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G-399 - 05/26/1987 - CABLE TV - Ordinances 4 �R�1NC N i S E A GrMF 5EE ALSO: ORDINANCE NO. G-399 PAMPHLET FRONT OF PAMPHLET AN ORDINANCE PROVIDING FOR THE FRANCHISING AND REGULATION OF CABLE TELEVISION SYSTEMS IN .THE VILLAGE OF OAK BROOK, ILLINOIS PUBLISHED IN PAMPHLET FORM THIS 27th DAY OF May 1987. BY ORDER OF THE CORPORATE AUTHORITIES OF THE VILLAGE OF OAK BROOK, DU PAGE AND COOK COUNTIES, ILLINOIS. Vi age Clerk 5/22/87 I N D E X VILLAGE OF OAK BROOK \.• CABLE TELEVISION ORDINANCE ARTICLE SECTION DESCRIPTION PAGE I TITLE AND PURPOSES OF ORDINANCE 1 1 Title 1 2 Purposes 1 II DEFINITIONS 1 III GRANT OF AUTHORITY 5 1 Franchise Required 5 2 Applications for a Franchise 5 3 Criteria for Evaluation of Applications 6 IV FRANCHISE CONDITIONS 6 1 Franchise Term 6 2 Notice to Grantee 6 3 Franchise Review and Modification 7 4 Performance Evaluation Sessions 7 5 Franchise Processing Costs 8 6 Franchise Renewal 8 7 Franchise Revocation Procedure 9 8 Arbitrary and Capricious Action by Grantee 10 9 Arbitration 11 10 Transfer of Ownership to Grantor 11 11 Grantee's Obligations as Trustee 11 12 Franchise Fee 13 13 Indemnification 14 14 Insurance 15 15 Bonds; Letters of Credit 15 16 Transfer of Franchise 17 V SUBSCRIBER AND USER FEES AND RECORDS 18 1 Subscriber and User Fees 18 2 Books and Records 19 ARTICLE SECTION DESCRIPTION PAGE VI SYSTEM OPERATIONS 20 1 Franchise Areas and Schedule 20 2 Expansion of Franchise Areas 20 3 Individual Service Drops 21 4 System Description and Service 21 5 Operational Requirements and Records 22 6 Tests and Performance Monitoring 23 7 Service, Adjustment, and Complaint Procedure 24 8 Occupancy and Use of Public Ways and 25 Private Property 9 Construction Schedule and Reports 27 10 Protection of Privacy 28 11 Areawide Interconnection of CATV Systems 28 VII GENERAL PROVISIONS 29 1 Limits on Grantee's Recourse 29 2 Compliance with State and Federal Law 30 3 Special License 30 4 Franchise Validity 30 5 Failure to Enforce Franchise 30 6 Rights Reserved to Grantor 31 7 Employment Requirement 31 8 Time Essence of Agreement 31 9 Acceptance 31 10 Reselling Service Prohibited 32 11 Offenses and Penalties 32 12 Grantee May Promulgate Rules 33 13 Delegation of Powers 33 14 Severability 33 15 Effective Date 34 ORDINANCE NO. G-399 AN ORDINANCE PROVIDING FOR THE FRANCHISING AND REGULATION OF CABLE TELEVISION SYSTEMS IN THE VILLAGE OF OAK BROOK, ILLINOIS BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF OAK BROOK, COOK AND DU PAGE COUNTIES, ILLINOIS, AS FOLLOWS: Article I: TITLE AND PURPOSES OF ORDINANCE Section 1: Title This Ordinance shall be known as the Village of Oak Brook Cable Tele- communications Ordinance. Section 2: Purposes The purposes of this Ordinance are to: A. Provide a procedure for the franchising and regulation of cable tele- communications systems within the Village of Oak Brook, and B. Provide for the payment of a fee and other valuable consideration to the Village for the construction and operation of cable telecommuni- cations systems, and C. Provide procedures for the regulation by the Village of the rates to be charged to subscribers for cable telecommunication service, and D. Provide for the development of cable telecommunications as a means to improve communications betweeen and among the citizens and public institutions of the Village, and E. Provide for remedies and penalties for violation of this Ordinance and any franchise granted hereunder, all in furtherance of the statutory authority granted to the Village pursuant to the provisions of Section 11-42-11 and Division 80 of Article 11 of the Illinois Municipal Code, Chapter 24 of the Illinois Revised Statutes. Article II : DEFINITIONS For the purposes of this Ordinance, the following terms, phrases, words and their derivations, shall have the meaning given herein, unless the context clearly indicates that another meaning is intended. When not inconsistent with the context, words used in the present tense include the future; words in the plural number include the singular number; and words in the singular number include the plural number. The word "shall " is mandatory and not merely directory. A. "Act" means the Cable Communications Policy Act of 1984, enacted into law as Public Law 98-549 by the Congress of the United States of America, and effective December 29, 1984, and any amendments thereto. B. "Auxiliary Service" means any communication service in addition to regular subscriber services", including, but not limited to, pay TV, burglar alarm services, data or other electronic transmission services, facsimile reproduction services, meter reading services, home shopping services, etc. C. "Community Antenna Television System", which may also be popularly referred to as a "Cable Television System", "Cable Communications System", or "CATV�System" or as herein referred to as a "Cable System") means a facility, consisting of a set of closed transmission paths and associated signal generation, reception and control equipment, that is designated to provide Cable Service (as herein defined) which includes video programming and which is provided to multiple Subscribers within a community, but such terms do not include: (a) Any facility that serves fewer than fifty (50) subscribers. (b) A facility that serves only Subscribers in one or more multiple unit dwellings under common ownership, control , or management, and commercial establishments located on the premises of such dwellings, unless such facility uses any public right-of-ways. (c) A facility of a common carrier, except that such facility shall be considered a Cable System to the extent such facility is used in the transmission of video programming directly to Subscribers. (d) Any facilities of any electric utility used solely for operating its electric utility system. D. "Channel" is a band of frequencies, six megahertz wide in the electro- magnetic spectrum capable of carrying either one audio-visual tele- vision signal and a few non-video signals or a large number of non video signals. E. "Converter" means an electronic device which converts signals to a frequency not susceptible to interference within the television re- ceiver of a subscriber, and by an appropriate channel selector also permits a subscriber to view all signals delivered at designated dial locations. F. "Depreciated Value" means the value as shown on the Grantee's books and records of all the cable telecommunications system's tangible assets after depreciation, which shall be calculated to the end of the Grantee's last fiscal year. Said value shall not include "good will" or any value that Grantee's books and records attribute to the fran- chise. G. "Fair Market Value" means the price that a willing buyer would pay to a willing seller for a going concern. H. "Federal Communications Commission" or "FCC" means the present federal agency of that name as constituted by the Communication Act of 1934, or any successor agency created by the United States Congress. -2- ICA I. "Franchise" means the non-exclusive rights granted hereunder to con- struct and operate a cable telecommunications system along the public ways in the Village, or within specified areas in the Village, and is not intended to include any license or permit required for the pri- vilege of transacting and carrying on a business within the Village as may customarily be required by other ordinances and laws of the Village. J. "Franchise Area" means that portion of the Village for which a fran- chise is granted under the authority of this Ordinance. If not other- wise stated in the franchise, the Franchise Area shall be the corporate limits of the Village, including all territory thereafter annexed to the Village. K. "Franchise Fee" means any license, tax, fee, or assessment of any kind imposed by the Village on a Grantee or Subscriber, or both, solely because of their status as such. The term "Franchise Fee" does not include: (a) Any tax, fee, or assessment of general applicability including any such tax, fee, or assessment imposed on both utilities and Grantees or their services, but not inccuding a tax, fee, or assessment which is unduly discriminatory against Grantee. (b) Capital costs which are required by the Franchise to be incurred by Grantee for PEG Facilities (as herein defined). (c) Requirements or charges incidental to the awarding or enforcing of a Franchise, including payments for bonds, security funds, letters of credit, insurance, indemnification, penalties, or liquidated damages. (d) Any fee imposed under Title 17, United States Code. L. "Grantee" means the natural person, partnership, domestic or foreign corporation, association, joint venture, or organization of any kind granted a franchise by the Corporate Authorities under this Ordinance or its lawful successor, transferee, or assignee. M. "Grantor" shall mean the Village of Oak Brook, Du Page and Cook Counties, a municipal corporation. N. "Gross Revenues" means all revenue derived directly or indirectly by a Grantee, its affiliates, subsidiaries, parents, and any person in which a Grantee has a financial interest, including, but not limited to, regular subscriber service, auxiliary services, advertising revenues, etc. , or any service from or in connection with the opera- tion of the cable system within the Village, but excluding revenues which do not qualify for purposes of computing the municipality's permissable franchise fee under the Federal Communications Commission Regulations, and revenues received by a parent, subsidiary, or affiliate for services, programming or merchandise upon which the Grantee has also derived revenue. -3- 0. "Net Profit" means the amount remaining after deducting from gross revenues all of the actual , direct and indirect expenses associated �. with operating the cable telecommunications system, including the franchise fee, interest, depreciation, and Federal or State income taxes. P. "Persons" means any people, firms, corporations, associations, or other legally recognized entities. Q. "Public, Educational or Governmental Access Facilities" or "PEG Access Facilities" means the total of the following: (a) Channel capacity designated for public, educational , or governmental use. (b) Facilities and equipment for the use of such channel capacity. R. "Public Way" means the surface, the air space above the surface, and the area below the surface, of any public street, highway, lane, path, alley, sidewalk, boulevard, drive, bridge, tunnel , park, parkways, waterways, or other public right-of-way, including public utility easements or rights-of-way, and any temporary or permanent fixtures or improvements located thereon now or hereafter held by the Village which shall entitle the Village and the Grantee to the use thereof for �. the purpose of installing and maintaining the Grantee's cable tele- communications system. S. "Regular Subscriber Service_" shall mean the distribution to sub- scribers of signals over the cable telecommunications system on all channels except those for which a per-program or per-channel charge is made, two-way services, and those intended for reception by equipment other than a television broadcast receiver. T. "Schools'" means public and private schools offering some or all of grades kindergarten through 12th grade, which have been granted a certificate of recognition by the State Board of Education pursuant to Sec. 2-3.25 of the Illinois School Code. U. "Subscriber" means any member of the