ORDINANCE NO. ________ AN ORDINANCE GRANTING A FRANCHISE TO MILLENNIUM TELCOM, L.L.C. FOR USE OF PUBLIC RIGHTS-OF-WAY IN THE CITY OF FORT WORTH FOR THE PURPOSE OF CONSTRUCTING, MAINTAINING AND OPERATING A CABLE TELEVISION SYSTEM; REQUIRING EXECUTION OF A FRANCHISE AGREEMENT BETWEEN THE CITY OF FORT WORTH AND MILLENNIUM TELCOM, L.L.C. REGARDING CONDITIONS, AND REQUIREMENTS RELATED TO THE USE OF PUBLIC RIGHTS-OF-WAY IN THE CITY OF FORT WORTH AND TO THE CONSTRUCTION, MAINTENANCE AND OPERATION OF A CABLE TELEVISION SYSTEM AND TO THE PROVISION OF CABLE SERVICES TO RESIDENTS OF THE CITY OF FORT WORTH AND TO REASONABLE COMPENSATION TO THE CITY OF FORT WORTH FOR THE USE OF THE PUBLIC RIGHTS-OF- WAY; PROVIDING FOR PUBLICATION; AND PROVIDING AN EFFECTIVE DATE. The following statements are true and correct and constitute the basis upon which the City Council of the City of Fort Worth ("City") has adopted this Ordinance: A. Millennium Telcom, L.L.C. ("Company") wishes to construct a cable television system and to provide cable television services in the City of Fort Worth. In accordance with the City Charter and ordinances of the City, Company has applied for a franchise from the City in order to carry out those purposes. B. Company is a Texas limited liability company owned equally by Value Choice, Inc. and One Source Communications, L.L.C. Value Choice, Inc. is a wholly-owned subsidiary of Tri-County Electric Cooperative, Inc., a Texas corporation. One Source Communications, L.L.C. is owned by First American Communications Enterprises, Inc., a Texas corporation; C. Roger Hutton, an individual; and Conley L. Cathey, an individual. C. The City has reviewed Company's franchise application and determined that the granting of a franchise, on the terms and conditions set forth herein, will assist the cable-related needs and interests of the community, including, but not limited to, the provision of necessary competition in cable services and participation in the provision of valuable public, educational and governmental programming. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS: Ordinance Section 1. The City hereby grants Company a franchise to erect, construct, install and maintain a cable television system in, over, under, along and across the public rights-of-way and to transact business related to the provision of cable services over such cable television system subject to the execution by Company, Tri-County Electric Cooperative, Inc., First American Communications Enterprises, Inc., Value Choice, Inc. and One Source Communications, L.L.C. of a Franchise Agreement in the form attached hereto as Exhibit 1, which is hereby made a part of this Ordinance for all purposes. Section 2. In accordance with and as required by Section 2 of Chapter XXV of the City's Charter, the City Secretary is hereby directed to publish this Ordinance in its entirety once each week for four (4) consecutive weeks within a period of thirty (30) days following adoption by the City Council in the official newspapers of the City. Company shall pay for or reimburse the City for all expenses incurred from such publication. Section 3. This Ordinance shall be in full force and effect following (i) its adoption; and (ii) its publication in accordance with Section 2; and (iii) in accordance with Section 1, the execution of the Franchise Agreement attached hereto as Exhibit 1. ADOPTED: ______________ _______________ Date M & C Number EFFECTIVE DATE: _________________________ APPROVED AS TO FORM AND LEGALITY: By: _______________________________________ Peter Vaky Assistant City Attorney City of Fort Worth Exhibit 1 FRANCHISE AGREEMENT The following statements are true and correct and constitute the basis upon which the City of Fort Worth has executed this Franchise Agreement. A. The City Council of the City of Fort Worth has adopted an ordinance that grants Millennium Telcom, L.L.C. a franchise to erect, construct, install and maintain a cable television system in, over, under, along and across the public rights-of-way in the City of Fort Worth and to transact business related to the provision of cable services over such cable television system ("Franchise Ordinance"), subject to the execution by Company, Tri-County Electric Cooperative, Inc., First American Communications Enterprises, Inc., Value Choice, Inc. and One Source Communications, L.L.C. of this Franchise. B. In accordance with the Franchise Ordinance, Millennium Telcom, L.L.C. desires to enter into this Franchise. Tri-County Electric Cooperative, Inc., First American Communications Enterprises, Inc., Value Choice, Inc. and One Source Communications, L.L.C. consent to Millennium Telcom, L.L.C.'s entering into this Franchise and desire, jointly and severally, to guarantee unconditional performance of Millennium Telcom, L.L.C.'s performance of its duties and obligations under this Franchise. Agreement 1. DEFINITIONS. Capitalized terms used in this Franchise and not otherwise defined within this Franchise shall have the following meanings: Act shall mean the federal Communications Act of 1934, as amended. Affiliate shall mean any individual, partnership, association, joint stock company, limited liability company, trust, corporation, or other person or entity who owns or controls, or is owned or controlled by, or is under common ownership or control with, the entity in question. Cable Business shall mean the provision by Company of Cable Services solely by means of Company's Cable Television System. Cable Services shall mean only: * The one-way transmission to subscribers of (i) Video Programming or (ii) other programming services, such as digital audio, by which is meant information which Company makes available generally to all subscribers of Company's Cable Services, such as digital cable radio service; and * Subscriber interaction, if any, including, but not limited to, that which is used for the selection or use of (i) Video Programming or other programming services; (ii) various on-screen options; (iii) Enhanced Cable Services; (iv) game channels; and (v) interactive services, such as the ordering of merchandise and the downloading of programs or data access; and * Enhanced Cable Services; and * Institutional Network Services. Cable Television System or System shall mean a facility consisting of a set of closed transmission paths and associated signal generation, reception and control equipment that is designed to provide Cable Services which are provided to multiple subscribers within the City, but shall not include (i) a facility that serves only to re-transmit the television signals of one or more television broadcast stations; (ii) a facility that serves subscribers without occupying any portion of the Public right-of-way; (iii) a facility of a common carrier which is subject, in whole or in part, to the provisions of Title II of the Act, except that, other than for purposes of Section 621(c) of the Act, such a facility shall be considered a Cable Television System to the extent that such facility is used in the transmission of Video Programming directly to subscribers, unless the extent of such use is solely to provide interactive on- demand services; (iv) an open video system that complies with Section 653 of the Act; or (v) any facilities of any electric utility used solely for operating its electric utility systems. Company shall mean Millennium Telcom, L.L.C. City shall mean the area within the corporate limits of the City of Fort Worth, Texas. Complaint shall mean a telephone call or written communication from a customer notifying Company of a problem relating to Company’s billing or billing practices, Company’s equipment, picture quality, failure to receive one or more channels, a change in Company’s practice or policy, Company advertising or other business practice, the conduct of a Company employee or contractor, or the failure of Company or a service representative to comply with customer service regulations. Drop shall mean the cable or wire that connects the distribution portion of Company's Cable Television System to a customer's premises. Enhanced Cable Services shall mean (i) information services; (ii) Internet protocol (IP) telephony; (iii) high speed data service; and (iv) Internet access and Internet service, such as that of an Internet service provider. Facilities shall mean all duct spaces, manholes, poles, conduits, underground and overhead passageways, and other equipment, structures and appurtenances and all associated transmission media in the Public Rights-of-Way used by Company in the provision of Cable Services. Franchise shall mean the authorization issued to Company by the City for the construction and operation of Company's Cable Television System, as provided by Title VI of the Act and pursuant to and in accordance with the Franchise Ordinance and this Franchise Agreement. FCC shall mean the Federal Communications Commission. Gross Revenue shall mean all of the amounts earned or accrued by Company, or by an entity in any way affiliated with Company, in whatever form and from all sources which are in connection with or attributable to (i) the operation of the Cable Television System with in the City's corporate limits or (ii) Company's provision of Cable Services within the City's corporate limits. Gross Revenue shall include, but not be limited to, all subscriber and customer revenues earned or accrued net of bad debts, including revenues for (i) basic cable services; (ii) additional tiers of service; (iii) premium services; (iv) pay- per-view programs and services; program guides; (v) cable modem, high speed data, IP telephony and Internet access and services; fees for (vi) the installation or disconnection of Cable Services; (vii) service calls; (viii) the provision, sale, rental or lease of converters, remote controls, additional outlets and other customer premises equipment; (ix) revenues from the use of leased access channels; (x) advertising revenues from the Cable Television System; and (xi) revenues in compensation from home shopping programming. Advertising revenues and other revenues whose source cannot be identified with a specific subscriber shall be allocated to the City based upon the percentage of subscribers residing in the City compared to that served from the head-end serving the City. Institutional Network or I-NET shall mean the fiber optic communications network described in Section 5.2 and Exhibit "B" to be constructed and operated by Company for the provision of Institutional Network Services to I-NET Users. Institutional Network Services shall mean the provision of usable bandwidth capacity to I-NET Users through fiber optic lines for applications including, but not limited to, (i) two-way dedicated voice, data, video and telephony channels connecting and interconnecting facilities owned, leased or used by the City, schools, counties, road commissions or other units of state or local government; (ii) computerized traffic control systems for coordinated traffic control on an area-wide basis; (iii) Supervisory Control and Data Acquisition (SCADA) systems for municipally owned water, sewer, gas and electric systems (including street lighting systems); (iv) interconnection of facilities serving police, fire and other public safety systems; (v) interconnection of libraries and other government buildings for the one-way or two-way interchange of video signals; and (vi) local area networks or wide-area networks connecting governmental buildings, such as for geographical informational systems purposes. I-NET User shall mean the City and any school or unit of state or local government designated by the City to receive Institutional Network Services under this Franchise Agreement. Normal Operating Conditions shall mean those service conditions which are within the control of Company. Those conditions which are not within the control of Company 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 Company include, but are not limited to, special promotions, pay-per-view events, rate increases, regular or seasonal demand periods, changes in the billing cycle, changes in the form of bills and other billing matters, changes in channel lineups or services that are within Company’s control, and repairs, rebuilds, maintenance and upgrade of the cable system including computer software and hardware. Public Right-of-Way shall mean all dedicated public streets, highways, alleys and rights-of-way in the City , but shall not include any property of the City that is not a dedicated public street, highway, alley or right-of-way. Telecommunications Service shall mean the offering of any type of telecommunications service, other than Cable Services, to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used, by means of the transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received. Transfer or Transferred shall mean, in addition to supplements set forth in Section 13 of this Franchise, (i) any form of sale, conveyance, assignment, lease, sublease or merger involving Company as to this Franchise or the Cable Television System or (ii) any change in the effective control of Company, such as, by way of example only, that described in 47 C.F.R. § 76.501 et seq. and the notes thereto. Video Programming shall mean programming provided by, or generally considered comparable to programming provided by, a television broadcast station. 