF A's regulatory authority under Title VI of the Communications Act is not applicable to the construction, installation, maintenance or operation of Franchisee's FTTP Network to the extent the FTTP Network is constructed, installed, maintained or operated for the purpose of upgrading and/or extending Verizon's existing Telecommunications Facilities for the provision of Non-Cable Services. 2.3 Term: This Franchise shall become effective on the date set forth on the signature page below (the "Effective Date"); provided, however, that Franchisee agrees to commence providing Cable Service on a commercial basis directly to multiple Subscribers in the Service Area within eighteen (18) months of the Effective Date (the "Beginning Service Date"). The term of this Franchise shall be fifteen (15) years from the Effective Date unless the Franchise 9 is earlier revoked as provided herein. Franchisee shall memorialize the Beginning Service Date by notifying LF A in writing of the same, which notification shall become a part of this Agreement. 2.4 Grant Not Exclusive: The Franchise and the right it grants to use and occupy the Public Rights-of-Way to provide Cable Services shall not be exclusive and nothing herein shall be construed to prevent LF A from granting other franchises for similar uses or for other uses ofthe Public Rights-of-Way, or any portions thereof, to any Person, or to make any such use themselves, at any time during the term of this Franchise. Any such rights which are granted shall not adversely impact the authority as granted under this Franchise and shall not interfere with existing facilities of the Cable System or Franchisee's FTTP Network. 2.5 Franchise Subject to Federal Law: Notwithstanding any provision to the contrary herein, this Franchise is subject to and shall be governed by all applicable provisions of federal law as it may be amended, including but not limited to the Communications Act. 2.6 No Waiver: 2.6.1 The failure of LF A on one or more occasions to exercise a right or to require compliance or performance under this Franchise or any other applicable law shall not be deemed to constitute a waiver of such right or a waiver of compliance or performance by LF A, nor to excuse Franchisee from complying or performing, unless such right or such compliance or performance has been specifically waived in writing. 2.6.2 The failure of Franchisee on one or more occasions to exercise a right under this Franchise or applicable law, or to require performance under this Franchise, shall not be deemed to constitute a waiver of such right or of performance of this Agreement, nor shall it excuse LF A from performance, unless such right or performance has been specifically waived in writing. 2.7 Construction of Franchise: 2.7.1. The provisions of this Franchise shall be liberally construed to effectuate their objectives. 2.7.2. Nothing herein shall be construed to limit the scope or applicability of Section 625 Communications Act, 47 V.S.C. S 545. 2.7.3. Should any change to state law have the lawful effect of materially altering the terms and conditions of this Franchise, then the parties shall modify this Franchise to the mutual satisfaction of both parties to ameliorate the negative effects on the Franchisee of the material alteration. If the parties cannot reach agreement on the above-referenced modification to the Franchise, then Franchisee may terminate this Agreement without further obligation to the LF A or, at Franchisee's option, the parties agree to submit the matter to binding arbitration in accordance with the commercial arbitration rules of the American Arbitration Association. 2.8 Police Powers: Nothing in the Franchise shall be construed to prohibit the reasonable, necessary and lawful exercise of LF A's police powers. However, if the reasonable, necessary and lawful exercise of LF A's police power results in any material alteration of the terms 10 and conditions of this Franchise, which material alteration has a material negative financial effect on Franchisee's provision of Cable Service in the Service Area, then the parties shall modify this Franchise to the mutual satisfaction of both parties to ameliorate the negative effects on Franchisee of the material alteration. If the parties cannot reach agreement on the above-referenced modification to the Franchise, then Franchisee may terminate this Agreement without further obligation to LF A or, at Franchisee's option, the parties agree to submit the matter to binding arbitration in accordance with the commercial arbitration rules of the American Arbitration Association. 2.9 Franchisee's Use ofGAAP. Franchisee represents and warrants that all of its financial and accounting records and books are maintained in accordance with generally accepted accounting principles. 3. PROVISION OF CABLE SERVICE 3.1. Service Areas: 3.1.1. Initial Service Area: Franchisee shall provide Cable Service to all residential areas of the Initial Service Area and may make Cable Service available to businesses in the Initial Service Area, vv'ithin eighteen (18) months of the Effective Date of this Franchise, except: (A) for periods of Force Majeure; (B) for periods of delay caused by LF A; (C) for periods of delay resulting from Franchisee's inability to obtain authority to access rights-of-way in the Service Area; CD) in areas where developments or buildings are subject to claimed exclusive arrangements with other providers; (E) in developments or buildings that Franchisee cannot access under reasonable terms and conditions after good faith negotiation, as determined by Franchisee; and (F) in developments or buildings that Franchisee is unable to provide Cable Service for technical reasons or which require non-standard facilities which are not available on a commercially reasonable basis; and (G) in areas where the occupied residential household density does not meet the density requirement set forth in Subsection 3.1.1.1. 3.1.1.1. Density Requirement: Franchisee shall make Cable Services available to residential dwelling units in all areas of the Service Area (including the Initial Service Area, the Extended Service Area and the Additional Service Areas pursuant to the terms set forth herein,) where the average density is equal to or greater than thirty (30) occupied residential dwelling units per mile as measured in strand footage from the nearest point on the active FTTP Network trunk or feeder line. Should, through new construction, an area within the Initial Service Area or the Extended Service Area meet the density requirements after the time stated for providing Cable Service as set forth in Subsections 3.1.1, 3.1.2 and 3.1.3 respectively, Franchisee shall provide Cable Service to such area within six (6) months of receiving notice that the density requirements have been met. Upon written request from LF A, Franchisee agrees to confirm within thirty (30) days whether a density requirement has been met within the portion of the Service Area that is the subject of the required notice. LF A may request to meet with Franchisee annually regarding customer service requests for service where density under this Section 3.1.1.1 is in question or requires resolution by Franchisee. 11 3.1.2. Extended Service Area: Within seven (7) years following the Effective Date, Franchisee shall provide Cable Service in the Extended Service Area subject to the conditions of Subsection 3.1.1 above and the other terms set forth herein. 3.1.3. Additional Service Areas: Aside from the Initial Service Area and the Extended Service Area, Franchisee shall not be required to extend its Cable System or to provide Cable Services to any other area within the Franchise Area ("Additional Service Areas") as delineated in Exhibit A. The parties agree that land annexed by the City of Wylie, Texas during the term of this Franchise shall be Additional Service Areas; provided, however, that such annexed areas shall be part of the Franchise Area and Franchisee shall be required to extend Cable Service within a reasonable time to such annexed areas that (a) are contiguous to LF A, (b) within Franchisee's Title II service territory served by the FTTP Network and (c) meet the density requirement set forth in Section 3.1.1 above. 3.2. Availability of Cable Service: Franchisee shall make Cable Service available to all residential dwelling units and may make Cable Service available to businesses within the Service Area in conformance with Section 3.1 and Franchisee shall not discriminate between or among any individuals in the availability of Cable Service. In the areas in which Franchisee shall provide Cable Service, Franchisee shall be required to connect, at Franchisee's expense, all residential dwelling units that are within one hundred fifty (150) feet of trunk or feeder lines not otherwise already served by Franchisee's FTTP Network. Franchisee shall be allowed to recover, from a Subscriber that requests such connection, actual costs incurred for residential dwelling unit connections that exceed one hundred fifty (150) feet and actual costs incurred to connect any non-residential dwelling unit Subscriber. 