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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission file number: 0-17733
CABLE TV FUND 15-A, LTD.
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(Exact name of registrant as specified in its charter)
Colorado 84-1091413
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(State of Organization) (IRS Employer Identification No.)
P.O. Box 3309, Englewood, Colorado 80155-3309 (303) 792-3111
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(Address of principal executive office and Zip Code) (Registrant's telephone
no. including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Limited Partnership
Interests
Indicate by check mark whether the registrants, (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days:
Yes X No
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Aggregate market value of the voting stock held by non-affiliates of the
registrant: N/A
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K ((S)229.405) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. X
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DOCUMENTS INCORPORATED BY REFERENCE: None
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Information contained in this Form 10-K Report contains "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. All statements, other than statements of historical facts,
included in this Form 10-K Report that address activities, events or
developments that the Partnership or the General Partner expects, believes or
anticipates will or may occur in the future are forward-looking statements.
These forward-looking statements are based upon certain assumptions and are
subject to a number of risks and uncertainties. Actual results could differ
materially from the results predicted by these forward-looking statements.
PART I.
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ITEM 1. BUSINESS
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THE PARTNERSHIP. Cable TV Fund 15-A, Ltd. (the "Partnership") is a
Colorado limited partnership that was formed pursuant to the public offering of
limited partnership interests in the Cable TV Fund 15 Limited Partnership
Program (the "Program"), which was sponsored by Jones Intercable, Inc. (the
"General Partner"). The Partnership was formed for the purpose of acquiring and
operating cable television systems. The Partnership owns the cable television
systems serving the areas in and around the communities of Barrington, Elgin,
South Elgin, Hawthorn Woods, Kildeer, Lake Zurich, Indian Creek, Vernon Hills
and certain unincorporated areas of Kane and Lake counties, all in the State of
Illinois (the "Barrington System") and the cable television systems serving the
areas in and around the municipalities of Flossmoor, La Grange, La Grange Park,
Riverside, Indian Head Park, Hazel Crest, Thornton, Lansing, Matteson, Richton
Park, Crete, University Park, Olympia Fields, Western Springs and certain areas
of Cook and Will Counties, all in the State of Illinois (the "South Suburban
System"). See Item 2. The Barrington System and the South Suburban System may
collectively hereinafter be referred to as the "Systems."
It is the General Partner's publicly announced policy that it intends
to liquidate its managed limited partnerships, including the Partnership, as
opportunities for sales of partnership cable television systems arise in the
marketplace over the next several years. In accordance with the General
Partner's policy, the Barrington System and the South Suburban System, along
with other Chicago-area systems owned or managed by the General Partner and its
affiliates, were marketed for sale in 1996. The deadline set by the General
Partner for receipt of indications of interest for such systems from prospective
buyers was October 15, 1996. The General Partner did not receive any offer for
the Barrington System or the South Suburban System. The General Partner will
continue to explore other alternatives for sale. There is no assurance as to
the timing or terms of any sales.
CABLE TELEVISION SERVICES. The Systems offer to subscribers various
types of programming, which include basic service, tier service, premium
service, pay-per-view programs and packages including several of these services
at combined rates.
Basic cable television service usually consists of signals of all four
national television networks, various independent and educational television
stations (both VHF and UHF) and certain signals received from satellites. Basic
service also usually includes programs originated locally by the system, which
may consist of music, news, weather reports, stock market and financial
information and live or videotaped programs of a public service or entertainment
nature. FM radio signals are also frequently distributed to subscribers as part
of the basic service.
The Systems offer tier services on an optional basis to its
subscribers. A tier generally includes most of the cable networks such as
Entertainment and Sports Programming Network (ESPN), Cable News Network (CNN),
Turner Network Television (TNT), Family Channel, Discovery and others, and the
cable television operators buy tier programming from these networks. The
Systems also offer a package that includes the basic service channels and the
tier services.
The Systems also offer premium services to subscribers, which consist
of feature films, sporting events and other special features that are presented
without commercial interruption. The cable television operators buy
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premium programming from suppliers such as HBO, Showtime, Cinemax or others at a
cost based on the number of subscribers the cable operator serves. Premium
service programming usually is significantly more expensive than the basic
service or tier service programming, and consequently cable operators price
premium service separately when sold to subscribers.
The Systems also offer to subscribers pay-per-view programming. Pay-
per-view is a service that allows subscribers to receive single programs,
frequently consisting of motion pictures that have recently completed their
theatrical exhibitions and major sporting events, and to pay for such service on
a program-by-program basis.
REVENUES. Monthly service fees for basic, tier and premium services
constitute the major source of revenue for the Systems. At December 31, 1996,
the Systems' monthly basic service rates ranged from $7.99 to $13.11, monthly
basic and tier ("basic plus") service rates ranged from $19.99 to $26.58 and
monthly premium services ranged from $3.95 to $12.95 per premium service. In
addition, the Partnership earns revenues from the Systems' pay-per-view programs
and advertising fees. Related charges may include a nonrecurring installation
fee that ranges from $1.99 to $42.47; however, from time to time the Systems
have followed the common industry practice of reducing or waiving the
installation fee during promotional periods. Commercial subscribers such as
hotels, motels and hospitals are charged a nonrecurring connection fee that
usually covers the cost of installation. Except under the terms of certain
contracts with commercial subscribers and residential apartment and condominium
complexes, the subscribers are free to discontinue the service at any time
without penalty. For the year ended December 31, 1996 of the total fees
received by the Systems, basic service and tier service fees accounted for
approximately 63% of total revenues, premium service fees accounted for
approximately 18% of total revenues, pay-per-view fees were approximately 3% of
total revenues, advertising fees were approximately 7% of total revenues and
the remaining 9% of total revenues came principally from equipment rentals,
installation fees and program guide sales. The Partnership is dependent upon
the timely receipt of service fees to provide for maintenance and replacement of
plant and equipment, current operating expenses and other costs of the Systems.
FRANCHISES. The Systems are constructed and operated under non-
exclusive, fixed-term franchises or other types of operating authorities
(referred to collectively herein as "franchises") granted by local governmental
authorities. These franchises typically contain many conditions, such as time
limitations on commencement and completion of construction, conditions of
service, including the number of channels, types of programming and the
provision of free service to schools and certain other public institutions, and
the maintenance of insurance and indemnity bonds. The provisions of local
franchises are subject to federal regulation.
The Partnership holds 29 franchises relating to the Systems. These
franchises provide for the payment of fees to the issuing authorities and
generally range from 3% to 5% of the gross revenues of a cable television
system. The 1984 Cable Act prohibits franchising authorities from imposing
annual franchise fees in excess of 5% of gross revenues and also permits the
cable television system operator to seek renegotiation and modification of
franchise requirements if warranted by changed circumstances.
The Partnership has never had a franchise revoked. The Partnership is
currently negotiating the renewal of nine franchises that are either operating
under extensions or will expire prior to December 31, 1997. The General Partner
has no reason to believe that such franchises will not be renewed in due course.
The General Partner recently has experienced lengthy negotiations with some
franchising authorities for the granting of franchise renewals. Some of the
issues involved in recent renewal negotiations include rate regulation, customer
service standards, cable plant upgrade or replacement and shorter terms of
franchise agreements.
COMPETITION. Cable television systems currently experience
competition from several sources.
Broadcast Television. Cable television systems have traditionally
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competed with broadcast television, which consists of television signals that
the viewer is able to receive directly on his television without charge using an
"off-air" antenna. The extent of such competition is dependent in part upon the
quality and quantity of signals available by such antenna reception as compared
to the services provided by the local cable system. Accordingly, it has
generally been less difficult for cable operators to obtain higher penetration
rates in rural areas where
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signals available off-air are limited, than in metropolitan areas where
numerous, high quality off-air signals are often available without the aid of
cable television systems.
Traditional Overbuild. Cable television franchises are not exclusive,
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so that more than one cable television system may be built in the same area
(known as an "overbuild"), with potential loss of revenues to the operator of
the original cable television system. The General Partner has experienced
overbuilds in connection with certain systems that it has owned or managed for
limited partnerships, and currently there are overbuilds in the systems owned or
managed by the General Partner. Constructing and developing a cable television
system is a capital intensive process, and it is often difficult for a new cable
system operator to create a marketing edge over the existing system. Generally,
an overbuilder would be required to obtain franchises from the local
governmental authorities, although in some instances, the overbuilder could be
the local government itself. In any case, an overbuilder would be required to
obtain programming contracts from entertainment programmers and, in most cases,
would have to build a complete cable system, including headends, trunk lines and
drops to individual subscribers homes, throughout the franchise areas.
DBS. High-powered direct-to-home satellites have made possible the
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wide-scale delivery of programming to individuals throughout the United States
using small roof-top or wall-mounted antennas. Several companies began offering
direct broadcast satellite ("DBS") service over the last few years and
additional entrants are expected. Companies offering DBS service use video
compression technology to increase channel capacity of their systems to 100 or
more channels and to provide packages of movies, satellite network and other
program services which are competitive to those of cable television systems.
DBS cannot currently offer its subscribers local programming, although at least
one future DBS entrant is attempting to offer customers regional delivery of
local broadcast signals. In addition to emerging high-powered DBS competition,
cable television systems face competition from a major medium-powered satellite
distribution provider and several low-powered providers, whose service requires
use of much larger home satellite dishes. Not all subscribers terminate cable
television service upon acquiring a DBS system. The General Partner has
observed that there are DBS subscribers that also elect to subscribe to cable
television service in order to obtain the greatest variety of programming on
multiple television sets, including local programming not available through DBS
service. The ability of DBS service providers to compete successfully with the
cable television industry will depend on, among other factors, the ability of
DBS providers to overcome certain legal and technical hurdles and the
availability of equipment at reasonable prices.
Telephone. Federal cross-ownership restrictions historically limited
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entry by local telephone companies into the cable television business. The 1996
Telecommunications Act (the "1996 Telecom Act") eliminated this cross-ownership
restriction, making it possible for companies with considerable resources to
overbuild existing cable operators and enter the business. Several telephone
companies have begun seeking cable television franchises from local governmental
authorities and constructing cable television systems. Ameritech, one of the
seven regional Bell Operating Companies ("BOCs"), which provides telephone
service in a multi-state region including Illinois, has been the most active BOC
in seeking local cable franchises within its service area. Ameritech has
obtained a franchise authorizing it to provide cable television service to the
community of Vernon Hills, which is located in the Partnership's Barrington
System, but Ameritech has not commenced construction of cable plant in Vernon
Hills. Ameritech has already begun cable service in Naperville, Illinois and has
also obtained a franchise for Glen Ellyn, Illinois both of which are currently
served by cable systems owned by two partnerships managed by the General
Partner. The General Partner cannot predict at this time the extent of telephone
company competition that will emerge to owned or managed cable television
systems. The entry of telephone companies as direct competitors, however, is
likely to continue over the next several years and could adversely affect the
profitability and market value of the General Partner's owned and managed
systems. The entry of electric utility companies into the cable television
business, as now authorized by the 1996 Telecom Act, could have a similar
adverse effect.
Private Cable. Additional competition is provided by private cable
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television systems, known as Satellite Master Antenna Television (SMATV),
serving multi-unit dwellings such as condominiums, apartment complexes, and
private residential communities. These private cable systems may enter into
exclusive agreements with apartment owners and homeowners associations, which
may preclude operators of franchised systems from serving residents of such
private complexes. Private cable systems that do not cross public rights of way
are free
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from the federal, state and local regulatory requirements imposed on franchised
cable television operators. In some cases, the Partnership has been unable to
provide cable television service to buildings in which private operators have
secured exclusive contracts to provide video and telephony services. The
Partnership is interested in providing these same services, but expects that the
market to install and provide these services in multi-unit buildings will
continue to be highly competitive.
MMDS. Cable television systems also compete with wireless program
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distribution services such as multichannel, multipoint distribution service
("MMDS") systems, commonly called wireless cable, which are licensed to serve
specific areas. MMDS uses low-power microwave frequencies to transmit
television programming over-the-air to paying subscribers. The MMDS industry is
less capital intensive than the cable television industry, and it is therefore
more practical to construct MMDS systems in areas of lower subscriber
penetration. Wireless cable systems are now in direct competition with cable
television systems in several areas of the country, including the system in Pima
County, Arizona owned by the General Partner. Telephone companies have recently
acquired or invested in wireless companies, and may use MMDS systems to provide
services within their service areas in lieu of wired delivery systems.
Enthusiasm for MMDS has waned in recent months, however, as Bell Atlantic and
NYNEX have suspended their investment in two major MMDS companies. To date, the
Partnership has not lost a significant number of subscribers, nor a significant
amount of revenue, to MMDS operators competing with the Partnership's cable
television systems. A series of actions taken by the FCC, however, including
reallocating certain frequencies to the wireless services, are intended to
facilitate the development of wireless cable television systems as an
alternative means of distributing video programming. The FCC recently held
auctions for spectrum that will be used by wireless operators to provide
additional channels of programming over larger distances. In addition, an
emerging technology, Local Multipoint Distribution services ("LMDS"), could also
pose a significant threat to the cable television industry, if and when it
becomes established. LMDS, sometimes referred to as cellular television, could
have the capability of delivering more than 100 channels of video programming to
a subscriber's home. The potential impact, however, of LMDS is difficult to
assess due to the newness of the technology and the absence of any current fully
operational LMDS systems.
Cable television systems are also in competition, in various degrees
with other communications and entertainment media, including motion pictures and
home video cassette recorders.
REGULATION AND LEGISLATION
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The operation of cable television systems is extensively regulated by
the FCC, some state governments and most local governments. The new 1996
Telecom Act alters the regulatory structure governing the nation's
telecommunications providers. It removes barriers to competition in both the
cable television market and the local telephone market. Among other things, it
also reduces the scope of cable rate regulation.
The 1996 Telecom Act requires the FCC to undertake a host of
implementing rulemakings, the final outcome of which cannot yet be determined.
Moreover, Congress and the FCC have frequently revisited the subject of cable
regulation. Future legislative and regulatory changes could adversely affect
the Partnership's operations. This section briefly summarizes key laws and
regulations affecting the operation of the Partnership's cable systems and does
not purport to describe all present, proposed, or possible laws and regulations
affecting the Partnership.
Cable Rate Regulation. The 1992 Cable Act imposed an extensive rate
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regulation regime on the cable television industry. Under that regime, all
cable systems are subject to rate regulation, unless they face "effective
competition" in their local franchise area. Federal law now defines "effective
competition" on a community-specific basis as requiring either low penetration
(less than 30%) by the incumbent cable operator, appreciable penetration (more
than 15%) by competing multichannel video providers ("MVPs"), or the presence of
a competing MVP affiliated with a local telephone company.
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Although the FCC rules control, local government units (commonly
referred to as local franchising authorities or "LFAs") are primarily
responsible for administering the regulation of the lowest level of cable -- the
basic service tier ("BST"), which typically contains local broadcast stations
and public, educational, and government ("PEG") access channels. Before an LFA
begins BST rate regulation, it must certify to the FCC that it will follow
applicable federal rules, and many LFAs have voluntarily declined to exercise
this authority. LFAs also have primary responsibility for regulating cable
equipment rates. Under federal law, charges for various types of cable
equipment must be unbundled from each other and from monthly charges for
programming services. The 1996 Telecom Act allows operators to aggregate costs
for broad categories of equipment across geographic and functional lines. This
change should facilitate the introduction of new technology.
The FCC itself directly administers rate regulation of any cable
programming service tiers ("CPST"), which typically contain satellite-delivered
programming. Under the 1996 Telecom Act, the FCC can regulate CPST rates only
if an LFA first receives at least two rate complaints from local subscribers and
then files a formal complaint with the FCC. When new CPST rate complaints are
filed, the FCC now considers only whether the incremental increase is justified
and will not reduce the previously established CPST rate.
Under the FCC's rate regulations, most cable systems were required to
reduce their BST and CPST rates in 1993 and 1994, and have since had their rate
increases governed by a complicated price cap scheme that allows for the
recovery of inflation and certain increased costs, as well as providing some
incentive for expanding channel carriage. The FCC has modified its rate
adjustment regulations to allow for annual rate increases and to minimize
previous problems associated with regulatory lag. Operators also have the
opportunity of bypassing this "benchmark" regulatory scheme in favor of
traditional "cost-of-service" regulation in cases where the latter methodology
appears favorable. Premium cable services offered on a per-channel or per-
program basis remain unregulated, as do affirmatively marketed packages
consisting entirely of new programming product. Federal law requires that the
BST be offered to all cable subscribers, but limits the ability of operators to
require purchase of any CPST before purchasing premium services offered on a
per-channel or per-program basis.
The 1996 Telecom Act sunsets FCC regulation of CPST rates for all
systems (regardless of size) on March 31, 1999. It also relaxes existing
uniform rate requirements by specifying that uniform rate requirements do not
apply where the operator faces "effective competition," and by exempting bulk
discounts to multiple dwelling units, although complaints about predatory
pricing still may be made to the FCC.
Cable Entry Into Telecommunications. The 1996 Telecom Act provides
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that no state or local laws or regulations may prohibit or have the effect of
prohibiting any entity from providing any interstate or intrastate
telecommunications service. States are authorized, however, to impose
"competitively neutral" requirements regarding universal service, public safety
and welfare, service quality, and consumer protection. State and local
governments also retain their authority to manage the public rights-of-way and
may require reasonable, competitively neutral compensation for management of the
public rights-of-way when cable operators provide telecommunications service.
The favorable pole attachment rates afforded cable operators under federal law
can be gradually increased by utility companies owning the poles (beginning in
2001) if the operator provides telecommunications service, as well as cable
service, over its plant.
Cable entry into telecommunications will be affected by the regulatory
landscape now being fashioned by the FCC and state regulators. One critical
component of the 1996 Telecom Act to facilitate the entry of new
telecommunications providers (including cable operators) is the interconnection
obligation imposed on all telecommunications carriers. Review of the FCC's
initial interconnection order is now pending before the Eighth Circuit Court of
Appeals.