2. GRANT OF RIGHTS. 2.1. General Use of Public Rights-of-Way for Provision of Cable Services. Subject to the terms and conditions set forth in this Franchise and the City Charter and ordinances, the City hereby grants Company the right to erect, construct, install and maintain a Cable Television System in, over, under, along and across the Public Rights-of-Way and to provide Cable Services and transact a Cable Business in the City. Company hereby acknowledges and agrees that this Franchise does not allow Company to provide any Telecommunications Service in or through the City. If Company or an Affiliate of Company contends that Company or an Affiliate of Company is permitted or intends to provide any Telecommunications Service in or through the City, Company shall first notify the City in writing and shall obtain a franchise or other permit or agreement for the use of the Public Rights-of-Way if required by the City. 2.2. Scope. 2.2.1. Initial Service Area. If Company will not make its Cable Services available in all parts of the City on the Effective Date of this Franchise, Company shall outline the area within the City in which Company will initially offer its Cable Services, a map of which area shall be attached hereto as Exhibit "A" and made a part of this Franchise for all purposes ("Initial Service Area"). The Initial Service Area and any other portion of the City in which Company, in accordance with this Franchise, is authorized to provide Cable Service shall be collectively referred to as the "Authorized Area". 2.2.2. Extensions of System. The City believes that competition between providers of Cable Services will benefit citizens and desires Company to provide Cable Service to all areas of the City regardless of marketing attractiveness. As a result, the City cannot endorse or condone any plan by Company to provide Cable Service in geographically disparate areas of the City that might be favored by Company, At the same time, the City understands Company's financial inability to construct a City-wide cable system in a short amount of time. Therefore, the City is willing to allow Company to provide Cable Service immediately in the Initial Service Area and beyond the Initial Service Area as follows: 2.2.2.1. If Company wishes to provide Cable Service to an area of the City beyond the Initial Service Area ("New Service Area"), Company shall provide the City with a written request to extend the Authorized Area and a detailed map that specifically depicts the New Service Area. Company may not provide Cable Service or engage in construction work on or to the System or another cable or video system or facilities outside the then-current Authorized Area without the advance written consent of the City Council. 2.2.2.2. If the New Service Area is not completely geographically adjacent to the existing Authorized Area, Company must provide the City with a plan to extend the System to the area of the City between the then- current Authorized Area and the New Service Area ("In-fill Area") if the In-fill Area has a density of fifty (50) occupied residences, whether single- family homes, duplexes or multi-family dwellings, per square mile and regardless of whether the residents of the In-fill Area have personally requested Cable Service from Company. The City and Company shall negotiate in good faith the parameters of a given In-fill Area, but in the event of a disagreement as to the parameters of a given In-fill Area, the City's sole decision shall be final and binding. The City shall not consent to an extension of the then-current Authorized Area unless Company agrees to provide Cable Service to all parts of the In-fill Area as well as to the New Service Area. Company may not offer Cable Service in a New Service Area before it offers Cable Service in a corresponding In-fill Area. 2.3. Nonexclusive. This Franchise and all rights granted to Company herein are strictly nonexclusive. The City reserves the right to grant other and future Cable Television System franchises to other persons and entities as the City deems appropriate. This Franchise does not establish any priority for the use of the Public Rights-of-Way by Company or by any present or future franchisees or other permit holders. In the event of any dispute as to the priority of use of the Public Rights-of-Way, the first priority shall be to the public generally, the second priority to the City in the performance of its various functions, and thereafter, as between franchisees and other permit holders, as determined by the City in the exercise of its powers, including the police power and other powers reserved to and conferred on it by the State of Texas. 2.4. Other Permits. This Franchise does not relieve Company of any obligation to obtain permits, licenses and other approvals from the City necessary for the construction, repair or maintenance of the System or the provision of Cable Services. 2.5. Bonds. Prior to the commencement of any construction work in the Public Rights-of-Way in the City that requires a cut, opening or other excavation, Company shall deliver to the City bonds executed by a corporate surety authorized to do business in the State of Texas and acceptable to the City in the proportional amount of the cost of work under the construction contract or construction project that will be performed in the City's corporate limits. The bonds shall guarantee (i) satisfactory compliance by Company with all requirements, terms and conditions of this Franchise Agreement and (ii) full payments to all persons, firms, corporations or other entities with whom Company has a direct relationship for the performance of such construction, maintenance or repairs. If any such construction, maintenance and repair work is undertaken by a contractor of Company, Company shall also require such contractor to deliver to Company bonds executed by a corporate surety authorized to do business in the State of Texas and acceptable to the City in the proportional amount of the cost of work under the construction contract or construction project that will be performed by the contractor in the City's corporate limits. The bonds shall guarantee (i) the faithful performance and completion of all construction, maintenance or repair work in accordance with the contract between Company and the contractor and (ii) full payment for all wages for labor and services and of all bills for materials, supplies and equipment used in the performance of that contract. Such bonds shall name both the City and Company as dual obligees. 3. FEES AND PAYMENTS TO CITY. 3.1. Franchise Fee. Company shall pay the City throughout the term of this Franchise an amount equal to five percent (5%) of Company's Gross Revenue ("Franchise Fee"). 3.1.1. When Due. Company shall pay the Franchise Fee to the City on a calendar quarterly basis. The Franchise Fee shall be due within forty-five (45) days following the last day of each quarter. 3.1.2. Accompanying Report. Company shall submit with its Franchise Fee payment a written report in a form acceptable to the City and verified by an officer of the Company that summarizes Company's Gross Revenue for the previous quarter and computes the amount of the Franchise Fee due the City for that quarter. 3.1.3. Audits. The City may audit Company at any time to verify the accuracy of Franchise Fees paid to the City. Company shall pay any additional amounts due the City as reported in any City audit within thirty (30) days following the City's submission to Company of an invoice for such sum. If this amount exceeds ten percent (10%) of the Franchise Fee which the audit shows should have been paid to the City for the period in which the audit covered, Company shall pay the City's costs for the audit. Otherwise, the City shall pay its own costs for the audit. 3.2. Other Payments. In addition to the Franchise Fee, Company shall pay the City all sums which may be due the City for property taxes, license fees, permit fees, or other taxes, charges or fees that the City may from time to time impose. Company shall reimburse the City for publication of this Franchise as required by the City's Charter. 3.3. Interest. All sums not paid when due shall bear interest at the rate of ten percent (10%) per annum or the maximum amount allowed by law, whichever is less, computed monthly. If such outstanding sums are paid with interest within thirty (30) days following their respective due dates, Company's failure to pay such sums by their respective due dates shall not, in and of itself, constitute an Event of Default under Section 15 of this Franchise. 3.4. Letter of Credit. Within thirty (30) days following the Effective Date of this Franchise, Company shall provide the City with a Letter of Credit in favor of the City in the amount of Five Thousand Dollars ($5,000.00) issued by a financial institution in the City's corporate limits and in a form acceptable to the City. Company shall increase the amount of this Letter of Credit to $10,000 once Company has two thousand (2,000) or more subscribers in the City; $25,000.00 once Company has fifteen thousand (15,000) or more subscribers in the City; $50,000.00 once Company has thirty thousand (30,000) or more subscribers in the City; and $100,000.00 once Company has sixty thousand (60,000) or more subscribers in the City. This Letter of Credit shall serve a security to the City for the faithful performance by Company of the provisions of this Franchise. The Letter of Credit shall provide that the City may draw down an amount owed by Company to the City under the provisions of this Franchise or applicable law by presenting the issuer with (i) a written statement, signed by the City Manager, that sets forth the basis of the City's demand and contains an appropriate reference to the applicable law, ordinance or Franchise provision under which the City is due the sum demanded and (ii) a copy of the Letter of Credit. Company shall keep in effect and maintain this Letter of Credit at the amount specified herein at all times during the term of this Franchise. The Letter of Credit shall provide that the Letter of Credit shall not expire and that the issuer shall not cancel the Letter of Credit unless the issuer provides written notice to the City in advance of such expiration or termination. 