3.3. Cable Service to Public Buildings: Franchisee shall provide, within thirty (30) days of a written request thereof and without charge within the Service Area, one service outlet activated for Basic Service to each fire station, police station, public library, city hall, other public buildings, and public school building or facility operated by an independent school district that is located in Wylie, Texas, as may be initially designated or in the future designated by LF A in Exhibit B (the "Public Facility(ies)"); provided, however, that if it is necessary to extend Franchisee's trunk or feeder lines more than one hundred fifty (150) feet solely to provide service to any such Public Facility, LF A or local independent school districts shall have the option either of paying Franchisee's direct costs for such extension in excess of one hundred fifty (150) feet, or of releasing Franchisee from the obligation to provide service to such Public Facility. Furthermore, Franchisee shall be permitted to recover, from any Public Facility owner entitled to free service, the direct cost of installing, when requested to do so, more than one outlet, or concealed inside wiring, or a service outlet requiring more than one hundred fifty (150) feet of drop cable; provided, however, that Franchisee shall not charge for the provision of Basic Service to the additional service outlets once installed. Franchisee will make one (1) service outlet available at city hall without charge for the purpose of monitoring Basic Service and Expanded Service. In the event that LF A or any local school authority referenced herein constructs or leases new Public Facilities within Franchisee's Title II service territory and served by the FTTP Network during the term of this Franchise, Franchisee agrees that it will provide one (1) free service outlet to such in accordance with the terms of this Section 3.3; provided, however, that Franchisee shall not be required to provide any such free service outlet if the new Public Facility is located outside Franchisee's Title II service territory and not served by the FTTP Network. 12 3.4. INET If, during the term of the Franchise, another cable operator provides LF A with an institutional network, as defined in Section 611 (c) of the Communications Act ("INET"), Franchisee agrees to enter into good faith negotiations, within sixty (60) days of being requested to do so, with LF A as to Franchisee's provision of a pro rata, per Subscriber grant to LF A in relation to Franchisee's proportional share (in relation to other cable operators) of the incremental, verifiable cost to the cable operator of such an INET; provided, however, that LF A agrees that it will require all cable operators within the Franchise Area to make equitable pro rata contributions toward the construction of any such INET. LF A further agrees to reimburse such cable operator for any pro rata, per Subscriber payments made by Franchisee. 4. OPERATION Franchisee shall provide Cable Service III full compliance with this Franchise and applicable law. 5. CABLE SYSTEM 5.1. Cable System Characteristics: Franchisee's Cable System shall meet or exceed the following requirements: 5.1.1. The Cable System shall be designed with an initial analog passband of 860 MHz. 5.1.2. The Cable System shall be designed to be an active two-way plant utilizing the return bandwidth to permit such services as impulse pay-per-view and other interactive services. 5.2. Interconnection: Franchisee's Cable System may interconnect with other cable systems in the Franchise Area subject to Section 6.1.3 below. Interconnection of systems may be made by direct cable connection, microwave link, satellite, or other appropriate methods. 5.3. Emergency Alert System: 5.3.1'- Franchisee shall comply with the Emergency Alert System ("EAS") requirements of the FCC in order that emergency messages may be distributed over the System. 5.3.2. LFA shall permit only appropriately trained and authorized Persons to operate the EAS equipment and shall take reasonable precautions to prevent any use of the Cable System in any manner that results in inappropriate use thereof, or any loss or damage to the Cable System. Except to the extent expressly prohibited by law, LF A shall hold Franchisee, its employees, officers and assigns harmless from any claims arising out of use of the EAS including without limitation reasonable attorneys' fees and costs. 5.3.3. Service for Hearing Impaired: Franchisee shall take any and all reasonable steps necessary to comply with any FCC or other federal or state requirements regarding altering or adapting programming for the hearing impaired. Franchisee shall not take any action to remove or alter closed captioned programming provided for the hearing impaired as 13 part of any programming. Franchisee shall deliver intact such closed captioning in the manner in which it arrives at the headend or from another origination source to the Cable Service. 6. EG SERVICES 6.1. EG Set Aside 6.1.1. In order to ensure universal availability of educational and government programming, Franchisee shall provide on the Basic Service Tier one (1) dedicated Educational Access Channel and one (1) dedicated Government Access Channel for LF A's exclusive use (the "Dedicated Government Access Channel"). In addition, Franchisee will reserve, to be on a Basic Service Tier, digital service tier or other technology tier that may exist as permissible under federal law, one (1) government access channel which the LF A may use or which the LFA may allow either (a) any County of the State of Texas in which LFA is located or (b) any institution of higher education located within LF A to use; provided, however, that Franchisee consents in writing to such use, which consent Franchisee shall not unreasonably withhold (the "Reserved Government Access Channel"). 6.1.2. At least sixty (60) days prior to beginning use of an EG Channel, LF A, or the entity authorized under the terms of this Franchise to use such channel ("Authorized User"), shall notify Franchisee of the programming to be carried on such EG Channel set aside by Franchisee. Thereafter, Franchisee shall assign the EG Channels on its channel line-up as set forth in such notice. In the event that the requested channel assignment is in conflict with a pre-existing cham1el assignment, LF A and Franchisee with jointly determine what available channel assignment will be used. If the Educational Access Channel or the Reserved Government Access Channel provided under this Article is not being utilized by the Authorized User or LF A, respectively, Franchisee may utilize such Educational Access Channel and Reserved Government Access Channel, in its sole discretion, until such time as LF A elects to utilize the Educational Access Channel and/or Reserved Government Access Channel for its intended purpose. If, after twelve (12) months following the Beginning Service Date, the Dedicated Government Access Channel provided under this Article is not being utilized by the LF A, Franchisee may utilize such Dedicated Government Access Channel, in its sole discretion, until such time as LF A elects to utilize the Dedicated Goveriunent Access Channel for its intended purpose. Franchisee shall not permit any other governmental entity to utilize LFA's Government Access Channels during the term of this Franchise without LF A's prior written permission. 6.1.3. Franchisee shall use reasonable efforts to interconnect its Cable System with the existing cable operator(s). Promptly after LF A grants the Franchise, the Franchisee shall initiate interconnection negotiations with the existing cable operator(s) to cablecast, on a live basis, public, educational and governmental access programming consistent with this Franchise. Interconnection may be accomplished by direct cable, microwave link, satellite or other reasonable method of connection. Franchisee shall negotiate in good faith with existing cable operator(s) respecting reasonable, mutually convenient, cost-effective, and technically viable interconnection points, methods, terms and conditions. The LF A shall require the existing cable operator(s) to provide such interconnection to the Franchisee on reasonable terms and conditions. The construction costs and ongoing expenses of interconnection shall be fairly shared between the Franchisee and the existing cable operator(s). The Franchisee and the 14 existing cable operator(s) shall negotiate the precise terms and conditions of an interconnection agreement. The LF A shall use its best efforts to facilitate these negotiations. If Franchisee is unable to reach such an agreement within thirty (30) days after requesting in writing to interconnect with other local cable operator(s), LFA shall use its best efforts to aid in discussions and resolution of such dispute. If no agreement is reached within an additional thirty (30) days, Franchisee agrees that LF A shall designate the point of interconnection. If the cost of interconnection would be umeasonable, interconnection is not technically feasible or would cause an unacceptable increase in Subscriber rates, or if an existing cable operator will not agree to reasonable terms and conditions of interconnection, the Franchisee will be under no obligation to carry EG programming originating on the cable system of the existing cable operator or to interconnect the Cable System. 6.2 All local producers and users of any of the EG facilities or Channels shall agree in writing to hold harmless Franchisee, LF A, from any and all liability or other injury, including the reasonable cost of defending claims or litigation, arising from or in connection with claims for failure to comply with applicable federal laws, rules, regulations or other requirements of local, state or federal authorities; for claims oflibel, slander, invasion of privacy, or the infringement of common law or statutory copyright; for unauthorized use of any trademark, trade name or service mark; for breach of contractual or other obligations owing to third parties by the producer or user; and for any other injury or damage in law or equity, which result from the use of a EG facility or Channel. 6.3 If, during the term of this Franchise, any other cable operator within the Franchise Area provides LJ:A with an EG grant, Franchisee agrees to negotiate in good faith with LF A to compensate LF A on an equitably comparable pro rata, per Subscriber basis for such EG grant; provided, however, that Franchisee shall not be required to make such EG grant compensation unless all cable operators within the Franchise Area provide comparable EG grant compensation. 