Telephone Company Entry Into Cable Television. The 1996 Telecom Act
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allows telephone companies to compete directly with cable operators by repealing
the historic telephone company/cable cross-ownership ban. Local exchange
carriers ("LECs"), including the BOCs, can now compete with cable operators both
inside and
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outside their telephone service areas. Because of their resources, LECs could be
formidable competitors to traditional cable operators, and certain LECs have
begun offering cable service. As described above, the General Partner is now
witnessing the beginning of LEC competition in a few of its cable communities.
Under the 1996 Telecom Act, a LEC providing video programming to
subscribers will be regulated as a traditional cable operator (subject to local
franchising and federal regulatory requirements), unless the LEC elects to
provide its programming via an "open video system" ("OVS"). To qualify for OVS
status, the LEC must reserve two-thirds of the system's activated channels for
unaffiliated entities.
Although LECs and cable operators can now expand their offerings
across traditional service boundaries, the general prohibition remains on LEC
buyouts (i.e., any ownership interest exceeding 10 percent) of co-located cable
systems, cable operator buyouts of co-located LEC systems, and joint ventures
between cable operators and LECs in the same market. The 1996 Telecom Act
provides a few limited exceptions to this buyout prohibition, including a
carefully circumscribed "rural exemption." The 1996 Telecom Act also provides
the FCC with the limited authority to grant waivers of the buyout prohibition
(subject to LFA approval).
Electric Utility Entry Into Telecommunications/Cable Television. The
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1996 Telecom Act provides that registered utility holding companies and
subsidiaries may provide telecommunications services (including cable
television) notwithstanding the Public Utilities Holding Company Act. Electric
utilities must establish separate subsidiaries, known as "exempt
telecommunications companies" and must apply to the FCC for operating authority.
Again, because of their resources, electric utilities could be formidable
competitors to traditional cable systems.
Additional Ownership Restrictions. The 1996 Telecom Act eliminates
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statutory restrictions on broadcast/cable cross-ownership (including broadcast
network/cable restrictions), but leaves in place existing FCC regulations
prohibiting local cross-ownership between co-located television stations and
cable systems. The 1996 Telecom Act also eliminates the three year holding
period required under the 1992 Cable Act's "anti-trafficking" provision. The
1996 Telecom Act leaves in place existing restrictions on cable cross-ownership
with SMATV and MMDS facilities, but lifts those restrictions where the cable
operator is subject to effective competition. In January 1995, however, the FCC
adopted regulations which permit cable operators to own and operate SMATV
systems within their franchise area, provided that such operation is consistent
with local cable franchise requirements.
Pursuant to the 1992 Cable Act, the FCC adopted rules precluding a
cable system from devoting more than 40% of its activated channel capacity to
the carriage of affiliated national program services. A companion rule
establishing a nationwide ownership cap on any cable operator equal to 30% of
all domestic cable subscribers has been stayed pending further judicial review.
There are no federal restrictions on non-U.S. entities having an
ownership interest in cable television systems or the FCC licenses commonly
employed by such systems. Section 310(b)(4) of the Communications Act does,
however, prohibit foreign ownership of FCC broadcast and telephone licenses,
unless the FCC concludes that such foreign ownership is consistent with the
public interest. BCI's investment in the General Partner could, therefore,
adversely affect any plan to acquire FCC broadcast or common carrier licenses.
The Partnership, however, does not currently plan to acquire such licenses.
Must Carry/Retransmission Consent. The 1992 Cable Act contains
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broadcast signal carriage requirements that allow local commercial television
broadcast stations to elect once every three years between requiring a cable
system to carry the station ("must carry") or negotiating for payments for
granting permission to the cable operator to carry the station ("retransmission
consent"). Less popular stations typically elect "must carry," and more popular
stations typically elect "retransmission consent." Must carry requests can
dilute the appeal of a cable system's programming offerings, and retransmission
consent demands may require substantial payments or other concessions. Either
option has a potentially adverse affect on the Partnership's business.
Additionally, cable systems are required to obtain retransmission consent for
all "distant" commercial television
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stations (except for satellite-delivered independent "superstations" such as
WTBS). The constitutionality of the must carry requirements has been challenged
and is awaiting a decision from the U.S. Supreme Court.
Access Channels. LFAs can include franchise provisions requiring
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cable operators to set aside certain channels for public, educational and
governmental access programming. Federal law also requires cable systems to
designate a portion of their channel capacity (up to 15% in some cases) for
commercial leased access by unaffiliated third parties. The FCC has adopted
rules regulating the terms, conditions and maximum rates a cable operator may
charge for use of the designated channel capacity, but use of commercial leased
access channels has been relatively limited. The FCC released revised rules in
February 1997 which mandate a modest rate reduction and could make commercial
leased access a more attractive option to third party programmers.
Access to Programming. To spur the development of independent cable
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programmers and competition to incumbent cable operators, the 1992 Cable Act
imposed restrictions on the dealings between cable operators and cable
programmers. Of special significance from a competitive business posture, the
1992 Cable Act precludes video programmers affiliated with cable companies from
favoring cable operators over competitors and requires such programmers to sell
their programming to other multichannel video distributors. This provision
limits the ability of vertically integrated cable programmers to offer exclusive
programming arrangements to cable companies.
Other FCC Regulations. In addition to the FCC regulations noted
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above, there are other FCC regulations covering such areas as equal employment
opportunity, subscriber privacy, programming practices (including, among other
things, syndicated program exclusivity, network program nonduplication, local
sports blackouts, indecent programming, lottery programming, political
programming, sponsorship identification, and children's programming
advertisements), registration of cable systems and facilities licensing,
maintenance of various records and public inspection files, frequency usage,
lockbox availability, antenna structure notification, tower marking and
lighting, consumer protection and customer service standards, technical
standards, and consumer electronics equipment compatibility. The FCC is
expected to impose new Emergency Alert System requirements on cable operators
this year. The FCC has the authority to enforce its regulations through the
imposition of substantial fines, the issuance of cease and desist orders and/or
the imposition of other administrative sanctions, such as the revocation of FCC
licenses needed to operate certain transmission facilities used in connection
with cable operations.
Two pending FCC proceedings of particular competitive concern involve
inside wiring and navigational devices. The former rulemaking is considering
ownership of cable wiring located inside multiple dwelling unit complexes. If
the FCC concludes that such wiring belongs to, or can be unilaterally acquired
by the complex owner, it will become easier for complex owners to terminate
service from the incumbent cable operator in favor of a new entrant. The latter
rulemaking is considering whether cable customers must be allowed to purchase
cable converters from third party vendors. If the FCC concludes that such
distribution is required, and does not make appropriate allowances for signal
piracy concerns, it may become more difficult for cable operators to combat
theft of service.
Copyright. Cable television systems are subject to federal copyright
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licensing covering carriage of television and radio broadcast signals. In
exchange for filing certain reports and contributing a percentage of their
revenues to a federal copyright royalty pool (that varies depending on the size
of the system and the number of distant broadcast television signals carried),
cable operators can obtain blanket permission to retransmit copyrighted material
on broadcast signals. The possible modification or elimination of this
compulsory copyright license is the subject of continuing legislative review and
could adversely affect the Partnership's ability to obtain desired broadcast
programming. In addition, the cable industry pays music licensing fees to BMI
and is negotiating a similar arrangement with ASCAP. Copyright clearances for
nonbroadcast programming services are arranged through private negotiations.
State and Local Regulation. Cable television systems generally are
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operated pursuant to nonexclusive franchises granted by a municipality or other
state or local government entity in order to cross public rights-of-way.
Federal law now prohibits franchise authorities from granting exclusive
franchises or from unreasonably
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refusing to award additional franchises. Cable franchises generally are granted
for fixed terms and in many cases include monetary penalties for non-compliance
and may be terminable if the franchisee fails to comply with material
provisions.
The terms and conditions of franchises vary materially from
jurisdiction to jurisdiction. Each franchise generally contains provisions
governing cable operations, service rates, franchise fees, system construction
and maintenance obligations, system channel capacity, design and technical
performance, customer service standards, and indemnification protections. A
number of states subject cable television systems to the jurisdiction of
centralized state governmental agencies, some of which impose regulation of a
character similar to that of a public utility. Although LFAs have considerable
discretion in establishing franchise terms, there are certain federal
limitations. For example, LFAs cannot insist on franchise fees exceeding 5% of
the system's gross revenues, cannot dictate the particular technology used by
the system, and cannot specify video programming other than identifying broad
categories of programming.
Federal law contains renewal procedures designed to protect incumbent
franchisees against arbitrary denials of renewal. Even if a franchise is
renewed, the franchise authority may seek to impose new and more onerous
requirements such as significant upgrades in facilities and services or
increased franchise fees as a condition of renewal. Similarly, if a franchise
authority's consent is required for the purchase or sale of a cable system or
franchise, such authority may attempt to impose more burdensome or onerous
franchise requirements in connection with a request for consent. Historically,
franchises have been renewed for cable operators that have provided satisfactory
services and have complied with the terms of their franchises.
GENERAL. The Partnership's business consists of providing cable
television services to a large number of customers, the loss of any one of which
would have no material effect on the Partnership's business. The Systems have
had some subscribers who later terminated the service. Terminations occur
primarily because people move to another home or to another city. In other
cases, people terminate on a seasonal basis or because they no longer can afford
or are dissatisfied with the service. The amount of past due accounts in the
Systems is not significant. The Partnership's policy with regard to past due
accounts is basically one of disconnecting service before a past due account
becomes material.
The Partnership does not depend to any material extent on the
availability of raw materials; it carries no significant amounts of inventory
and it has no material backlog of customer orders. The Partnership has no
employees because all properties are managed by employees of the General
Partner. The General Partner has engaged in research and development activities
relating to the provision of new services but the amount of the Partnership's
funds expended for such research and development has never been material.
Compliance with federal, state and local provisions that have been
enacted or adopted regulating the discharge of materials into the environment or
otherwise relating to the protection of the environment has had no material
effect upon the capital expenditures, earnings or competitive position of the
Partnership.
ITEM 2. PROPERTIES
-------------------
The cable television systems owned by the Partnership are described
below:
SYSTEM ACQUISITION DATE
------ ----------------
Barrington December 1989
South Suburban September 1990
The following sets forth (i) the monthly basic plus service rates
charged to subscribers and (ii) the number of basic subscribers and pay units
for the Systems. The monthly basic service rates set forth herein represent,
with respect to systems with multiple headends, the basic service rate charged
to the majority of the
9
<PAGE>
subscribers within the system. In cable television systems, basic subscribers
can subscribe to more than one pay TV service. Thus, the total number of pay
services subscribed to by basic subscribers are called pay units. As of December
31, 1996 the Barrington System operated cable plant passing approximately 69,900
homes, with an approximate 66% penetration rate, and the South Suburban System
operated cable plant passing approximately 61,900 homes, with an approximate 58%
penetration rate. Figures for numbers of subscribers and homes passed are
compiled from the General Partner's records and may be subject to adjustments.
At December 31,
-------------------------
Barrington System 1996 1995 1994
- ----------------- ------- ------- -------
Monthly basic service rate $ 26.58 $ 25.08 $ 23.58
Basic subscribers 46,266 44,085 41,330
Pay units 38,812 37,643 36,333
At December 31,
-------------------------
South Suburban System 1996 1995 1994
- --------------------- ------- ------- -------
Monthly basic service rate $ 23.90 $ 22.40 $ 20.90
Basic subscribers 36,472 34,741 32,711
Pay units 31,228 30,519 31,082
ITEM 3. LEGAL PROCEEDINGS
--------------------------
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------
None.
PART II.
--------
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
-------------------------------------------------
AND RELATED SECURITY HOLDER MATTERS
-----------------------------------
While the Partnership is publicly held, there is no public market for
the limited partnership interests, and it is not expected that a market will
develop in the future. During 1996, several partners of the Partnership
conducted "limited tender offers" for interests in the Partnership at prices
ranging from $170 to $195 per interest. As of February 14, 1997 the number of
equity security holders in the Partnership was 11,740.
10
<PAGE>
Item 6. Selected Financial Data
- -------------------------------
<TABLE>
<CAPTION>
For the Year Ended December 31,
-------------------------------------------------------------------------
Cable TV Fund 15-A, Ltd. 1996 1995 1994 1993 1992
- ------------------------------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Revenues $ 37,280,733 $ 34,225,349 $ 31,086,361 $ 30,139,742 $ 27,478,157
Depreciation and Amortization 21,219,039 22,103,416 22,409,936 21,921,234 20,970,611
Operating Loss (9,215,988) (11,587,702) (12,760,453) (11,405,328) (11,660,432)
Net Loss (16,193,666) (18,258,258) (17,968,299) (16,147,302) (18,244,077)
Net Loss per Limited
Partnership Unit (75.20) (84.79) (83.45) (74.99) (84.73)
Weighted Average Number of Limited
Partnership Units Outstanding 213,714 213,174 213,174 213,174 213,174
General Partner's Deficit (1,164,529) (1,002,592) (820,009) (640,326) (478,853)
Limited Partners' Capital (Deficit) (23,424,817) (7,393,088) 10,682,587 28,471,203 44,457,032
Total Assets 61,956,101 77,127,809 92,800,087 108,708,332 124,778,551
Debt 83,824,072 78,818,284 70,287,693 70,694,251 70,674,319
General Partner Advances 430,624 4,782,507 10,952,538 8,630,540 7,609,685
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
- -------------------------------------------------------------------------------
of Operations
- -------------
CABLE TV FUND 15-A, LTD.
------------------------
The following discussion of the financial condition and results of
operations of Cable TV Fund 15-A, Ltd. (the "Partnership") contains, in
addition to historical information, forward-looking statements that are based
upon certain assumptions and are subject to a number of risks and uncertainties.
The Partnership's actual results may differ significantly from the results
predicted in such forward-looking statements.
FINANCIAL CONDITION
- -------------------
It is the General Partner's publicly announced policy that it intends
to liquidate its managed limited partnerships, including the Partnership, as
opportunities for sales of partnership cable television systems arise in the
marketplace over the next several years. In accordance with the General
Partner's policy, the Barrington System and the South Suburban System, along
with other Chicago-area systems owned or managed by the General Partner and its
affiliates, were marketed for sale in 1996. The deadline set by the General
Partner for receipt of indications of interest for such systems from prospective
buyers was October 15, 1996. The General Partner did not receive any offer for
the Barrington System or the South Suburban System. The General Partner will
continue to explore other alternatives for sale. There is no assurance as to
the timing or terms of any sales.
For the twelve months ended December 31, 1996, the Partnership
generated net cash from operating activities totaling approximately $5,526,000,
which is available to fund capital expenditures and non-operating costs. Capital
expenditures totaled approximately $5,786,000 in 1996. Approximately 46 percent
of these expenditures was for service drops to homes. New plant construction
accounted for approximately 20 percent and approximately 10 percent related to
the rebuild and upgrade of portions of the Partnership's systems. The remaining
expenditures were for various enhancements in the Partnership's systems. Funding
for these expenditures was provided by cash generated from operations and
borrowings under the Partnership's revolving credit facility. Anticipated
capital expenditures for 1997 are approximately $4,837,000. Approximately 54
percent of these capital expenditures will relate to service drops to homes.
Approximately 14 percent of the capital expenditures will relate to new plant
construction and approximately 12 percent will relate to continuing the rebuild
and upgrade of portions of the Partnership's systems. The remainder of the
anticipated expenditures is for various enhancements in the Partnership's
systems. These capital expenditures are necessary to maintain the value of the
Partnership's systems. Funding for these expenditures is expected to be provided
by cash generated from operations and borrowings available under the
Partnership's revolving credit facility.
On March 28, 1996, the Partnership amended its revolving credit
facility to provide for a maximum of $90,000,000 in available borrowings and to
extend the revolving credit period to September 30, 1997. The revolving
11
<PAGE>
credit facility converts to a term loan on September 30, 1997, with annual
principal installments due at the end of each calendar year and a final maturity
date of March 31, 2004. Installments due in 1997 will be 4 percent of the
outstanding balance of the converted term loan at September 30, 1997. At
December 31, 1996, $83,500,000 was outstanding under the Partnership's revolving
credit facility, leaving $6,500,000 of available borrowings until September 30,
1997. Interest is at the Partnership's option of the Prime Rate plus 1/2
percent, the London Interbank Offered Rate plus 1-1/2 percent or the Certificate
of Deposit Rate plus 1-5/8 percent. The effective interest rates on outstanding
obligations as of December 31, 1996 and 1995 were 7.08 percent and 7.40 percent,
respectively.
The Partnership has sufficient sources of capital in the form of
borrowings available under its revolving credit facility and cash generated from
operations to meet its presently anticipated liquidity and capital needs.
RESULTS OF OPERATIONS
- ---------------------
1996 compared to 1995
---------------------
Revenues of the Partnership increased $3,055,384, or approximately 9
percent, to $37,280,733 in 1996 from $34,225,349 in 1995. An increase in the
number of basic subscribers combined with basic service rate increases
implemented in the Partnership's systems primarily accounted for the increase in
revenues. The number of basic subscribers increased 3,912 subscribers, or
approximately 5 percent, to 82,738 subscribers in 1996 from 78,826 subscribers.
The increase in the number of basic subscribers accounted for approximately 40
percent of the increase in revenues and basic service rate increases accounted
for approximately 31 percent of the increase in revenues. No other individual
factor contributed significantly to the increase in revenues.
Operating expenses consist primarily of costs associated with the
operation and administration of the Partnership's cable television systems. The
principal cost components are salaries paid to system personnel, programming
expenses, professional fees, subscriber billing costs, rent for leased
facilities, cable system maintenance expenses and marketing expenses.
Operating expenses of the Partnership increased $1,447,344, or
approximately 7 percent, to $21,003,796 in 1996 from $19,556,452 in 1995.
Operating expenses represented approximately 56 percent of revenue in 1996
compared to approximately 57 percent in 1995. Increases in programming fees and
personnel related costs were primarily responsible for the increase in operating
expenses. No other individual factor contributed significantly to the increase
in operating expenses.