4. TERM This Franchise shall become effective on the Effective Date, as established in the Franchise Ordinance, and shall expire at 11:59 P.M. CDT on August 31, 2006. This Franchise and all rights of Company hereunder shall automatically terminate upon the expiration of this Franchise. The City or Company, at either party's option, may reopen this Franchise within six (6) months following the date of adoption of federal or state legislation or FCC rules or regulations if such affect the City's ability to (i) regulate rates for any Cable Services provided by Company or (ii) protect subscribers within the City on matters such as customer service or consumer protection. This Franchise may not be reopened for any reason other than as set forth in the immediately preceding sentence. 5. ACCESS TO THE SYSTEM. 5.1. PEG Channels. Company shall provide non-commercial public access, educational and government channels ("PEG Channels") on its System in the basic or lowest tier of service as follows: 5.1.1. Public Access Channel. Company shall designate Channel 46 as a public access channel for use by members of the general public which will be administered by the City or by an institution or institutions designated by the City in the City's sole discretion. 5.1.2. Educational Channels. Company shall designate Channels 43 and 50 as educational channels for use by educational entities located in the Dallas-Fort Worth metropolitan area designated by the City in the City's sole discretion. 5.1.3. Government Channels. Company shall designate Channels 7 and 45 as government channels administered by the City for programming provided by the City, a designee of the City or such other units of state or local government as the City may appoint from time to time. 5.1.4. PEG Programming Support. The City already owns and operates its own community access studio and produces programming for all PEG channels on its own or on its behalf. Although federal law allows the City to require a cable operator to provide facilities for PEG programming, the City is willing to forgo any such requirement in return for Company's assistance in the City's production of and administration over PEG programming as provided in this Section 5.1.4. In order for the City to continue its production of and administration over PEG programming, Company shall pay to the City each month during the term of this Franchise a payment equal to One Dollar ($1.00) for each subscriber of the Company that resides in the City ("PEG Fee"). In accordance with federal law, Company may elect, but is not required, to pass through this PEG Fee to its subscribers in the City. In the event that Company does elect to pass through the PEG Fee to its subscribers in the City, Company shall list the PEG Fee as a separate line charge on its subscribers' monthly bills. 5.1.5. Allocation of PEG Channels. Upon at least six (6) months' advance written notice to Company, the City may allocate or reallocate the usage of the PEG Channels among and between different uses and users of such PEG Channels, including, but not limited to, the City's removing a PEG Channel or a user of a PEG Channel; replacing a PEG Channel or a user of a PEG Channel; requiring several different users to share or jointly use a given PEG Channel; or allowing one or more users currently sharing a PEG Channel to have a PEG Channel in which they are the sole User. 5.1.6. Temporary Additional PEG Channels, After the date on which Company begins to provide at least fifty (50) channels in a high definition television format (or technological successor thereof), Company shall provide, upon written request by the City, one additional PEG Channel so as to allow, to the extent deemed appropriate by the City, PEG Channel simulcasting in both 6 MHz analog NTSC format and in an HDTV format. If Company ceases to provide any channel of programming on its System in 6 MHz NTSC analog format, Company shall not be required to provide such additional PEG Channel. 5.2. Institutional Network. Company shall provide, construct, operate and maintain an Institutional Network (excluding coders/decoders, interface and other terminal equipment which will be supplied by I-NET Users) that will provide I-NET Users with Institutional Network Services. Unless the City agrees otherwise in writing with Company, the I-NET, including the individual fiber optic fibers constituting all or any portion of the I-NET, shall by owned and maintained by Company but provided for the sole and exclusive use of I-NET Users. Upon written request by the City, Company will provide the City with a written final cost estimate and other information that the City may reasonably require of installing I-NET fiber from Company's fiber optic Facilities to the locations to be served are set forth on Exhibit "B" ("I-NET Sites"), attached hereto and hereby made a part of this Franchise Agreement for all purposes. Company shall pay (i) all costs and expenses associated with connecting the I-NET from Company's head end to the City's Municipal Building located at 1000 Throckmorton and (ii) the City's Cable Communications Office located at 401 W. Second St. plus (iii) the actual cost of the first five hundred (500) feet of fiber optic fiber installation from Company's fiber optic Facilities to any respective I-NET Site. The City shall pay the for the installation of fiber optic fiber over five hundred (500) feet from Company's fiber optic Facilities to any I-NET Site based on the written final cost estimate provided to the City. In addition, the City agrees to use its best efforts to negotiate an arrangement with E-Spire Communications, Inc. ("E-Spire") under which E-Spire will allow Company to use a portion of E- Spire's fiber optic system at no charge to the City or Company for purposes of the I-NET. In the event that the City cannot negotiate such an agreement with E-Spire or if a material provision of any agreement between the City and E-Spire is lawfully terminated by E-Spire or preempted by law, the City and Millennium shall use their best efforts to negotiate a satisfactory remedy. 5.3. I-NET Design. 5.3.1. For each I-NET Site, Company shall purchase and have installed within the fiber optic cable jacket or in a separate fiber optic cable jacket a minimum of six (6) dark optical fibers interconnecting each of the I-NET Sites in a star or hybrid network architecture, as requested and approved by the City in writing. 5.3.2. Within thirty (30) days following receipt of the architecture and design for the I-NET, the City shall respond to Company with approval or a reasonable request for re-design. If the City approves the design, the City shall advise Company of the portions of the I-NET that the Company shall construct, activate and connect. If the City reasonably requests a re-design, the City shall provide a written reason therefor and Company shall accordingly revise and resubmit the architecture and design and resubmit within thirty (30) days following receipt of the City's request. This procedure shall be repeated until agreement as to the architecture and design of the I-NET is reached. 5.3.3. Company shall purchase and install termination hardware at each I- NET Site, including standard connectors designated by the City and appropriately labeled. Company shall terminate the fibers on the termination hardware. Site equipment other than termination hardware shall be provided and maintained by the City for I-NET Users. 5.4. Incremental I-NET Fiber. Company shall install and terminate additional fiber optic pairs ("Incremental I-NET Fiber") in Company's future new and replacement fiber optic installations for use as an I-NET in the following manner: 5.4.1. The City will inform Company in writing from time to time of the additional facilities it would like to have served by an I-NET. Company will use such information in its plans for future fiber optic installations, where, for example, one routing will pass a facility the City would like to have served and another routing of comparable cost would not. 5.4.2. By January 31 of each year, Company will provide the City with its conceptual plans for new and replacement fiber optic construction for that calendar year. Company will also provide the City from time to time with written notice of conceptual plans for additional fiber optic construction as soon as is feasible, but not less than thirty (30) days prior to the initiation of such construction. 5.4.3. Upon written request by the City, Company will provide the City with a conceptual cost estimate, and other information that the City may reasonably require, of installing Incremental I-NET fiber along all or any portion of a route or routes that are part of Company's conceptual plans. Such estimates shall be provided as soon as possible after the City's request so that the City may have time to obtain City Council approval or to amend its budget. 5.4.4. As to any route where the City has requested a conceptual cost estimate, Company shall provide the City with the final cost estimate of installing Incremental I-NET Fiber, and other information that the City may reasonably require, as soon as Company's design of the fiber for such route is reasonably complete. The City will have thirty (30) days following receipt of the final cost figure to notify Company to install Incremental I-NET Fiber. 5.4.5. The cost of the installation of Incremental I-NET Fiber shall be computed on an incremental basis, meaning the cost to Company of constructing and installing fiber on a given route with the Incremental I-NET Fiber less the cost to Company of constructing and installing fiber on a given route without the Incremental I-NET Fiber. 5.5. I-NET Maintenance. Company shall provide I-NET Users with a reliable level of service, repair and maintenance that, at a minimum, meets the following performance standards: 5.5.1. Company shall maintain of 99.5 percent service availability to I-NET Users measured over a period of twelve (12) months. 5.5.2. Company shall respond to repair requests from I-NET Users for circuits identified as critical pursuant to Section 5.5.4 within two (2) hours of the request. Company shall respond to other repair requests within four (4) hours of the request. 5.5.3. Company shall provide ongoing maintenance of the I-NET at its discretion and as it deems necessary. Except in emergency situations, Company shall provide at least one (1) week's advance notice to any affected I-NET User of any maintenance requiring temporary interruption of services. 5.5.4. Company and the City shall develop a mutually agreeable priority listing of critical circuits and their terminal locations. When notifying Company of service complaints, an I-NET User shall identify critical circuits requiring priority repair. Company shall escalate the repair of critical circuits to the extent reasonable under the circumstances. 6. USE OF PUBLIC RIGHTS-OF-WAY. 6.1. No Undue Burden. The System shall not be erected, installed, constructed, repaired, replaced or maintained in any manner that places an undue burden on the present or future use of the Public Rights-of-Way by the City and the public. If the City, in its sole and reasonable judgment, determines that any portion of the System does place an undue burden on a portion of the Public Rights-of-Way, Company, at Company's sole cost and expense and within a reasonable time period specified by the City, shall modify the System or take other actions determined by the City to be in the public interest to remove or alleviate the burden. 