general public who receives the regular subscriber service and/or any one or more of such other ser- vices as may be provided by the Grantee's cable telecommunications system, and does not further distribute such service(s). V. "System" means a cable telecommunications system composed of, without limitation, antennae, cables, wires, lines, towers, amplifiers, con- ductors, converters, equipment or facilities, designed, constructed, or wired for the purpose of producing, receiving, amplifying and distributing by coaxial cable, fiber optics, microwave, or other means, audio and/or visual radio, television, electronic, or electrical signals to and from Subscribers and located within the Franchise Area. W. "Village" shall mean the Village of Oak Brook, Du Page and Cook Counties, a municipal corporation. -4- X. "Two-way Service means the subscriber or any other location shall have the capability to choose whether or not to respond immediately or by sequential delay by utilizing any type of terminal equipment what- ever, by push-button code, dial code, meter, voice, video, including, but not limited to, audio and video, electrical , or mechanically produced signal , display, and/or interrogation. Y. "User" means a person or organization utilizing a system channel for purposes of production and/or transmission of material , as constrasted with receipt thereof in a subscriber capacity. Article III: GRANT OF AUTHORITY Section 1: Franchise Required No person, firm, company, corporation, or association shall construct, install , maintain, or operate a cable telecommunications system within the Village, or within any public property of the Village, unless a franchise has first been obtained pursuant to the provisions of this Ordinance, and unless `. such franchises is in full force and effect. Such franchise shall not obviate the requirement for any other license or permit which may be legally required of a Grantee in order to conduct such a business. Section 2• Applications for a Franchise A. Applications for a cable telecommunications system franchise shall be submitted to the Corporate Authorities, or its designee, on a written application form furnished by the Village, and in accordance with procedures and schedules established by the Corporate Authorities. The application form may request facts and information the Corporate Authorities deem appropriate. Applications shall be accompanied by a non-refundable application fee in an amount determined by the Cor- porate Authorities, which amount shall be used by the Village to offset direct expenses incurred in the franchising and evaluation procedures, including, but not limited to, staff time and consulting assistance. B. An applicant (Grantee) to whom the Corporate Authorities grant a non-exclusive franchise, shall , in addition to the non-refundable fee specified hereinabove, pay to the Village at the time the Grantee files the written instrument specified in Article VII, Section 9 hereof, an amount to be determined by the Corporate Authorities to be used to offset all direct, reasonable expenses actually incurred by the Village in granting the franchise, which are not defrayed by fees received pursuant to the provisions of Paragraph A of this Section. -5- Section 3: Criteria for Evaluation of Application Applications for a cable telecommunications system franchise will be evaluated under the following criteria: A. Experience. Preference may be given to applicants that can give evidence of providing dependable and complete service to other com- munities and who have established a record of excellent construction practices, ability to meet deadlines, and good planning and marketing practices. B. Financial Stability. Preference may be given to applicants that present evidence of financial resources which will assure that the applicant will have the ability to complete the entire system in the Franchise Area within the time period established by the Corporate Authorities. C. System Design. Preference may be given to a system which contains the flexibility to adjust to new technological developments and which indicates that high quality equipment will be used and high quality maintenance practices will be followed. D. Services. Preference may be given to the applicant that proposes to provide superior programming or other auxiliary services. In deter- mining what constitutes superior programming, particular consideration `. will be given to local origination and the resources which an applicant proposes to devote to local origination in order to make it interesting, innovative, and financially feasible. E. Local Studio Facilities. Preference may be given to applicants that propose to maintain studio facilities within the Village. Article IV: FRANCHISE CONDITIONS Section 1: Franchise Term The term of an original franchise shall be no more than fifteen (15) years from the date the franchise is accepted by the Grantee. The term of a renewed franchise shall be no more than fifteen (15) years. No franchise granted pur- suant to this Ordinance shall give any exclusive right to a Grantee, and every such franchise shall be deemed to reserve the right to grant other franchises to use and occupy the public ways of the Village for cable television or any other purpose on such terms as the Corporate Authorities may then deem appropriate. Section 2: Notice to Grantee Except as provided in Section 4 (A) of this Article IV, the Village shall not take any final action involving the evaluation, modification, renewal , revocation, or termination of a Grantee's franchise unless the Board has (1) called a meeting for such purpose, and (2) advised the Grantee, in writing, at least thirty (30) days prior to such meeting, as to its time, place, and purpose. -6- Section 3: Franchise Review and Modification It shall be the policy of the Village to amend a franchise, upon applica- tion of the Grantee, when necessary, to enable the Grantee to take advantage of technological advancements which will afford it an opportunity to more effec- tively, efficiently, or economically serve its subscribers; provided, however, that this Section shall not be construed to require the Village to make any amendment. Section 4: Performance Evaluation Sessions A. The Corporate Authorities and Grantee may hold performance evalu- ation meetings within thirty (30) days of the third, eighth, and fourteenth anniversary dates of the Grantee's award of franchise and as required by federal and state law. All such evaluation meetings shall be open to the public. The Village shall be responsible for notifying the Grantee, in writing, at least sixty (60) days in advance, of each of the specified performance evaluation meetings, and no notice to the Grantee pursuant to Section 2 of this Article IV shall be required. B. Special evaluation meetings may be held at any time during the term of the franchise at the request of the Village or a Grantee. C. All performance evaluation sessions shall be open to the public and preceded by public notice thereof in accordance with the provisions of the Open Meetings Act, Chapter 102, paragraph 42.02 of the Illinois Revised Statutes. In addition, Grantee shall notify subscribers of any performance evaluation session by announcement on the highest use origination channel no less than three times between 7 p.m. and 9 p.m. daily for the five days immediately preceding each such session. D. Topics which may be discussed at any scheduled or special evaluation session may include, but not be limited to, service rate structures, franchise fees, penalties, applications of new technologies, system performance, services provided, programming offered, customer com- plaints, privacy, amendments to this Ordinance, modification to the franchise, judicial and FCC rulings, line extension policies, and Grantee or Village rules. E. During a review and evaluation by the Village, the Grantee shall fully cooperate with the Village and shall provide such information and documents as the Corporate Authorities may request to reasonably perform its review. F. If, at any time during its review, the Corporate Authorities determine that reasonable evidence exists of inadequate cable telecommunications system performance, they may require a Grantee to perform tests and analyses directed toward the suspected inadequacies. A Grantee shall fully cooperate with the Village in performing such tests and shall prepare results and a report, if requested, within thirty (30) days after notice. Such report shall include the following information: -7- (1) The nature of the complaint or problem which precipitated the special tests; (2) What system was tested; (3) The equipment used and procedures employed in testing; (4) The method, if any, in which such complaint or problem was resolved; (5) Any other information pertinent to said tests and analyses which may be required; (6) The Corporate Authorities may require the tests to be supervised at Grantee's expense by a professional engineer to be approved by the Corporate Authorities. The engineer, if other than an engineer of the Grantee, shall be accompanied by an engineer designated by the Grantee, and should sign all records of special tests and forward to the Corporate Authorities and Grantee such records with a report interpreting the results of the tests and recommending actions to be taken. (7) The Village's right under this Section shall be limited to re- quiring tests, analyses, and reports covering specific subjects and characteristics based on said complaints or other evidence when and under such circumstances as the Corporate Authorities have reasonable grounds to believe that the complaints or other evidence require that tests be performed to protect the public against substandard cable service. Section 5: Franchise Processing Costs For either a new Franchise award or a Franchise renewal , costs to be borne by Grantee shall include, but shall not be limited to, all costs of publications of notices prior to any public meetings provided for pursuant to a Franchise; development and publication of an Enabling Ordinance, Franchise, and other relevant Agreements; fees and any costs not covered by the application fees incurred by the Grantor in its study, preparation of proposal solicitation documents, evaluation of all applications, including, but not limited to, consultant and attorneys fees and Grantor staff time. These Franchise processing costs are over and above any construction, inspection, permit, and Franchise Fee specified in Section 12 of this Article IV. Section 6: Franchise Renewal A. A Grantee shall be solely responsible for requesting the Village, in writing, to hold a special meeting to review the Grantee's performance during the term of its franchise, to consider the adequacy of the franchise from the standpoint of the Village, the Grantee, and the Federal Communications Commission Rules for Cable Television, and to determine the advisability of renewing the Grantee's franchise. -8- & -3q9 Unless the Village shall consent to some lesser notice, said request �.. shall be made not less than thirty (30) months prior to the franchise expiration date, as specified in the Act. Upon receipt of said request, the Corporate Authorities shall schedule the time and place of the special meeting for this purpose. If no request for renewal is made, the franchise shall expire according to its terms, provided, however, that the Corporate Authorities may extend the term of the franchise in accordance with other