Management fees and allocated overhead from the General Partner
increased $120,703, or approximately 3 percent, to $4,273,886 in 1996 from
$4,153,183 in 1995. The increase was due primarily to the increase in revenues,
upon which management fees are based.
Depreciation and amortization expense decreased $884,377, or
approximately 4 percent, to $21,219,039 in 1996 from $22,103,416 in 1995 due to
the maturation of the Partnership's depreciable asset base.
Operating loss decreased $2,371,714, or approximately 20 percent, to
$9,215,988 in 1996 from $11,587,702 in 1995. This decrease was due to the
increase in revenues and decrease in depreciation and amortization expense
exceeding the increases in operating expenses and management fees and allocated
overhead from the General Partner.
The cable television industry generally measures the financial
performance of a cable television system in terms of operating income before
depreciation and amortization. This measure is not intended to be a substitute
or improvement upon the items disclosed on the financial statements, rather it
is included because it is an industry standard. Operating income before
depreciation and amortization increased $1,487,337, or approximately 14 percent,
to $12,003,051 in 1996 from $10,515,714 in 1995, due to the increase in revenues
exceeding the increases in operating expenses and management fees and allocated
overhead from the General Partner.
Interest expense decreased $175,851, or approximately 3 percent, to
$6,451,648 in 1996 from $6,627,499 in 1995, due to lower interest rates on
interest bearing obligations.
Net loss decreased $2,064,592, or approximately 11 percent, to
$16,193,666 in 1996 from $18,258,258 in 1995. Such losses were the result of
the factors discussed above.
12
<PAGE>
1995 compared to 1994
---------------------
Revenues increased $3,138,988, or approximately 10 percent, to
$34,225,349 in 1995 from $31,086,361 in 1994. An increase in the number of
basic subscribers combined with basic service rate increases implemented in the
Partnership's systems primarily accounted for the increase in revenues. The
increase in the number of basic subscribers accounted for approximately 56
percent of the increase in revenues. At December 31, 1995, the Partnership's
systems had 78,826 basic subscribers compared to 74,041 basic subscribers at
December 31, 1994, an increase of approximately 6 percent. The basic service
rate increases accounted for approximately 40 percent of the increase in
revenues. No other individual factor contributed significantly to the increase
in revenues.
Operating expenses of the Partnership increased $2,024,989, or
approximately 12 percent, to $19,556,452 in 1995 from $17,531,463 in 1994.
Operating expenses represented approximately 57 percent of revenue in 1995
compared to approximately 56 percent in 1994. Increases in programming fees and
personnel related costs were primarily responsible for the increase in operating
expenses. No other individual factor contributed significantly to the increase
in operating expenses.
Management fees and allocated overhead from the General Partner
increased $247,768, or approximately 6 percent, to $4,153,183 in 1995 from
$3,905,415 in 1994. The increase was due primarily to the increase in revenues,
upon which such fees and allocations are based.
Depreciation and amortization expense decreased $306,520, or
approximately 1 percent, to $22,103,416 in 1995 from $22,409,936 in 1994 due to
the maturation of the Partnership's depreciable asset base.
Operating loss decreased $1,172,751, or approximately 9 percent, to
$11,587,702 in 1995 from $12,760,453 in 1994. This decrease was due to the
increase in revenues exceeding the increase in operating expenses and the
decrease in depreciation and amortization expense.
Operating income before depreciation and amortization increased
$866,231, or approximately 9 percent, to $10,515,714 in 1995 from $9,649,483 in
1994, due to the increase in revenues exceeding the increases in operating
expenses and management fees and allocated overhead from the General Partner.
Interest expense increased $1,674,189, or approximately 34 percent, to
$6,627,499 in 1995 from $4,953,310 in 1994, due to higher outstanding balances
on interest bearing obligations during 1995.
Net loss increased $289,959, or approximately 2 percent, to
$18,258,258 in 1995 from $17,968,299 in 1994. Such losses were the result of
the factors discussed above.
13
<PAGE>
Item 8. Financial Statements
- -----------------------------
CABLE TV FUND 15-A, LTD.
------------------------
FINANCIAL STATEMENTS
--------------------
AS OF DECEMBER 31, 1996 AND 1995
--------------------------------
INDEX
-----
<TABLE>
<CAPTION>
Page
----------
<S> <C>
Report of Independent Public Accountants 15
Balance Sheets 16
Statements of Operations 18
Statements of Partners' Capital (Deficit) 19
Statements of Cash Flows 20
Notes to Financial Statements 21
</TABLE>
14
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Partners of Cable TV Fund 15-A, Ltd.:
We have audited the accompanying balance sheets of CABLE TV FUND 15-A,
LTD. (a Colorado limited partnership) as of December 31, 1996 and 1995, and the
related statements of operations, partners' capital (deficit) and cash flows for
each of the three years in the period ended December 31, 1996. These financial
statements are the responsibility of the General Partner's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Cable TV Fund 15-A,
Ltd. as of December 31, 1996 and 1995, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 7, 1997.
15
<PAGE>
CABLE TV FUND 15-A, LTD.
------------------------
(A Limited Partnership)
BALANCE SHEETS
--------------
<TABLE>
<CAPTION>
December 31,
----------------------------
ASSETS 1996 1995
------ ------------- -------------
<S> <C> <C>
CASH $ 452,484 $ 58,719
TRADE RECEIVABLES, less allowance for
doubtful receivables of $58,936 and $132,431
at December 31, 1996 and 1995, respectively 850,977 965,495
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 80,368,193 74,582,334
Less- accumulated depreciation (38,212,602) (32,507,403)
------------ ------------
42,155,591 42,074,931
Franchise costs and other intangible assets, net of
accumulated amortization of $102,216,387 and
$87,030,946 at December 31, 1996 and 1995, respectively 17,606,585 32,782,026
------------ ------------
Total investment in cable
television properties 59,762,176 74,856,957
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 890,464 1,246,638
------------ ------------
Total assets $ 61,956,101 $ 77,127,809
============ ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these balance sheets.
16
<PAGE>
CABLE TV FUND 15-A, LTD.
------------------------
(A Limited Partnership)
BALANCE SHEETS
--------------
<TABLE>
<CAPTION>
December 31,
-----------------------------
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1996 1995
- -------------------------------------------------- -------------- -------------
<S> <C> <C>
LIABILITIES:
Debt $ 83,824,072 $ 78,818,284
General Partner advances 430,624 4,782,507
Trade accounts payable and accrued liabilities 2,173,095 1,825,707
Subscriber prepayments 117,656 96,991
------------- ------------
Total liabilities 86,545,447 85,523,489
------------- ------------
COMMITMENTS AND CONTINGENCIES (Note 7)
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (1,165,529) (1,003,592)
------------- ------------
(1,164,529) (1,002,592)
------------- ------------
Limited Partners-
Net contributed capital
(213,174 units outstanding at
December 31, 1996 and 1995) 90,575,991 90,575,991
Accumulated deficit (114,000,808) (97,969,079)
------------- ------------
(23,424,817) (7,393,088)
------------- ------------
Total liabilities and
partners' capital (deficit) $ 61,956,101 $ 77,127,809
============= ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these balance sheets.
17
<PAGE>
CABLE TV FUND 15-A, LTD.
------------------------
(A Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
<TABLE>
<CAPTION>
For the Year Ended December 31,
-------------------------------------------
1996 1995 1994
------------- ------------- -------------
<S> <C> <C> <C>
REVENUES $ 37,280,733 $ 34,225,349 $ 31,086,361
COSTS AND EXPENSES:
Operating expenses 21,003,796 19,556,452 17,531,463
Management fees and allocated
overhead from General Partner 4,273,886 4,153,183 3,905,415
Depreciation and amortization 21,219,039 22,103,416 22,409,936
------------ ------------ ------------
OPERATING LOSS (9,215,988) (11,587,702) (12,760,453)
------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest expense (6,451,648) (6,627,499) (4,953,310)
Other, net (526,030) (43,057) (254,536)
------------ ------------ ------------
Total other income (expense) (6,977,678) (6,670,556) (5,207,846)
------------ ------------ ------------
NET LOSS $(16,193,666) $(18,258,258) $(17,968,299)
============ ============ ============
ALLOCATION OF NET LOSS:
General Partner $ (161,937) $ (182,583) $ (179,683)
============ ============ ============
Limited Partners $(16,031,729) $(18,075,675) $(17,788,616)
============ ============ ============
NET LOSS PER LIMITED
PARTNERSHIP UNIT $ (75.20) $ (84.79) $ (83.45)
============ ============ ============
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 213,174 213,174 213,174
============ ============ ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
18
<PAGE>
CABLE TV FUND 15-A, LTD.
------------------------
(A Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
-----------------------------------------
<TABLE>
<CAPTION>
For the Year Ended December 31,
--------------------------------------------
1996 1995 1994
-------------- -------------- --------------
<S> <C> <C> <C>
GENERAL PARTNER:
Balance, beginning of year $ (1,002,592) $ (820,009) $ (640,326)
Net loss for year (161,937) (182,583) (179,683)
------------ ------------ ------------
Balance, end of year $ (1,164,529) $ (1,002,592) $ (820,009)
============ ============ ============
LIMITED PARTNERS:
Balance, beginning of year $ (7,393,088) $ 10,682,587 $ 28,471,203
Net loss for year (16,031,729) (18,075,675) (17,788,616)
------------ ------------ ------------
Balance, end of year $(23,424,817) $ (7,393,088) $ 10,682,587
============ ============ ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
19
<PAGE>
CABLE TV FUND 15-A, LTD.
------------------------
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
------------------------
<TABLE>
<CAPTION>
For the Year Ended December 31,
-------------------------------------------
1996 1995 1994
------------- ------------- -------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(16,193,666) $(18,258,258) $(17,968,299)
Adjustments to reconcile net
loss to net cash provided by
operating activities:
Depreciation and amortization 21,219,039 22,103,416 22,409,936
Amortization of interest rate protection contract 75,375 75,375 -
Decrease (increase) in trade receivables 114,518 (346,752) (164,385)
Increase in deposits, prepaid expenses
and deferred charges (57,600) (36,497) (289,674)
Increase in trade accounts payable and accrued
liabilities and subscriber prepayments 368,053 225,420 144,614
------------ ------------ ------------
Net cash provided by operating activities 5,525,719 3,762,704 4,132,192
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (5,785,859) (6,090,555) (6,188,536)
------------ ------------ ------------
Net cash used in investing activities (5,785,859) (6,090,555) (6,188,536)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 5,688,725 8,696,192 70,224,678
Repayment of debt (682,937) (165,601) (70,631,236)
Increase (decrease) in advances from
General Partner (4,351,883) (6,170,031) 2,321,998
------------ ------------ ------------
Net cash provided by financing activities 653,905 2,360,560 1,915,440
------------ ------------ ------------
Increase (decrease) in cash 393,765 32,709 (140,904)
Cash, beginning of year 58,719 26,010 166,914
------------ ------------ ------------
Cash, end of year $ 452,484 $ 58,719 $ 26,010
============ ============ ============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 6,228,037 $ 6,318,316 $ 4,880,346
============ ============ ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
20
<PAGE>
CABLE TV FUND 15-A, LTD.
------------------------
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(1) ORGANIZATION AND PARTNERS' INTERESTS
------------------------------------
Formation and Business
----------------------
Cable TV Fund 15-A, Ltd. (the "Partnership"), a Colorado limited
partnership, was formed on February 9, 1989, under a public program sponsored by
Jones Intercable, Inc. ("Intercable"). The Partnership was formed to acquire,
construct, develop and operate cable television systems. Intercable, a publicly
held Colorado corporation, is the "General Partner" and manager of the
Partnership. Intercable and its subsidiaries also own and operate cable
television systems. In addition, Intercable manages cable television systems
for other limited partnerships for which it is the general partner and, also,
for affiliated entities.
Contributed Capital, Commissions and Syndication Costs
------------------------------------------------------
The capitalization of the Partnership is set forth in the accompanying
statements of partners' capital (deficit). No limited partner is obligated to
make any additional contribution to partnership capital.
Intercable purchased its interest in the Partnership by contributing
$1,000 to partnership capital.
All profits and losses of the Partnership are allocated 99 percent to
the limited partners and 1 percent to Intercable, except for income or gain from
the sale or disposition of cable television properties, which will be allocated
to the partners based upon the formula set forth in the Partnership's
partnership agreement, and interest income earned prior to the first acquisition
by the Partnership of a cable television system, which was allocated 100 percent
to the limited partners.
Partnership Acquisitions
------------------------
The Partnership owns the cable television systems serving the
communities of Barrington, Elgin, South Elgin, Hawthorn Woods, Kildeer, Lake
Zurich, Indian Creek, Vernon Hills and certain unincorporated areas of Kane and
Lake counties, all in the State of Illinois (the "Barrington System") and the
cable television systems serving the communities of Flossmoor, LaGrange,
LaGrange Park, Riverside, Indianhead Park, Hazel Crest, Thornton, Lansing,
Matteson, Richton Park, University Park, Crete, Olympia Fields and Western
Springs, all in the State of Illinois (the "South Suburban System").
The Partnership allocated the total contract purchase price of the
cable television systems acquired as follows: first, to the fair value of net
tangible assets acquired; second, to the value of subscriber lists; third, to
franchise costs; and fourth, to costs in excess of interests in net assets
purchased. System acquisition costs were allocated to intangible assets based
upon the relative value of these assets at acquisition.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Accounting Records
------------------
The accompanying financial statements have been prepared on the
accrual basis of accounting in accordance with generally accepted accounting
principles. The Partnership's tax returns are also prepared on the accrual
basis.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the General Partner's management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
21
<PAGE>
Property, Plant and Equipment
-----------------------------
Depreciation of property, plant and equipment is provided primarily
using the straight-line method over the following estimated service lives:
<TABLE>
<CAPTION>
<S> <C>
Cable distribution systems 5 - 15 years
Equipment and tools 3 - 5 years
Office furniture and equipment 5 years
Buildings 10- 20 years
Vehicles 3 years
</TABLE>
Replacements, renewals and improvements are capitalized and maintenance and
repairs are charged to expense as incurred.
Property, plant and equipment and the corresponding accumulated
depreciation are written off as certain assets become fully depreciated and are
no longer in service.
Intangible Assets
-----------------
Costs assigned to franchises and subscriber lists are being amortized
using the straight-line method over the following remaining estimated useful
lives:
<TABLE>
<CAPTION>
<S> <C>
Franchise costs 1 - 4 years
Subscriber lists 1 - 4 years
Costs in excess of interests in net
assets purchased 34 years
</TABLE>
Revenue Recognition
-------------------
Subscriber prepayments are initially deferred and recognized as revenue
when earned.
Reclassification
----------------
Certain prior year amounts have been reclassified to conform to the
1996 presentation.
(3) TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES
----------------------------------------------------
Management Fees, Distribution Ratios and Reimbursements
-------------------------------------------------------
Intercable manages the Partnership and receives a fee for its services
equal to 5 percent of the gross revenues of the Partnership, excluding revenues
from the sale of cable television systems or franchises. Management fees paid
to Intercable by the Partnership for the years ended December 31, 1996, 1995 and
1994 were $1,864,037, $1,711,267 and $1,554,318, respectively.
Any Partnership distributions made from cash flows (defined as cash
receipts derived from routine operations, less debt principal and interest
payments and cash expenses) are allocated 99 percent to the limited partners and
1 percent to Intercable. Any distributions other than interest income on
limited partner subscriptions earned prior to the acquisition of the
Partnership's first cable television system or from cash flow, such as from the
sale or refinancing of a system or upon dissolution of the Partnership, will be
made as follows: first, to the limited partners in an amount which, together
with all prior distributions, will equal the amount initially contributed to the
Partnership capital by the limited partners and Intercable; second, to the
limited partners which, together with all prior distributions, will equal a 6
percent per annum cumulative and noncompounded return on the capital
contributions of the limited partners; the balance, 75 percent to the limited
partners and 25 percent to Intercable.
The Partnership reimburses Intercable for certain allocated overhead
and administrative expenses. These expenses represent the salaries and related
benefits paid for corporate personnel, rent, data processing services and other
corporate facilities costs. Such personnel provide engineering, marketing,
administrative, accounting, legal and investor relations services to the
Partnership. Such services, and their related costs, are necessary to the
operations of the Partnership and would have been incurred by the Partnership if
it was a stand alone entity. Allocations of personnel costs are based primarily
on actual time spent by employees of Intercable with respect to each partnership
managed. Remaining expenses
22
<PAGE>
are allocated based on the pro rata relationship of the Partnership's revenues
to the total revenues of all systems owned or managed by Intercable and certain
of its subsidiaries. Systems owned by Intercable and all other systems owned by
partnerships for which Intercable is the general partner are also allocated a
proportionate share of these expenses. Intercable believes that the methodology
used in allocating overhead and administrative expenses is reasonable.
Reimbursements by the Partnership to Intercable for allocated overhead and
administrative expenses for the years ended December 31, 1996, 1995 and 1994
were $2,409,849, $2,441,916 and $2,351,097, respectively.
The Partnership was charged interest during 1996 at an average
interest rate of 8.58 percent on the amounts due Intercable, which approximated
Intercable's weighted average cost of borrowing. Total interest charged to the
Partnership by Intercable for the years ended December 31, 1996, 1995 and 1994
was $273,827, $724,127 and $898,722, respectively.
Payments to/from Affiliates for Programming Services
----------------------------------------------------
The Partnership receives programming from Superaudio, Jones Education
Company, Great American Country, Inc. and Product Information Network, all of
which are affiliates of Intercable.
Payments to Superaudio totaled $12,783, $11,303 and $11,268 in 1996, 1995
and 1994, respectively. Payments to Jones Education Company totaled $114,703,
$101,247 and $51,950 in 1996, 1995 and 1994, respectively. Payments to Great
American Country, Inc., which initiated service in 1996, totaled $3,937 in 1996.
The Partnership receives a commission from Product Information Network
based on a percentage of advertising revenue and number of subscribers. Product
Information Network paid commissions to the Partnership totaling $56,078,
$26,854 and $1,472 in 1996, 1995 and 1994, respectively.