6.2. Minimal Interference. The System shall be erected and maintained in a manner that causes minimal interference with the public's use of the Public Rights-of-Way and with the rights or reasonable convenience of the owners of property which adjoins any of the Public Rights-of-Way. 6.3. Underground Facilities. In any area of the City where the City currently or may in the future require public utilities to place their cables, wires or other equipment underground, then Company shall also place its existing and future cables, wires and other equipment underground. In any such area where Company may have existing cables, wires and other equipment above ground, Company shall install such cables, wires and other equipment underground within six (6) months following written notification from the City and at no expense, cost or liability to the City. In this event, Company shall coordinate with other utilities serving such area of the City so that only one or as few possible trenches as necessary are utilized for the underground installation of Facilities and other equipment. 6.4. Restoration of Property. Company, at Company's sole cost and expense, and in a manner approved by the City, shall promptly restore any portion of the Public Rights-of-Way that are in any way disturbed or damaged by the construction, operation, maintenance or removal of the System to, at Company's option, as good or better a condition as such property was in immediately prior to the disturbance or damage. Company shall diligently commence such restoration within fifteen (15) calendar days following the date that Company first became aware of the disturbance or damage or, if the System is being removed, within fifteen (15) calendar days following removal of the System. 6.5. Joint Use. Company shall permit the joint use of its poles, conduits and Facilities located in the Public Rights-of-Way by other utilities and by the City or other governmental entities; provided that (i) the I-NET shall be for the exclusive use, free of charge, by I-NET Users and (ii) for Facilities other than the I- NET, Company may require such users to enter into a reasonable agreement with Company for such use. 6.6. Tree Trimming. Upon receipt of and in accordance with the City's ordinances and applicable permits, Company may trim trees in or overhanging the Public Rights-of-Way so as to prevent the branches of such trees from coming into contact with the System in a manner that affects the integrity of the System. Except in an emergency, Company shall trim trees in or overhanging the Public Rights-of-Way or City property only after it has notified the City and received a permit for tree trimming as required by City ordinances. Company shall not trim trees on privately owned property unless it has obtained the consent of the property's owner. 6.7. Relocation of Facilities. Company, at Company's sole cost and expense, shall protect, support, disconnect or remove from the Public Rights-of-Way any portion of its System when required by the City due to street or other public excavation, construction, repair, grading, regrading or traffic conditions; the installation of sewers, drains, water pipes or municipally-owned facilities of any kind; the vacation, construction or relocation of streets or any other type of structure or improvement of a public agency; or any other type of improvement necessary for the public health, safety or welfare. 6.8. Temporary Relocation of Facilities. Upon advance notice of at least fifteen (15) business days, Company shall temporarily raise or lower its wires, cables or other equipment upon the reasonable request of any person or entity, including, but not limited to, a person or entity with a building moving permit issued by the City. Company may charge a reasonable fee for this service, but such fee shall not exceed the actual and direct costs incurred by Company in the temporary relocation of such Facilities. 6.9. Removal of System. Upon the revocation, termination or expiration without extension or renewal of this Franchise, Company's right to use Public Rights-of-Way under this Franchise shall cease and Company shall immediately discontinue the provision of Cable Services in the City and the use of the System. Within six (6) months following such revocation, termination or expiration and in accordance with directions from the City, Company shall remove the System, including, but not limited to, all supporting structures, poles, transmission and distribution systems and other appurtenances, fixtures or property from the Public Rights-of-Way. If Company has not removed all Facilities from the Public Rights-of-Way within six (6) months following revocation, termination or expiration of this Franchise, the City may deem all of Company's Facilities remaining in the Public Rights-of-Way abandoned and, at the City's sole option, (i) take possession of and title to such property or (ii) take any and all legal action necessary to compel Company to remove such property. Within six (6) months following revocation, termination or expiration of this Franchise and in accordance with Section 3.3 of this Franchise, Company shall also restore any property, public or private, that is disturbed or damaged by removal of the System. If Company has not restored all such property within this time, the City, at the City's sole option, may perform or have performed any necessary restoration work, in which case Company shall immediately reimburse the City for any and all costs incurred in performing or having performed such restoration work. 7. CUSTOMER SERVICE AND CONSUMER PROTECTION. 7.1. General Standards. Company shall comply with the more stringent of the customer service and consumer protection provisions of (i) this Franchise or (ii) the FCC, as may be set forth from time to time in FCC rules and regulations, such as the current FCC Rule 76.309. 7.2. Scrambling/Blocking. If at any time the System operates at 860 MHz, Company shall at all times scramble both the audio and video portions of all channels with predominately adult-oriented programming. Upon request by a subscriber, Company shall entirely block such subscriber from receiving both the audio and video portion of any channel with predominantly adult-oriented programming with devices, such as, by way of example, notch filters, which prevent the frequencies containing a specific channel or channels from being transmitted into the subscriber’s premises. 7.3. Pay Per View Options. Subscribers shall be given the option of (i) not having pay per view or per program service available at all or (ii) only having such services provided upon the subscriber's provision of a security number selected by an adult representative of the subscriber. 7.4. Customer Notifications. Company shall provide all subscribers with written information on at least each of the following matters: (i) products and services offered; (ii) prices (rates) and options for Cable Services and the conditions of a subscription to such Cable Services, including, but not limited to, prices for programming, equipment rental, program guides, installation, disconnection, processing charges for late payment and other fees charged by Company; (iii) Company's installation and service maintenance policies; (iv) Instructions on how to use Cable Services, including procedures and options for pay per view, premium channels and connection to a VCR; (v) channel positions of programming carried on the System, including a listing specific to the City showing the channel names and numbers actually available to subscribers in the City; (vi) billing and Complaint procedures with a notice for a subscriber to contact Company initially with Complaints and questions; (vii) applicable privacy requirements as set forth in this Franchise or provided for by law; (viii) the availability of lockout devices and the ability to have a channel entirely blocked or trapped; and (ix) the procedure for resolving signal quality problems as set forth in Section 10.3. Company shall provide such written information to subscribers (i) at the time of installation or reinstallation of service; (ii) annually to all subscribers, and (iii) at any time upon request of a subscriber or the City. The information shall be dated with the printing, revision, or effective date. 7.5. Notifications Pertaining to Cable Services-related Changes. Company shall notify subscribers of any changes in rates, Cable Services or channel positions as soon as possible through announcements on the cable system or in writing. Company will provide written notice of such changes to the City in advance of its notifying subscribers and will make every effort to notify the City forty-five (45) days in advance of any such change. Unless a longer time period is required by applicable law or regulation, notice must be given to subscribers a minimum of thirty (30) days in advance of the implementation of any such change if the change is within the control of Company and as soon as possible if the change is not within the control of Company. In addition, Company shall notify subscribers and the City at least thirty (30) days in advance of any significant changes in the matters covered in Section 7.4. 7.6. Telephone Service Standards. 7.6.1. Customer Service Telephone Number. Company shall have a local or toll-free telephone number available for use by subscribers in the City twenty-four (24) hours per day, seven (7) days per week. The local or toll-free numbers shall be listed, with appropriate explanations, in the directory published by each local telephone company and in any significant directories published by others. 7.6.2. Customer Service Representatives. Once Company has two thousand (2,000) subscribers located in the City, Company shall ensure that Trained Company Representatives will be available to respond to subscriber telephone inquiries twenty-four (24) hours per day, seven (7) days per week. As to video service matters, the term “Trained Company Representatives” shall mean employees of Company who have the authority and capability while speaking with a subscriber to, among other things, answer billing questions, adjust bills, and schedule service and installation calls. 7.6.3. Response Time. Under Normal Operating Conditions, a Trained Company Representative shall personally answer a telephone call within thirty (30) seconds from the time that the telephone connection is made. If the telephone call needs to be transferred, the time to complete the transfer shall not exceed thirty (30) seconds. These standards shall be met no less than ninety percent (90%) of the time under Normal Operating Conditions, measured on a quarterly basis. 7.6.4. Busy Signals. Under Normal Operating Conditions, the subscriber shall receive a busy signal less than three percent (3%) of the time, measured on a quarterly basis. 7.7. Company Office. Company shall maintain a physical office within the City or within ten (10) miles of the Authorized Area, which shall include a place where subscribers may pay their bills, pickup and return converter boxes and comparable items and receive information on Company and its services. The office shall be open at least from 8:00 A.M. to 6:00 P.M. Monday through Friday and 9:00 A.M. to 1:00 P.M. on Saturdays. 