7. FRANCHISE FEES 7.1 Payment to LFA: Franchisee shall pay to LFA a Franchise fee of five percent (5%) of annual Gross Revenue. In accordance with Title VI of the Communications Act, the twelve (12) month period applicable under the Franchise for the computation of the Franchise fee shall be a calendar year. Such payments shall be made no later than forty five (45) days following the end of each calendar quarter. Franchisee shall be allowed to submit or correct any payments that were incorrectly omitted, and shall be refunded any payments that were incorrectly submitted, in connection with the quarterly Franchise fee remittances within ninety (90) days following the close of the calendar year for which such payments were applicable. Franchisee agrees to wire Franchisee fee payments to LFA upon LFA's prior written request. A copy of Franchisee's proposed Franchise Fee Schedule/Report is attached hereto as Exhibit E. 7. 2 Supporting Information: Each Franchise fee payment shall be accompanied by a brief report prepared by a representative of Franchisee showing the basis for the computation. 7. 3 Limitation on Franchise Fee Actions: The period of limitation for recovery of any Franchise fee payable hereunder shall be four (4) years from the date on which payment by 15 Franchisee is received by LFA (the "Limitations Period"). During any such four (4) year period, the Limitations Period shall be tolled beginning on the date that LF A mails written notice to Franchisee that LF A intends to conduct an inspection of the books and records of Franchisee as permitted by Article 9 herein to determine compliance with this Article 7, and ending on the date LF A asserts a claim as to any unpaid fees hereunder or provides notice that it does not intend to assert a claim, such claim to be asserted within twelve (12) months from the date of production of all the records reasonably requested; provided however, that the completion date for review may be extended by mutual agreement ofLF A and Franchisee. The parties intend that the tolling of the Limitations Period is to allow LF A to complete its review in a timely and efficient manner and the parties do not intend for the Limitations Period to be unreasonably tolled. During the tolling period, Franchisee shall maintain its books and records related to the inspection of unpaid fees being conducted by LF A until final resolution of any claim asserted by LF A as a result of the inspection, notwithstanding the four (4) year provisions contained in Article 9 of this Franchise. 7. 4 Bundled Services: If Franchisee bundles Cable Service with Non-Cable Service, Franchisee agrees that it will not unlawfully allocate such revenue for the purpose of evading Franchise fee payments under this Franchise. The parties agree that tariffed Telecommunication Services that cannot be discounted by state or federal law or regulation are to be excluded from the bundled discount allocation basis. For the purpose of calculating the Franchise fee due to LF A, bundled discounts will be allocated consistent with the allocation of discounts on the customer bill. Any non-service apportioned bundled discount appearing on the customer bill will be allocated proportionately between the discountable services provided in the bundle for the purpose of calculating franchise fees. If a dispute arises between LF A and Franchisee as to the proper allocation of bundled services revenue, such records pertaining to the allocation shall be maintained by Franchisee until the dispute is resolved. 7.5 Late Payments: If any payments due under this Franchise remain unpaid after the due date ("Past Due Amounts"), Franchisee shall pay LF A interest on such Past Due Amounts in addition to the Past Due Amounts. The interest shall accrue on the Past Due Amounts from the due date until paid in full ("Period of Delinquency"). Franchisee shall pay LF A interest at a rate per annum equal to the highest Bank Prime Rate during the Period of Delinquency plus 1 %. The "Bank Prime Rate" sheill mean the prime lending rate from U.S. Banks as it appears in the Wall Street Journal during the Period of Delinquency. LFA's acceptance of payment shall not be construed as an agreement that the amount paid was correct, nor shall acceptance be construed as a release of any claim, which LF A may have for additional sums payable under provisions of this Article 7. 8. CUSTOMER SERVICE Customer Service Requirements are set forth in Exhibit D and shall be binding unless amended by written consent of the parties. IfLF A submits a proposal requesting an amendment in Customer Service Requirements, Franchisee shall respond in writing within sixty (60) days stating whether it will either consent to such a proposal or its reasons for declining LF A's proposal. 9. REPORTS AND RECORDS 16 9.1 Open Books and Records: Upon reasonable written notice to Franchisee and with no less than thirty (30) days written notice to Franchisee, LF A shall have the right to inspect Franchisee's books and records pertaining to Franchisee's provision of Cable Service in the Franchise Area at any time during Normal Business Hours and on a nondisruptive basis, as are reasonably necessary to ensure compliance with the terms of this Franchise. Such notice shall specifically reference the article, section or subsection ofthe Franchise that is under review, so that Franchisee may organize the necessary books and records for appropriate access by LF A. Franchisee shall not be required to maintain any books and records for Franchise compliance purposes longer than four (4) years except that any records relevant or related to an unresolved, ongoing dispute shall be maintained until final resolution of such dispute including records provided pursuant to Section 7.4 herein. Notwithstanding anything to the contrary set forth herein, Franchisee shall not be required to disclose information that it reasonably deems to be proprietary or confidential in nature, nor disclose any of its or an Affiliate's books and records not relating to the provision of Cable Service in the Service Area, LF A agrees to treat any information disclosed by Franchisee as confidential and only to disclose it to employees, representatives, and agents thereof that have a need to know, or in order to enforce the provisions hereof and as may be required by the Texas open records or freedom of information laws, with notice to Franchisee if any request for such information is made, as may be provided under the circumstances. Franchisee shall not be required to provide Subscriber information in violation of Section 631 of the Communications Act, 47 FS.C. 9551. 9.2. Records Required: Franchisee shall at all times maintain: 9.2.1. Records of all written complaints for a period of four (4) years after receipt by Franchisee. The term "complaint" as used herein refers to complaints about any aspect of the Cable System or Franchisee's cable operations, including without limitation complaints about employee courtesy. Complaints recorded will not be limited to complaints requiring an employee service call; 9.2.2. Records of outages for a period of four (4) years after occurrence, indicating date, duration, area, and the number of Subscribers affected, type of outage, and cause; 9.2.3. Records of service calls for repair and maintenance for a period of four (4) years after resolution by Franchisee, indicating the date and time service was required, the date of acknowledgment and date and time service was scheduled (if it was scheduled), and the date and time service was provided, and (if different) the date and time the problem was resolved; 9.2.4. Records of installation/reconnection and requests for service extension for a period of four (4) years after the request was fulfilled by Franchisee, indicating the date of request, date of acknowledgment, and the date and time service was extended; and 9.2.5. A public file showing the area of coverage for the provisioning of Cable Services and estimated timetable to commence providing Cable Service. 10. INSURANCE AND INDEMNIFICATION 10.1 Insurance: 17 10.1.1. Franchisee shall maintain in full force and effect, at its own cost and expense, during the Franchise Term, the following insurance coverage: 10.1.1.1. Commercial General Liability Insurance in the amount of three million dollars ($3,000,000) combined single limit for property damage and bodily injury. Such insurance shall cover the construction, operation and maintenance of the Cable System, and the conduct of Franchisee's Cable Service business in LF A. 10.1.1.2. Automobile Liability Insurance in the amount of three million dollars ($3,000,000) combined single limit for bodily injury and property damage coverage. 10.1.1.3 . Workers' Compensation Insurance meeting all legal requirements of the State of Texas. 10.1.1.4. Employers' Liability Insurance in the following amounts: (A) Bodily Injury by Accident: $100,000; and (B) Bodily Injury by Disease: $100,000 employee limit; $500,000 policy limit. 10.1.:2. LF A shall be designated as an additional insured under each of the insurance policies required in this Article 10 except Worker's Compensation and Employer's Liability Insurance. 10.1.3. Each of the required insurance policies shall not be cancelled, reduced or expired except upon thirty (30) days prior written notice to LF A. Franchisee shall not cancel any required insurance policy without submitting documentation to LF A verifying that Franchisee has obtained alternative insurance in conformance with this Franchise. 10.1.4. Each of the required insurance policies shall be with sureties qualified to do business in the State of Texas, with an A or better rating for financial condition and financial performance by Best's Key Rating Guide, Property/Casualty Edition. 10.1.5. Within thirty (30) days after the Effective Date of this Franchise, Franchisee shall deliver to LF A Certificates of Insurance showing evidence of the required coverage. 