(4) PROPERTY, PLANT AND EQUIPMENT
-----------------------------
Property, plant and equipment as of December 31, 1996 and 1995, consisted
of the following:
<TABLE>
<CAPTION>
December 31,
---------------------------
1996 1995
----------- ------------
<S> <C> <C>
Cable distribution systems $ 75,288,599 $ 69,900,792
Equipment and tools 2,676,421 2,344,523
Office furniture and equipment 654,576 562,802
Buildings 638,343 638,343
Vehicles 932,254 957,874
Land 178,000 178,000
------------ ------------
80,368,193 74,582,334
Less: accumulated depreciation (38,212,602) (32,507,403)
------------ ------------
$ 42,155,591 $ 42,074,931
============ ============
<CAPTION>
(5) DEBT
----
Debt consists of the following: December 31,
---------------------------
1996 1995
----------- ------------
<S> <C> <C>
Lending institutions-
Revolving credit and term loan $ 83,500,000 $ 78,500,000
Capital lease obligations 324,072 318,284
------------ ------------
$ 83,824,072 $ 78,818,284
============ ============
</TABLE>
23
<PAGE>
On March 28, 1996, the Partnership amended its revolving credit facility to
provide for a maximum of $90,000,000 in available borrowings and to extend the
revolving credit period to September 30, 1997. The revolving credit facility
converts to a term loan on September 30, 1997, with annual principal
installments due at the end of each calendar year and a final maturity date of
March 31, 2004. Installments due in 1997 will be 4 percent of the outstanding
balance of the converted term loan at September 30, 1997. At December 31, 1996,
$83,500,000 was outstanding under the Partnership's revolving credit facility,
leaving $6,500,000 of available borrowings until September 30, 1997. Interest is
at the Partnership's option of the Prime Rate plus 1/2 percent, the London
Interbank Offered Rate plus 1-1/2 percent or the Certificate of Deposit Rate
plus 1-5/8 percent. The effective interest rates on outstanding obligations as
of December 31, 1996 and 1995 were 7.08 percent and 7.40 percent, respectively.
During January 1995, the Partnership entered into interest rate cap
agreements covering outstanding debt obligations totaling $35,000,000. The
Partnership paid fees totaling $150,750. The agreements protect the Partnership
from interest rates that exceed 9 percent for a two year period. The fees were
charged to interest expense over the life of these agreements using the
straight-line method.
At December 31, 1996, the carrying amount of the Partnership's long-term
debt did not differ significantly from the estimated fair value of the financial
instruments. The fair value of the Partnership's long-term debt is estimated
based on the discounted amount of future cash flows using the Partnership's
current incremental rate of borrowing for a similar liability as well as on
other factors.
Installments due on debt principal for each of the five years in the
period ending December 31, 2001 and thereafter, respectively, are: $3,437,222,
$5,942,222, $8,447,222, $10,887,406, $12,525,000 and $42,585,000. At December
31, 1996, substantially all of the Partnership's property, plant and equipment
secured the above indebtedness.
(6) INCOME TAXES
------------
Income taxes have not been recorded in the accompanying financial
statements because they accrue directly to the partners. The federal and state
income tax returns of the Partnership are prepared and filed by Intercable.
The Partnership's tax returns, the qualification of the Partnership as
such for tax purposes, and the amount of distributable Partnership income or
loss are subject to examination by federal and state taxing authorities. If
such examinations result in changes with respect to the Partnership's
qualification as such, or in changes with respect to the Partnership's recorded
income or loss, the tax liability of the general and limited partners would
likely be changed accordingly.
Taxable income (loss) reported to the partners is different from that
reported in the statements of operations due to the difference in depreciation
recognized under generally accepted accounting principles and the expense
allowed for tax purposes under the Modified Accelerated Cost Recovery System
(MACRS). There are no other significant differences between taxable income
(loss) and the net income (loss) reported in the statements of operations.
(7) COMMITMENTS AND CONTINGENCIES
-----------------------------
Office and other facilities are rented under various long-term lease
arrangements. Rent paid under such lease arrangements totaled $123,430,
$120,120 and $125,648, respectively, for the years ended December 31, 1996, 1995
and 1994. Minimum commitments under operating leases for each of the five years
in the period ending December 31, 2001 and thereafter are as follows:
<TABLE>
<CAPTION>
<S> <C>
1997 $153,087
1998 74,566
1999 64,812
2000 58,056
2001 16,886
Thereafter 8,400
--------
$375,807
=======
</TABLE>
24
<PAGE>
(8) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
-----------------------------------------
Supplementary profit and loss information is presented below:
<TABLE>
<CAPTION>
For the Year Ended December 31,
-------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Maintenance and repairs $ 201,270 $ 193,886 $ 190,432
=========== =========== ===========
Taxes, other than income and
payroll taxes $ 88,981 $ 64,056 $ 96,020
=========== =========== ===========
Advertising $ 490,961 $ 782,532 $ 700,024
=========== =========== ===========
Depreciation of property,
plant and equipment $ 5,950,669 $ 6,671,817 $ 7,039,561
=========== =========== ===========
Amortization of intangible assets $15,268,370 $15,431,599 $15,370,375
=========== =========== ===========
</TABLE>
25
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
---------------------------------------------------------
ACCOUNTING AND FINANCIAL DISCLOSURE
-----------------------------------
None.
PART III.
---------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------------------------------
The Partnership itself has no officers or directors. Certain
information concerning the directors and executive officers of the General
Partner is set forth below. Directors of the General Partner serve until the
next annual meeting of the General Partner and until their successors shall be
elected and qualified.
Glenn R. Jones 67 Chairman of the Board and Chief Executive Officer
Derek H. Burney 57 Vice Chairman of the Board
James B. O'Brien 47 President and Director
Ruth E. Warren 47 Group Vice President/Operations
Kevin P. Coyle 45 Group Vice President/Finance
Christopher J. Bowick 41 Group Vice President/Technology
George H. Newton 62 Group Vice President/Telecommunications
Raymond L. Vigil 50 Group Vice President/Human Resources
Cynthia A. Winning 45 Group Vice President/Marketing
Elizabeth M. Steele 45 Vice President/General Counsel/Secretary
Larry W. Kaschinske 37 Vice President/Controller
Robert E. Cole 64 Director
William E. Frenzel 68 Director
Donald L. Jacobs 58 Director
James J. Krejci 55 Director
John A. MacDonald 43 Director
Raphael M. Solot 63 Director
Howard O. Thrall 49 Director
Siim A. Vanaselja 40 Director
Sanford Zisman 57 Director
Robert B. Zoellick 43 Director
Mr. Glenn R. Jones has served as Chairman of the Board of Directors
and Chief Executive Officer of the General Partner since its formation in 1970,
and he was President from June 1984 until April 1988. Mr. Jones is the sole
shareholder, President and Chairman of the Board of Directors of Jones
International, Ltd. He is also Chairman of the Board of Directors of the
subsidiaries of the General Partner and of certain other affiliates of the
General Partner. Mr. Jones has been involved in the cable television business
in various capacities since 1961, is a member of the Board of Directors and the
Executive Committee of the National Cable Television Association. Additionally,
Mr. Jones is a member of the Board of Governors for the American Society for
Training and Development, and a member of the Board of Education Council of the
National Alliance of Business. Mr. Jones is also a founding member of the James
Madison Council of the Library of Congress. Mr. Jones has been the recipient of
several awards including the Grand Tam Award in 1989, the highest award from the
Cable Television Administration and Marketing Society; the President's Award
from the Cable Television Public Affairs Association in recognition of Jones
International's educational efforts through Mind Extension University (now
Knowledge TV); the Donald G. McGannon Award for the advancement of minorities
and women in cable from the United Church of Christ Office of Communications;
the STAR Award from American Women in Radio and Television, Inc. for exhibition
of a commitment to the issues and concerns of women in television and radio; the
Cableforce 2000 Accolade awarded by Women in Cable in recognition of the General
Partner's innovative employee programs; the Most Outstanding Corporate
Individual Achievement Award from the International Distance Learning Conference
for his contributions to distance education; the Golden Plate Award from the
American Academy of Achievement for his advances in distance education; the Man
of the Year named by the
26
<PAGE>
Denver chapter of the Achievement Rewards for College Scientists; and in 1994
Mr. Jones was inducted into Broadcasting and Cable's Hall of Fame.
Mr. Derek H. Burney was appointed a Director of the General Partner in
December 1994 and Vice Chairman of the Board of Directors on January 31, 1995.
Mr. Burney joined BCE Inc., Canada's largest telecommunications company, in
January 1993 as Executive Vice President, International. He has been the
Chairman of Bell Canada International Inc., a subsidiary of BCE, since January
1993 and, in addition, has been Chief Executive Officer of BCI since July 1993.
Prior to joining BCE, Mr. Burney served as Canada's ambassador to the United
States from 1989 to 1992. Mr. Burney also served as chief of staff to the Prime
Minister of Canada from March 1987 to January 1989 where he was directly
involved with the negotiation of the U.S. - Canada Free Trade Agreement. In
July 1993, he was named an Officer of the Order of Canada. Mr. Burney is also a
director of Bell Cablemedia plc, Mercury Communications Limited, Videotron
Holdings plc, Tele-Direct (Publications) Inc., Teleglobe Inc., Bimcor Inc.,
Maritime Telegraph and Telephone Company, Limited, Moore Corporation Limited,
Northbridge Programming Inc. and certain subsidiaries of Bell Canada
International.
Mr. James B. O'Brien, the General Partner's President, joined the
General Partner in January 1982. Prior to being elected President and a
Director of the General Partner in December 1989, Mr. O'Brien served as a
Division Manager, Director of Operations Planning/Assistant to the CEO, Fund
Vice President and Group Vice President/Operations. Mr. O'Brien was appointed
to the General Partner's Executive Committee in August 1993. As President, he
is responsible for the day-to-day operations of the cable television systems
managed and owned by the General Partner. Mr. O'Brien is a board member of
Cable Labs, Inc., the research arm of the U.S. cable television industry. He
also serves as Vice Chairman and a director of the Cable Television
Administration and Marketing Association and as a director and member of the
Executive Committee of the Walter Kaitz Foundation, a foundation that places
people of ethnic minority groups in positions with cable television systems,
networks and vendor companies.
Ms. Ruth E. Warren joined the General Partner in August 1980 and has
served in various operational capacities, including system manager and Fund Vice
President, since then. Ms. Warren was elected Group Vice President/Operations
of the General Partner in September 1990.
Mr. Kevin P. Coyle joined The Jones Group, Ltd. in July 1981 as Vice
President/Financial Services. In September 1985, he was appointed Senior Vice
President/Financial Services. He was elected Treasurer of the General Partner
in August 1987, Vice President/Treasurer in April 1988 and Group Vice
President/Finance and Chief Financial Officer in October 1990.
Mr. Christopher J. Bowick joined the General Partner in September 1991
as Group Vice President/Technology and Chief Technical Officer. Previous to
joining the General Partner, Mr. Bowick worked for Scientific Atlanta's
Transmission Systems Business Division in various technical management
capacities since 1981, and as Vice President of Engineering since 1989.
Mr. George H. Newton joined the General Partner in January 1996 as
Group Vice President/Telecommunications. Prior to joining the General Partner,
Mr. Newton was President of his own consulting business, Clear Solutions, and
since 1994 Mr. Newton has served as a Senior Advisor to Bell Canada
International. From 1990 to 1993, Mr. Newton served as the founding Chief
Executive Officer and Managing Director of Clear Communications, New Zealand,
where he established an alternative telephone company in New Zealand. From 1964
to 1990, Mr. Newton held a wide variety of operational and business assignments
with Bell Canada International.
Mr. Raymond L. Vigil joined the General Partner in June 1993 as Group
Vice President/Human Resources. Previous to joining the General Partner, Mr.
Vigil served as Executive Director of Learning with USWest. Prior to USWest,
Mr. Vigil worked in various human resources posts over a 14-year term with the
IBM Corporation.
Ms. Cynthia A. Winning joined the General Partner as Group Vice
President/Marketing in December 1994. Previous to joining the General Partner,
Ms. Winning served since 1994 as the President of PRS Inc.,
27
<PAGE>
Denver, Colorado, a sports and event marketing company. From 1979 to 1981 and
from 1986 to 1994, Ms. Winning served as the Vice President and Director of
Marketing for Citicorp Retail Services, Inc., a provider of private-label credit
cards for ten national retail department store chains. From 1981 to 1986, Ms.
Winning was the Director of Marketing Services for Daniels & Associates cable
television operations, as well as the Western Division Marketing Director for
Capital Cities Cable. Ms. Winning also serves as a board member of Cities in
Schools, a dropout intervention/prevention program.
Ms. Elizabeth M. Steele joined the General Partner in August 1987 as
Vice President/General Counsel and Secretary. From August 1980 until joining
the General Partner, Ms. Steele was an associate and then a partner at the
Denver law firm of Davis, Graham & Stubbs, which serves as counsel to the
General Partner.
Mr. Larry Kaschinske joined the General Partner in 1984 as a staff
accountant in the General Partner's former Wisconsin Division, was promoted to
Assistant Controller in 1990, named Controller in August 1994 and was elected
Vice President/Controller in June 1996.
Mr. Robert E. Cole was appointed a Director of the General Partner in
March 1996. Mr. Cole is currently self-employed as a partner of First Variable
Insurance Marketing and is responsible for marketing to National Association of
Securities Dealers, Inc. firms in northern California, Oregon, Washington and
Alaska. From 1993 to 1995, Mr. Cole was the Director of Marketing for Lamar
Life Insurance Company; from 1992 to 1993, Mr. Cole was Senior Vice President of
PMI Inc., a third party lender serving the special needs of Corporate Owned Life
Insurance (COLI) and from 1988 to 1992, Mr. Cole was the principal and co-
founder of a specialty investment banking firm that provided services to finance
the ownership and growth of emerging companies, productive assets and real
property. Mr. Cole is a Certified Financial Planner and a former United States
Naval Aviator.
Mr. William E. Frenzel was appointed a Director of the General Partner
in April 1995. Mr. Frenzel has been a Guest Scholar since 1991 with the
Brookings Institution, a research organization located in Washington D. C.
Until his retirement in January 1991, Mr. Frenzel served for twenty years in the
United States House of Representatives, representing the State of Minnesota,
where he was a member of the House Ways and Means Committee and its Trade
Subcommittee, the Congressional Representative to the General Agreement on
Tariffs and Trade (GATT), the Ranking Minority Member on the House Budget
Committee and a member of the National Economic Commission. Mr. Frenzel also
served in the Minnesota Legislature for eight years. He is a Distinguished
Fellow of the Tax Foundation, Vice Chairman of the Eurasia Foundation, a Board
Member of the U.S.-Japan Foundation, the Close-Up Foundation, Sit Mutual Funds
and Chairman of the Japan-America Society of Washington.
Mr. Donald L. Jacobs was appointed a Director of the General Partner
in April 1995. Mr. Jacobs is a retired executive officer of TRW. Prior to his
retirement, he was Vice President and Deputy Manager of the Space and Defense
Sector; prior to that appointment, he was the Vice President and General Manager
of the Defense Systems Group and prior to his appointment as Group General
Manager, he was President of ESL, Inc., a wholly owned subsidiary of TRW.
During his career, Mr. Jacobs served on several corporate, professional and
civic boards.
Mr. James J. Krejci was President of the International Division of
International Gaming Technology, International headquartered in Reno, Nevada,
until March 1995. Prior to joining IGT in May 1994, Mr. Krejci was Group Vice
President of Jones International, Ltd. and was Group Vice President of the
General Partner. He has also served as an officer of subsidiaries of Jones
International, Ltd. until leaving the General Partner in May 1994. Mr. Krejci
has been a Director of the General Partner since August 1987.
28
<PAGE>
Mr. John A. MacDonald was appointed a Director of the General Partner
in November 1995. Mr. MacDonald is Executive Vice President of Business
Development and Chief Technology Officer of Bell Canada International Inc.
Prior to joining Bell Canada in November 1994, Mr. MacDonald was President and
Chief Executive Officer of The New Brunswick Telephone Company, Limited, a post
he had held since March of that year. Prior to March 1994, Mr. MacDonald was
with NBTel for 17 years serving in various capacities, including Market Planning
Manager, Corporate Planning Manager, Manager of Systems Planning and Development
and General Manager, Chief Engineer and General Manager of Engineering and
Information Systems and Vice President of Planning. Mr. MacDonald was the
former Chairman of the New Brunswick section of the Institute of Electrical and
Electronic Engineers and also served on the Federal Government's Information
Highway Advisory Council. Mr. MacDonald is Chairman of MediaLinx Interactive
Inc. and Stentor Canadian Network Management and is presently a Governor of the
Montreal Exchange. He also serves on the Board of Directors of Tele-Direct
(Publications) Inc., Bell-Northern Research, Ltd., SRCI, Bell Sygma, Canarie
Inc., and is a member of the University of New Brunswick Venture Campaign
Cabinet.
Mr. Raphael M. Solot was appointed a Director of the General Partner
in March 1996. Mr. Solot is an attorney and has practiced law for 31 years with
an emphasis on franchise, corporate and partnership law and complex litigation.
Mr. Howard O. Thrall was appointed a Director of the General Partner
in March 1996. Mr. Thrall had previously served as a Director of the General
Partner from December 1988 to December 1994. Mr Thrall is Senior Vice
President-Corporate Development for First National Net, Inc., a leading service
provider for the mortgage banking industry, and he heads First National Net's
Washington, D.C. regional office. From September 1993 to July 1996, Mr. Thrall
served as Vice President of Sales, Asian Region, for World Airways, Inc.
headquartered at the Washington Dulles International Airport. From 1984 until
August 1993, Mr. Thrall was with the McDonnell Douglas Corporation, where he
concluded as a Regional Vice President, Commercial Marketing with the Douglas
Aircraft Company subsidiary. Mr. Thrall is also an active management and
international marketing consultant, having completed assignments with McDonnell
Douglas Aerospace, JAL Trading, Inc., Technology Solutions Company, Cheong
Kang Associated (Korea), Aero Investment Alliance, Inc. and Western Real Estate
Partners, among others.