procedures allowed under the Act. B. The Corporate Authorities shall hear any interested persons during said special Village meeting and shall determine whether or not the Grantee did reasonably comply with the terms and conditions imposed by this Ordinance and the franchise. Notice of such meeting shall be given in accordance with Sections 2 and 4 (C) of Article IV hereof. C. If the Corporate Authorities determine that the Grantee has been in reasonable compliance with the terms and conditions imposed by this Ordinance and the franchise, they shall , by resolution or ordinance, and in compliance with the Act, renew the Grantee's franchise, with any modifications it deems desirable, for a period of time not longer than fifteen (15) years. L-- O. If the Corporate Authorities determine that the Grantee has not been in reasonable compliance with the terms and conditions imposed by this Ordinance and the franchise, the Corporate Authorities shall have the right not to renew the Franchise. If the Franchise is not renewed, the Corporate Authorities shall , to the extent then permitted by existing law, have the option to: (1) acquire at fair market value all the assets of the Grantee's operation within the Village; (2) require the sale at fair market value of all such assets to a suc- ceeding Grantee; or (3) require the removal of all such assets from the Village. Except as provided in Section 9 of this Article IV, the Corporate Authorities' above-stated options must be exercised within one (1) year from the date of the Franchise expiration, unless such period is extended with the consent of the Grantee. E. The Village shall have the right to recoup from the Grantee all direct expenses incurred pursuant to renewal of the franchise granted to that Grantee, including, but not limited to, staff time and consulting assistance. Section 7: Franchise Revocation Procedure A. Whenever a Grantee shall refuse, neglect, or willfully fail to con- struct, operate, or maintain its cable television system or to provide service to its subscribers in substantial compliance with the terms of this Ordinance and the franchise or to comply with the conditions of occupancy of any public way or to make required extensions of service, or shall in any other way substantially violate the terms and condi- tions of this Ordinance, the franchise, or any applicable rule or regulation, or practices any fraud or deceit upon the Village or its -9- subscribers, or fails to pay franchise fees when due, or if a Grantee becomes insolvent, as adjudged by a court of competent jurisdiction, or is unwilling to pay its uncontested debts, or is adjudged bankrupt, or seeks relief under the bankruptcy laws, then the franchise may be revoked by Village ordinance or resolution of the Corporate Authorities. B. In the event the Village believes that grounds for revocation exist, or have existed, the Village may notify a Grantee, in writing, setting forth the nature and facts of such noncompliance. If, within thirty (30) days following such written notification, the Grantee has not furnished reasonably satisfactory evidence that the corrective action has been taken or is being actively and expeditiously pursued, or that the alleged violations did not occur, or that the alleged violations were beyond the Grantee's control , the Corporate Authorities may revoke the franchise pursuant to Section 7 (A) of this Article IV. C. A Grantee shall not be subject to the sanctions of this Section for any act or omission wherein such act or omission was beyond the Grantee's control . An act or omission shall not be deemed to be beyond a Grantee's control if committed, omitted, or caused by a corporation or other business entity which holds a controlling in- terest in the Grantee, whether held directly or indirectly. Further, the inability of a Grantee to obtain financing, for whatever reason, shall not be an act or omission which is "beyond the Grantee's control". D. In the event that a Franchise has been revoked, the Village shall , to the extent then permitted by existing law, have the options to: (1) acquire, at fair market value, all the assets of the Grantee's opera- tions within the Village; or (2) require the sale, at the fair market value, of all such assets of the Grantee's operations within the Village to a successor Grantee; or (3) require the removal of all such assets from the Village. Unless some later date is agreed to by the Grantee, and except as provided in Section 8 of this Article IV, such an option must be exercised within six (6) months from the date of the revocation of the franchise, or the entry of the final judgement by a court reviewing the question of the Village revocation, or the entry of a final order upon appeal of same, whichever is later. E. The termination of a Grantee's rights under a franchise shall in no way affect any other rights the Village may have under the franchise or under any provision of law or ordinance, and the Grantee shall continue to maintain records and make reports as required by this Ordinance and the franchise until such time as all payments due the Village have been paid and accounted for to the reasonable satis- faction of the Village. Section 8: Arbitrary and Capricious Action by Grantee If a Grantee arbitrarily and capriciously discontinues service to a substan- tial number of its subscribers, the Grantee's franchise may be revoked by ordi- nance or resolution of the Corporate Authorities following notice to the Grantee and an opportunity to be heard, in the manner specified in Sections 6 (A) and (B) of this Article IV, provided the Village may seek appropriate judicial or other relief and/or may proceed to exercise its rights and powers as provided for herein. -10- Section 9: Arbitration In the event the Corporate Authorities exercise its' options to acquire all of the assets of the Grantee, and the fair market value cannot be agreed upon, said value shall be determined by a panel of arbitrators knowledgeable in the valuation of Cable Systems, which panel may be requested by either the Village or the Grantee no sooner than ninety (90) days after notice that the Village desires to purchase the system. The panel shall be composed of one arbitrator chosen by the Village, one arbitrator chosen by the Grantee, and a third arbi- trator chosen by the first two arbitrators. The expenses of the arbitration, including the fees of the arbitrators, shall be borne by the parties in such manner as the arbitrators provide in their award, but in no event will the Village be obligated for more than one-half of said expenses. The determination of a majority of the arbitrators shall be binding on the parties. The arbitra- tors shall follow the rules and procedures of the American Arbitration Associa- tion except where in conflict with an express provision of this Ordinance. The arbitration hearing shall take place in Du Page County, unless otherwise agreed to by the parties in writing. Notwithstanding any other timetable imposed by this Ordinance, the Village shall , within ninety (90) days following notice to it of the decision of the arbitrators, either withdraw any notice it may have given of its intent or election to acquire the Grantee's system or shall affirm- atively accept the decision of the arbitrators and affirm its election to pur- chase the system or assets. If the Corporate Authorities fail to accept the arbitrators' decision and affirm its election to purchase within the aforesaid ninety (90) day period, the rights of the Village to purchase shall expire. However, nothing in this ordinance shall prohibit a Grantee or the Village from seeking appropriate legal remedies in this or other matters; provided that arbitration shall be a condition precedent to seeking any such legal remedies on the issue of the fair market value of a Grantee's assets, as set forth in Sec- tion 7 (D) of this Article IV. Section 10: Transfer of Ownership to Grantor In those circumstances wherein the Village shall have elected to purchase ownership of all the assets of the Grantee's operations within the Villge, the Village shall , unless the Grantee shall agree to some other terms, pay, in cash, to the Grantee, the price of such assets plus any interest, calculated at an annual ratio of two (2) percentage points over the prime rate given by the Continental Illinois National Bank to its most credit-worthy borrowers of demand loans, which may have accrued from the date the Village or any interim operator assumed direction and control of the Grantee's cable system within the Village to the date of payment. Such payment shall be made within twelve (12) months following the date of revocation. Title to the system or assets shall pass to the Grantor upon such payment. Section 11: Grantee's Obligation As Trustee A. At all times from the expiration or revocation of a franchise and until either (1) a Grantee transfers to the Village or other succeed- ing operator of the system all of its rights, title and interest to all assets, real and personal , related to it cable telecommunications -11- system in the Village, or, (2) the Village's right to either acquire L.. or assign. its rights to acquire any of the Grantee's assets expires without the Village having exercised such a right, whichever occurs first, the Grantee shall have a duty to such successor as a trustee holding such assets for the benefit of such successor and the Grantee shall not sell any of the system assets in the Village, nor shall the Grantee make any physical , material , or administrative operational changes that would tend to (1) degrade the quality of service to the subscribers, (2) decrease gross revenues, or (3) materially increase expenses without the express permission, in writing, of the Village or its assigns. Immediately upon the assumption of operating control of the system by the Grantee, as a Trustee, or a successor trustee, the Corporate Authorities shall cause an independent appraisal and inven- tory of all of the assets of the system to be made to verify and establish the existence and condition of all such real and personal property of the system. The Grantee shall at all times operate the system in accordance with the terms of this Ordinance and the terms of the franchise, as if the franchise had not expired or had not been revoked. In the event Grantee fails or refuses to operate the system as a Trustee, the Village shall have the right to apply to a court of competent jurisdiction for the appointment of a receiver to operate the system itself as a trustee in accordance with the terms of this Ordinance, the terms of the franchise, and applicable law. B. In the event of expiration or revocation of a franchise, this Section shall not be construed to give a Grantee any vested or other franchise right, but the right of the Grantee in such circumstances shall exist only on a day-to-day basis. C. As full compensation for its ownership interests during this interim period, the Grantee shall be entitled to receive the net profit generated during the period between the expiration or revocation of the franchise, as the case may be, and the transfer of title to the Grantee's assets to the Village or a successor Grantee. Net profit shall be determined in accordance with generally accepted accounting principles and reported on a basis which is consistent and comparable with the format of the books and accounts maintained by the Grantee during the immediately preceding two fiscal years and as presented in the audited