1 0.2. Indemn~fication: 10.2.1. Franchisee shall indemnify, save and hold harmless LF A, its officers, agents, boards, employees, and contractors from and against any liability for damages and for any liability, cost or damage arising from tangible property damage or bodily injury (including accidental death), to the extent proximately caused by Franchisee's negligent act, error or omission in its=construction, operation, or maintenance of its Cable System, provided that LF A shall give Franchisee written notice of its obligation to indemnify LF A within fourteen (14) days of receipt of a claim or action pursuant to this subsection; provided, however, that LF A may provide written notice after such fourteen (14) day period so long as Franchisee is not prejudiced by such late 18 notice. Notwithstanding the foregoing, Franchisee shall not indemnify LF A, for any damages, liability or claims resulting from the willful misconduct or negligence of LF A, its officers, agents, employees, attorneys, consultants, independent contractors or third parties or for any activity or function conducted by any Person other than Franchisee in connection with EG Channels or EAS, or the distribution of any Cable Service over the Cable System. 10.2.2. With respect to Franchisee's indemnification obligations set forth in subsection 10.2.1, Franchisee shall provide the defense of any claims brought against LF A, its officers, agents, boards, employees, and contractors under this Section 10.2 of the Franchise by selecting counsel of Franchisee's choice to defend the claim, subject to the consent ofLFA, which shall not unreasonably be withheld. Nothing herein shall be deemed to prevent LF A from cooperating with Franchisee and participating in the defense of any litigation by its own counsel at its own cost and expense, provided however, that after consultation with LF A, Franchisee shall have the right to defend, settle or compromise any claim or action arising hereunder, and Franchisee shall have the authority to decide the appropriateness and the amount of any such settlement as to both LF A and Franchisee, with full releases as to LF A and Franchisee included in such settlement, only in the event that the amount of such settlement is within Franchisee's insurance policy limits or if Franchisee agrees to pay all excess amounts above insurance policy limits. 10.2.3 }Jotwithstanding anything to the contrary in this Article 10, if representation of both LF A and Franchisee by the same attorney would be inconsistent with accepted canons of professional ethics, LF A shall have the right to employ separate counsel in any action or proceeding and to participate in the investigation and defense thereof, and Franchisee shall pay the resulting reasonable attorneys' fees and expenses. 10.2.4. LF A shall hold Franchisee harmless and shall be responsible for damages, liability or claims resulting from willful misconduct of LF A. 10.2.5. LF A shall be responsible for its own acts of willful misconduct or negligence, or breach of obligation committed by LF A for which LF A is legally responsible, subject to any and all defenses and limitations ofliability provided by law. Franchisee shall not be required to indemnify LF A for acts of LF A which constitute willful misconduct or negligence, on the part of LF A, its officers, employees, agents, attorneys, consultants, independent contractors or third parties. Franchisee shall be responsible for its own acts of willful misconduct or negligence, or breach of obligation committed by Franchisee for which Franchisee is legally responsible, subject to any and all defenses and limitations ofliability provided by law. Franchisee shall not be required to indemnify LF A for acts of Franchisee which constitute willful misconduct or negligence on the part of Franchisee, its officers, employees, agents, attorneys, consultants, independent contractors or third parties. 10.2.6. The provisions of Section 10.2 shall survIve the termination of this Franchise. 10.2.7 The provisions of this Section 10.2 are solely for the benefit of LF A and Franchisee and do not create or grant any rights, contractual or otherwise, to any other Person or entity. 19 11. TRANSFER OF FRANCHISE Subject to Section 617 of the Communications Act, 47 D.S.C. 9537, no Transfer ofthe Franchise shall occur without the prior consent of LF A, provided that such consent shall not be unreasonably withheld, delayed or conditioned. No such consent shall be required, however, for a transfer in trust, by mortgage, by other hypothecation, by assignment of any rights, title, or interest of Franchisee in the Franchise or Cable System in order to secure indebtedness, or otherwise excluded under Section 1.35 above. To the extent that LF A's consent to a Transfer of Franchise is required, Franchisee (or transferee) shall reimburse LF A for reasonable expenses incurred in reviewing that the transferee has the technical, legal, financial and operational ability to operate the Cable System to provide Cable Service. In no case shall Franchisee reimburse LF A for expenses exceeding $5,000. 12. RENEWAL OF FRANCHISE 12.1. LF A and Franchisee agree that any proceedings undertaken by LF A that relate to the renewal of this Franchise shall be governed by and comply with the provisions of Section 626 ofthe Communications Act, 47 U.S.c. 9 546. LF A and Franchisee agree that the term of any future cable franchise agreement between the parties shall be determined during renewal negotiations p:lrsuant to the provisions of Section 626. 12.2. In addition to the procedures set forth in said Section 626 of the Communications Act, LF A agrees to notify Franchisee of all of its assessments regarding the identity of future cable-related community needs and interests, as well as the past performance of Franchisee under the then current Franchise term. LF A further agrees that such assessments shall be provided to Franchisee within ninety (90) days following the completion of such assessment so that Franchisee has adequate time to submit a proposal under Section 626 and complete renewal of the Franchise prior to expiration of its term. 12.3. Notwithstanding anything to the contrary set forth herein, Franchisee and LF A agree that at any time during the term ofthe then current Franchise, while affording the public appropriate notice and opportunity to comment, LF A and Franchisee may agree to undertake and finalize informal negotiations regarding renewal of the then current Franchise and LF A may grant a renewal thereof. 12.4. Franchisee and LF A agree that they may simultaneously pursue informal and formal franchise renewal processes pursuant to this Article 12 and Section 626 of the Communications Act. 13. ENFORCEMENT AND TERMINATION OF FRANCHISE 13.1. Notice of Violation: In the event that LF A believes that Franchisee has not complied with the terms of the Franchise, LF A shall informally discuss the matter with Franchisee. If these discussions do not lead to resolution of the problem, LF A shall notify Franchisee in writing of the exact nature of the alleged noncompliance. 20 13.2. Franchisee's Right to Cure or Respond: Franchisee shall have thirty (30) days from receipt of the written notice described in Section 13.1 to: (i) respond to LF A, if Franchisee contests (in whole or in part) the assertion of noncompliance; (ii) cure such default; or (iii) in the event that, by the nature of default, such default cannot be cured within the thirty (30) day period, initiate reasonable steps to remedy such default and notify LF A of the steps being taken and the projected date that they will be completed and request from LFA an extension of the time to cure, which shall not be unreasonably denied by LF A, but which in no event shall the cure period exceed a total of ninety (90) days unless Franchisee demonstrates to LF A in good faith that additional delay is unavoidable. 13.3. Public Hearing: In the event that Franchisee fails to respond to the written notice described in Section 13.1 pursuant to the procedures set forth in Section 13.2, or in the event that the alleged default is not remedied within thirty (30) days or the extension date granted by LF A pursuant to Section 13.2(iii) above, if LF A intends to continue its investigation into the default, then LF A shall schedule a public hearing. LF A shall provide Franchisee at least thirty (30) calendar days prior written notice of such hearing, which will specify the time, place and purpose of such hearing, and provide Franchisee the opportunity to be heard. 13.4. Enforcement: Subject to applicable federal and state law, in the event LF A, after the hearing set forth in Section 13.3, determines that Franchisee is in default of any provision of the Franchise, LFA may: 13.4 .1. Seek specific performance of any provision, which reasonably lends itself to such remedy, as an alternative to damages; or 13.4.2. Commence an action at law for monetary damages or seek other equitable relief: or 13.4.3. In the case of a substantial material default of a material provision of the Franchise, seek to revoke the Franchise in accordance with Section 13.5. 13.5. Revocation: Should LFA seek to revoke the Franchise after following the procedures set forth in Sections 13.1 through 13.4 above, LF A shall give written notice to Franchisee of its intent. The notice shall set forth the exact nature of the noncompliance. Franchisee shall have twenty (20) business days from such notice to object in writing and to state its reasons for such objection. In the event LF A has not received a satisfactory response from Franchisee, it may then seek termination of the Franchise at a public hearing. LF A shall cause to be served upon Franchisee, .at least ten (10) business days prior to such public hearing, a written notice specifying the time and place of such hearing and stating its intent to revoke the Franchise. 13.5.1. At the designated hearing, Franchisee shall be provided a fair opportunity for full participation, including the right to be represented by legal counsel, to introduce relevant evidence, to require the production of evidence, and to question and/or cross examine witnesses. Franchisee shall be allowed to record a verbatim record and/or transcript of such hearing at Franchisee's sole cost and expense and Franchisee shall provide a copy thereof to LFA within thirty (30) days of Franchisee's receipt thereof. 