Mr. Siim A. Vanaselja was appointed a Director of the General Partner
in August 1996. Mr. Vanaselja joined BCE Inc., Canada's largest
telecommunications company, in February 1994 as Assistant Vice-President,
International Taxation. In June 1994, he was appointed Assistant Vice-President
and Director of Taxation, and in February 1995, Mr. Vanaselja was appointed
Vice-President, Taxation. On August 1, 1996, Mr. Vanaselja was appointed the
Chief Financial Officer of Bell Canada International Inc., a subsidiary of BCE
Inc. Prior to joining BCE Inc. and since August 1989, Mr. Vanaselja was a
partner in the Toronto office of KPMG Peat Marwick Thorne. Mr. Vanaselja has
been a member of the Institute of Chartered Accountants of Ontario since 1982
and is a member of the Canadian Tax Foundation, the Tax Executives Institute and
the International Fiscal Association.
Mr. Sanford Zisman was appointed a director of the General Partner in
June 1996. Mr. Zisman is a member of the law firm, Zisman & Ingraham, P.C. of
Denver, Colorado and has practiced law for 31 years, with an emphasis on tax,
business and estate planning and probate administration. Mr. Zisman currently
serves as a member of the Board of Directors of Saint Joseph Hospital, the
largest hospital in Colorado, and he has served as Chairman of the Board,
Chairman of the Finance Committee and Chairman of the Strategic Planning
Committee of the hospital. Since 1992, he has also served on the Board of
Directors of Maxim Series Fund, Inc., a subsidiary of Great-West Life Assurance
Company.
Mr. Robert B. Zoellick was appointed a Director of the General Partner
in April 1995. Mr. Zoellick is Executive Vice President for Housing and Law of
Fannie Mae, a federally chartered and stockholder-owned corporation that is the
largest housing finance investor in the United States. From August 1992 to
January 1993, Mr. Zoellick served as Deputy Chief of Staff of the White House
and Assistant to the President. From May 1991 to August 1992, Mr. Zoellick
served concurrently as the Under Secretary of State for Economic and
Agricultural Affairs and as Counselor of the Department of State, a post he
assumed in March 1989. From 1985 to 1988, Mr. Zoellick served at the Department
of Treasury in a number of capacities, including Counselor to the Secretary.
Mr. Zoellick received the Alexander Hamilton and Distinguished Service Awards,
highest honors of the Departments of Treasury and State, respectively. The
German Government awarded him the Knight Commanders Cross for his work on
Germany unification. Mr. Zoellick currently serves on the boards of Alliance
Capital, Said
29
<PAGE>
Holdings, the Council on Foreign Relations, the Congressional Institute, the
German Marshall Fund of the U.S., the European Institute, the National Bureau of
Asian Research, the American Council on Germany, the American Institute for
Contemporary German Studies and the Overseas Development Council.
ITEM 11. EXECUTIVE COMPENSATION
--------------------------------
The Partnership has no employees; however, various personnel are
required to operate the Manitowoc System. Such personnel are employed by the
General Partner and, the cost of such employment is charged by the General
Partner to the Partnership as a direct reimbursement item. See Item 13.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS
----------------------------------------------------------------------
As of March 4, 1997, no person or entity owned more than 5 percent of
the limited partnership interests of the Partnership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------
The General Partner and its affiliates engage in certain transactions
with the Partnership. The General Partner believes that the terms of such
transactions are generally as favorable as could be obtained by the Partnership
from unaffiliated parties. This determination has been made by the General
Partner in good faith, but none of the terms were or will be negotiated at
arm's-length and there can be no assurance that the terms of such transactions
have been or will be as favorable as those that could have been obtained by the
Partnership from unaffiliated parties.
TRANSACTIONS WITH THE GENERAL PARTNER
The General Partner charges a management fee, and the General Partner
is reimbursed for certain allocated overhead and administrative expenses. These
expenses represent the salaries and benefits paid to corporate personnel, rent,
data processing services and other corporate facilities costs. Such personnel
provide engineering, marketing, administrative, accounting, legal and investor
relations services to the Partnership. Allocations of personnel costs are based
primarily on actual time spent by employees of the General Partner with respect
to each partnership managed. Remaining expenses are allocated based on the pro
rata relationship of the Partnership's revenues to the total revenues of all
systems owned or managed by the General Partner and certain of its subsidiaries.
Systems owned by the General Partner and all other systems owned by partnerships
for which Jones Intercable, Inc. is the general partner are also allocated a
proportionate share of these expenses.
The General Partner also advances funds and charges interest on the
balance payable. The interest rate charged approximates the General Partner's
weighted average cost of borrowing.
TRANSACTIONS WITH AFFILIATES
Jones Education Company ("JEC") is owned 63% by Jones International,
Ltd. ("International"), an affiliate of the General Partner, 9% by Glenn R.
Jones, 12% by Bell Canada International Inc. ("BCI") and 16% by the General
Partner. JEC operates two television networks, JEC Knowledge TV and Jones
Computer Network. JEC Knowledge TV provides programming related to computers
and technology; business, careers and finance; health and wellness; and global
culture and languages. Jones Computer Network provides programming focused
primarily on computers and technology. JEC sells its programming to certain
cable television systems owned or managed by the General Partner.
30
<PAGE>
The Great American Country network provides country music video
programming to certain cable television systems owned or managed by the General
Partner. This network is owned and operated by Great American Country, Inc., a
subsidiary of Jones International Networks, Ltd., an affiliate of International.
Jones Galactic Radio, Inc. is a company now owned by Jones
International Networks, Ltd., an affiliate of International. Superaudio, a
joint venture between Jones Galactic Radio, Inc. and an unaffiliated entity,
provides satellite programming to certain cable television systems owned or
managed by the General Partner.
The Product Information Network Venture (the "PIN Venture") is a
venture among a subsidiary of Jones International Networks, Ltd., an affiliate
of International, and two unaffiliated cable system operators. The PIN Venture
operates the Product Information Network ("PIN"), which is a 24-hour network
that airs long-form advertising generally known as "infomercials." The PIN
Venture generally makes incentive payments of approximately 60% of its net
advertising revenue to the cable systems that carry its programming. Most of
the General Partner's owned and managed systems carry PIN for all or part of
each day. Revenues received by the Partnership from the PIN Venture relating to
the Partnership's owned cable television systems totaled approximately $56,078
for the year ended December 31, 1996.
The charges to the Partnership for related party transactions are as
follows for the periods indicated:
<TABLE>
<CAPTION>
For the Year Ended December 31,
------------------------------------
Cable TV Fund 15-A 1996 1995 1994
- ------------------ ---------- ----------- -----------
<S> <C> <C> <C>
Management fees $1,864,037 $ 1,711,267 $ 1,554,318
Allocation of expenses 2,409,849 2,441,916 2,351,096
Interest on advances paid to the General Partner 273,827 724,127 898,722
Amount of advances outstanding 430,624 4,782,507 10,952,538
Highest amount of advances outstanding 4,782,507 11,894,092 10,952,538
Programming fees:
Jones Education Company 114,703 101,247 51,950
Great American Country 3,937 0 0
Superaudio 12,783 11,303 11,268
</TABLE>
31
<PAGE>
PART IV.
--------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
-------------------------------------------------------------------------
(a) 1. See index to financial statements for the list of financial
statements and exhibits thereto filed as part of this report.
3. The following exhibits are filed herewith.
4.1 Limited Partnership Agreement for Cable TV Fund 15-A, Ltd.
(1)
10.1.1 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of
Barrington, Illinois. (1)
10.1.2 Copy of franchise and related documents granting a community
antenna television system franchise for Cook County,
Illinois. (2)
10.1.3 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of Crete,
Illinois. (3)
10.1.4 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of Deer
Park, Illinois. (1)
10.1.5 Copy of franchise and related documents granting a community
antenna television system franchise for the City of Elgin,
Illinois. (1)
10.1.6 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of
Flossmoor, Illinois. (3)
10.1.7 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of
Hawthorn Woods, Illinois.
10.1.8 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of Hazel
Crest, Illinois. (3)
10.1.9 Copy of franchise and related documents granting a community
antenna television system franchise for Hoffman Estates,
Illinois. (2)
10.1.10 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of Indian
Creek, Illinois. (1)
10.1.11 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of Indian
Head Park, Illinois. (3)
10.1.12 Copy of franchise and related documents granting a community
antenna television system franchise for the County of Kane,
Illinois. (2)
10.1.13 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of
Kildeer, Illinois.
10.1.14 Copy of Amendatory Ordinance No. 96-0-732 of the Village of
Kildeer renewing and amendment the franchise.
32
<PAGE>
10.1.15 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of La
Grange, Illinois. (3)
10.1.16 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of La
Grange Park, Illinois. (3)
10.1.17 Copy of franchise and related documents granting a community
antenna television system franchise for the County of Lake,
Illinois. (1)
10.1.18 Copy of amendment to franchise agreement dated May 15, 1991.
(3)
10.1.19 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of Lake
Barrington, Illinois. (4)
10.1.20 Copy of Resolution 92-R-20 dated 9/8/92. (2)
10.1.21 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of Lake
Zurich, Illinois. (4)
10.1.22 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of
Lansing, Illinois. (3)
10.1.23 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of Long
Grove, Illinois. (2)
10.1.24 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of
Matteson, Illinois. (3)
10.1.25 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of
Olympia Fields, Illinois. (3)
10.1.26 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of
Riverside, Illinois. (3)
10.1.27 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of South
Elgin, Illinois. (1)
10.1.28 Copy of franchise and related documents granting a community
antenna television system franchise for Thornton, Illinois.
(3)
10.1.29 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of
University Park, Illinois.
10.1.30 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of Vernon
Hills, Illinois.
10.1.31 Copy of franchise and related documents granting a community
antenna television system franchise for the Village of
Western Springs, Illinois. (3)
10.2.1 Credit Agreement dated as of November 21, 1994 among Cable TV
Fund 15-A, Ltd. and Shawmut Bank Connecticut, N.A., as agent
for various lenders. (5)
10.2.2 Amendment Agreement dated as of March 28, 1996 to Credit
Agreement dated as of November 21, 1994. (6)
33
<PAGE>
27 Financial Data Schedule
__________
(1) Incorporated by reference from Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1989.
(2) Incorporated by reference from Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1992.
(3) Incorporated by reference from the Annual Report on Form 10-K
of Jones Intercable, Inc. (Commission File No. 1-9953) for
fiscal year ended 5/31/90.
(4) Incorporated by reference from Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1990.
(5) Incorporated by reference from Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994.
(6) Incorporated by reference from Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995.
(b) Reports on Form 8-K
-------------------
None.
34
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
CABLE TV FUND 15-A, LTD.
a Colorado limited partnership
By: Jones Intercable, Inc.
By: /s/ Glenn R. Jones
________________________________
Glenn R. Jones
Chairman of the Board and Chief
Dated: March 24, 1997 Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: /s/ Glenn R. Jones
________________________________
Glenn R. Jones
Chairman of the Board and Chief
Executive Officer
Dated: March 24, 1997 (Principal Executive Officer)
By: /s/ Kevin P. Coyle
________________________________
Kevin P. Coyle
Group Vice President/Finance
Dated: March 24, 1997 (Principal Financial Officer)
By: /s/ Larry Kaschinske
________________________________
Larry Kaschinske
Vice President/Controller
Dated: March 24, 1997 (Principal Accounting Officer)
By: /s/ James B. O'Brien
________________________________
James B. O'Brien
Dated: March 24, 1997 President and Director
By: /s/ Derek H. Burney
________________________________
Derek H. Burney
Dated: March 24, 1997 Director
By: /s/ Robert E. Cole
________________________________
Robert E. Cole
Dated: March 24, 1997 Director
35
<PAGE>
By: /s/ William E. Frenzel
________________________________
William E. Frenzel
Dated: March 24, 1997 Director
By: /s/ Donald L. Jacobs
________________________________
Donald L. Jacobs
Dated: March 24, 1997 Director
By: /s/ James J. Krejci
________________________________
James J. Krejci
Dated: March 24, 1997 Director
By: ________________________________
John A. MacDonald
Dated: March 24, 1997 Director
By: /s/ Raphael M. Solot
________________________________
Raphael M. Solot
Dated: March 24, 1997 Director
By: ________________________________
Howard O. Thrall
Dated: March 24, 1997 Director
By: /s/ Siim A. Vanaselja
________________________________
Siim A. Vanaselja
Dated: March 24, 1997 Director
By: /s/ Sanford Zisman
________________________________
Sanford Zisman
Dated: March 24, 1997 Director
By: /s/ Robert B. Zoellick
________________________________
Robert B. Zoellick
Dated: March 24, 1997 Director
36
<PAGE>
Exhibit 10.1.7
ORDINANCE NO. 73295
AN ORDINANCE GRANTING TO CABLE TV FUND 15-A, LTD. , ITS SUBSIDIARIES,
AFFILIATES, LESSEES, SUCCESSORS AND ASSIGNS, A NON-EXCLUSIVE FRANCHISE FOR
A PERIOD OF FIFTEEN (15) YEARS TO USE THE HIGHWAYS, STREETS, ALLEYS,
BRIDGES, RIVERS AND OTHER PUBLIC PLACES OF HAWTHORN WOODS, ILLINOIS, FOR
THE PURPOSE OF CONSTRUCTING, INSTALLING, MAINTAINING AND OPERATING A
COMMUNITY ANTENNA TELECOMMUNICATIONS SYSTEM, INCLUDING ALL NECESSARY
APPURTENANCES, AND PRESCRIBING CERTAIN TERMS AND CONDITIONS UNDER WHICH
SAID COMPANY IS TO OPERATE.
BE IT ORDAINED by the President and Board of Trustees of the Village
of Hawthorn Woods, Illinois:
Section 1. SHORT TITLE. This ordinance shall be known and may be
----------
cited as the Hawthorn Woods Community Telecommunications Ordinance.
Section 2. DEFINITIONS. For the purposes of this Ordinance, the
----------
following terms shall have the meanings given herein:
2.01 "CATV System" means a combination of Facilities constructed in
whole or in part in, on, under or over and highway, street, alley,
bridge, river or other public place which is operated to perform for
hire the service of receiving and amplifying telecommunication
signals and redistributing such signals by wire, cable or other means
to members of the public who subscribe to such services.
-1-
<PAGE>
2.02 "Village" means the Village of Hawthorn Woods, Illinois.
2.03 "Facilities" means the lines, wires, poles, equipment, cables,
underground conduits, conductors, fixtures and all appurtenances
thereto which are necessary for the construction, installation,
maintenance and operation in the Village of the CATV System herein
authorized.
2.04 "Gross Operating Revenue" means the revenues derived by the
Company from all services generated by the CATV System Facilities, or
from the use of the CATV System Facilities, including, but not
limited to, , advertising revenue, charges to Subscribers for Basic
Cable, Premium Programming, FM Services, installation charges, and
any and all revenue received from any source whatsoever for use of
the CATV System Facilities.
2.05 "Operator" means Cable TV Fund 15-A, Ltd., a Colorado limited
partnership, with its principal place of business at 9697 E. Mineral
Avenue, Englewood, Colorado 80112, , its subsidiaries, affiliates,
lessees, successors and assigns.
2.06 "Person" means any person, firm, partnership, corporation,
company or organization of any kind.
2.07 "Subscriber" means a person who for a charge receives services
distributed by the CATV System.
-2-
<PAGE>
2.08 "Utility" means any public utility which facilities are
located within the Village.
When not inconsistent with the context, words used in the present tense include
the future, words in the plural number include the singular number, words in the
singular number include the plural number, words used in the masculine gender
include the feminine gender and words used in the feminine gender include the
masculine gender.
Section 3. GRANT OF AUTHORITY.
----------
3.01 The Operator is hereby granted by the Village the non-
exclusive franchise to construct, install, maintain and operate a
CATV System in, upon, along, across, above, over and under, the
highways, streets, alleys, bridges, rivers, and other public places,
and all extensions thereof and additions thereto, in the Village. The
franchise herein granted shall extend to any area annexed to the
Village, and the Operator shall be bound by the same rules and
regulations as to such area as are otherwise provided herein.
3.02 The franchise granted to the Operator by this Ordinance shall
also include the right and privilege to construct, install, maintain
and operate any Facilities on or in the facilities of any Quasi
Public Utility located in the Village.
Section 4. CONSTRUCTION APPROVAL BY VILLAGE. Except for individual
----------
service drops, the Operator shall not construct, install, maintain or operate
any Facility without the prior approval (which shall not be unreasonably
withheld) of the Village. Such approval shall be in the form of a permit issued
-3-
<PAGE>
by the Village, upon approval of layout maps showing the location of the
Facility to be constructed, installed, maintained or operated. The Village
shall have the right to inspect, at reasonable intervals, the construction,
installation, maintenance and operation of the CATV System by the Operator to
insure the proper compliance with the terms of this Ordinance.
Such inspections, whether made or not, shall not operate to relieve
the Operator of any responsibility, obligations, or liability assumed under this
franchise.
Section 5. CONDITIONS OF STREET OCCUPANCY AND SYSTEM CONSTRUCTION.
----------
5.01 All Facilities shall be located so as to avoid unreasonable
interference with the proper use of highways, streets, alleys,
bridges, rivers, and other public places of the Village, to avoid
unreasonable interference with the rights or reasonable convenience
of property owners who adjoin any of said highways, streets, alleys,
bridges, rivers and other public places and to avoid unreasonable
interference with normal use of said highways, streets, alleys,
bridges, rivers or other public places by Utilities.
5.02 In case of any disturbance by the Operator of pavement,
sidewalks, driveways, or other surfaces owned by the Village, the
Operator shall, at its own expense and in a reasonable manner
approved by the Village, replace and restore such areas so disturbed,
in as good condition as before said work of the Operator was
commenced, and shall maintain, if required, the restoration in a good
condition approved by the Village for one year.