financial statements. D. This Section shall in no way Limit the power of the Village, upon expiration or revocation of a franchise, to require the Grantee to cease all operations whatsoever and/or remove its assets from the `• Village, or otherwise exercise any rights the Village would otherwise have. -12- Section 12: Franchise Fee A. Each Grantee, in consideration of the privilege granted under a fran- chise for operation of a cable telecommunications system and the expense of regulation pursuant to the franchise incurred by the Village, shall pay to the Village up to five (5%) percent of its annual gross revenues during the period of its operation under the franchise granted, as set forth in the Franchise Agreement. Such payment shall be in addition to any other customary payment, charge, permit fee or bond owed to the Village by the Grantee, and shall not be construed as payment in lieu of real property or other taxes levied by the Corporate Authorities. B. The Grantee shall file with the Village, within thirty (30) days after the expiration of each of the Grantee's fiscal quarters, a financial statement clearly detailing the gross revenues received by Grantee from the franchise area during the preceding quarter, and shall simul- taneously tender payment of the quarterly portion of the franchise fee. The Grantee shall also file, within one hundred twenty (120) days following the conclusion of the Grantee's fiscal year, a report prepared and certified by a Certified Public Accountant reasonably acceptable to the Village and the Grantee, detailing the status of the Grantee or its parent corporation, showing the total amount of Gross Revenues and all payments, deductions, and computations for the period in question. C. The Village shall have the right, consistent with the provisions of Article V, Section 2 (D) , to inspect the Grantee's income records insofar as they relate to Grantee's franchise area operations and the right of audit and recomputation of any amount determined to be pay- able under this Ordinance. Any additional amount due the Village as a result of the audit shall be paid within thirty (30) days following written notice to the Grantee by the Village, which notice shall include a copy of the audit report. The cost of said audit shall be borne by the Grantee if it is determined that the Grantee's annual payment to the Village for the preceding year was underpayed by two percent (2%) or more. D. Acceptance by Grantor: No acceptance of any payment by the Grantor shall be construed as a waiver, release, or an accord and satisfaction of any claim the Grantor may have for further or additional sums payable as Franchise Fees under this Enabling Ordinance, or any Fran- chise Agreement entered into hereunder, or for the performance of any L, other obligation of the Grantee. E. In the event that any franchise payment or recomputed amount is not made on or before the applicable dates heretofore specified, interest shall be charged from such due date at the annual rate of two (2) percentage points over the prime rate given by Continental Illinois National Bank due its most credit-worthy borrowers of demand loans. -13- F. In the event the frnchise is revoked or expires, the Grantee shall L file with the Village, within thirty (30) days of such revocation or expiration, a statement clearly showing the gross revenues received by Grantee since the end of the previous fiscal quarter. The Grantee shall pay the franchise fee due at the time such statement is filed or within thirty (30) days, whichever is sooner. Section 13: Indemnification A. A Grantee shall save and hold the Village, its Corporate Authorities, officers, boards, commissions, employees and agents, harmless from any injury, claim, demand, suit, judgment, execution liability, debt, damages, or penalty (hereinafter referred to as "claims") arising out of, resulting from, or alleged to arise out of or result from, the contruction, erection, installation, operation, maintenance of, or other activity connected with, the Grantee's cable telecommunications system, whether such acts or omissions are those of the Grantee, whether or not any such act or omission is authorized, allowed or prohibited by this Ordinance or the Grantee's franchise. Damages for purposes of this Section shall include, but not be limited to, penalties arising out of copyright infringements and damages arising out of any failure by Grantee to secure consents from the owners, authorized distributors, or licensee of programs to be delivered by the Grantee's cable television system. The Grantor shall give prompt written notice to Grantee of any "claim" or facts which might give rise to a "claim" under this Section. Said notice shall state particulars sufficient to identify the "claim" and shall contain reasonably obtainable information respecting the time, place, and circumstances of the occurrence underlying the "claim" or potential "claim". The Grantor shall promptly forward to Grantee any demand, notice, summons, or other process received by it or its agents in connection with a "claim" described in this Section. Further, the Grantor shall cooperate with Grantee and assist in the investigation of any "claim" or potential "claim". The Grantee shall have the right to defend and settle any "claim", and the right to enforce any right of contribution or indemnity against any third party who may be liable to Grantor or Grantee because of any occurrence giving rise to a "claim". B. A Grantee shall pay, and by its acceptance of a franchise, shall be deemed to have specifically agreed that it will pay all expenses incurred by the Village in defending itself with regard to all claims `.. mentioned in subsection (A) above. These expenses shall include all out-of-pocket expenses, such as attorneys' fees, and shall also in- clude the reasonable value of any services rendered by any employee of the Village. -14- Section 14: Insurance A. A Grantee shall maintain, at its own expense, and by its acceptance of \., a franchise, shall be deemed to have specifically agreed that it will maintain throughout the term of such franchise, general comprehensive liability insurance insuring the Village and the Grantee with regard to all claims mentioned in Section 12 of this Article IV in the minimum amounts of: (1) Five Million Dollars ($5,000,000) for bodily injury or death to any one person, within the limit, however, of Ten Million Dollars ($10,000,000) for bodily injury or death resulting from any one accident; (2) Two Million Dollars ($2,000,000) for property damage, including damage to Village property, resulting from any one accident; (3) Two Million Dollars ($2,000,000) for all other types of liability resulting from any one occurrence. (4) During any period of construction, adequate coverage to meet liability under the Illinois Structural Work Act; (5) Workers Compensation Insurance within statutory limits, and Employers Liability Insurance of not less than One Hundred Thousand Dollars ($100,000). B. All policies of insurance required by this Section shall be placed with companies which are qualified to write insurance in the State of Illinois by the Illinois Director of Insurance. C. The policies of insurance required in subsections (1) through (4) inclusive, shall name the Village as an additional insured or co- insured party in each such policy. D. Current Certificates of Insurance evidencing the coverages required under this Section shall be filed with the Village and shall at all times reflect policies currently in full force. E. The insurance policies required under this Section shall contain a broad form contractual liability endorsement and shall also contain the following endorsement: "It is hereby understood and agreed that this policy may not be cancelled nor the amount of coverage thereof reduced until ninety (90) days after receipt by the Village by registered mail of written notice `. of such intent to cancel or reduce the coverage." Section 15: Bonds; Letters of Credit A. A Grantee shall maintain, at its own expense and by its acceptance of a franchise, shall be deemed to have specifically agreed that it will maintain throughout the term of such franchise, a faithful performance license and franchise bond or letter of credit, as specified in the Franchise Agreement, running to benefit of the Village, with good and -15- sufficient sureties approved by the Village, in the penal sum of Fifty Thousand Dollars ($50,000) , or such greater or lesser sum as may be specified in such franchise. When regular subscriber service is available to more than ninety percent (90%) of the occupied dwelling units within the franchise area, the amount of the bond or letter of credit shall be reduced to the amount specified in the franchise, or, if no amount is specified therein, then to the sum of Ten Thousand Dollars ($10,000). Said bonds or letter of credit shall be condi- tioned that the Grantee shall well and truly observe, fulfill , and perform each term and condition of this Ordinance and its franchise, and that in case of any breach of condition of the bond, or letter of credit, the amount thereof shall be recoverable from the principal and sureties thereof by the Village for all damages and costs, whether direct or indirect, resulting from the failure of the Grantee to well and faithfully observe and perform any provision of this Ordinance or its franchise. Such damages and costs shall be deemed to include, as a minimum and without limitation, any expenses as may be incurred by the Village as a result of Grantee's failure to comply with the obli- gations imposed by this Ordinance and the franchise, including, but not limited to, attorneys' fees and costs, if any action or proceeding; the cost of refranchising; and the cost of removal or abandonment of any property, or other costs which may be in default, which costs shall be conclusively presumed to amount to a sum equal to at least the penal sum of such bond. The Village shall have no obligation to devote the proceeds of such bond or letter of credit to the completion, connection, operation, or removal of Grantee's cable television system, all of which shall remain the obligation of -the Grantee. The Village's right to recover under the bond or letter of credit shall be in addition to any other rights retained by the Village under this Ordinance and other applicable law. B. In addition to the requirements of subsection (A) above, the Grantee shall maintain, at its own expense, and by its acceptance of a fran- chise be deemed to have agreed, that it will maintain on deposit with the Village throughout the term of such franchise, a cash escrow or a letter of credit as specified in the Franchise Agreement, from a qualified financial institution, in the amount of Fifty Thousand Dollars ($50,000) , or such greater or lesser amount as may be speci- fied in the Franchise Agreement. The form and content of such escrow or letter of credit shall be approved by the Village Attorney. The escrow or letter of credit shall be conditioned in the same manner as the bond hereinabove required, and may be drawn on by the Village to compensate itself for any of the damages or costs specified in sub- section (A) above. In particular, but without limitation, such escrow or letter of credit shall be drawn on in the case of any default or failure of the Grantee to pay any fees, penalties, claims, liens, or taxes due to the Village under Article VII, Section 11, of this Ordi- nance or the franchise. Upon drawing on such escrow or letter of credit for any reason, the Village shall notify the Grantee. The Grantee shall , within seven (7) business days of the receipt of such notification, take all action required to restore the escrow or letter of credit to its original full amount. The rights reserved to the -16- G ..399 Village with respect to the escrow or letter of credit are in addition to all other rights of the Village, whether reserved by this Ordinance or the franchise or authorized by law, and no action, proceeding, or t� exercise of a right with respect to such escrow or letter of credit shall affect any other right the Village may have. Section 16: Transfer of Franchise A. A franchise granted under this Ordinance shall be a privilege to be held personally in trust by the Grantee. Except as otherwise provided in the Franchise Agreement, the franchise shall not be assigned, transferred, mortgaged, leased or sublet, sold or disposed of, trans- ferred in trust, pledged, in whole or in part, by voluntary sale, merger, sale and leaseback, consolidation, or otherwise or by forced or involuntary sale, without prior consent of the Village expressed by ordinance or resolution, and then on only such conditions as may therein be prescribed. Any sale, transfer, or assignment not made according to the procedures set forth in this Ordinance shall render the franchise void. The sale, transfer, or assignment in bulk of the major part of the tangible assets of the Grantee shall be considered an assignment and shall be subject to the provisions of this Section. Nothing in this Section shall prohibit a mortgage or pledge of the assets or stock of a Grantee exclusively for financing purposes in �.