21 13.5.2. Following the public hearing, Franchisee shall be provided up to twenty (20) business days to submit its proposed findings and conclusions in writing and thereafter LF A shall determine (i) whether an Event of Default has occurred; (ii) whether such Event of Default is excusable; and (iii) whether such Event of Default has been cured or will be cured by Franchisee. LF A shall also determine whether to revoke the Franchise based on the information presented, or, where applicable, grant additional time to Franchisee to effect any cure. If LF A determines that ~he Franchise shall be revoked, LF A shall promptly provide Franchisee with a written decision setting forth its reasoning. Franchisee may appeal such determination of LF A to an appropriate court, which shall have the power to review the decision of LF A de novo as may be permitted by law. Franchisee shall be entitled to such relief as the court finds appropriate. 13.5.3. LFA may, at its sole discretion, take any lawful action which it deems appropriate to enforce LF A's rights under the Franchise in lieu of revocation of the Franchise. 13.6 Franchisee Termination: Franchisee shall have the right to terminate this Franchise and all obligations hereunder within ninety (90) days after the end of three (3) years from the Effective Date of this Franchise, if at the end of such three (3) year period Franchisee does not then in good faith believe it has achieved a commercially reasonable level of Subscriber penetration on its Cable System. Franchisee may consider Subscriber penetration levels outside the Franchise Area in this determination. l'-.Jotice to terminate under this Section 13.6 shall be given to the City in writing, with such terminat;on to take effect no sooner than one hundred and twenty (120) days after giving such notice. Franchisee shall also be required to give its then current Subscribers not less than ninety (90) days prior written notice of termination. 14. MISCELLANEOUS PROVISIONS 14.1. Recoupment of Costs by LF A: Franchisee shall bear all reasonable costs of publication that may be required by law, by this Agreement or by action of the City of Wylie's City Council. 14.2. Actions of Parties: In any action by LF A or Franchisee that is mandated or pem1itted under the terms hereof, such party shall act in a reasonable, expeditious, and timely manner. Furthermore, in any instance where approval or consent is required under the terms hereof, such approval or consent shall not be unreasonably withheld, delayed or conditioned. 14.3. Rate Regulation: If, during the term of this Franchise, Franchisee is not subject to effective competition and federal law or regulation permits LF A to regulate Franchisee's rates for Basic Services under such circumstances, LF A reserves the right to regulate such rates consistent with law. 14.4. Binding Acceptance: This Franchise shall bind and benefit the parties hereto and their respective heirs, beneficiaries, administrators, executors, receivers, trustees, successors and assigns, and the promises and obligations herein shall survive the expiration date hereof. 22 14.5. Preemption: In the event that federal or state law, rules, or regulations preempt a provision or limit the enforceability of a provision of this Franchise, the provision shall be read to be preempted to the extent, and for the time, but only to the extent and for the time, required by law. In the event such federal or state law, rule or regulation is subsequently repealed, rescinded, amended or otherwise changed so that the provision hereof that had been preempted is no longer preempted, such provision shall thereupon return to full force and effect, and shall thereafter be binding on the parties hereto, without the requirement of further action on the part of LF A or Franchisee. 14.6. Force Majeure: Franchisee and LF A_shall not be held in default under, or in noncompliance with, the provisions of the Franchise, nor suffer any enforcement or penalty relating to noncompliance or default, where such noncompliance or alleged defaults occurred or were caused by a Force Majeure. 14.6.1. Furthermore, the parties hereby agree that it is not LFA's intention to subject Franchisee to penalties, fines, forfeitures or revocation of the Franchise for violations of the Franchise where the violation was a good faith error that resulted in no or minimal negative impact on Subscribers, or where strict performance would result in practical difficulties and hardship being placed upon Franchisee which outweigh the benefit to be derived by LF A and/or Subscribers. Nothing in this paragraph shall be construed as waiving any rights of LF A existing under this Agr~ement or under law. : 4.7. Notices: Unless otherwise expressly stated herein, notices required under the Franchise shall be transmitted via certified mail to the addresses below. Mailed notices are assumed received three (3) business days after mailing. The address below is the address for mailing of such notice, unless a party changes its contract information by providing written notice to the other party. 14.7.1. Notices to Franchisee shall be mailed via certified mail to: Steve Banta Verizon - Group President, NW and SW 600 Hidden Ridge HQE04GO Irving, TX 75038 With a copy to: Randal Milch Senior VP and Deputy General Counsel 1 095 Avenue of Americas New York, NY 92223 14.7.2 Notices to LFA shall be mailed via certified mail to: Attn: City Manager City of Wylie 23 2000 Highway 78 North Wylie, Texas 75098 14.8 Entire Agreement: This Franchise and the Exhibits hereto constitute the entire agreement between Franchisee and LF A and all Exhibits are incorporated as iffully set forth in the body of this Agreement. Amendments to this Franchise shall be mutually agreed to in writing by the parties. 14.9 Captions: The captions and headings of articles and sections throughout this Agreement are intended solely to facilitate reading and reference to the sections and provisions of this Agreement. Such captions shall not affect the meaning or interpretation of this Agreement. 14.10 Severability: If any section, subsection, sentence, paragraph, term, or provision hereof is determined to be illegal, invalid, or unconstitutional, by any court of competent jurisdiction or by any state or federal regulatory authority having jurisdiction thereof, such determination shall have no effect on the validity of any other section, subsection, sentence, paragraph, term or provision hereof, all of which will remain in full force and effect for the term of the Franchise. 14.11 Recitals: The recitals set forth in this Agreement are incorporated into the body of this Agreement as if they had been originally set forth herein. 14.12 Modification. This Franchise shall not be modified except by written instrument executed by both parties. ) 4.13 FTTP Network Transfer Prohibition. Under no circumstance including without limitation upon expiration, revocation, termination, denial of renewal of the Franchise or any other action to forbid or disallow Franchisee from providing Cable Services, shall Franchisee or its assignees be required to sell any right, title, interest, use or control of any portion of Franchisee's FTTP Network including without limitation any spectrum capacity used for Cable Service or otherwise, to LF A or any third party. Franchisee shall not be required to remove the FTTP Network(s) or to relocate the FTTP Network(s) as a result of revocation, expiration, termination, denial of renewal or any other action to forbid or disallow Franchisee from providing Cable Services. 14.14 Acceptance of Franchise Within thirty (30) days from the Effective Date of this Franchise, Franchisee shall file with LFA's City Secretary a written statement in the following form signed in its name and behalf: "To the Honorable Mayor and City Council of the City of Wylie, Texas: For itself, its successors, and assigns, GTE Southwest, Inc. d/b/a Verizon Southwest, a corporation duly authorized to do business in the State of Texas, hereby accepts the attached franchise and agrees to be bound by all of its terms, conditions, and provisions. Acceptance of this franchise by 24 Franchisee shall not constitute a waiver by it of any of its rights; however, Franchisee acknowledges that the terms of this franchise are contractual and not merely recitals and that Franchisee shall be bound by the terms and conditions stated herein." GTE Southwest, Inc. d/b/a Verizon Southwest BY~ ~Q Its: CtC:51{)€N~ Dated this the 4'/41 day of f e-(o r (,Ul (Y ,2005 14.15 Sovereign Immunity. The parties agree that LF A has not waived its sovereign immunity as to third parties by entering into and performing its obligations under this Franchise. 15. pue WAIVER This Agreement shdl be void and Verizon shall not be obligated to provide Cable Service in the City of Wylie, Texas pursuant to the terms hereunder in the event that a court reverses the effect ofVerizon's October 13,2004 Waiver (Docket No. 29879) of 962.072 of The Public Utility Regulato:'y Ac' ("PURA"), Tex. UtiI. Code. Ann. 99 11.001-64.158 (Vernon 1998 & Supp. 2004) granted by the Public Utilit~v Commission of Texas. [execution page follows] 25 AGREED TO THIS 26th DAY OF January, 2005. CITY OF WYLIE, TEXAS By: l~ 0. t?tl Mark B. Roath Title: City Manager Acknowledgments: State of Texas S County of Collin S This instrument was acknowledged before me on the 26th day of January, 2005 by Mark B. Roath of the CITY OF WYLIE on behalf of said corporation. e CAROLE '"RUC" ~~~ Notary Public, State of Texas · 'Ji · Commlu'on "pf'.. Notary Public -. !:rOT the AUGUST 03, 2006 State of Texas GTE SOUTHWEST, INC. d/b/a/ VERlZON SOUTHWEST BY:~~ Title: 7~rSI OEvV"-- Acknowledgments: State of Texas S County of Collin S - This instrument was acknowledged before me on the ~day of t-di;rllil% ' 2005 by 3te.-ve." '&t.~ ,:Pfe~lcieid of GTE SOUTHWEST, C. d/b/a VERIZON SOUTHWEST, on behalf of said corporation. G . oJu~ Not~ubliC in d for the State of Texas <; ~VED lJ,ttorney Date~ lOr ~.,,~. l~ " i*' :.- ;;~ : ~ ~.~.....