7.8. Standards for Installations and Service Calls. Company shall meet the following standards for installations and service calls not less than ninety-five percent (95%) of the time, measured on a quarterly basis: 7.8.1. Installations Made within Seven Business Days. Under Normal Operating Conditions, installations located up to one hundred fifty (150) aerial feet from the existing distribution cable system shall be performed within seven (7) business days after an order has been placed. 7.8.2. Scheduling. Installations and service calls shall be available at a minimum from 8:00 A.M. to6:00 P.M. Monday through Friday and 9:00 A.M. to 1:00 P.M. on Saturdays. Company shall, at the subscriber’s option, either (i) schedule the subscriber to be the first call of the day or last call of the day on a first come, first served basis; (ii) schedule the appointment for a date certain on a “call to meet” basis where as the service technician finishes his/her prior task, the technician calls the subscriber and arranges to meet the subscriber shortly thereafter; or (iii) establish an appointment window of no more than three (3) hours with the subscriber (or adult representative of the subscriber) or another appointment window mutually agreed upon between the subscriber and Company. 7.9. Operating Procedures for Installations and Service Calls. Company shall comply with the following operating procedures for all installations and service calls. If Company fails to comply with any operating procedure set forth in this Section 7.9, Company shall provide an affected subscriber with (i) a free installation if the call is for a Cable Service installation or (ii) at least twenty dollars ($20.00), which may be in the form of a credit, if the call is for any matter other than a Cable Service installation. 7.9.1. Nature of Response. Company shall respond to the request for service in accordance with the option selected by the subscriber. 7.9.2. Cancellations or Rescheduling Requests by Company. Company shall not cancel or request the rescheduling of an appointment with a subscriber after 5:00 P.M. on the business day prior to the scheduled appointment. If, on the day of a given appointment with a subscriber, Company’s technician is running late for such appointment and will not be able to keep the appointment as scheduled, the subscriber shall promptly be contacted. The appointment shall be rescheduled, as necessary, at a time which is convenient for the subscriber. 7.9.3. Cancellations or Rescheduling Requests by Customers. In the event access to the subscriber’s premises is not made available to Company’s technician when the technician arrives during the established appointment window, the technician shall leave written notification stating the time of arrival and requesting that Company be contacted again to establish a new appointment window. Notwithstanding the foregoing, if Company’s technician or service representative telephones the subscriber during or prior to the appointment window and is advised that the technician will not be given access to the subscriber’s premises during the appointment window, then the technician shall not be obliged to travel to the subscriber’s premises or to leave the written notification referred to above, and the burden shall again be upon the subscriber (or adult representative of the subscriber) to contact Company to arrange for a new appointment. 7.9.4. Length of Service Calls. Company’s service technicians and service representatives shall take adequate time on each service call to address or correct the problem in question and shall not be held to a quota of calls per day or an established limitation on time invested per call. 7.9.5. Charges for Service to Company Equipment. Company shall not charge a subscriber for any service call relating to Company owned and Company maintained equipment after the initial installation of Cable Services unless the problem giving rise to the service request can be demonstrated by Company to have been caused by the negligence or intentional misconduct of the subscriber. 7.10. Service Interruptions and Signal Quality Impairments. Company shall meet the standards set forth in Sections 7.10.1 and 7.10.2 not less than ninety-five percent (95%) of the time, measured on a quarterly basis. In addition, Company shall comply with the conditions of Section 7.10.3 at all times. 7.10.1. Service Interruptions. Under Normal Operating Conditions, Company shall diligently begin working on a Service Interruption promptly and in no event later than twenty- four (24) hours after the Service Interruption becomes known to Company. "Service Interruption" shall mean the loss of picture or sound on one or more cable channels that affects one or more subscribers. 7.10.2. Signal Quality Impairments. Under Normal Operating Conditions, Company shall begin diligently begin working on subscriber Complaints involving impairment or degradation of signal quality (other than a Service Interruption) promptly and in no event later than the next business day after the problem becomes known to Company. 7.10.3. Redress for Service Interruptions and Signal Quality Impairments Company shall provide affected subscribers, upon request by the City or the subscriber, with one day’s free service (equivalent to the service they were receiving at the time of the interruption) for each day or portion thereof of Service Interruption. 7.11. Log of Customer Complaints. Company shall maintain a written log, or an equivalent stored in computer memory and capable of access and reproduction in printed form, of all Cable Service-related customer Complaints originating within the City. Such log shall be in form and substance acceptable to the City and at minimum list the date and time of each such Complaint, identify the customer to the extent allowed by law, and describe the nature of the Complaint and when and what actions were taken by Company in response thereto. The log shall be organized by City. The log shall be kept at Company’s office in or near the City for a period of at least two (2) years and shall be available for inspection during regular business hours by the City upon request. 7.12. Bills. 7.12.1. Format. Company's bills to customers for Cable Services shall be issued monthly to each subscriber with a balance due or change of service. Bills shall be clear, concise and understandable. Bills shall be fully itemized, with itemizations including, but not limited to, basic service, cable programming service, premium service charges, equipment charges and processing fees for late payments as further specified in Section 7.14. Bills shall also clearly delineate all activity during the billing period, including optional charges, rebates, credits, and late charges. The City shall be given thirty (30) days advance notice of any change in the format of bills. Each bill shall prominently display Company’s local or toll-free telephone numbers available for use by subscribers. If a bill has more than one portion (for example, one portion that is kept by the customer and one portion that is sent to Company) such telephone numbers shall prominently appear on the front side of the portion of the bill retained by the customer. 7.12.2. Complaints and Disputes. Company shall respond in writing to all written complaints from subscribers regarding billing matters within thirty (30) days of receipt. Company shall not disconnect a subscriber for failure to pay legitimately contested charges during a billing dispute. However, during a billing dispute Company may disconnect a subscriber for failure to pay charges that are not contested. 7.13. Refunds and Credits. Refund checks for Cable Service shall be issued to subscribers promptly and in no event later than either (i) the subscriber’s next billing cycle following resolution of the request or thirty (30) days, whichever is earlier, or (ii) if service is terminated, thirty (30 ) days after return of equipment owned by Company or at the time of the next billing cycle, whichever is earlier. Credits for Cable Service shall be issued no later than the subscriber’s next billing cycle following a determination that a credit is warranted. 7.14. Late Payments. 7.14.1. Notification of Additional Fee on Bills. Each bill shall specify on its face in a fashion emphasizing same (such as bold face type, underlined type or a larger font): “For payments received after [date] a $_____ processing fee for late payment may be charged.” 7.14.2. Process for Assessment of Additional Fee. No processing fee for a late payment, however denominated, shall be assessed or added to a subscriber’s bill less than twenty-one (21) calendar days after the mailing of the bill to the subscriber. In the event any such fee is assessed or added, Company shall separately state the charge on the subscriber's bill and shall include the word “late” in the description of such fee. 7.15. Disconnection of Cable Services. Company shall comply with the following standards and procedures pertaining to the disconnection of Cable Services to any of Company's subscribers in the City. 7.15.1. Disconnection for Non-Payment. Company shall not disconnect a subscriber for failure to pay until at least forty-five (45) calendar days have elapsed after the due date for payment of the subscriber’s bill and Company has provided at least ten (10) calendar days' written notice separate from the monthly bill to the subscriber prior to disconnection, specifying the effective date after which Cable Services are subject to disconnection. 7.15.2. Disconnection for Illegal Practices. Company may disconnect a subscriber at any time if Company in good faith believes that the subscriber has tampered with or abused Company’s equipment, that there is a signal leakage problem (or other non-compliance with FCC rules or other standards which poses a risk to lives or property) on the subscriber’s premises, or that the subscriber is or may be engaged in the theft of Cable Services. 7.15.3. Disconnection at Subscriber's Request. Company shall promptly disconnect any subscriber who so requests disconnection, including those subscribers who elect to cease receiving Cable Services from Company in order to receive Cable Services or other multi-channel video services from another person or entity. No period of notice prior to requested termination of service shall be required of subscribers by Company. No charge shall be imposed upon the subscriber for or related to disconnection or for any Cable Service delivered after the effective date of the disconnect request (unless there is a delay by the subscriber in the return of Company equipment). If the subscriber fails to specify an effective date for disconnection, the effective date shall be deemed to be the day following the date the disconnect request is received by Company provided that Company equipment has been returned by the subscriber. 7.16. Truth In Advertising. Company’s bills, advertising and communications to its current or potential subscribers shall be truthful and shall not contain any false or misleading statement. For the purposes of the preceding, a statement is false or misleading if it contains an untrue statement of any material fact or omits to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading. 7.17. Underground Facilities Requested by Customer. If a subscriber requests Company to install Cable Services to a subscriber's property through underground facilities, Company shall comply with the subscriber's request but may charge the subscriber the actual difference in cost between the aerial installation of the Drop and the underground installation of the Drop. This provision shall not apply if the subscriber lives in an area of the City in which underground utilities and facilities are required, in which case Company may only charge the subscriber its normal installation charge. 