-4-
<PAGE>
5.03 In the event that at any time during the term of this
franchise, the Village shall lawfully elect to alter or change the
grade of any highway, street alley, bridge, river or other public
place of the Village, the Operator, upon reasonable notice by the
Village, shall (except to the extent that the Operator's Facilities
are located on private property) remove and relocate its Facilities
at its own expense.
5.04 The Operator shall, at the request of the Village, temporarily
raise or lower its wires to permit the moving of buildings. This work
shall be at the expense of the Person owning the building, and the
Operator shall be given at least forty-eight (48) hours prior written
notice of such request.
5.05 When necessary for the construction, installation, maintenance
or operation of its Facilities, Operator is hereby authorized to trim
trees located on public property. Such trimming shall be done in a
reasonable and workmanlike manner under the supervision of properly
designated Village personnel and shall be done at the Operator's sole
expense. Operator shall be responsible for the removal of all
trimmings at the Operator's sole expense. Any restoration work
necessary under this provision shall be done in conformance with
Section 5.02 and shall be at Operator's sole expense. Other than
minor trimming of trees, the Village and Operator shall meet to
review and determine the appropriateness of any removal or trimming.
-5-
<PAGE>
5.06 The Village shall have the right to attach transmitting and
receiving equipment to any tower erected by the Operator, provided,
however, that the attaching of such equipment does not interfere with
the operation of the CATV System.
5.07 The Operator shall be responsible for securing any rights-of-way,
easements, permits or agreements from any other Persons that may be
needed by the Operator for any reason under this franchise.
Section 6. SERVICE PROTECTION. The CATV System shall be constructed,
----------
installed, maintained and operated so as to avoid interference with the
reception of signals from standard television broadcast stations or the
reception of signals transmitted by any communications service authorized by any
Federal agency.
Section 7. PERFORMANCE BY OPERATOR.
----------
7.01 The Operator shall, provide service requested by Subscribers
residing in the dwelling units within the Village boundaries at
the time of the effective date of this franchise, excluding for any
and all purposes at any time during the term of this franchise,
dwelling units in any and all areas having a population of less than
twenty-five (25) dwelling units per cable mile. The Operator shall
establish and maintain in close proximity to the Village limits of
Hawthorn Woods a studio for local programming, consisting of at least
one view finder color video camera, switcher fader controls,
-6-
<PAGE>
audio system, lighting system, film chain, one video tape recorder
and multiplexing unit. All equipment shall be remotely controlled
from a master control unit. This facility shall be available on a
time sharing basis to the Village, its agencies, public service
organizations, and schools lying wholly or partly within the Village.
Currently, the Village and its residents may use the studios located
in either Libertyville or Vernon Hills. These facilities are
available on a first come, first served basis. In addition, Operator
shall provide and maintain in close proximity to the said Village
limits a business office and agent for the purpose of receiving
inquiries, requests, and complaints concerning all aspects of the
establishment, construction, maintenance, and operation of the
system, and the payment of Subscriber's service charge. The office
shall have a listed telephone and shall be open during reasonable
business hours. The Operator shall respond as soon as possible to
Subscriber's complaints or requests for service in connection with
repairs, maintenance, malfunctions of system facilities, and in no
event shall such response time exceed twenty-four (24) hours from the
receipt of the complaint.
7.02 At the request of the Village, the Operator shall provide limited and
expanded basic service (at no charge other than the direct charge, if
any, which the Operator pays a Utility in connection with the
provision of such service under an agreement of the type contemplated
by Section 3 hereof) to all municipal buildings, police and fire
stations, public park buildings, public libraries, and public and
private schools within the Village, provided, however, that the
-7-
<PAGE>
Operator shall not be required to provide service to any such
building which is located in any area having a population of less
than twenty five (25) dwelling units per cable mile. The Operator's
obligation under this Subsection shall be limited to providing one
drop in each such building except that Operator agrees to provide two
(2) drops to the Village Hall. The Village shall be allowed to make
such use of the drop into its municipal buildings as it shall deem
desirable.
7.03 The CATV System shall carry those television broadcast signals of
every television broadcast station which are required to be carried
pursuant to the applicable rules and regulations of the Federal
Communications Commission.
7.04 The CATV System shall maintain and test its Facilities
pursuant to the applicable rules and regulations of the Federal
Communications Commission.
Section 8. RATE SCHEDULES.
----------
8.01 The initial rates charged to its Subscribers by Operator shall be as
set forth in Schedule A attached hereto and by reference made a part
hereof, and Operator shall maintain its rates in conformance with FCC
regulations and the Cable Communications Policy Act of 1984, as
amended by the Cable Television Consumer Protection Act of 1992.
Nothing herein shall prevent the Village from exercising its rate
making authority as authorized under federal
-8-
<PAGE>
law. Further, the Village may at any time exercise rate-making
authority for the limited basic service, known currently under FCC
regulations as the Broadcast Basic Tier, so long as such rate-making
authority is not preempted under state or federal law.
8.02 The rates for all programming and services shall be non-
discriminatory provided that nothing contained herein shall be deemed
to prohibit reasonable promotional rates which may, from time to
time, be less than standard rates imposed.
8.03 Charges shall abate pro rata in the event that service to a
Subscriber is interrupted for more than twenty-four (24) hours for
any reason whatsoever.
Section 9. SYSTEM STANDARDS.
----------
9.01 The CATV System shall have a single trunk (54) channel
capacity; shall have a broad band signal, shall provide for or shall
be capable of receiving and transmitting all VHF, UHF and FM signals;
shall carry all available local television stations as required by
the FCC; and shall carry at least one channel for the following
purposes:
(A) Municipal Access
(B) Educational Access
(C) Public Access
9.02 The Operator shall establish and construct the CATV System in
accordance with the standards of the art of cable communications
-9-
<PAGE>
and in accordance with the standards of code of conduct with respect
to businesses in size and type like that of the Operator.
9.03 The Operator, through the CATV System, shall provide effective
and efficient service in accordance with the rules and regulations of
all governmental units and agencies having regulatory and licensing
authority in connection with the system.
9.04 The Operator shall cause to be delivered to the Subscribers
home signals that meet FCC technical standards.
9.05 The Operator shall not interrupt all or part of the services
of the system except under emergency circumstances or circumstances
beyond the Operator's control. Interruption of services on the system
for routine maintenance shall, to the extent possible, be confined to
the hours of 2:00 a.m. to 7:00 a.m. and not otherwise.
9.06 The Operator shall establish, construct, operate and maintain
the CATV System, including system facilities, so as to at all times
meet FCC technical standards, including without limitation
specifications for frequency levels, channel frequency response,
terminal isolation and radiation.
9.07 The Operator shall establish, construct, operate and maintain
the CATV System in accordance with all applicable national, state and
local building and safety codes. In the absence of any otherwise
applicable building and safety code, the Operator shall establish,
-10-
<PAGE>
construct, operate and maintain the system in accordance with the
most recent edition of the National Electrical Code.
9.08 The CATV System shall be designed, established, constructed,
operated and maintained for a 24-hour a day continuous operation.
9.09 The CATV System shall produce for receipt on Subscriber's receivers,
which are in good working order, either monochrome or color pictures
(providing the receiver is color capable) that are free from any
significant interference, distortion, or ghosting which would cause
any material degradation of video or audio quality.
9.10 The CATV System shall be capable of providing emergency override
alerts whereby the Village or other governmental units or agencies
designated by the Village may be able to issue a bulletin on all
channels simultaneously.
9.11 In connection with the CATV System, the Operator shall only
employ personnel with necessary and sufficient skills and experience
or training as such shall relate to their respective jobs and
positions.
9.12 The cable drop connection to the subscriber's building will be
installed in a manner similar to the telephone connection for the
same building. The desires of the subscriber as to point of entry
shall be observed wherever practicable. Cable runs in building
interiors will be installed as unobtrusively as possible.
-11-
<PAGE>
9.13 (a) The Operator shall be required to submit a report on cable
technology to the Village during the sixth year of the Franchise
term. This report shall describe developments in cable technology,
and whether the Operator plans to incorporate those technological
developments into the System. In addition, the report shall describe
how, to the Operator's knowledge, other cable companies have
incorporated or are planning to incorporate the technological
developments into their Systems and their estimated timetable for
doing so.
(b) Based on this report, the Village may determine that the System
or Franchise requirements should be updated, changed, revised, or
that additional services should be provided, but only if it would be
economically feasible to do so. Economic feasibility shall be
determined by the Village and Operator in good faith following an
evaluation of Operator's financial condition, economic waste, if any,
that would occur should the changes be made, the length of term
remaining on the Franchise, and the rate of return on the Operator's
investment (both prior investment and proposed future investment) in
the community. Upon the mutual consent of the Village and Operator,
this Agreement shall be amended to incorporate the determinations
made as a result of this process.
Section 10. PAYMENTS TO VILLAGE.
-----------
-12-
<PAGE>
10.01 The Operator shall pay to the Village for the privilege of operating
a CATV System under this franchise an amount equal to five percent
(5%) of the Gross Operating Revenues.
10.02 The Village reserves the right to increase or decrease the franchise
fee provided in Section 10.01 in compliance with applicable law. In
the event the Village determines that the franchise fee percentage
should be increased or decreased, it shall do so only after public
hearing has been held before the Village Board to consider the
question. The Village shall provide the Operator with ninety (90)
days prior written notice of such hearing. The notice shall contain
the following information:
(A) Date of hearing;
(B) Place of hearing, and
(C) Proposed increase or decrease in
franchise fee percentage.
At the hearing the Operator shall be allowed to present any testimony
or evidence to the Village Board as to its position on increase or
decrease. In addition, the Village Board shall hear the testimony of
any subscribers as to their opinion or opinions concerning the
proposed increase or decrease. After all such testimony and evidence
has been heard and adduced, the Village Board by majority vote shall
determine whether such franchise fee increase or decrease shall take
place and the Operator shall be given written notice as to such
increase or decrease. The Operator may on the effective date of any
such increase of decrease, increase
-13-
<PAGE>
or decrease its monthly charges for CATV System services by the
amount of such increase or decrease.
10.03 In the event that the Operator agrees to pay a franchise fee
for any franchise granted after the date hereof by any other
municipality within fifty (50) miles of the village of Hawthorn
Woods, which said fee is in excess of the amounts set forth in
Subsection 10.01, the franchise fee payable hereunder shall at the
option of the Village, be increased to a like amount.
10.04 The Operator may on the effective date of any increase in such fee,
pursuant to the provisions of Subsections 10.01, 10.02 or 10.03,
increase its monthly charges for CATV System services by the amount
of such increase.
10.05 All payments of such franchise fee shall be made quarterly within
thirty (30) days following the 31st of March, the 30th of June, the
30th of September and the 31st of December of each year. Payments
shall commence within thirty (30) days from the end of the quarter in
which the Operator begins to provide service to its Subscribers in
the Village.
Section 11. RECORDS AND REPORTS. On or before March 1 of each year,
-----------
commencing with the year following the year in which the Operator begins to
provide service to its Subscribers in the Village, the Operator shall submit to
the Village a summary report showing Gross Operating Revenue received by the
Operator from the operation of the CATV System within the
-14-
<PAGE>
Village during the preceding year. The Village or their authorized
representative shall have the right to inspect the operations within the Village
during regular business hours and upon first giving reasonable notice.
Section 12. LIST OF SUBSCRIBERS - CONFIDENTIALITY. Other than
-----------
affiliates of Operator, Operator shall not, without consent of the Village,
knowingly release or disclose its list of subscribers residing within the
Village to any other person or corporation.
Section 13. COMPANY LIABILITY INSURANCE.
-----------
13.01 It is expressly understood and agreed by and between the Operator and
the Village that the Operator shall save the Village, its officials
and employees harmless from all loss, including attorneys fees,
sustained by the Village, its officials and employees on account of
any claim, suit, judgment, execution or demand whatsoever arising out
of the construction, installation, maintenance and operation of the
CATV System by the Operator and Operator shall, if necessary, provide
for the Village's defense, to the extent it is necessary, to meet the
requirements of this Section. The Operator shall obtain liability
insurance coverage, including product liability, naming the Village,
its officials and employees as additional named insureds, to protect
the Village, its officials and employees against any such claims,
suits, judgments, executions, or demands to the following extent:
Bodily Injury Property Damage
------------- ---------------
-15-
<PAGE>
$1,000,000 per person $1,000,000 per accident
$1,000,000 per accident
13.02 There shall be filed in the office of the Village Clerk a Certificate
of Insurance, naming the Village as an additional named insured under
the liability insurance required by this Ordinance. The insurance
company providing and writing such insurance coverage and Certificate
of Insurance shall carry a "Class XV" financial size category rating
in the then current edition of Best's Insurance Guide.
13.03 The Village, its officials and employees shall not be liable for any
damage occurring to the property of the Operator caused by officials
or employees of the Village in performance of their duties, excepting
such damage occurring to the property of the Operator caused by the
sole negligence of the officials or employees of the Village. The
Village, its officials and employees shall not be held liable for the
interruption of service by actions of the Village.
Section 14. Defaults.
-----------
14.01 Requirement for Surety Bond.
Prior to the commencement of any construction pursuant to the
provisions of this Ordinance, the Operator shall file with the
Village, and shall maintain during the construction of and for a
period of one year after completion of the facilities to be provided
under this Ordinance, a surety bond from a company authorized to
-16-
<PAGE>
do business in the State of Illinois, in the amount of $25,000, or at
the option of the Village a letter of credit, conditioned upon the
Operator fulfilling and performing in connection with each provision,
term and condition of this Ordinance, and that in case of any breach
the Village shall be entitled to recover from said bond or letter of
credit the amount of any damages, and all costs incurred by the
Village resulting from the failure of the Operator to well and
faithfully observe and perform under any and all the undertakings,
terms and conditions of this Ordinance.
14.02 In the event the Operator should violate any of the material terms of
this Ordinance, the terms of any permit granted under the rules of
this Ordinance or any rules and regulations that subsequently may be
lawfully adopted by the Village, the Village may immediately give the
Operator written notice to correct such violation.
14.03 In the event the Operator does not make such correction within sixty
(60) days from the receipt of such written notice, the Village may
make such correction itself and charge the cost of the same to the
Operator, provided, however, that in the event the Operator cannot
reasonably make such correction within such sixty (60) day period,
the Operator shall receive an additional period of time as agreed
upon by and between the Operator and the Village to make such
correction.
-17-
<PAGE>
14.04 The Operator shall not be deemed nor declared to be in default under
any of the conditions, provisions, requirements or limitations of
this Ordinance in any case in which the performance of any such
condition, provision, requirement or limitation by the Operator is
prevented by reason of strikes, injunctions or any other cause,
including acts of God, any lawsuit or administrative agency
proceedings, reasonably beyond the control of the Operator. In the
event that the Operator's performance is prevented by any such cause,
the time for performance shall be extended by the period during which
such cause was in effect.
14.05 In the event of the bankruptcy or receivership of the Operator, all
rights and privileges herein given to the Operator shall at the
option of the Village be forfeited and terminated.
Section 15. SALE, ASSIGNMENT OR TRANSFER. The Operator shall not sell,
-----------
assign or transfer its CATV System, nor transfer any rights or privileges
granted under this franchise without the approval of the Village unless the
transferee is an affiliated or subsidiary company of the Operator. Any sale,
assignment or transfer of the CATV System shall not be effective until the
transferee has filed in the office of the Village Clerk an instrument, duly
executed and acknowledged, acknowledging the fact of such sale, assignment or
transfer, accepting the terms and conditions of the franchise, and agreeing to
perform all the obligations thereunder and fully complying with all bonding and
insurance requirements herein contained.
-18-
<PAGE>
Section 16. TERM OF FRANCHISE. The franchise granted and authorized
-----------
by this Ordinance shall remain in full force and effect for a primary term of
fifteen (15) years from its effective date. The Operator at the end of said
primary term shall have an option to renew said franchise for an additional term
of fifteen (15) year upon reasonable terms to be negotiated by the Village and
the Operator for such additional term.
Section 17. FINAL TERMINATION OF THE FRANCHISE. Within sixty (60)
-----------
days of the termination of the franchise, or any renewal thereof, except for
underground cable, the Operator shall remove its Facilities from all property of
the Village and all space reserved for the Village's use on property belonging
to others. If not removed within such sixty (60) day period, the Village shall
have the right to remove or have its contractors remove such Facilities where
such removal is necessary and practical at the risk, cost and expense of the
Operator and with liability therefor.
Section 18. COMPLIANCE WITH LAWS. The franchise herein granted by
-----------
this Ordinance shall be subject to and controlled by all of the provisions of
the laws of the State of Illinois and of the United States, and State and
Federal regulations, now existing or hereafter enacted, and all permits required
in connection therewith shall be obtained by the Operator at its own expense.
Section 19. CONFLICTING ORDINANCES.
-----------
19.01 Where the provision of any prior ordinance or any portion
thereof is in conflict herewith, the terms of this Ordinance shall
apply.
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<PAGE>
19.02 Any subsequent Ordinance lawfully adopted by the Village shall
not specifically or directly affect the rights and privileges granted
by this franchise.
Section 20. SEPARABILITY. In the event any Section or part of this
-----------
Ordinance shall be held invalid, such invalidity shall not affect the remaining
Sections or portions of this Ordinance.
Section 21. EFFECTIVE DATE. The franchise granted by this Ordinance
-----------
shall, if accepted by the Operator within thirty (30) days after the final
passage of this Ordinance, be in full force and effect on or after
____________, 199_.
/s/
__________________________________
Village President
ATTEST:
/s/
__________________________________
Village Clerk
PASSED: April 10, 1995
______________
APPROVED: April 10, 1995
______________
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<PAGE>
VILLAGE OF VERNON HILLS
ORDINANCE NO. 96-58
------
AN ORDINANCE GRANTING A NEW
CABLE COMMUNICATION FRANCHISE TO
CABLE TV FUND 15-A, LTD.