~. '''t:rl~t1~''\'' ELIZABETH J. CHIlDRESS MY COMMISSION EXPIRES March 15, 2005 26 tIl Q) 0) c: 1\J .t:: :i tIl U 1\J >< ><W 0 Q) c: a:) t-o - N ..0 .~ "C ...= >-~ t:: 3:0) c.8 c: .~ ....... 0 Q) .t:: r;/) CJ') ~ a Q) ...= ....... = ...... = ::: 0 -= r;/) Q) ~ r;/) C'd Q) -< Q) u ~ ';; ~ Q) < r:/) ~ ~ ~ ~ ..... - 0 = rrJ - ....... - :::: "'0 == U "'0 ~ Z <: ~ ~ '"C:l C ~ '"'" c<l ~) .... -< Q) (.) 'E Q) r:/) "'0 Q) "0 C Q) ....... '" ~l d' IU 10. <!~ Q) .~ t: rJ) r:/) "; ...... ."';::: = - Q) .= f..... 1\J co OJ !!: < <( 1\J Q) ~ ~ < '~ 'S; ~ OJ Cii III 'S CJ') CJ') .2=' III <... '0 ro ;, GlOJOJC ~ ~ ~ ~ ~ ~ ~ 7ij ~ 'c X '0 >...J._ W<( DI~DII ~ ~ v r--- N .. ~,. * tIl ~ ;2 3: L! EXHIBIT B MUNICIP AL BUILDINGS TO BE PROVIDED FREE CABLE SERVICE (All Locations are in Wylie, Texas 75098, except as noted below) Municipal Complex 2000 Highway 78 North Fire Administration 801-A Highway 78 South #204 Fire Station #1 1400 South Ballard Street Fire Station #2 555 Country Club Drive/FM1378 Public Works Service Center 949 Hensley Lane Smith Public Library & Akin Pavilion 800 Thomas Street Bart Peddicord Community Center 100 West Oak Street P.M. Akin Elementary 1100 Springwood T.F. Birn1ingham Elementary 700 West Brown Cheri L. Cox Elementary 7009 Woodbridge Parkway Sachse, Texas 75048 Dodd Elementary 1500 Park Boulevard R.V. Groves Elementary 1100 McCreary Road R.F. Hartman Elementary 510 South Birmingham Street Bill F. Davis Intermediate 950 Park Boulevard Ab Harrison Intermediate 1001 South Ballard Street Grady Burnett Junior High 516 Hilltop Lane Frank McMillan Junior High 1050 Park Boulevard Wylie High 2250 West FM 544 Wylie ISD Administration Building 951 South Ballard Street 28 Education Channel: EXHIBIT C EG CHANNELS (Point of Origination for EG Programming) Wylie Independent School District Wylie, Texas 75098 Government Channels: Dedicated (TBD) Reserved (TBD) 29 EXHIBIT D CUSTOMER SERVICE STANDARDS These standards shall, starting six (6) months after the Beginning Service Date, apply to Franchisee to the extent it is providing Cable Services over the Cable System in the Franchise area. 1. DEFINITIONS: In addition to the definitions contained in this Franchise, the following words shall have the meanings set forth below when used in this Exhibit D: A. Normal Business Hours: Those hours during which most similar businesses in the community are open to serve customers. In all cases, "normal business hours" must include some evening hours at least one night per week and/or some weekend hours and include being open to serve customers at least eight (8) hours each weekday. B. Normal Operating Conditions: Those service conditions which are within the control of Franchisee. Those conditions which are not within the control of Franchisee include, but are not limited to, natural disasters, civil disturbances, power outages, telephone network outages, and severe or unusual weather conditions. Those conditions which are within the control of Franchisee include, but are not limited to, special promotions, pay-per-view events, rate increases, regular peak or seasonal demand periods, and maintenance, installation, expansion or rebuild of the Cable System. See 47 C.F.R. S 309(c)(4)(ii). C. Respond: Franchisee's investigation of a Service Interruption initiated by receiving a Subscriber call and opening a trouble ticket, if required D. Service Call: The action taken by Franchisee to correct a Service Interruption the effect of which is limited to an individual Subscriber. E. Service Interruption: The loss of picture or sound on one or more cable channels. F. Significant Outage: A significant outage of the Cable Service shall mean any Service Interruption lasting at least four (4) continuous hours that affects at least ten percent (10%) of the Subscribers in the Service Area. G. Standard Installation: Installations where the Subscriber is within one hundred fifty (150) feet of trunk or feeder lines. 2. TELEPHONE AVAILABILITY A. Franchisee shall maintain a toll-free number to receive all calls and inquiries from Subscribers in the Franchise Area and/or residents regarding Cable Service. Franchisee representatives trained and qualified to answer questions related to Cable Service in the Service Area must be available to receive reports of Service Interruptions twenty-four (24) hours a day, 30 seven (7) days a week, and other inquiries at least forty-five (45) hours per week. Franchisee representatives shall identify themselves by name when answering this number. B. Franchisee's telephone numbers shall be listed, with appropriate description (e.g. administration, customer service, billing, repair, etc.), in the directory published by the local telephone company or companies serving the Service Area, beginning with the next publication cycle after acceptance of this Franchise by Franchisee and appear on Subscriber bills. C. Franchisee may use an Automated Response Unit ("ARU") or a Voice Response Unit ("VRU") to distribute calls. If a foreign language routing option is provided, and the Subscriber does not enter an option, the menu will default to the first tier menu of English options. After the first tier menu (not including a foreign language rollout) has run through three times, if customers do not select any option, the ARU or VRU will forward the call to a queue for a live representative. Franchisee may reasonably substitute this requirement with another method of handling calls from customers who do not have touch-tone telephones. D. Under Normal Operating Conditions, calls received by Franchisee shall be answered within thirty (30) seconds. Franchisee shall meet this standard for ninety percent (90%) of the calls it receives at all call centers receiving calls from Subscribers, as measured on a cumulative quarterly calendar basis. Measurement of this standard shall include all calls received by Franchisee at all call centers receiving calls from Subscribers, whether they are answered by a live representative, by an automated attendant, or abandoned after 30 seconds of call waiting. E. Under Normal Operating Conditions, callers to Franchisee shall receive a busy signal no more than three (3%) percent of the time during any calendar quarter. F. At Franchisee's option, the measurements and reporting above may be changed from calendar quarters to billing or accounting quarters. Franchisee shall notify LF A of such a change at least thirty (30) days in advance of any implementation. 3. INSTALLATIONS AND SERVICE APPOINTMENTS A. All installations will be in accordance with FCC rules, including but not limited to, appropriate grounding, connection of equipment to ensure reception of Cable Service, and the provision of required consumer information and literature to adequately inform the Subscriber in the utilization of Franchisee-supplied equipment and Cable Service. B. The Standard Installation shall be performed within seven (7) days after the placement of the Optical Network Terminal ("ONT") on the customer's premises. Franchisee shall meet this standard for ninety-five percent (95%) ofthe Standard Installations it performs, as measured on a calendar quarter basis, excluding customer requests for connection later than seven (7) days after ONT placement. 31 C. Franchisee will offer Subscribers "appointment window" alternatives for arrival to perform installations, Service Calls and other activities of a maximum four (4) hours scheduled time block during appropriate daylight available hours, usually beginning at 8:00 AM unless it is deemed appropriate to begin earlier by location exception. At Franchisee's discretion, Franchisee may offer Subscribers appointment arrival times other than these four (4) hour time blocks, if agreeable to the Subscriber. These hour restrictions do not apply to weekends. 4. SERVICE INTERRUPTIONS AND OUTAGES A. Service. Franchisee shall promptly notify LF A of any Significant Outage of the Cable B. Franchisee shall exercise commercially reasonable efforts to limit any Service Interruption for the purpose of maintaining, repairing, or constructing the Cable System. Except in an emergency or other situation necessitating a more expedited or alternative notification procedure, Franchisee may schedule a Significant Outage for a period of more than four (4) hours during any twenty-four (24) hour period only after LF A and each affected Subscriber in the Service Area have been given fifteen (15) days prior notice of the proposed Service Interruption. C. Franchisee representatives who are capable of responding to Service Interruptions must be available to Respond twenty-four (24) hours a day, seven (7) days a week. D. Under Normal Operating Conditions, Franchisee must Respond to a call from a Subscriber regarding a Service Interruption or other service problems within the following time frames: (1) Within twenty-four (24) hours, including weekends, of receiving subscriber calls respecting Service Interruptions in the Service Area; (2) Franchisee must begin actions to correct all other Cable Service problems the next business day after notification by the Subscriber or LF A of a Cable Service problem. E. Under Normal Operating Conditions, Franchisee shall complete Service Calls within seventy-two (72) hours of the time Franchisee commences to Respond to the Service Interruption, not including weekends and situations where the Subscriber is not reasonably available for a Service Call to correct the Service Interruption within the seventy-two (72) hour period. F. Franchisee shall meet the standard in Subsection E. ofthis Section for ninety percent (90%) of the Service Calls it completes within the Service Area, as measured on a quarterly basis. G. Under Normal Operating Conditions, Franchisee shall provide a credit upon Subscriber request when all Channels received by that Subscriber are out of service for a period of four (4) consecutive hours or more. The credit shall equal, at a minimum, a proportionate amount 32 of the affected Subscriber(s) current monthly bill. In order to qualify for the credit, the Subscriber must promptly report the problem and allow Franchisee to verify the problem if requested by Franchisee. If Subscriber availability is required for repair, a credit will not be provided for such time, if any, that the Subscriber is not reasonably available. H. Under Normal Operating Conditions, if a Significant Outage affects all Video Programming Cable Services for more than twenty-four (24) consecutive hours, Franchisee shall issue an automatic credit to the affected Subscribers in the amount equal to their monthly recurring charges for the proportionate time the Cable Service was out, or a credit to the affected Subscribers in the amount equal to the charge for the basic plus enhanced basic level of service for the proportionate time the Cable Service was out, whichever is technically feasible or, if both are technically feasible, as determined by Franchisee provided such determination is non-Discriminatory. Such credit shall be reflected on Subscriber billing statements within the next available billing cycle following the outage. 