- connection with construction of the Grantee's cable systems. However, any such mortgage, pledge, or lease shall be subject to and subordi- nate to the rights of the Village and Subscribers under this Ordi- nance. B. Any sale, transfer, or assignment authorized by the Village shall be made by a bill of sale or similar document, an executed copy of which shall be filed with the Village within thirty (30) days after any such sale, transfer or assignment. The Village shall not withhold its consent unreasonably; provided, however, the proposed assignee agrees to comply with all the provisions of this Ordinance and the franchise and reasonable amendments thereto, and must, at a minimum, satisfy the legal , financial , technical , and character qualifications required by this Ordinance. C. Prior approval of the Village shall be required where ownership or control of more than 20% of the right of control of the Grantee is acquired during the term of the franchise in any transaction or series of transactions by a person or a group of persons acting in concert, none of whom owned or controlled twenty percent (20%) or more of such right of control , singularly or collectively, on the effective date of the franchise. By its acceptance of a franchise, a Grantee speci- fically grants and agrees that any such change in ownership or control occurring without a prior approval of the Village shall be considered a material default under the Franchise, except that any public offering of its stock, under applicable rules of the Securities and Exchange Commission, and any change in ownership occurring thereunder, shall not constitute a change requiring Village approval under this Section. -17- &~39q D. In seeking the Grantor's consent to any Sale of the Franchise or change in control of the Grantee, it shall be incumbent upon the Grantee to demonstrate to the Grantor's reasonable satisfaction: (1) That the proposed purchaser or parties acquiring control which, in each case of a corporation shall include all officers, direc- tors, employees and shareholders, and, in the case of a partner- ship or joint venture, shall include each Person who is a partner therein who shall by virtue of such Sale or change of control acquire five percent (5%) or more of the beneficial ownership interest in the Grantee: a. Has never been convicted of or held liable for acts in- volving moral turpitude including, but not limited to, any violation of Federal , State, or local law or regulations, or is presently under an indictment, investigation, or com- plaint charging such acts; b. Has never had a judgment in an action for fraud, deceit, or misrepresentation entered against any such Person by any court of competent jurisdiction; or, C. Does not now nor never has had pending any legal claim, lawsuit, or administrative proceeding arising out of or involving a Cable System. (2) To establish, to the satisfaction of the Grantor, the financial solvency of the proposed purchaser or parties acquiring control by submitting current financial statements for each of said Persons and such other reasonable data as the Grantor may re- quest. Financial statements may include profit and loss state- ments, balance sheets, and other financial data and shall be audited, certified, and qualified by an independent Certified Public Accountant. (3) To establish to the satisfaction of the Grantor that the finan- cial and technical capability of the proposed purchaser or parties acquiring control is such that shall enable it to main- tain and operate the Cable System for the remaining term of the Franchise under the existing Franchise terms. E. The consent of the Village to any sale, transfer, lease, trust, mort- gage, or other instrument of hypothecation shall not constitute a waiver or release of any of the rights of the Village under this Ordinance and the franchise. Article V: SUBSCRIBER AND USER FEES AND RECORDS Section 1: Subscriber and User Fees A. Rates to be Uniform: The Grantee shall establish non-discriminatory rates for its Cable Services and equipment that shall be applied fairly and uniformly to all Subscribers, except that the Grantee may enter into separate agreements in providing service to multiple dwelling units within the Franchise Area. -18- B. Schedule of Rates: The Grantee shall maintain and file with the Grantor a complete schedule of Subscriber rates, including all fees �- and charges for Cable Services and equipment. C. Disconnections: There shall be no charge for disconnection from the Cable System. However, if a Subscriber has failed to pay properly due monthly fees or if a Subscriber disconnects for seasonal periods, the Grantee may require, in addition to full payment of any delinquent fees, a reasonable fee for reconnection. Additionally, nothing herein shall prohibit a charge for other changes in service requested by the subscriber. 0. A Grantee shall be required to apprise, in writing, each new sub- scriber of all applicable fees and charges for providing cable tele- vision service. E. A Grantee may, at its own discretion, in a non-discriminatory manner, waive, reduce, or suspend connection fees or monthly service fees for promotional purposes, or may enter into separate agreements with multiple dwelling units. F. Except as may be otherwise provided in a franchise, a Grantee may offer service which requires advance payment of periodic service charges for no more than one (1) year in advance, subject to the conditions contained in this paragraph. A subscriber shall have the right, at any time, to have its service disconnected without charge and with a refund of unused service charges paid to the customer within thirty (30) days from the date of service. Rate increases shall not be effective with respect to any subscriber until after the expiration of any period for which advance payment has been accepted by the Grantee. Section 2: Books and Records A. A Grantee shall (1) within thirty (30) days following the acceptance of a franchise, and (2) at least yearly thereafter, and within thirty (30) days of the change of ownership of three percent (3%) or more of any class or series of the outstanding voting stock or equivalent ownership interest of Grantee, furnish the Village a list, showing the names and addresses of persons owning three percent (3%) or more of any class or series of the outstanding voting stock or equivalent ownership interest of the Grantee, together with a roster of the Grantee's officers and directors (or equivalent managerial personnel ) and their addresses, and if 50% or more of Grantee's voting stock is owned by another corporation, such information as to such other cor- poration. B. A Grantee shall maintain books and records of its operations within the Village to show the following in sufficient detail , consistent with generally accepted accounting principles: -19- ...399 (1) Total revenues, by service category. (2) Operating expenses, categorized by general and administrative L expenses, technical expenses, and programming expenses, and overhead where applicable. (3) Capital expenditures, to include capitalized interest and over- head, if any. (4) Depreciation expenses, by category. C. A Grantee shall maintain such books and records for the franchise area specified in the franchise separately from any other operations ; provided, however, that any expenses or expenditures which apply to both the system in said franchise area and any other operations shall be reasonably allocated between all such operations, consistent with generally accepted accounting principles. Such books and records shall be retained, in any reasonable form, for a period of not less than three (3) years, or as required for Internal Revenue Service audit requirements, whichever is shorter. The Village shall have the right to extend the retention period through the term of any renewed franchise. D. The books and records of a Grantee's operation within the Village shall be made available in the Village during normal business hours, �. for inspection and audit by the Village, within thirty (30) days after such request has been made. E. Copies of a Grantee's schedule of charges, contract, or application forms for subscriber and user services, policy regarding the proces- sing of subscriber complaints, delinquent subscribers, disconnect and reconnect procedures, and any other terms and conditions adopted as the Grantee's policy in connection with its subscribers or users shall be filed with the Village and shall be made available for inspection by the public in the Grantee's local office. Article VI: SYSTEM OPERATIONS Section 1: Franchise Areas and Schedule A Grantee shall provide service to all subscribers within the timetable established by the Corporate Authorities. Section 2: Expansion of Franchise Areas Unless specified differently in the franchise, the franchise area shall be automatically expanded upon annexation of any territory to the Village to in- clude such territory. -20- Section 3: Individual Service Drops A. A Grantee shall extend and make cable television service available to any potential subscriber within the Village and the remaining service area requesting connection at the standard connection charge, if the connection to such subscriber would require no more than a standard two hundred fifty (250' ) foot aerial or buried drop line from the closer of any trunk or feeder cable. B. With respect to requests for connection requiring an aerial or buried drop line in excess of two hundred fifty (250' ) feet, Grantee shall extend and make available cable television service to such subscribers at a connection charge not to exceed the actual installation costs incurred by the Grantee for the distance exceeding two hundred fifty (250' ) feet. Section 4: System Description and Service