WHEREAS, on July 15, 1980, the Vernon Hills Board of Trustees adopted
Vernon Hills Ordinance No. 335 granting a 15-year, non-exclusive franchise to
Centel Communications Company ("Centel") to construct, install, maintain and
operate a community antenna television system in the Village of Vernon Hills;
and
WHEREAS, on September 26, 1989, the Board of Trustees adopted Vernon Hills
Resolution approving the transfer of the franchise granted pursuant to Ordinance
No. 335 from Centel to Cable TV Fund 15-A, Ltd. (d/b/a "Jones Intercable"); and
WHEREAS, the franchise granted pursuant to Ordinance No. 335 was due to
expire on July 16, 1996; and
WHEREAS, the Village extended the term of Jones Intercable's franchise to
September 30, 1996; and
WHEREAS, Jones Intercable has requested that the Village renew the existing
franchise; and
WHEREAS, as part of the renewal process, the Village and Jones lntercable
have jointly developed, agreed to, and accepted a new franchise agreement, the
terms, conditions, and provisions of which are set forth in this Ordinance and
in the exhibits attached hereto; and
WHEREAS, pursuant to the Federal Cable Communications Policy Act of 1984,
as amended, 47 U.S.C. (S)(S) 521 et seq. (the "Cable Act") and Section 11-42-11
of the Illinois
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Municipal Code, 65 ILCS 5/11-42-11, the President and Board of Trustees are
authorized to license, franchise, and impose charges in connection with the
business of operating a cable communication system within the Village; and
WHEREAS, the Mayor and Board of Trustees believe that it is appropriate and
necessary to enact this Ordinance comprehensively amending and superseding
Ordinance No. 335:
NOW, THEREFORE, BE IT ORDAINED by the President and Board of Trustees of
the Village of Vernon Hills, Lake County and State of Illinois, as follows:
Section 1. Recitals. The foregoing recitals are incorporated herein as findings
- -------------------
of the President and Board of Trustees.
Section 2. Short Title. This Ordinance shall be known and referred to as the
- ----------------------
Vernon Hills Cable Communication Ordinance.
Section 3. New Cable Franchise. Vernon Hills Ordinance No. 335, including all
- ------------------------------
amendments thereto, shall be, and it is hereby, comprehensively amended,
replaced, and superseded by this Ordinance to establish and create a new Vernon
Hills Cable Communication Franchise as follows:
2
<PAGE>
VILLAGE OF VERNON HILLS
CABLE COMMUNICATION FRANCHISE
PART 1: PURPOSES AND POLICIES
1-1: Purposes and Policies. The purposes and policies of this Franchise are to:
A. Provide assurance that cable television and communication systems are
responsive to the needs and interests of the Village and its residents;
and
B. Grant to Jones Intercable a franchise to permit the use of Village streets
and other public ways for a cable communication system, but only to the
extent and only in the manner provided in this Franchise; and
C. Provide for the regulation by the Village of the erection, construction,
reconstruction, installation, operation, maintenance, dismantling,
testing, repair, and use of the cable communication system or cable system
authorized pursuant to this Franchise, in, upon, along, across, above,
over, or under, or in any other manner connected with, the streets and
other public ways in the Village; and
D. Provide for the payment by Jones Intercable of fees and other valuable
consideration to the Village (1) in exchange for the privilege of having
been granted the Franchise and the use permitted herein of Village streets
and other public ways; and (2) to compensate the Village for the costs
associated with such use and with the regulation and administration of the
Franchise; and
E. Provide for the development of a cable communication system as a means to
improve communications between and among, and to otherwise serve the
present and future needs of, the government, the citizens, the private and
public institutions and organizations, and the commercial enterprises of
the Village and surrounding communities; and
F. Provide for remedies and prescribe penalties for violations of this
Franchise.
PART II: DEFINITIONS AND INTERPRETATION
2-1: Definitions.
A. The following terms, phrases, words, and their derivations shall have the
meanings hereafter ascribed to them.
1. "Activation" of a Cable system or a Cable Communication System shall be
------------
deemed to occur, unless otherwise provided herein, on the first date that
trunk and feeder cable have been installed and constructed so as to be
available to serve any potential
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<PAGE>
Subscriber at levels of equipment and service standards in compliance with
the provisions of this Ordinance.
2. "Authorized Agent" means any Person, department, board, commission, or
------------------
agency that is delegated authority or designated by the Board of Trustees
of the Village to act for the Village in matters related to cable
communications. "Authorized Agent" shall include such Person, department,
board, commission, or agency only when he, she, or it is acting within the
scope of authority granted by the Board of Trustees.
3. "Basic Service" means any level of service which includes the retrans-
---------------
mission of local television signals.
4. "Board" or "Board of Trustees" means the President and Board of Trustees
-----------------------------
of the Village or their Authorized Agent.
5. "Cable Communication System" or "Cable System" means all or any part of
---------------------------- --------------
any facility operating by means of coaxial cable, optical fiber, or other
transmission, and associated equipment, devices, and facilities, the
primary function of which is to receive, through any means including
without limitation coaxial cable, optical fiber, or satellite or microwave
transmission, and to distribute the signals of one or more broadcast
television or radio stations and of other sources of video, audio, voice,
or data signals. Said facility, or any part thereof, also may be one that
distributes to, from, or among Subscribers or other Persons such other
video, audio, voice, or data signals as may originate within the Village
or elsewhere. "Cable Communication System" and "Cable System" shall
include, without limitation, (a) "cable system," as defined in Section
522(6) of the Cable Act; (b) community antenna television system," as
defined in Section 11-42-11 of the Illinois Municipal Code; and (c) any
system that provides any "cable service," as defined in Section 522(5) of
the Cable Act, or any "cable television service." as defined in Section
16-10(a)(1) of the Illinois Criminal Law and Procedure Code, as either of
those statutes may be amended from time to time. The definition of "Cable
Communication System" and "Cable System" shall not be deemed to
circumscribe any valid authority of any governmental body, including the
Village, to regulate the activities of telephone or telegraph companies,
or the provision of any Service over the Cable System that is not a "cable
service" as such term is defined in the Cable Act.
6. "Cable Drop" means the cable or other wires extending from the attachment
-----------
pole to the subscriber receiving cable service, and that conducts the
cable system signal from the attachment pole to the subscribers receiving
or transmitting equipment. "Cable Drop" shall include the cable that is
installed within the structure receiving the Cable Service and the
transformer that matches the impedance of the cable to the input leads of
the receiving equipment.
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<PAGE>
7. "Cable Ordinance" or "Ordinance" means Vernon Hills Ordinance No. ____,
-------------------------------
being the Vernon Hills Cable Communication Ordinance, including all
exhibits, modifications, and amendments thereto.
8. "Cable Service" Shall mean: (1) the one-way transmission to subscribers of
---------------
video programming and (ii) subscriber interaction, if any, which is
required for the selection of such video programming.
9. "Cable Service Area" means all residential areas within the Village to be
--------------------
provided with access to cable service in accordance with the Franchisee's
provision of service policies contained in this Franchise.
10. "Channel" means a band of frequencies, in the electromagnetic spectrum, or
---------
any other means of transmission (including, without limitation, optical
fibers or any other now available or that may become available) capable of
carrying a video signal, an audio signal, a voice signal, or a data
signal.
11. "Connection" means the attachment of the Cable Drop to the radio or
------------
television receiver of a Subscriber, including the installation of a
Converter where applicable and necessary.
12. "Community Access Channel" means a Channel specifically designated,
--------------------------
intended, and reserved for noncommercial, origination programming on a
first-come, first-served, nondiscriminatory basis, to provide the general
public with maximum availability of low-cost access to television
production, transmission, and communication capability.
13. "Control" or "Controlling Interest" means actual working control in
--------- ----------------------
whatever manner exercised.
14. "Converter" means an electronic device that converts, signals to a
-----------
frequency not susceptible to off-air interference, within the receiver of
a Subscriber, and that, by an appropriate Channel selector, also permits a
Subscriber to view or use all signals delivered in the Basic Service and
all other Services delivered at designated converter dial locations for
which the Subscriber pays a fee.
15. "Extensive System Failure" means (a) the failure of any trunk or feeder
--------------------------
cable causing a service outage of 10 or more Subscribers in the same
geographic area, or (b) the failure of modular equipment, satellite
reception equipment, or other System functions that results in the
interruption of Service throughout the Cable Service Area.
16. "FCC" means the Federal Communications Commission as constituted by the
-----
Communications Act of 1934, or any successor agency created by the United
States Congress.
5
<PAGE>
17. "Franchise" means the nonexclusive right to make use of the Public Ways in
-----------
the Village, or within specified areas of the Village, for the purpose of
constructing and operating a Cable Communication System, as granted to
Franchisee pursuant to Vernon Hills Ordinance No. ___. "Franchise" does
not include any license or permit required for the privilege of
transacting and carrying on a business within the Village as may be
required by Village ordinances and laws.
18. "Franchisee" means Cable TV Fund, 15-A, Ltd. and any and all of its
------------
agents, employees, lawful successors, transferees, or assignees.
19. "Franchise Fee" means the fee required to be paid by the Franchisee
---------------
pursuant to Subsection 4-6A of this Franchise.
20. "Gross Revenue" means all revenue, as determined in accordance with
--------------
generally accepted accounting principles, that is derived, directly or
indirectly, by the Franchisee from or in connection with the provision of
Cable Service including without limitation (a) the distribution of any
Cable Service over the Cable System; (b) installation, reconnection, and
similar fees; fees paid for Channels designated for commercial use; (c)
Converter rentals and sales; (d) studio and other facility or equipment
rentals; (e) advertising revenues. "Gross Revenue" shall not include any
taxes imposed directly on any Subscriber or user by a state, local, or
other governmental unit; bad debts; Franchise Fees; subscriber deposits;
and programming fees paid by the Franchisee for non-broadcast program
expenses.
21. "Installation" means the process of installing a Cable Drop and completing
--------------
a Connection of the Cable System.
22. "Person" means any natural person, or any association, firm, partnership,
--------
joint venture, corporation, or other legally recognized entity or
organization, whether for-profit or not-for-profit, but excluding the
Village.
23. "Public Property" means any real property owned by any governmental unit,
-----------------
other than a Public Way.
24. "Public Way" means, except where expressly limited by this Ordinance and,
------------
in any event, only to the extent necessary to permit the installation and
maintenance of a Cable System, 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, conduit, tunnel,
park, parkway, waterway, utility easement (as defined in Section 541 of
the Cable Act) or other public right-of-way now or hereafter held by the
Village or dedicated for use by the Village, use by the general public. No
reference in this Ordinance to "Public Way" shall be deemed to be a
representation or guarantee by the Village that its title or interest in
any property is sufficient to permit its use for such purpose, and this
Ordinance shall, by the use of such term, be deemed
6
<PAGE>
to grant only such rights to use property in the Village as the Village
may have the right and power to grant in this Ordinance.
25. "Resident" means any Person residing in the Village or as otherwise
----------
defined by applicable law.
26. "Service" means any Cable Service, non-cable or any other service, whether
---------
originated by the Franchisee or any other person.
27. "Subscriber" means any Person who lawfully receives, or has legally
------------
contracted for the right to receive, any Cable Service by means of or in
connection with the Cable System, and does not future distribute said
Cable Service.
28. "Village" means the Village of Vernon Hills and its Board of Trustees.
---------
Unless the Board of Trustees shall have designated an Authorized Agent to
act for the Village, references in this Franchise to actions by the
Village shall be construed to refer to actions by the Board of Trustees.
B. Any word or term defined in the Cable Act but not defined in Subsection
2.IA of this Franchise shall have the meaning set forth in the Cable Act.
2-2: Interpretation.
A. Word Use. When not inconsistent with the context, any word used in the
present tense includes the future tense, any word used in plural includes
the singular, and any word used in the singular includes the plural.
"Shall" and "will" are always mandatory and not merely directory. "May" is
permissive.
B. Federal and State Law. This Franchise is adopted pursuant to the authority
of the Village under the Cable Act and the Constitution and statutes of
the State of Illinois. Where any provision of this Franchise conflicts
with any provision of federal or State law, this Franchise shall control
to the full extent permitted by law.
C. Prior Drafts. In no event shall prior drafts of this Franchise, or any
exhibits to this Franchise, if any, be used, considered, or relied upon in
any way to interpret or construe any provision of this Franchise, or any
exhibit to this Franchise.
D. Headings. The headings contained in this Franchise are to facilitate
reference only, do not form a part of this Franchise, and shall not be
used, considered, or relied on in any way to interpret or construe any
provision of this Franchise or any exhibit to this Franchise.
7
<PAGE>
PART III: GRANT AND ACCEPTANCE OF FRANCHISE
3-1: Grant of Franchise. Pursuant to and in strict accordance with the terms,
provisions, and conditions set forth in this Franchise, the Village hereby
grants to the Franchisee this nonexclusive Franchise to construct, install,
maintain and operate a Cable System in the Village and to use the Public Ways in
furtherance thereof; provided, however, that no such grant shall be effective
unless and until the Franchisee accepts terms and provision of this Franchise
pursuant to the requirements set forth in Section 3-2 of this Franchise.
3-2: Acceptance of Franchise; Effective Date. In order to accept the Franchise
or to receive any of the rights, benefits, or interests to be granted hereby,
the Franchisee shall execute and file with the Village Clerk, no later than 60
days after this Franchise has been finally approved by the Village Board, a
Franchise Acceptance Agreement in form and substance the same or substantially
similar to Exhibit A, attached hereto and incorporated herein (the "Franchise
Acceptance Agreement"). For reference purposes and for all other purposes stated
herein, the date on which this Franchise takes effect pursuant to Section 4 of
this Franchise shall be deemed to be the "Effective Date" of this Franchise.
3-3: Effect of Franchise Acceptance. By accepting the Franchise pursuant to
Section 3-2 of this Franchise, the Franchisee shall be deemed to have agreed to
be bound by ail of the terms, conditions, and provisions set forth in this
Franchise, and to strictly comply with each and every one of them.
3-4: Licenses and Permits. Nothing in this Franchise shall take the place of or
supersede other license or permit that the Franchisee is required to obtain to
construct, install, maintain, and operate a Cable System in the Village.
3-5: Franchise Term. The Franchise granted pursuant to this Ordinance shall be
effective for a period of fifteen (15) years from and after the Effective Date.
3-6: Nonexclusivity of Grant. Village reserves the right to award additional
Franchises; so long as in the event another person uses the public rights-of-way
to construct, operate or maintain a Cable System, or otherwise uses the streets
for the delivery of any Service, the additional Franchise may not be on material
terms and conditions which are more favorable or less burdensome than those
applied to Franchisee, with respect to the following matters: (1) the term of
any such authorization shall be no more than the term of this Franchise; (2) the
Franchise Fee assessed on any such other person shall be no less, as a percent
of the portion of the persons Gross Revenues that are attributable to its
provision of any Service, than the fee Franchisee pays under this Franchise; and
(3) the channels, support and facilities for public, educational and government
access channels provided by any such other person shall be no less than the
channels, support and facilities provided by the Franchisee.
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<PAGE>
PART IV: FRANCHISE CONDITIONS
4-1: Franchise Variance. Variance Initiated by Franchisee. Franchisee may make
applications for a Variance to this Franchise, to accommodate a significant
change in circumstances, to prevent unreasonable hardship to the Franchisee, or
to permit technical variations which will satisfy the purpose of this Franchise,
may be made by the Franchisee to the Village. The Village shall review the
application within fourteen (14) calendar days, or earliest meeting of the
Village Council, and shall issue a report of the findings of the Village and
shall act on a request within thirty (30) days. The Village is under no
obligation to grant a request for a Variance under this section, provided that
the Village's consent to a request for a variance shall not be unreasonably
withheld. Franchisee may appeal a final determination by the Village to a court
of competent jurisdiction.
4-2: Performance Evaluation Meetings.
A. Regular Evaluation Meetings. The Village and the Franchisee shall hold
regular performance evaluation meetings within 30 days after the second
anniversary date of the Effective Date. All such evaluation meetings shall
be noticed in advanced and open to the public.
B. Special Evaluation Meetings. Special evaluation meetings may be held at
any time during the term of this Franchise on the written request of
either the Village or the Franchisee.
C. Elements of Evaluation. Topics that may be discussed at any regular or
special evaluation meeting may include specifically, but without
limitation, programming, Subscriber rate structures, Franchise Fees, free
or discounted Service, penalties, application of new technologies, Cable
System performance, Services provided, Subscriber and community
complaints, privacy, modification to this Ordinance, judicial and FCC
rulings, line extension policies, and the Franchisee or Village rules and
regulations.
D. Franchisee Cooperation. The Franchisee shall fully cooperate with the
Village in all matters relating to any regular or special evaluation
pursuant to this Section and shall, provide such reasonable information,
data, and documents as the Village may reasonably request in connection
with any such evaluation.
4-3: Franchise Renewal.
A. Renewal Request Requirements. The Franchisee may file a written request to
renew the Franchise; provided, however, that unless the Village shall
consent to some lesser notice, the Franchisee's renewal request shall be
filed in accordance with federal law.
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<PAGE>
The Franchisee's renewal request shall include all data and information
that the Franchisee considers pertinent in support of the request and the
Franchisee's specific proposals, if any, for revision or modification of
this Franchise.
B. Franchise Renewal Standards. This Franchise may be renewed if:
1. the Franchisee has substantially complied with the material terms of
the existing Franchise and with applicable laws;
2. the quality of the Franchisee's service has been reasonable in light
of community needs;
3. the Franchisee has the financial, legal, and technical ability to
provide the services, facilities, and equipment set forth in the
Franchisee's proposal, and
4. Franchisee's proposal is reasonable to meet the future cable-related
community needs and interests, taking into account the cost of
meeting such needs and interests.
C. Renewal Proceeding. In any renewal proceeding, the Franchisee shall be
afforded adequate notice and the Franchisee and the Village, or its
designee, shall be afforded fair opportunity for full participation,
including the right to introduce evidence, to require the production of
evidence, and to question witnesses. A transcript shall be made of any
such proceeding.
1. A proceeding under this subsection shall be completed within twelve
(12) months of its commencement, within which time the Village shall
issue a written decision granting or denying the proposal for renewal
based upon the record of such proceeding, and transmit a copy of such
decision to the Franchisee. Such decision shall state the reasons
therefor.