1. With respect to service issues concerning Cable Services provided to LF A facilities, Franchisee shall Respond to all inquiries from LF A within four (4) hours and shall commence necessary repairs within twenty-four (24) hours under Normal Operating Conditions. If such repairs cannot be completed within twenty-four (24) hours, Franchisee shall notify LF A in writing as to the reason( s) for the delay and provide an estimated time of repair. 5. CUSTOMER COMPLAINTS Under Normal Operating Conditions, Franchisee shall investigate Subscriber complaints referred by LF A within seventy-two (72) hours. Franchisee shall notify LF A of those matters that necessitate an excess of seventy-two (72) hours to resolve, but those matters must be resolved within fifteen (15) days ofthe initial complaint. LF A may require reasonable documentation to be provided by Franchisee to substantiate the request for additional time to resolve the problem. For purposes of this Section, "resolve" means that Franchisee shall perform those actions, which, in the normal course of business, are necessary to investigate the Subscriber's complaint and advise the Subscriber of the results of that investigation. 6. BILLING A. Subscriber bills must be itemized to describe Cable Services purchased by Subscribers and related equipment charges. Bills shall clearly delineate activity during the billing period, including optional charges, rebates, credits, and aggregate late charges. Franchisee shall, without limitation as to additional line items, be allowed to itemize as separate line items, Franchise fees, taxes and/or.other governmentally imposed fees. Franchisee shall maintain records of the date and place of mailing of bills. B. Every Subscriber with a current account balance sending payment directly to Franchisee shall be given at least twenty (20) days from the date statements are mailed to the Subscriber until the payment due date. 33 C. A specific due date shall be listed on the bill of every Subscriber whose account is current. Delinquent accounts may receive a bill which lists the due date as upon receipt; however, the current portion of that bill shall not be considered past due except in accordance with 6.B. above. D. Any Subscriber who, in good faith, disputes all or part of any bill shall have the option of withholding the disputed amount without disconnect or late fee being assessed until the dispute is resolved provided that: (1) The Subscriber pays all undisputed charges; (2) The Subscriber provides notification ofthe dispute to Franchisee prior to the due date; and (3) The Subscriber cooperates in determining the accuracy and/or appropriateness of the charges in dispute. (4) It shall be within Franchisee's sole discretion to determine when the dispute has been resolved. E. Under Normal Operating Conditions, Franchisee shall initiate investigation and resolution of all billing complaints received from Subscribers within five (5) business days of receipt of the complaint. Final resolution shall not be unreasonably delayed. F. Franchisee shall provide a telephone number and address on the bill for Subscribers to contact Franchisee. G. Franchisee shall forward a copy of any Cable Service related billing inserts or other mailing sent to Subscribers to LF A upon request. H. Franchisee shall provide all Subscribers with the option of paying for Cable Service by check or an automatic payment option where the amount of the bill is automatically deducted from a checking account designated by the Subscriber. Franchisee may in the future, at its discretion, permit payment by using a major credit card on a preauthorized basis. Based on credit history, at the option of Franchisee, the payment alternative may be limited. 7. DEPOSITS. REFUNDS AND CREDITS A. Franchisee may require refundable deposits from Subscribers with 1) a poor credit or poor payment history, 2) who refuse to provide credit history information to Franchisee, or 3) who rent Subscriber equipment from Franchisee, so long as such deposits are applied on a non-Discriminatory basis. The deposit Franchisee may charge Subscribers with poor credit or poor payment history or who refuse to provide credit information may not exceed an amount equal to an average Subscriber's monthly charge multiplied by six (6). The maximum deposit Franchisee may charge for Subscriber equipment is the cost of the equipment which Franchisee would need to purchase to replace the equipment rented to the Subscriber. 34 B. Franchisee shall refund or credit the Subscriber for the amount ofthe deposit collected for equipment, which is unrelated to poor credit or poor payment history, after one year and provided the Subscriber has demonstrated good payment history during this period. Franchisee shall pay interest on other deposits if required law. C. Under Normal Operating Conditions, refund checks will be issued within next available billing cycle following the resolution of the event giving rise to the refund, (e.g. equipment return and final bill payment). D. Credits for Cable Service will be issued no later than the Subscriber's next available billing cycle, following the determination that a credit is warranted, and the credit is approved and processed. Such approval and processing shall not be unreasonably delayed. E. Bills shall be considered paid when appropriate payment is received by Franchisee or its' authorized agent. Appropriate time considerations shall be included in Franchisee's collection procedures to assure that payments due have been received before late notices or termination notices are sent. 8. RATES, FEES AND CHARGES A. Franchisee shall not, except to the extent expressly permitted by law, impose any fee or charge for Service Calls to a Subscriber's premises to perform any repair or maintenance work related to Franchisee equipment necessary to receive Cable Service, except where such problem is caused by a negligent or wrongful act of the Subscriber (including, but not limited to a situation in which the Subscriber reconnects Franchisee equipment incorrectly) or by the failure of the Subscriber to take reasonable precautions to protect Franchisee's equipment (for example, a dog chew). B. Franchisee shall provide reasonable notice to Subscribers ofthe possible assessment of a late fee on bills or by separate notice. 9. DISCONNECTION /DENIAL OF SERVICE A. Franchisee shall not terminate Cable Service for nonpayment of a delinquent account unless Franchisee provides a notice ofthe delinquency and impending termination at least ten (10) days prior to service suspension and twenty (20) days prior to the proposed final termination. The notice shall be mailed to the Subscriber to whom the Cable Service is billed. The notice of delinquency and impending termination may be part of a billing statement. B. Cable Service terminated in error must be restored without charge within twenty-four (24) hours of notice. If a Subscriber was billed for the period during which Cable Service was terminated in error, a credit shall be issued to the Subscriber if the Service Interruption was reported by the Subscriber. 35 C. Nothing in these standards shall limit the right of Franchisee to deny Cable Service for non-payment of previously provided Cable Services, refusal to pay any required deposit, theft of Cable Service, damage to Franchisee's equipment, abusive and/or threatening behavior toward Franchisee's employees or representatives, or refusal to provide credit history information or refusal to allow Franchisee to validate the identity, credit history and credit worthiness via an external credit agency. D. Charges for cable service will be discontinued at the time ofthe requested termination of service by the Subscriber, except equipment charges may by applied until equipment has been returned. No period of notice prior to requested termination of service can be required of Subscribers by Franchisee. No charge shall be imposed upon the Subscriber for or related to total disconnection of Cable Service or for any Cable Service delivered after the effective date of the disconnect request, unless there is a delay in returning Franchisee equipment or early termination charges apply pursuant to the Subscriber's service contract. If the Subscriber fails to specify an effective date for disconnection, the Subscriber shall not be responsible for Cable Services received after the day following the date the disconnect request is received by Franchisee. For purposes of this subsection, the term "disconnect" shall include Subscribers who elect to cease receiving Cable Service from Franchisee. 