A. The cable telecommunications system to be installed by a Grantee shall comply in all respects with the requirements set forth in the FCC's Rules for Cable Television, including applicable amendments thereto; and with the Act. B. Geographical Coverage: A Grantee shall design and construct the Cable System in such a manner as to have the capability to pass by every single-family dwelling unit, multiple-family dwelling unit, school and public agency within the Franchise Area. Cable Service shall be provided to Subscribers in accordance with the schedules and line extension policies specified in the Franchise Agreement. Cable System construction and provision of Cable Service shall be non-discriminatory, and Grantee shall not delay or defer service to any section of the Franchise Area on the grounds of economic preference. C. Public access, educational access, local government access, and leased access channels shall be provided as follows: (1) A Grantee shall have available equipment for local production and presentation of cablecast programs other than automated services, and shall permit its use for the production and presentation of public, educational , and government access programs. (2) A public access channel (s) or part thereof shall be available to residents of the Village on a first-come, first-served, non discriminatory basis. (3) An educational access channel (s) or part thereof shall be avail- able to residents of the Village on a first-come, first-served, non-discriminatory basis. (4) The local government access channel (s), or part thereof, shall be made available for the use of the Village or such other unit of local government as shall be designated by the Village, free of charge. -21- D. Within two (2) years of date of acceptance by a Grantee of the fran- chise Ordinance, Grantee will provide for: (1) All fire and police stations in the Village, Village Hall , and all other Village-owned buildings designated from time to time by the Village; (2) All public library buildings; (3) All park district buildings; (4) All schools located within the franchise area (hereinafter collectively referred to as institutional users). all such equipment proposed by the applicant and reasonable training and technical assistance in the use of such equipment, including training and technical assistance in the use of any local studio equipment, in order to enhance the usage by and programming ability of the institutional users. Grantee shall maintain and repair said equipment without charge, and shall replace such equipment without charge when it is not feasible to continue to maintain and repair the same. A Grantee also shall provide, within two (2) years from the date of acceptance by Grantee of the franchise Ordinance, one service outlet activated for regular subscriber service to all institutional users, except that where a Grantee has proposed the provision of studio equipment and/or services to a particular school or schools, exclusive of the services and/or equipment proposed to all other schools, the obligation for the replacement and repair of such equip- ment shall lie with the school (s) to which such studio equipment is provided. E. A Grantee shall not knowingly or negligently permit the transmission of any programming in violation of any federal , state, or local law or Ordinance. Except as specifically modified by the franchise Ordinance, Grantee shall provide, without charge, each subscriber's television set with a lockout capability to limit the auxiliary service programs available to viewers, upon the request of such subscribers. Such lockout shall have the capability of being changed one time at no charge to the subscriber. Section 5: Operational Requirements and Records A. A Grantee shall construct, operate, and maintain the cable telecommuni- cations system in full compliance with the rules and regulations, including applicable amendments, of the Federal Communications Commis- sion, and all other applicable Federal , State, or local laws and `.- regulations, including the latest editions of the National Electrical Safety Code and the National Fire Protection Association National Electrical Code. The cable television system and all its parts shall be subject to inspection by the Village, and the Village hereby re- serves the right to review Grantee's construction plans prior to the commencement of construction. The Village shall not, however, be required to make inspections or approve the Grantee's system and plans, and specifically disclaims such obligations ; the Grantee shall -22- be solely responsible for taking all steps necessary to assure com- pliance with such laws and regulations and the safety of its systems as installed. B. Grantee shall employ an operator or maintain a telephone answering service twenty-four (24) hours per day, each day of the year, to receive subscriber complaints and to dispatch assistance in the case of any emergency or major system malfunction affecting a number of subscribers. C. A Grantee shall design, construct, operate, and maintain the system at all times, so that the signals carried are delivered to subscribers without material degradation in quality (within the limitations imposed by the technical state-of-the-art). D. Copies of all correspondence, petitions, reports, applications, and other documents filed by Grantee with Federal or State agencies having appropriate jurisdiction in matters affecting cable television opera- tion, with the Village, or received from said agencies, shall be furnished to the Village by the Grantee upon the Village's request. E. In the event of any disaster or emergency, the Grantee shall , upon the Village's request, make available its facilities to the Village, without cost, for emergency use during the period of the emergency or disaster. Section 6: Tests and Performance Monitoring A. Not later than ninety (90) days after any new or substantially rebuilt portion of the system is made available for service to subscribers, technical performance tests shall be conducted by the Grantee to demonstrate full compliance with the Technical Standards applicable pursuant to Paragraph A of Section 4, and Paragraph C of Section 5 of this Article VI. Such tests shall be performed by, or under the supervision of, a qualified engineer with proper training and exper- ience. A copy of the report shall be submitted to the Village, upon its request, describing test results, instrumentation, calibration, test procedures and the qualifications of the engineer responsible for the tests. At the option of the Village, additional tests may be required at the expense of the Grantee, conducted by a qualified engineer, when evidence exists of inadequate system performance. B. System monitor test points shall be established at or near the output of the last amplifier in the longest feeder line, at or near trunk line extremities, or at the locations to be specified in the franchise. Such periodic tests shall be made at the test points as shall be required by the Village. C. At any time after commencement of service to subscribers, the Village may require additional reasonable tests, including full or partial repeat tests, different test procedures, or tests involving a specific subscriber's terminal , at the Grantee's expense, to the extent such -23- ,., G-349 tests may be performed by the Grantee's employees utilizing its exist- ing facilities and equipment; provided, however, that the Village �.� reserves the right to conduct its own tests upon reasonable notice to the Grantee, and, if non-compliance is found, the expense thereof shall be borne by the Grantee. The Village will endeavor to arrange its request for such special tests so as to minimize hardship or inconvenience to Grantee or to the subscriber. D. A copy of the annual performance tests report required by the Federal Communications Commission shall be submitted to the Village within thirty (30) days of it completion. Section 7: Service, Adjustment and Complaint Procedure A. A Grantee shall establish a maintenance service capable of locating and correcting major system malfunctions promptly, except for circum- stances beyond the Grantee's control , such as strikes, acts of God, wars, riots, and civil disturbances. Said maintenance service shall be available at all hours, to correct such major system malfunctions affecting a number of subscribers. B. A listed local telephone number shall be made available to subscribers `- for service calls at any time of the day or night. Whenever service to more than four (4) subscribers is unintentionally interrupted, Grantee shall fully restore such service to all the affected sub- scribers within twelve (12) hours of the first report of the service interru tion. Whenever unintentional service interruptions affect four (4� or less subscribers, service to such subscribers shall be fully restored within twenty-four (24) hours of the first report of service interruption. Appropriate records shall be made of service calls, showing when and what corrective action was completed. Such records shall be available to the Village during normal business hours and retained in Grantee's files until the next scheduled performance evaluation session described in Article IV, Section 4, of this Ordi- nance, or for a longer period as directed by the Village. A summary of service calls shall be prepared by the Grantee and submitted to the Village annually, beginning twelve (12) months after service is pro- vided to the first subscriber. C. The Grantee shall furnish each subscriber, at the time service is installed, written instructions that clearly set forth procedures for placing a service call or requesting an adjustment. D. In the event a subscriber does not obtain a satisfactory response or resolution to his request for service or an adjustment, within a reasonable period of time, he may advise the Village in writing of his dissatisfaction. The Village shall have the authority to investigate any subscriber or user complaint or request for adjustment, and to order corrective action as shall be appropriate. The Village may require Grantee to establish rules and procedures regarding complaint resolution in the Franchise Agreement. -24- E. A Grantee shall interrupt system service after 7:00 a.m. and before 1:00 a.m. only with good cause and for the shortest time possible, and, except in emergency situations, only after cablecasting notice of service interruption at least twenty-four (24) hours in advance of the service interruption. Service may be interrupted between 1:00 a.m. and 7:00 a.m. for routine testing, maintenance, and repair, with notification, on any day except Saturday or Sunday, or the day follow- ing a legal holiday. Section 8: Occupancy and Use of Public Ways and Private Property A. A Grantee shall notify the Grantor at least ten (10) days prior to the intention of the Grantee to commence any construction in any public way. The Grantor shall cooperate with the Grantee in granting any permits required, providing such grant and subsequent construction by the Grantee shall not unduly interfere with the use of such public ways and that proposed construction shall be done in accordance with the pertinent provisions of the ordinances of the Grantor. B. A Grantee shall utilize existing poles, conduits, and other facilities whenever possible, and shall not construct or install any new, differ- ent, or additional poles, conduits, or other facilities, whether on the public way or on privately owned