7.18. Identification of Company Personnel. All service personnel of Company, including contractors and subcontractors, whose normal duties involve contact with the general public shall wear on their clothing a clearly visible identification card bearing their name and photograph. Company shall account for all identification cards at all times. Every service vehicle of Company shall be clearly identifiable by the public. 7.19. Subscriber Information. Company shall not record or retain any information as to the programming actually watched by a subscriber. Company shall destroy all subscriber information of a personally identifiable nature after a reasonable period of time unless otherwise requested by the affected subscriber. This Section 7.19 shall not prohibit Company from its conducting system wide or individually addressed "sweeps" solely for the purpose of (i) verifying system integrity, (ii)checking for illegal taps or (iii) billing. 8. REPORTS TO CITY. 8.1. Service-Related Reports. Company shall provide the following reports to the City monthly (by the 15th business day of the following month) and quarterly (by the 15th business day of the following quarter. These reports shall in forms currently used by Company or otherwise in form and substance acceptable to the City, showing on a consistent basis, fairly applied, Company’s compliance with the customer service standards set forth in this Franchise. * Number of Subscribers; * Report of Monthly Report of Service Calls by Reason, which shall include an explanation of the categories of reported reasons; * Monthly Outage Summary by Franchise; Once Company has two thousand (2,000) subscribers located in the City, the City may require Company to provide the following additional reports: * System Statistics Report; * Monthly Service Call Availability Analysis and Installation Call Availability Analysis; * Monthly Customer Call Sample Report, showing the results of a random sampling of customer complaints; and * Monthly Call Center Performance Report. 8.2. Format of Reports. Company's service-related reports to the City shall show Company’s performance for the respective time period, excluding periods that were not Normal Operating Conditions (“Abnormal Operating Conditions”) and, if Company contends any Abnormal Operating Conditions occurred during the period in question, it shall describe the nature and extent of such Abnormal Operating Conditions and show Company’s performance both including and excluding the time periods Company contends such conditions were in effect. At the City’s request, Company will provide additional information and existing reports reasonably related to the measurement and evaluation of Company’s compliance with the customer service requirements set forth in this Franchise. 8.3. Audits Pertaining to Service-Related Reports. The City, by itself or in combination with other municipalities with whom Company has a franchise or other agreement to use public rights-of-way for the provision of Cable Services, reserves the right to audit Company or any Affiliate of Company to verify the accuracy of the service-related reports required under this Section 8. In the event of any such audit, Company shall make available at a location in Tarrant County, Texas that is convenient to the City all records of Company or an Affiliate of Company reasonably necessary to conduct such audit. If the audit discloses performance that is three (3) percentage points worse than any of the standards of the referenced sections (such as compliance 92% of the time versus 95% of the time), Company shall pay the City’s costs in connection with the audit within thirty (30) days of submission of an invoice. Otherwise, the City shall pay the costs of such audit. 8.4. Construction-Related Reports. Company shall provide the City with a written quarterly report that outlines Company's plans for construction to the System and for expansion of the System into areas of the City beyond the Initial Service Area and other areas of the City previously approved by the City Council for service by Company. This report shall be a public document and kept on file in the City Secretary's Office for inspection by the public. 9. LIQUIDATED DAMAGES FOR VIOLATIONS OF CUSTOMER SERVICE STANDARDS. 9.1. Telephone Service. Company acknowledges and agrees that its failure to comply with the telephone service standards set forth in Sections 7.6.2; 7.6.3; and/or 7.6.4 of this Franchise will harm subscribers and the City and that the amounts of actual damages will be difficult or impossible to ascertain. Therefore, for each quarter following the Effective Date of this Franchise, the City may assess the following liquidated damages against Company for non-compliance with the customer service standards set forth in Sections 7.6.2; 7.6.3 and 7.6.4 (measured on a quarterly basis). Company acknowledges and agrees that the liquidated damages set forth below are a reasonable approximation of actual damages and that this Section 9.1 is intended to provide compensation and is not a penalty. Subject to Section 9.3 of this Franchise, the damages for non-compliance with one or more of the standards in Sections 7.6.2; 7.6.3; and/or 7.6.4 during a calendar quarter are as follows: * First quarter of non-compliance: $1.00 per subscriber or $5,000.00, whichever is more. * Second quarter of non-compliance within three (3) consecutive calendar quarters: $2.00 per subscriber or $5,000.00, whichever is more. * Third quarter of non-compliance within six (6) consecutive calendar quarters and each subsequent non-compliance: $3.00 per subscriber or $5,000.00, whichever is more. 9.2. Installations, Service Calls and Service Interruptions. Company acknowledges and agrees that its failure to comply with the standards for installations, service calls and service interruptions set forth in Section 7.8.1; 7.8.2; 7.10.1; and/or 7.10.2 of this Franchise will harm subscribers and the City and that the amounts of actual damages will be difficult or impossible to ascertain. Therefore, for each quarter following the Effective Date of this Franchise, the City may assess the following liquidated damages against Company for non-compliance with the customer service standards set forth in Sections 7.8.1; 7.8.2; 7.10.1 and/or 7.10.2 (measured on a quarterly basis). Company acknowledges and agrees that the liquidated damages set forth below are a reasonable approximation of actual damages and that this Section 9.2 is intended to provide compensation and is not a penalty. Subject to Section 9.3, the damages for non-compliance with one or more of the standards in Sections 7.6.2; 7.6.3; and/or 7.6.4 during a calendar quarter are as follows: * First quarter of non-compliance: $1.00 per subscriber or $5,000.00, whichever is more. * Second quarter of non-compliance within three (3) consecutive calendar quarters: $2.00 per subscriber or $5,000.00, whichever is more. * Third quarter of non-compliance within six (6) consecutive calendar quarters and each subsequent non-compliance: $3.00 per subscriber or $5,000.00, whichever is more. 9.3. Effect of Extended Periods of Compliance. If Company complies with all of the standards identified in Sections 9.1 and 9.2 for eight (8) consecutive calendar quarters, the damages for the first subsequent non-compliance with any and each of those standards will be $0.25 per subscriber or $3,000, whichever is more. Thereafter, the damages provided in Sections 9.1 and 9.2 will again be applicable so that the next non-compliance within three (3) and/or six (6) consecutive calendar quarters, as the case may be, will be subject to the damages set forth for such quarters in Sections 9.1 and/or 9.2, respectively. 9.4. Calculation of Number of Subscribers. For purposes of calculating liquidated damages under Sections 9.1 or 9.2, the number of subscribers shall be that reflected on Company's report to the City pertaining to subscriber numbers for the quarter in which liquidated damages are subject to assessment or, if Company fails to provide such report, as reasonably calculated by the City. 9.5. Failure to Submit Quarterly Reports. Company acknowledges and agrees that its failure to submit quarterly reports to the City as required by Sections 8.1 and 8.2 will harm the City and its ability to serve its citizens who subscribe to Company's Cable Services, and that the amounts of actual damages will be difficult or impossible to ascertain. Therefore, for each quarter following the Effective Date of this Franchise, the City may assess liquidated damages against Company for Company's failure to submit quarterly reports as required by Sections 8.1 and 8.2 in the amount of $1.00 per subscriber or $5,000.00, whichever is more. Company acknowledges and agrees that such liquidated damages are a reasonable approximation of actual damages and that this Section 10.5 is intended to provide compensation and is not a penalty. 9.6. No Waiver. An event of non-compliance will be taken into account in determining whether a later event of non-compliance is a second, third or subsequent event without regard to whether City has assessed liquidated damages or taken any other action with respect to the non-compliance. 9.7. Procedure for Assessment. Liquidated damages shall be assessed by the City Manager or his or her designee. Company may obtain a review of the assessment by the City Council by making a written request within ten (10) business days after receipt of notice in writing of the assessment and its basis. Company shall have an opportunity to be heard at a meeting of the City Council or by a person designated by the City Council as a hearing officer prior to the actual assessment of liquidated damages by the City Manager or his or her designee. The City Council may adopt additional procedures, including appointment of a City official or other person to act as a hearing officer. The City Council’s decision may be based upon the record of proceedings conducted by the hearing officer or a proposal for decision submitted by the hearing officer. 9.8. Payment and Classification of Liquidated Damages. Liquidated damages shall be paid on or before the tenth (10th) business day following assessment. Company acknowledges and agrees that liquidated damages paid under this Franchise do not constitute franchise fees, do not reduce the amounts otherwise payable as franchise fees and will not be passed through to subscribers in the City. 10. TECHNICAL STANDARDS. The following provisions shall apply to Company’s implementation of and compliance with the FCC's rules and regulations relating to cable television technical standards for signal quality, currently set forth at 47 C.F.R. § 76.601 and following, and subsequent amendments to any such rules and regulations. 10.1. Testing by Company. Company shall notify the City in advance of testing for compliance with FCC standards. The City may have a representative present to observe such tests and may designate one location to be tested. Company shall provide the City with a report of testing for compliance with such standards upon written request (but not more than twice a year). Such report to City shall state, in pertinent part, that the person doing the testing has reviewed the applicable rules and regulations of the FCC, the industry standards and other materials referenced therein, and that such testing was done fairly and either shows full compliance with such rules and regulations or sets forth with specificity and in detail all areas of non-compliance, their actual or likely scope and causes, and Company’s professional recommendation of the best corrective measures to immediately and permanently correct the non-compliance. 