10. COMMUNICATIONS WITH SUBSCRIBERS A. All Franchisee personnel, contractors and subcontractors contacting Subscribers or potential Subscribers outside the office of Franchisee shall wear a clearly visible identification card bearing their name and photograph. Franchisee shall make reasonable effort to account for all identification cards at all times. In addition, all Franchisee representatives shall wear appropriate clothing while working at a Subscriber's premises. Every service vehicle of Franchisee and its contractors or subcontractors shall be clearly identified as such to the public. Specifically, Franchisee vehicles shall have Franchisee's logo plainly visible. The vehicles of those contractors and subcontractors working for Franchisee shall have the contractor's / subcontractor's name plus markings (such as a magnetic door sign) indicating they are under contract to Franchisee. B. All contact with a Subscriber or potential Subscriber by a Person representing Franchisee shall be conducted in a courteous manner. C. Franchisee shall send annual notices to all Subscriber informing them that any complaints or inquiries not satisfactorily handled by Franchisee may be referred to LF A. D. All notices identified in this Section shall be by either: (1) A separate document included with a billing statement or included on the portion of the monthly bill that is to be retained by the Subscriber; or (2) A separate electronic notification E. Franchisee shall provide reasonable notice to Subscribers of any pricing changes (excluding sales discounts, new products or offers) and, subject to the forgoing, any changes in 36 Cable Services, including channel line-ups. Such notice must be given to Subscribers a minimum of thirty (30) days in advance of such changes if within the control of Franchisee, and Franchisee shall provide a copy of the notice to LF A including how and where the notice was given to Subscribers. F. Franchisee shall provide information to all Subscribers about each ofthe following items at the time of installation of Cable Services, annually to all Subscribers, at any time upon request, and, subject to Subsection 10.E., at least thirty (30) days prior to making significant changes in the information required by this Section if within the control of Franchisee: (1) Products and Cable Service offered; (2) Prices and options for Cable Services and condition of subscription to Cable Services. Prices shall include those for Cable Service options, equipment rentals, program guides, installation, downgrades, late fees and other fees charged by Franchisee related to Cable Service; (3) Installation and maintenance policies including, when applicable, information regarding the Subscriber's in-home wiring rights during the period Cable Service is being provided; (4) Channel positions of Cable Services offered on the Cable System; (5) Complaint procedures, including the name, address and telephone number of LF A, but with a notice advising the Subscriber to initially contact Franchisee about all complaints and questions; (6) Procedures for requesting Cable Service credit; (7) The availability of a parental control device; (8) Franchisee practices and procedures for protecting against invasion of privacy; and (9) The address and telephone number of Franchisee's office to which complaints may be reported. A copy of notices required in this Subsection 10.F., will be given to LFA at least fifteen (15) days prior to distribution to Subscribers if the reason for notice is due to a change that is within the control of Franchisee and as soon as possible if not with the control of Franchisee. G. Notices of changes in rates shall indicate the Cable Service new rates and old rates, if applicable. H. Notices of changes of Cable Services and/or Channel locations shall include a description of the new Cable Service, the specific channel location, and the hours of operation of 37 the Cable Service ifthe Cable Service is only offered on a part-time basis. In addition, should the channel location, hours of operation, or existence of other Cable Services be affected by the introduction of a new Cable Service, such information must be included in the notice. 1. Every notice of termination of Cable Service shall include all of the following information: (1) The name and address of the Subscriber whose account is delinquent; (2) The amount of the delinquency; (3) The date by which payment is required in order to avoid termination of Cable Service; and (4) The telephone number for Franchisee where the Subscriber can receive additional information about their account and discuss the pending termination. 38 EXHIBIT E FRANCHISE FEE SCHEDULEIREPORT For the Month of 1. 2. 3. 4. Less: Monthly Recurring Cable Service Charges (e.g., Basic, Enhanced Basic, Premium and Equipment Rental) U sage Based Charges (e.g, Pay Per View, Installation) Other Misc. Revenue (e.g., Late Charges, Advertising, Leased Access) Franchise Fees Collected 1. Sales Tax Collected $ 2. Uncol1ectibles $ Total Roxeipts Subject to Franchise Fee Calculation Franchise Fee Rate (5%) Franchise Fee Due 39 $ $ $ $ $ $ $ THE WYLIE NEWS t:overmg Wylie, Sachse, Murphy and the surroundmg area 110 N. Ballard P.O. Box 369 Wylie, Texas 75098 (972) 442-5515 Fax (972) 442-4318 STATE OF TEXAS COUNTY OF COLLIN Before me, the undersigned authority, on this day personally appeared Chad Engbrock, publisher of The Wylie News, a newspaper regularly published in Collin County, Texas and having general circulation in Collin County, Texas, who being by me duly sworn, deposed and says that the foregoing attached City of Wylie Ord. No. 2005-05, Ord. No. 2005-06, Ord. No. 2005-07, Ord. No. 2005-08 was published in said newspaper on the following date(s), to-wit: Feb. 2, 2005 ~ Chad Engbrock, Publisher Subscribed and sworn before me on this, the (M day of ~~ , 2005 to certify which witness my hand and seal of office. ~~..~;.~ (:(:f\~' ~j.' ~):,l ..,...............:::0/ .~::... ADA L. MOONEY Notary Public State of Texas My Oomm Exp. 01-02,07 ~X?JJ. ~otary Public in a~ The State of Texas My commission expires 01102/07 RECtQ MAR 0 7 2005 ..-- -~--- -~.- r -.-------- Page ;'1 - Section C - C&S MEDIA PUBLICATIONS - February 2-3, 2005 Pub Ii c Notices Continued from page C 7 ( INVITATION FOR BIDS The North Texas Municipal Water District is soliciting proposals for the construction of the follow- ing project: Little Elm Pipeline NTMWD Project No. LEWCF 03-1 This project includes con- struction of approximately 18,800 feet of 30" potable water transmission pipeline, connections to existing pipelines, flow meter vault and associated yard piping, electrical and instrumentation, and appurtenances. Proposals must be deliv- ered to the President and Board of Director~ of the North Texas Municipal Water District at 505 East Brown Street, Wylie, Texas 75098 until 11:00 a.Ill. local time, February 16, 2005 to be accepted. The proposals will be publicly opened and read aloud at this time and place. Bids received after this time will be returned unopened. Contract Documents may be examined or purchased at the offices of Freese and Nichols, Inc., Consulting Engineers at the following address: Freese and Nichols, Inc. 1701 North Market Street Suite 500, LB51 Dallas, Texas 75202 Attention: Paul Lyons The cost for Contract Documents is $75 per set for full-size documents and $50 for half-size docu- ments. als are to be received, or at the offices of Freese and Nichols at the address list- ed above. Contract Documents are also on file in the following Plan Rooms: McGraw Hill Construction Dodge 9155 Sterling Street, Suite 160 Irving, Texas 75063 Phone (972)819-1400 North Texas Construction Reports 11325 Pegasus #233W Dallas, TX 75238 Phone (214) 342-9200 Direct questions regarding distribution of Contract Documents for this project to Mr. Paul Lyons, (214) 920-2500. Direct que tions related to the desi of the project to Mr. Carleton Sherrer, P.E., (214) 920-2500 or Mr. Nick Lester, E.Ii!T. '9't7) 735-7300. Wri ~'4ues- tions may be su . d to Freese and Nichols at the address shown above or you may fax questions to (214) 920-2565 or email questions to Mr. Sherrer (jcs@freese.com). Bidders must submit a cashier's check, certified check, or acceptable bid- der's bond with their pro- posal as a guarantee that the Bidder will enter into a contract for the project with the Owner within fif- teen (15) days of Notice of Award of the contract. The security must be payable to the North Texas Municipal Water District in the amount of five percent (5%) of the bid submitted. Contractor must execute the contract, bonds and certificates of insurance on OF NEW TARIFFS AS FEBRUARY 1, 2005; FINDING CITIES' RATE CASE EXPENSES REA- SONABLE; SEVERING THE DETERMINATION OF THE REASONABLE- NESS OF COSERV GAS LTD.'S RATE CASE EXPENSE FROM APPROVAL OF THE REVISED TARIFFS; RETAINING JURISDIC- TION OVER THE DETERMINATION OF THE REASONABLE- NESS OF COSERV GAS NORTH TEXAS MUNIC- LTD.'S RATE CASE IPALWATER DISTRICT EXPENSE ISSUE UNTIL MARCH 1, 2005; Joe Farmer ADOPTING A BASE President, Board of RATE CASE MORATO- rectors 37-3t-~_ RIUM; FINDING THAT ANY RELIEF REQUEST- ORDINANCE NO. D BY COSERV GAS 2005-05 LTD. NOT SPECIFICAL- LY GRANTED HEREIN IS DENIED; ADOPTING A MOST FAVORED NATIONS PROVISION; FINDING THAT THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC AS REQUIRED BY LAW; AND PROVIDING FOR NOTICE OF THIS ORD~ NANCE TO COSERV GAS LTD. also The North Texas Municipal Water District reserves the right to adopt the most advantageous interpretation of the bids submitted in the case of ambiguity or lack of clear- ness in stating proposal prices, to reject any or all bids, and/or waive formali- ties. Bids may not be with- drawn within sixty (60) days from date on which bids are opened. AN ORDINANCE OF THE CITY OF WYLIE, TEXAS GRANTING A CABLE FRANCHISE 'GRANTED TO GTE SOUTHWEST, INC. D/B/A VERIZON SOUTHWEST SETTING FORTH THE TERMS AND CONDITIONS TO CONSTRUCT, OPER- ATE, AND MAINTAIN A CABLE SYSTEM IN THE CITY OF WYLIE; AND PROVIDING FOR AN EFFECTIVE DATE. ORDINANCE NO. 2005-06 AN ORDINANCE OF THE CITY OF WYLIE, TEXAS, FINDING THAT THE CURRENT RATES OF COSERV GAS LTD. ARE UNREASONABLE; APPROVING COSERV GAS LTD.'S REVISED AND UNCONTESTED TARIFFS: APPROVING A ORDINANCE NO. 2005-07 AN ORDINANCE ADOPTING AND ENACTING A NEW CODE FOR THE CITY OF WYLIE, TEXAS; PROVIDING FOR THE REPEAL OF CERTAIN ORDINANCES NOT INCLUDED THEREIN; PROVIDING A PENAL- TY FOR THE VIOLA- TION THEREOF; PRO- VIDING FOR THE MAN"