property within the Village, until the written approval of Village and, if necessary, of the prop- erty owner, is obtained. Such approval shall not be unreasonably withheld by the Village. No location of any pole, wire-holding struc- . tune, or other facility of the Grantee shall be a vested interest, and such poles, structures and facilities shall be removed, relocated, or modified by the Grantee at its own expense whenever the Village or other governmental authority determines that the public convenience would be enhanced thereby. Nothing herein or in any franchise shall be construed to entitle Grantee to the use of any property other than the public way. C. The Village shall be entitled to make use of a Grantee's poles and other wire-holding structures, so long as such use does not unreason- ably interfere with Grantee's operations. D. Where a public utility serving the Village desires to make use of the poles or other wire-holding structures of a Grantee, but agreement therefor with the Grantee cannot be reached, the Village may require the Grantee to permit such use for such consideration and upon such terms as the Village shall determine to be just and reasonable, based �• upon comparable costs of like-kind pole arrangements, if the Village determines that the use would enhance the public convenience and would not unduly interfere with the Grantee's operations. E. All transmission lines, equipment and structures shall be installed and located in compliance with all applicable local ordinances, and so as to cause minimum interference with the rights and reasonable con- venience of property owners who adjoin any public way, and at all times shall be kept and maintained in a safe, adequate, and substantial -25- Gr - 319 9 and in good order and repair, consistent with the provi- conditio n, sions of subsection G hereof. The Gcestforspreventinglfailures and °y reasonably accepted methods to cause damage, injuries, or nuisances to accidents which are likely lights, flares, or other flags, the public. Suitable barricades, laces as are required by laces devices shall be used at such times and places members of the public. applicable Village ordinances, and at such all times and p PP required for the b a Grantee as are reasonably laced in any public way Y Any poles or other fixtures p shall be placed and maintained ein such uses oftsuchre with the usual travel or other public way. lace, or modify, at its own expense, the F. Grantee shall remove rep 'ed in this Section. installation of any of its facilities chf� directed to do so by the ins ur oses specified Village for any reason or p P rivate property shall be G. All installations within public ways and on P ublic utilities underground in those areas of the Village whore a hone or electric providing both telephone and electric service are underground at the time of installation. In area©undrattheetime f,inst Nation, the utility facilities are above g provided Grantee may install its service above to bedplaced underground by the time as those facilities are required lace e or are placed underground, the,onaltcosthtolthekVillage or to Village, round, without addition Where not its services underground, this Ordinance, the the individual subscriber so serve undergroundtby this under otherwise required to b placed shall that the excess Grantee's cable tel ecommu the proopertycowner, Prov i be located wake n ground at the request of the property the property owner g cost over aerial location shall be borne by developer to the request. Further, should the Viltheedeveloper'sexpene, the relocate aerial lines underground shall reimburse the Grantee for the relocation of its lines. developer property, or ublic way, private P H. In the event of disturbances of any public it shall , at its own improvement on either of them by the Village or other appropriate roved by public expense and in a manner approved e a a condition ch before governmental authority, and the owner, replace and restore such p 9 rivate property, or improvement in as g way, p such disturbance was done. In the event the Grantee the work cat the right to do so at the soles manner, fails to perform such replacement or restoration in a timely owner the Village or the owner shall In each such expense of the Grantee. Detonation shallnbetontwriting. or o for such replacement or res iall adequate notice in writing instance, the Grantee shall (1) be given (2) shall be granted an of the problem by the aggrieved party; replacement or appropriate reasonable time to make any necessary restoration. -26- I. At the request of any person holding a valid building moving permit issued by the Village or other appropriate governmental authority, and upon at least forty-eight (48) hours notice, Grantee shall temporarily raise, lower, or cut its wires as may be necessary to facilitate such move. The direct expense of such temporary changes, including standby time, shall be paid by the permit holder, and Grantee shall have the authority to require payment in advance. J. A Grantee shall not remove any tree, shrub, or vegetation on public property without first obtaining specific written authorization from the Village. Any such work shall be done at Grantee's expense, and shall be subject to the supervision and direction of the Village. K. A Grantee, at its expense, shall protect, support, temporarily dis- connect, relocate, or remove any element of the Cable System, when, in the opinion of the Grantor, the same is required by reason of traffic conditions, public safety, street vacation, freeway or street grade, separation or realignment, installation of sewers, drains, waterpipes, power lines, signal lines, transportation facilities, tracks, or any other types of structures or improvements by governmental agencies, whether acting in a governmental or proprietary capacity. Nothing hereunder shall be deemed a taking of the property of Grantee and Grantee shall be entitled to no surcharge by reason of anything here- under. L. The Grantee shall make no paving cuts or curb cuts unless absolutely necessary, and only after written permission has been given by the Grantor. M. Grantor reserves the right to require appropriate protection for underground cabling in special areas, where considered technically unnecessary. Section 9: Construction Schedule and Reports A. Upon accepting the franchise, a Grantee shall , within sixty (60) days, file the documents required to obtain all necessary Federal , State, and local licenses, permits, and authorizations required for the conduct of its business, and shall submit monthly reports to the Village on progress in this respect, until all such documents are in hand. Failure of the Grantee to pursue all necessary steps to secure the aforementioned authorizations with due diligence shall constitute a substantial violation of this Ordinance. B. Franchise applications shall include a schedule for construction of the cable television system, including a timetable for commencement of cable television service to subscribers. Said schedule, as approved by the Corporate Authorities, shall be incorporated into the franchise and shall be enforceable as to the Grantee under the provisions of this Ordinance. -27- C. Each Grantee shall fill all requests for CATV service, once facilities are in place consistent with the proposed schedule for service, within thirty (30) days after the date of each request. D. Within three (3) months after accepting the franchise, Grantee shall furnish the Village a detailed construction schedule and map setting forth target dates by areas for commencement of service to subscribers. The schedule and map shall be updated whenever substantial changes become necessary. E. Every three (3) months after the start of construction, Grantee shall furnish the Village a report on progress of construction until com- plete. The report shall include a map that clearly defines the areas wherein regular subscriber service is available. Section 10: Protection of Privacy A. A Grantee shall not permit the transmission of any signal , aural , visual , or digital , including "polling" the channel selection, from any subscriber's premises without first obtaining informed consent of the subscriber which shall not have been obtained from the subscriber as a condition of any service for which transmission is not an essen- tial element. The request for such consent shall be contained in a separate document, which specifically enumerates and describes the transmissions being authorized, and includes a prominent statement that the subscriber is authorizing the permission in full knowledge of its provision and shall be revocable at any time by the subscriber without penalty of any kind whatsoever. This provision is not in- tended to prohibit the use or transmission of signals useful only for the control or measurement of system performance or used for billing subscribers. B. A Grantee shall not permit the installation of any special terminal equipment in any subscriber's premises of two-way services utilizing aural , visual or digital signals, without first obtaining written permission of the subscriber as provided in subsection A hereof. C. A Grantee, or any of its agents or employees, shall not, without the specific written authorization of the subscriber involved, as provided in Paragraph A of this Section, sell or otherwise make available to any party any information which identifies the viewing habits or responses of individual subscribers. Section 11: Areawide Interconnection of CATV Systems A. Each Grantee, if ordered to do so by ordinance or resolution of the Village, shall interconnect Access Channels and/or Local Origination Channels of its CATV System with all other CATV Systems in adjacent areas. -28- (5--399 B. Upon receiving an order to interconnect, the Grantee shall make a good faith effort to obtain agreements for the sharing of interconnection costs among all interconnecting companies. The Corporate Authorities may extend the time to interconnect or may rescind its order to inter- connect upon finding that the Grantee has made a good faith effort but has been unable to obtain a reasonable interconnection agreement or that the cost of the interconnection would cause an unreasonable increase in subscriber rates. C. Each Grantee shall reasonably endeavor to cooperate with any entity established for the purpose of regulating, financing, or otherwise providing for the interconnection of CATV Systems. D. The Corporate Authorities may require a Grantee to provide local origination equipment that is compatible with that used by other CATV Systems within the adjacent areas, provided such equipment is consis- tent with industry and area standards for such equipment. E. The Village shall make every reasonable effort to cooperate with the franchising authorities in contiguous communities, and, with a Grantee, in order to provide cable television service in areas outside the Village. Article VII: GENERAL PROVISIONS Section 1: Limits on Grantee's Recourse A. A Grantee shall have no recourse against the Village for any loss, expense or damage resulting from the terms and conditions of this Ordinance or the franchise, or because of the Village's granting or enforcement thereof, nor for the Village's failure to have the authority to grant the franchise. A Grantee expressly agrees that upon its acceptance of the franchise, it does so relying upon its own investigation and understanding of the power and authority of the Village to grant said