10.2. Testing by City. The City at its expense (no more than twice per year, barring unusual circumstances) upon thirty (30) days written notice to Company may test the System for compliance with the FCC technical standards. Company shall cooperate in such tests and provide access to the System. Company shall reimburse the City for the full expense of any test which shows a material non-compliance with such standards. 10.3. Subscriber Complaints Regarding Signal Quality. Company shall establish and notify subscribers of the following procedure for the resolution of complaints from subscribers about the quality of the television signal delivered to them: (i) All complaints shall go initially to Company; (ii) All matters not resolved by Company shall at Company’s or the subscriber’s option be referred to the City for the City to resolve; and (iii) All matters not resolved by the City may be referred to the FCC for the FCC to resolve. 11. RATES AND REGULATION. 11.1. General Rights of the City. The City reserves the right to regulate Company, the Cable Television System, the provision of Cable Services authorized under this Franchise, Company's rates and charges for the provision of Cable Services and for related services, such as, without limitation, rental deposits and downgrade fees, as expressly permitted by federal, state and/or local laws, ordinances, rules and regulations. 11.2. Frequency of Rate Increases. Company will not increase or file any form or notification with the FCC related to an increase in Company's rates for basic cable service, equipment, service calls or other services over which the City has regulatory authority under federal, state and/or local laws, ordinances, rules and regulations more than once in each calendar year. 11.3. Rate Orders. Unless a final order of the FCC, affirmed on appeal if an appeal is taken, determines that a rate order of the City, as a franchise authority, is automatically stayed by the filing of an appeal by Company to the FCC, Company will implement each rate order adopted by the City unless and until Company obtains an order of the FCC or a court of competent jurisdiction staying or overruling the effectiveness of the rate order. Company will reimburse the City for all reasonable attorneys' fees and other expenses incurred by the City as a result of Company's violation of this Section 11.3. 11.4. Notice of Certain Costs. On at least an annual basis and at any other time when requested by the City, Company shall identify to the City in writing the costs which Company claims are external costs that Company potentially may pass through to subscribers under rules and regulations of the FCC or successor rules with a similar effect. Company's notice to the City shall state the individual amounts of such costs and the approximate amount that subscribers may be billed as a result and shall contain a calculation to justify such amount. 12. LIABILITY AND INDEMNIFICATION. 12.1. Disclaimer of Liability. The City shall not at any time be liable for any injury or damage occurring to any person or property from any cause whatsoever that arises out of the construction, maintenance, repair, use, operation, condition or dismantling of the System or Company's provision of Cable Services. 12.2. Indemnification. Company, at Company's sole cost and expense, shall indemnify and hold harmless the City, its officers, boards, commissions, agents, employees and volunteers ("Indemnitees"), from and against any and all liabilities, obligations, damages, penalties, claims, liens, costs, charges, losses and expenses, whether legal or equitable, which may be imposed upon, incurred by or asserted against any Indemnitees by reason of any personal injury or property damage or any act or omission of Company, its personnel, employees, agents, contractors or subcontractors which may arise out of or be in any way connected with (i) the construction, installation, operation, maintenance or condition of the System; (ii) the transmission of any programming over the System; (iii) any claim or lien arising out of work, labor, materials or supplies provided or supplied to Company, its contractors or subcontractors; (iv) the provision of Cable Services; or (v) Company's failure to comply with any federal, state or local law, ordinance, franchise, rule or regulation. 12.3. Assumption of Risk. Company hereby undertakes and assumes, for and on behalf of Company, its officers, agents, contractors, subcontractors, agents and employees, all risk of dangerous conditions, if any, on or about any City-owned or -controlled property, including, but not limited to, the Public Rights-of-Way. In addition, Company hereby agrees to and shall indemnify and hold harmless any Indemnitee against and from any claim asserted or liability imposed upon any Indemnitee for any personal injury or property damage incurred or asserted by Company or any of its employees, agents, servants, contractors or subcontractors, and arising from the installation, operation, maintenance or condition of the System. 12.4. Defense of Indemnitees. In the event any action, lawsuit or other proceeding is brought against any Indemnitee by reason of any matter for which the Indemnitees are indemnified under Sections 12.2 or 12.3, the City shall give Company prompt notice of the making of any claim or commencement of any such action, lawsuit or other proceeding, and Company, at Company's sole cost and expense, shall resist and defend the same with legal counsel selected by the City and reasonably acceptable to Company and with reasonable participation by the City. In such an event, Company shall not admit liability in any matter on behalf of any Indemnitee without the advance written consent of the City. 13. INSURANCE. Company shall procure and maintain at all times, in full force and effect, a policy or policies of insurance to provide coverages as specified herein, naming the City as an additional insured and covering all public risks related to the use, occupancy, condition, maintenance, existence or location of the Public Rights-of-Way and the construction, installation, operation, maintenance or condition of the System. 13.1. Primary Liability Insurance Coverage. * Commercial General Liability: $1,000,000 per occurrence; * Property Damage Liability: $1,000,000 per occurrence; * Automobile Liability: $1,000,000 per accident, including, but not limited to, all owned, hired or non-owned motor vehicles used in conjunction with the rights granted under this Franchise * Worker's Compensation: As required by law; and, Employer's Liability as follows: $1,000,000 per accident. 13.2. Excess Liability Insurance Umbrella. $10,000,000, including Primary Coverage, for each coverage listed in § 13.1. 13.3. Revisions to Required Coverage. At the reasonable recommendation of the City's Risk Manager, the City may at any time revise insurance coverage requirements and limits required by this Franchise. Company agrees that within thirty (30) days of receipt of written notice from the City, Company will implement all such revisions requested by the City. The policy or policies of insurance shall be endorsed to provide that no material changes in coverage, including, but not limited to, cancellation, termination, non-renewal or amendment, shall be made without thirty (30) days' prior written notice to the City. 13.4. Underwriters and Certificates. Company shall procure and maintain its insurance with underwriters authorized to do business in the State of Texas and who are acceptable to the City in terms of solvency and financial strength. Within thirty (30) days following adoption of this Franchise by the City Council, Company shall furnish the City with certificates of insurance signed by the respective companies as proof that it has obtained the types and amounts of insurance coverage required herein. In addition, Company shall, on demand, provide the City with evidence that it has maintained such coverage in full force and effect. 13.5. Deductibles. Deductible or self-insured retention limits on any line of coverage required herein shall not exceed $25,000 in the annual aggregate unless the limit per occurrence, or per line of coverage, or aggregate is otherwise approved by the City. 13.6. No Limitation of Liability. The insurance requirements set forth in this Section 13 and any recovery by the City of any sum by reason of any insurance policy required under this Franchise shall in no way be construed or effected to limit or in any way affect Company's liability to the City or other persons as provided by this Franchise or law. 14. TRANSFERS, OWNERSHIP AND CONTROL. 14.1. Management of Cable Television System. Company shall personally manage the Cable Television System and the provision of Cable Services within the City. Company shall not, directly or indirectly, contract for, subcontract or assign, in whole or in part, the management of the Cable Television System or the provision of Cable Services within the City unless the City provides advance written consent. 14.2. Transfers. This Franchise and the Cable Television System shall not be sold, Transferred, assigned or otherwise encumbered without the prior written consent of the City. For purposes of this Franchise, in addition to the definition provided in Section 1, a "Transfer" shall specifically include (i) any change in limited partnership interests, non-managing limited liability company interests, or non voting stock representing thirty percent (30%) or more of the equity interests in the entity in question and (ii) any option, right of conversion or similar right to acquire interests constituting control without substantial additional consideration. If Company seeks to obtain the consent of the City for any kind of Transfer, sale, assignment or other encumbrance, Company shall submit an application for such consent in the form requested by the City and shall submit or cause to be submitted to the City all such documents and information that the City may reasonably need for its consideration of the application. Company shall pay on the City's behalf or reimburse the City for all costs reasonably incurred by the City due to any proposed sale, Transfer, assignment or other encumbrance. 15. DEFAULTS. The occurrence at any time during the term of this Franchise of one or more of the following events shall constitute an "Event of Default" under this Franchise: 15.1. Failure to Pay Franchise Fees. An Event of Default shall occur if Company fails to pay any Franchise Fee on or before the respective due date. 15.2. Breach. An Event of Default shall occur if Company materially breaches or violates any of the terms, covenants, representations or warranties set forth in this Franchise or fails to perform any obligation required by this Franchise. 15.3. Bankruptcy, Insolvency or Receivership. An Event of Default shall occur if Company (i) files a voluntary petition in bankruptcy; (ii) is adjudicated insolvent; (iii) files any petition or fails to contest any petition filed against it seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief for itself under any laws relating to bankruptcy, insolvency or other relief for debtors; (iv) seeks, consents to or acquiesces in the appointment of any trustee, receiver, master, custodian or liquidator of Company, any of Company's property, franchises, or any revenues, issues, earnings or profits thereof; (v) makes an assignment for the benefit of creditors; or (vi) fails to pay Company's debts generally as they become due. 15.4. Violations of the Law. An Event of Default shall occur if Company violates any existing or future federal, state or local laws or any existing or future ordinances, rules and regulations of the City. 16. UNCURED DEFAULTS AND REMEDIES. 