franchise. B. A Grantee, by accepting the franchise, acknowledges that it has not been induced to accept same by any promise, verbal or written, by or on behalf of the Village or by any third person regarding any term or condition of this Ordinance or the franchise not expressed therein. The Grantee further pledges that no promise or inducement, oral or written, has been made to any Village employee or official regarding receipt of the cable television franchise other than as contained in the franchise agreement. C. A Grantee further acknowledges by acceptance of the franchise, that it has carefully read the terms and conditions of this Ordinance and the franchise, and accepts without reservation the obligations imposed by the terms and conditions thereof. -29- &-391 D. The decision of the Corporate Authorities concerning Grantee selection and awarding of the franchise shall be final . E. A Grantee shall not apply for any waivers, exceptions, or declaratory rulings from the Federal Communications Commission or any other Federal or State regulatory agency relative to the service provided to the Village, without prior written notice to the Village. Section 2: Compliance with State and Federal Law A Grantee shall , at all times, comply with all laws of the State and Federal government, and the rules and regulations of any Federal or State administrative agency having jurisdiction over cable telecommunications systems. Section 3: Special License Upon such conditions as the Village may deem necessary, and notwithstanding the provision of Article III of this Ordinance, the Village may issue a license, easement or other permit to anyone other than a Grantee to permit that person to traverse any portion of the Village in order to provide service outside the Village. Such license or easement, absent a grant or a franchise in accordance with this Ordinance, shall not authorize nor permit said person to provide a cable television service of any nature to any home or place of business within the Village, nor to render any service or connect any subscriber within the Village to a Grantee's cable television system. Section 4: Franchise Validity A. Grantee agrees, by the acceptance of the franchise, to accept the validity of the terms and conditions of this Ordinance and the fran- chise in their entirety, and that it will not, at any time, proceed against the Village in any claim or proceeding challenging any term or provision of this Ordinance or the franchise as unreasonable, arbi- trary, or void, or that the Village did not have the authority to impose such term or condition. B. In case of conflict or ambiguity between this Ordinance, the franchise, or the Grantee's franchise application, the Grantee agrees that the Franchise Agreement shall prevail . Section 5: Failure to Enforce Franchise A Grantee shall not be excused from complying with any of the terms and conditions of this Ordinance or the franchise by any failure of the Village upon any one or more occasions, to insist upon the Grantee's performance or to seek Grantee's compliance with any one or more of such terms or conditions. -30- Section 6: Rights Reserved to the Grantor_ The Village hereby expressly reserves the following rights, which shall not be deemed to be waived or abrogated by any franchise granted under this Ordinance. A. To exercise its governmental powers, now or hereafter granted, to the full extent that such powers may be vested in or to the Village. B. To adopt, in addition to the provisions contained herein and in the franchise, and in any existing applicable ordinances, such additional regulations as it shall find necessary in the exercise of its police powers. C. To renegotiate the appropriate sections of any franchise granted pursuant to this Ordinance, should substantial Section(s) of the Ordinance or franchise be rendered void by the Federal Communi- cations Commission, or by subsequent changes in applicable Federal or State law. Section 7: Employment Requirement A Grantee shall not refuse to hire, nor discharge from employment, nor discriminate against any person regarding compensation, terms, conditions, or privileges of employment because of age, sex, race, color, creed, or national origin. The Grantee shall take affirmative action to insure that employees are treated fairly and equally during employment, without regard to their age, sex, race, color, creed, or national origin. The condition includes, but is not limited to, the following: recruitment advertising, employment interviews, employment, rates of pay, upgrading, transfer, demotion, lay-off, and termi- nation. Section 8: Time Essence of Agreement Whenever this Ordinance or the franchise sets forth any time for any act to be performed by the Grantee, such time shall be deemed of the essence and the Grantee's failure to perform within the time allotted shall , in all cases, be sufficient grounds for the Village to invoke the remedies available under the terms and conditions of this Ordinance and the franchise. Section 9: Acceptance This Ordinance and the franchise and their terms and conditions shall be accepted by the Grantee by written instrument filed with the Village within thirty (30) days after the granting of the franchise, unless said period is extended by the Village at its sole discretion. In its acceptance, the Grantee shall declare that it has carefully read the terms and conditions of this Ordi- nance and the franchise and accepts all of the terms and conditions imposed by this Ordinance and the franchise and agrees to abide by and comply with same. -31- Section 10: Reselling Service Prohibited No person receiving within the Village any cable service, program, or signal transmitted by a cable television company operating under a franchise issued by the Village, shall resell such service, program, or signal , without the express, written consent of both the Grantee and the Village. Section 11: Offenses and Penalties A. It shall be unlawful for any person to attach or affix or cause to be attached or affixed any equipment or device which allows access to or use of any cable television service without payment to the Grantee for same. B. In addition to recovery of any monies owed by Grantee to Village for damages to Village as a result of any acts or omissions by Grantee pursuant to this Ordinance or franchise, the Village, in its sole discretion, may charge to and collect from the letter of credit or cash escrow provided for in Article IV, Section 12, hereof, the following penalties: (1) For failure to activate the system in accordance with the Fran- chise Agreement, unless the Corporate Authorities approve the delay, the penalty shall be Two Hundred Dollars ($200.00) per day for each day, or part thereof, such failure occurs or continues. (2) For failure of a Grantee to complete system construction in accordance with Grantee's franchise, within the Primary Service Area, unless the Corporate Authorities approve the delay, the penalty shall be Two Hundred Dollars ($200.00) per day for each day, or part thereof, such failure occurs or continues. (3) for failure of a Grantee to provide data, documents, reports, or information, or to cooperate with Village during any performance evaluation session provided for in Article IV, Section 4, the penalty shall be Fifty Dollars ($50.00) per day for each day, or part thereof, such failure occurs or continues. (4) For failure of a Grantee to test, analyze, and report on the performance of the system following a request by the Corporate Authorities, the penalty shall be Fifty Dollars ($50.00) per day for each day, or part thereof, such failure occurs or continues. (5) For failure of a Grantee to provide services required under the applicable Franchise Agreement within forty-five (45) days after required by the Village following a performance evaluation ses- sion, the penalty shall be Two Hundred Dollars ($200.00) per day for each day, or part thereof, such failure occurs or continues. (6) For failure of a Grantee to comply with construction, operation, or maintenance standards within forty-five (45) days following notice from the Corporate Authorities, the penalty shall be Two Hundred Dollars ($200.00) per day for each day, or part thereof, such failure occurs or continues. -32- C. Exclusive of the penalties set out above in this section, persons, whether natural or artificial , or commercial entities, who violate any �.. of the provisions of this Ordinance, shall be subject to a fine not to exceed Five Hundred Dollars ($500.00) for each offense. Each day a violation continues or is permitted to exist shall constitute a separate and distinct offense. In addition to any penalty which may be imposed herein, the Village may initiate injunctive relief, including the issuance of temporary restraining orders and preliminary injunctions, to abate any violation of this Ordinance, the continuance of which would be injurious to the welfare of the residents or which would frustrate or defeat the intent and purpose of this Ordinance. 0. In meeting the obligations imposed in this Ordinance and any franchise, a Grantee shall not be held responsible for acts or omissions which occur without fault of the Grantee or which occur as a result of circumstances beyond its control , such as war, natural catastrophe, and other acts of God or third parties over which Grantee exercises no control , as specified in Section 6 (C) of Article IV hereof. A Grantee shall promptly notify the Village of the cause of any delay or default in the performance of any of its obligations and the Grantee's actions to remedy same. �•- Section 12: Grantee May Promulgate Rules Grantee shall have the authority to promulgate such rules, regulations, terms and conditions of its business as shall be reasonably necessary to enable it to exercise its right and perform its services under this Ordinance and the Rules of the FCC, and to assure uninterrupted service to each and all of its subscribers. Such rules and regulations shall not be deemed to have the force of law. Such rules and regulations shall be filed with the Village and shall not, unless the Village consents in writing to an earlier effective date, take effect until thirty (30) days after such filing. Section 13: Delegation of Powers Any right, power or duty of the Village, the Agency, or any official of the Village under this Ordinance may be transferred or delegated by ordinance, resolution, or other appropriate action of the Village to an appropriate office, employee, or department of the Village, or any other legal authority, including any intergovernmental agency created for the purpose of regulating the operation and development of the cable telecommunications system. Section 14: Severability If any section of this Ordinance or the franchise, or any portion thereof, is held invalid or unconstitutional by any court of competent jurisdiction or administrative agency, such decision shall not affect the validity of the re- maining portions hereof, except as otherwise provided for herein. -33- r r• Section 15: Effective Date This Ordinance shall be in full force and effect from and after its passage and publication in pamphlet form as required by law. Passed on this 26th day of May 1987. Ayes: Trustees Bartecki, Bushy, Imrie, Maher, Rush and Winters Nays: None Absent: None Approved this 26th day of May. 1987. Village President ATTEST: M Village Clerk Approyfd as to form: Village Attorney Published 5-27-87 Pamphlet form Date Paper -34- Not Published