16.1. Notice of Default and Opportunity to Cure. If an Event of Default occurs, the City shall provide Company with written notice and shall give Company the opportunity to cure such Event of Default. For an Event of Default which can be cured by the immediate payment of money to the City, Company shall have thirty (30) days from the date it receives written notice from the City to cure the Event of Default. For any other Event of Default, Company shall have sixty (60) days from the date it receives written notice from the City to cure the Event of Default. If any Event of Default is not cured within the time period specified herein, such Event of Default shall, without further notice from the City, become an "Uncured Default" and the City immediately may exercise the remedies provided in Section 16.2. 16.2. Remedies for Uncured Defaults. Upon the occurrence of an Uncured Default, the City shall be entitled to exercise, at the same time or at different times, any of the following remedies, all of which shall be cumulative of and without limitation to any other rights or remedies the City may have: 16.2.1. Termination of Franchise. Upon the occurrence of an Uncured Default, the City may terminate this Franchise. Upon such termination, Company shall forfeit all rights granted to it under this Franchise, and, except as to Company's unperformed obligations and existing liabilities as of the date of termination, this Franchise shall automatically be deemed null and void and shall have no further force or effect. Company shall remain obligated to pay and the City shall retain the right to receive Franchise Fees and any other payments due up to the date of termination. Company shall remove the System from the City as and when requested by the City. The City's right to terminate this Franchise under this Section 16.2.1 shall does not and shall not be construed to constitute any kind of limitation on the City's right to terminate this Franchise for other reasons as provided by and in accordance with this Franchise. 16.2.2. Legal Action Against Company. Upon the occurrence of an Uncured Default, the City may commence against Company an action at law for monetary damages or in equity for injunctive relief or specific performance of any of the provisions of this Franchise which, as a matter of equity, are specifically enforceable. 17. RIGHTS AND RESERVATIONS OF THE CITY. In addition to the rights reserved to the City under this Franchise, the City shall have the following rights and reservations: 17.1. To require proper and adequate extensions of the System and Cable Services and maintenance thereof at the highest practicable standards of efficiency; 17.2. To establish reasonable standards of Cable Service and product quality and to prevent unjust discrimination in Company's provision of Cable Services and/or rates for Cable Services; 17.3. To require continuous and uninterrupted service to the public in accordance with the terms and conditions of this Franchise throughout the entire term of this Franchise; 17.4. To control and regulate the use of the City's Public Rights-of-Way, public places and other City-owned property and the spaces above and beneath them; 17.5. To install and maintain, without charge, City equipment upon Company's poles and in Company's conduit upon the condition that such equipment does not actually and unreasonably interfere with Company's provision of Cable Services and is not used by the City to provided services in competition with Company; 17.6. Through representatives designated by the City, to inspect all construction, Facility-installation or other work performed by Company in the City, and to make any inspections that the City reasonably finds necessary to ensure compliance with the terms of this Franchise and applicable laws, ordinances, rules and regulations. 18. PROVISION OF INFORMATION. 18.1. Filings. Company shall provide copies of all documents which Company files with or sends to the FCC and, upon the City's request, copies of records that Company is required to maintain under FCC regulations (currently 47 C.F.R. § 76). 18.2. Lawsuits. Company shall provide the City with copies of all pleadings in all lawsuits to which Company is a party and that pertain to the granting of this Franchise and/or the operation of the Cable Television System within thirty (30) days of Company's receipt of same. 18.3. Books and Records. From time to time, during normal business hours and on a non-disruptive basis, the City may review all portions of Company's books and records that are reasonably necessary to monitor compliance by Company with the terms and conditions of this Franchise. Such records shall include, but shall not be limited to, records that Company is required to maintain under FCC and financial information underlying reports provided to the City in accordance with this Franchise. However, Company shall not be required to release (i) personally identifiable subscriber information if prohibited by applicable law (such as § 631 of the Cable Act, codified at 47 U.S.C. § 551) or (ii) Company's income tax returns or information directly underlying the preparation of any such returns. To the extent permitted by law, the City shall treat any information released to it by Company on a confidential basis if requested by Company and upon execution of a City-signed written agreement or letter to that effect. 19. COMPANY AS INDEPENDENT CONTRACTOR. It is expressly understood and agreed that Company shall operate as an independent contractor as to all rights and privileges granted by this Franchise, and not as an agent, representative or employee of the City. Company shall have the exclusive right to control the details of its Cable Business and operation, in accordance with the terms and conditions of this Franchise, and shall be solely responsible for the acts and omissions of its officers, agents, servants, employees, contractors and subcontractors. Company acknowledges that the doctrine of respondeat superior shall not apply as between the City and Company, its officers, agents, employees, contractors and subcontractors. Company further agrees that nothing herein shall be construed as the creation of a partnership or joint enterprise between the City and Company. 20. NOTICES. Notices required pursuant to the provisions of this Franchise shall be conclusively determined to have been delivered when (1) hand-delivered to the other party, its agents, employees, servants or representatives, or (2) received by the other party by United States Mail, postage prepaid, return receipt requested, addressed as follows: To THE CITY: To COMPANY: City of Fort Worth Millennium Telcom, L.L.C. Cable Communications Office 891 E. Price St., Suite 200 Attn: Director Keller, TX 76248 401 W. Second St. Fort Worth, TX 76102 with a copy to: City of Fort Worth Department of Law Attn: Attorney for Telecommunications 1000 Throckmorton Fort Worth, TX 76102 21. NON-DISCRIMINATION COVENANT. Company shall not discriminate against any person on the basis of race, color, national origin, religion, handicap, sex, sexual orientation or familial status in the provision of Cable Services, in the receipt of benefits from Company's Cable Business, in any opportunities for employment with Company that Company may offer or in the construction or installation of Company's Cable Television System or other Facilities. 22. NO WAIVER. The failure of the City to insist upon the performance of any term or provision of this Franchise or to exercise any rights that the City may have, either under this Franchise or the law, shall not constitute a waiver of the City's right to insist upon appropriate performance or to assert any such right on any future occasion. 23. GOVERNING LAW AND VENUE. This Franchise shall be construed pursuant to and in accordance with the laws of the United States of America and the State of Texas. If any action, whether real or asserted, at law or in equity, arise out of the terms of this Franchise, Company's provision of Cable Services or Company's use of the Public Rights-of- Way, venue for such action shall lie exclusively in state courts located in Tarrant County, Texas or the United States District Court for the Northern District of Texas, Fort Worth Division. 24. CONFERENCES. At the request of either the City or Company, the City and Company shall meet at reasonable times and upon reasonable notice to discuss any aspect of this Franchise, Company's provision of Cable Services, Company's Systems or Cable Business or Company's use of Public Rights-of-Way. 25. SEVERABILITY. If any provision of this Franchise is held to be invalid, illegal or unenforceable by a final order entered by a court of competent jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired. For purposes of this Franchise, a court order shall be final only to the extent that all available legal rights and remedies pertaining to such order, including, without limitation all available appeals, have been exhausted. In such an event, the City and Company agree that they shall amend or have amended this Franchise to comply with such final order entered by a court of competent jurisdiction. 26. FORCE MAJEURE. In the event Company's performance of any of the terms, conditions or obligations required by this Franchise is prevented by a cause or event that is not within Company's reasonable control, Company's non-performance shall be deemed excused for the period of such inability. Causes or events that are not within the Company's control shall include, but not be limited to, acts of God, strikes, sabotage, riots or civil disturbances, failure or loss of utilities, explosions and natural disasters. 27. HEADINGS NOT CONTROLLING. Headings and titles, other than those captions in Section 1, that are used in this Franchise are for reference purposes only and shall not be deemed a part of this Franchise. 28. ENTIRETY OF AGREEMENT. This Franchise, including the schedule of exhibits attached hereto and any documents incorporated herein by reference, contains the entire understanding and agreement between the City and Company as to the matters contained herein. Any prior or contemporaneous oral or written agreement is hereby declared null and void to the extent in conflict with the terms and conditions of this Agreement. This Franchise shall not be amended unless agreed to in writing by both parties and approved by the City Council of the City. 29. GUARANTEE OF PERFORMANCE. Company hereby acknowledges that it carefully has read the terms and conditions of this Franchise and accepts and agrees to perform the duties and obligations set forth in this Franchise. Tri-County Electric Cooperative, Inc., First American Communications Enterprises, Inc., Value Choice, Inc. and One Source Communications, L.L.C. hereby jointly and severally guarantee unconditional performance of Company's duties and obligations under this Franchise. MILLENNIUM TELCOM, L.L.C. By: Name: Title: TRI-COUNTY ELECTRIC COOPERATIVE, INC. By: Name: Title: FIRST AMERICAN COMMUNICATIONS ENTERPRISES, INC. By: Name: Title: VALUE CHOICE, INC. By: Name: Title: ONE SOURCE COMMUNICATIONS, L.L.C. By: Name: Title: EXHIBIT "B" I-NET SITES I-NET Site Number Location Address 1 Fire Station No. 31 4209 Longstraw 2 Fire Station No. 35 2250 Alliance Blvd. 3 Fire Station No. 37 4721 Ray White Rd. 4 Fire Station No. 38 Hwy. 170 @ Old Denton Rd. 5 Police Storefront (Summerfields) 6901 N. Beach St. 6 Police Storefront (Alliance) 2421 Westport Pkwy, #900 7 Summerglen Branch Library 4209 Basswood Blvd.