2. Any denial of a proposal for renewal shall be based on one or more
adverse findings made with respect to the factors described in
subsection B, pursuant to the record of the proceeding under this
subsection. Village may not base a denial of renewal on a failure to
substantially comply with the material terms of the Franchise under
subsection B or on events considered under subsection B unless the
Village has provided Franchisee with notice and the opportunity to
cure, or in any case in which it is documented that the Village has
waived its right to object, or Franchisee gives written notice of a
failure or inability to cure and the Village fails to object within a
reasonable time after receipt of such notice.
3. Franchisee is expressly reserved its rights of appeal under federal
and state law. In addition to such rights, this Franchise shall
remain in effect at all times
10
<PAGE>
during which a renewal proceeding or appeal remains pending.
Notwithstanding the provisions of subsections A through C of this
Section, Franchisee may submit a proposal for the renewal of the
Franchise, and Village may, after affording the public adequate
notice and opportunity for comment, grant or deny such proposal at
any time (including after proceedings pursuant to this Section have
commenced). The denial of a renewal pursuant to this subsection shall
not affect action on a renewal proposal that is submitted in
accordance with subsections A through C.
4. Village may not, upon the expiration of this Franchise, or otherwise,
acquire an ownership interest in the System, or require a sale of the
System to any other person, unless Village or such other person
acquires the ownership interest at not less than fair market value
for the System as a going concern.
D. Franchise Expiration; Temporary Extensions. If no request for renewal is
filed pursuant to this Section, and in any case in which such a request is
filed but denied or not yet granted, this Franchise shall expire according
to its terms; provided, however, that the Village may extend the term of
this Franchise in such increments as is reasonable while considering a
franchise renewal request filed pursuant to this Section or while
negotiating a new franchise with another Person.
E. Village Rights on Expiration and Nonrenewal. If this Franchise expires
according to its terms, or if the Village exercises its right not to renew
the Franchise pursuant to Subsection 4-4 of this Franchise, then the
Village shall have the option to require the Franchisee to remove all such
assets from the Public Ways in the manner and within the times set forth
in Subsection 4-5 of this Ordinance.
4-4: Termination.
A. Date of Termination. The termination of the Franchise granted pursuant to
this Ordinance and all of the rights granted to the Franchisee pursuant
hereto shall take place on the earlier of:
1. the revocation of the Franchise by action of the Village, as provided
in Section 4-5 of this Ordinance;
2. the abandonment of the Cable System (for purposes of this section
abandonment of the Cable System shall take place when the Franchisee
fails to provide any Cable Service over the Cable System for a period
greater than 7 days) in whole or material part, by the Franchisee
without the express, prior written approval of the Village; or
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<PAGE>
3. the expiration of the term of the Franchise, if not renewed pursuant
to Section 4-3 of this Franchise.
B. Rights Upon Termination. If, on the date that this Franchise terminates
pursuant to Section 4-4 of this Ordinance, the Franchisee is in possession
or control of the Franchise or the Cable System, then, as of that date:
(1) the Franchisee shall have no right to operate or receive any
revenues from the operation of the Cable System and shall cease all
construction and operation activities in a prompt and workmanlike manner,
except as provided in subsection C below, or as otherwise authorized or
directed by the Village in order to maintain continuity of all services to
all Subscribers; and (2) the Village shall have the right to order the
removal, or to effect a transfer of the Cable System, as provided in
Subsection 4-6 of this Ordinance.
C. Mandatory Continuity of Service. In the event of purchase by the Village,
or a change of the Franchisee, the current Franchisee shall continue to
operate the Cable System and maintain continuity of service to all
Subscribers for a period determined by the Village, in the Village's sole
judgment and discretion; provided, however, that in no case shall such
period exceed three (3) months. The Franchisee shall be entitled to
receive any and all applicable revenue from such continued operation.
4-5: Franchise Revocation.
A. Grounds for Revocation. The Village may revoke this Franchise only after a
declaration of intent to revoke and only if the Franchisee refuses,
neglects or fails to (1) commence and complete construction of the Cable
System pursuant to the terms and conditions of this Franchise; (2)
Franchisee makes a material misrepresentation to Village of information
required to be provided under the Franchise; (3) Franchisee willfully or
persistently violates any material orders or rulings of any regulating
body having jurisdiction over the Franchise; (4) Franchise willfully fails
to acquire the insurance required by the Franchise; (5) Franchisee is
adjudged insolvent or becomes unable or unwilling to pay its uncontested
debts as they become due or is adjudged bankrupt or seeks relief under the
bankruptcy code, or (b) Franchisee, materially violates the transfer
provisions of Section 4-9.
B. Revocation Procedures. If the Village determines that grounds for
revocation exist or have existed, then the Village shall notify the
Franchisee in writing of its intent to revoke and the lawful grounds
therefore. If, within 90 days after such written notification, the
Franchisee does not furnish evidence satisfactory to the Village that the
grounds for revocation have been eliminated or that corrective action has
been taken or is being actively and expeditiously pursued, or that the
alleged grounds did not exist, or that the allege grounds were caused by a
Force Majeure, then the Village shall call, notice, and conduct a public
hearing to consider revocation of the Franchise. The Village shall give
the Franchisee no fewer than 15 days written notice of the revocation
hearing. Such hearing shall provide Franchisee with full due process
rights
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Any decision shall be in writing and shall be based upon written findings
of fact. If the Village, after such hearing, finds that grounds for
revocation exist, then the Village may thereon and in lieu of or in
addition to any other rights or remedies available to it, revoke, by
ordinance duly adopted, this Franchise.
C. De Novo Review. In the event the Village orders termination of the
Franchise, the Franchisee shall have the right to appeal the determination
of the Village within thirty (30) days to any agency or court of competent
jurisdiction for de Novo review. The Village's determination to terminate
-- ----
this Franchise shall not be effective until final resolution of all
appeals under this Section.
D. No Election of Remedies. The revocation of this Franchise pursuant to this
Section shall in no way affect any other rights the Village may have under
this Franchise or any applicable law.
4-6: Disposition After Termination.
Upon termination of this Franchise, the Village shall have the right to direct
the Franchisee to remove, at the Franchisee's sole cost and expense, all or any
portion of the Cable System from all Public Ways and other Public Property
within the Village, subject to the following terms and conditions:
1. This Subsection 4-5 shall not apply to buried cable, which shall not
be removed.
2. In removing the Cable System, or any portion thereof, the Franchisee
shall refill and compact, at its sole cost and expense, any resulting
excavation and shall leave all Public Ways and other property in as
good a condition as that prevailing immediately prior to the
Franchisee's removal activities or excavation.
3. The Village shall have the right to inspect and approve the condition
of all Public Ways and property affected by any of the Franchisee's
removal activities.
4. The financial security, liability, indemnification, and insurance
provisions of this Franchise shall remain in full force and effect
until the Village has inspected and approved the completion of all of
Franchisee's removal obligations required pursuant to this
Subsection.
5. The Franchisee shall commence removal activities no later than 30
days after the Franchisee receives the Village's removal order.
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6. The Franchisee shall complete all removal activities no later than
180 days after the date on which the Franchisee is required to
commence removal activities pursuant to this Subsection 4-5 of this
Franchise.
7. If the Franchisee fails to substantially complete such removal within
180 days after the date on which the Franchisee is required to
commence removal activities pursuant to this subsection, then, to the
extent not inconsistent with applicable law, the Village shall have
the right to: (a) declare all rights, title, and interest to the
Cable System, and any portion thereof, to belong to the Village along
with all rights of ownership including, without limitation, the right
to operate the Cable System or to effect a transfer of the Cable
System to another Person for operation; or (b) authorize another
Person, including the Village, to remove the Cable System, or portion
thereof as designated by the Village, at the Franchisee's sole cost
and expense.
4-7: Franchise Fee and Other Payments.
A. Franchise Fee.
1. Amount of Fee.
A. In addition to all other fees and payments required pursuant to
this Ordinance, the Franchisee shall pay to the Village a
Franchise Fee in an amount equal to 5 percent of the Franchisee's
annual Gross Revenues (the "Franchise Fee"). The Franchise Fee
shall be in consideration of the privilege granted pursuant to
this Ordinance, to the Franchisee, to use the valuable Public
Ways and the expense of regulation and administration of the
Franchise.
B. The Franchisee shall not be obligated to pay to the Village this
Franchise Fee from the date of grant of a second Cable Television
Franchise in the Village, until such time as the Village
establishes a Village-owned and operated public, educational and
governmental access studio in the Village, and ceases to use
Franchisee's local origination studio in the Village. Under no
circumstance, shall this period of time extend past May 31, 1997.
2. Time of Payment. The Franchisee shall pay Franchise Fees on a
quarterly basis, before the fifteenth (15) day of the month following
the end of the calendar quarter. If any Franchise Fee is not paid when
due, interest shall be charged from the due date at the prime rate
given by the First Chicago Bank to its most credit worthy borrowers of
demand loans. If any subsequent inspection, audit, or recomputation
conducted pursuant to Paragraph 4-6A(4) of this Franchise demonstrates
to the satisfaction of the Village that the required
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Franchise Fee was either overpaid or underpaid, the next Franchise Fee
due following the Village's notification to the Franchisee of approval
of such inspection, audit, or recomputation shall be adjusted
accordingly, either by being credited for the amount of the
overpayment or by being increased in the amount of the underpayment.
3. Required Reports. The Franchisee shall include, with each quarterly
Franchise Fee payment, a statement, verified by a representative of
the Franchisee, clearly showing the Franchisee' Gross Revenues during
said calendar quarter and the Franchise Fee due with respect to such
Gross Revenues pursuant to Paragraph 4-6A(1) of this Franchise. The
Franchisee shall also file, within 90 days after the last day of the
Franchisee's fiscal year, an annual report prepared at Franchisee's
sole cost and expense, by a certified public accountant, clearly
showing the Franchisee's total Gross Revenues for said fiscal year and
explaining and reconciling any differences between such report and the
quarterly reports submitted to the Village by the Franchisee pursuant
to the first sentence of this Paragraph.
4. Village Inspection and Audit. The Village shall have the right to
inspect and audit the Franchisee's books and records upon reasonable
request during normal business hours at the Franchisee's local office
for a period of six months after receipt of the Franchise fee payment,
after which payments shall be final. Based on any such inspection and
audit, the Village shall have the right to recompute any Franchise Fee
due. Whenever an independent auditor shall certify that the results of
any such Village inspection, audit, or recomputation demonstrate that
the Franchise Fee due in any fiscal year was underpaid by more than
five (5) percent, the Franchisee shall reimburse the Village, in
addition to paying the amount due and any interest or penalties due
thereon, for the costs of such inspection, audit, or recomputations.
5. Acceptance by Village. The acceptance by the Village of any Franchise
Fee payment shall not in any way be construed as an accord that the
amount paid is in fact the correct amount, nor shall such acceptance
of any payment be construed as a release of any claim the Village may
have for further or additional sums payable under the provisions of
this Ordinance. All Franchise Fee payments shall be subject to audit
and recomputation by the Village in accordance with paragraphs 4-6A(4)
of this Franchise.
6. Acknowledgment by the Franchisee. The Franchisee acknowledges as
follows:
The Franchise Fee shall be in addition to any and all taxes or other
fees or charges that the Franchisee shall be required to pay to the
Village or to any state or federal agency or authority, all of which
shall be separate and distinct
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obligations of the Franchisee and its affiliates, except that any
taxes, fees, or assessments of any kind imposed on a cable operator or
cable subscriber, or both, solely because of their status as such, or
any tax, fee or assessment which is unduly discriminatory against
cable operators or cable subscribers, shall be considered as part of
the franchise fee; and
7. Change in Franchise Fee. In the event that the maximum allowable
Franchise Fee is increased by the FCC and Village desires an increase
in its Franchise Fee payment, the Village shall provide the Franchisee
with written notice of its desire to increase the fee, and the Village
and Franchisee shall enter into good faith negotiations concerning an
increase in the franchise fee payment. In the event another provider
of video programming, including video dialtone, uses the Public
rights-of-way for purposes of constructing, operating and maintaining
a facility for the distribution of Video programming, the Franchisee
shall not be required to pay a franchise fee on the portion of its
Gross Revenues derived from its provision of any service unless such
other provider is also required to pay a franchise fee on the same
portion of its gross revenues attributable to its provision of that
service. The fee payable by the Franchisee, as a percentage of any
portion of its Gross Revenues, shall not exceed the percentage payable
by the other provider on the same portion of its Gross Revenue.
B. Other Payments.
1. Acknowledgement by the Franchisee. The Franchisee acknowledges that
all contributions, Services, equipment, facilities, support,
resources, and other activities to be paid or supplied by the
Franchisee pursuant to this Franchise are for the benefit of all
Subscribers and the public at large. The Franchisee also acknowledges
that said contributions, Services, equipment, facilities, support,
resources, and other activities shall not be deemed to be a part of
the Franchise Fee or chargeable against the Franchise Fee, except as
federal law allows. The Franchise Fee shall take precedence over all
other payments, contributions, services, equipment, facilities,
support, resources, and other activities to be paid or supplied by the
Franchisee.
2. Continuation of Service. In the event the Franchisee continues to
operate all or any part of the Cable System after this Franchise
expires, then the Franchisee shall continue to comply with all
applicable provisions of this Franchise, including specifically, but
without limitation, all Franchise Fee and other payment provisions
throughout the period of such continued operation.
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4-8: Liability, Indemnification, Insurance, and Performance Bond.
A. Liability.
1. Franchisee. The Franchisee shall be responsible for any and all
damage or loss to any real or personal property of the Village or of
any Person, and for any injury to or death of any individual Person,
or any officer, employee, or agent of the Village, arising out of or
in connection with the Franchisee's construction, operation,
maintenance, repair, or removal of the Cable System. The Franchisee
shall, at its sole cost and expense, replace, repair, and restore all
such property to its prior condition, and shall pay all legal damages
in the event of any such injury to or death of any individual or any
injury to property.
2. Village. Neither the Village nor its officers, employees, or agents
shall be liable for any loss or damage to any real or personal
property of any Person, or for any injury to or death of any
individual Person, arising out of or in connection with the
Franchisee's construction, operation, maintenance, repair, or removal
of, or other action or event with respect to the Cable System, or the
distribution of Cable Service over the Cable System.
3. Emergency and Other Actions.
A. The Village may, at any time in case of fire, disaster, or other
emergency as determined by the Village in its reasonable
discretion, cut or move any of the wires, cables, amplifiers,
poles, appurtenances, or other parts of the Cable System as
necessary to respond to the fire, disaster, or other emergency.
If the Village takes any such emergency action, then the Village
shall not be liable therefor to the Franchisee or any affiliate
of the Franchisee. When practical in the Village's reasonable
discretion, the Village shall consult with the Franchisee before
the Village takes any such emergency action, and the Village
shall give the Franchisee reasonable opportunity to perform such
emergency work itself.
B. The Village shall consult with the Franchisee at least forty-five
(45) days before undertaking any public work, public improvement,
alteration of any, municipal structure, any change in the grade
or line of any public way, or the elimination or discontinuation,
and closing of any public way, that may result in the breaking
through, movement, removal, alteration, or relocation of any part
of the Cable System. The Franchisee shall be given the
opportunity to perform such work pertaining to the cable system
itself.
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C. Neither the Village nor its officers, employees, or agents shall
be liable to the Franchise or any affiliate of the Franchisee for
any special, incidental, consequential, punitive, or other
damages as a result of the exercise of any right of the Village
pursuant to this Franchise, including without limitation the
right of the Village to terminate this Franchise and to take any
action subsequent thereto.
B. Indemnification.
1. Hold Harmless. The Franchisee shall save, indemnify, and hold the
Village and its corporate authorities, elected and appointed
officials, officers, boards, commissions, legal counsel, employees,
and agents harmless from any injury, claim, demand, suit, judgment,
execution, liability, debt, damages, or penalty (the "Claims") arising
out of, resulting from, or alleged to arise out of or result from the
Franchisee's construction, operation, maintenance, repair, or removal
of the Cable System, whether such acts or omissions are those of the
Franchisee or its officers, employees, agents, or contractors, and
whether any such act or omission is authorized, allowed, or prohibited
by this Franchise.
2. Defense. The Franchisee shall pay all expenses incurred in defense of
any claims. The Village must give the Franchisee timely written notice
of the making of any claim or of the commencement of any action, suit
or other proceeding for which coverage is requested pursuant to the
indemnity provisions of this Section. In the event such claim arises,
the Village or any other indemnified party shall tender the defense
thereof to the Franchisee and the Franchisee shall have the right to
defend, settle or compromise any claims arising hereunder and the
Village shall cooperate fully therein.
C. Insurance.
1. General Liability. The Franchisee shall carry and maintain,
throughout the term of this Franchise, liability insurance insuring
the Franchisee, the Village, and the Village's officers, boards,
commissions, elected and appointed officials, agents, and employees
with regard to any of the matters listed in Paragraphs 1 and 2 of
Subsection 4-8B of this Franchise, and in the minimum amounts as
follows:
A. $2,500,000 for bodily injury or death to each Person.
B. $2,000,000 for property damage resulting from any one accident.
C. $2,000,000 for all other types of liability.
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2. Automobile. The Franchisee shall carry and maintain in its own name
automobile liability insurance with a limit of $2,000,000 for each
Person and $2,000,000 for each accident for property damage with
respect to owned and non-owned automobiles for the operations of which
the Franchisee is responsible.
3. Hazard. Because the Franchisee is authorized by this Franchise to
undertake certain work within the Public Ways, the Franchisee's
insurance shall cover comprehensive form, premises-operations,
explosions and collapse hazard, underground hazard and products
completed hazard, in the minimum amount of $3,000,000, or whatever
limits are permitted by the State of Illinois for bodily injury and
property damage combined.
4. Evidence of Insurance Policies. Within thirty (30) days of the filing
of the Franchise Acceptance Agreement pursuant to Section 3-2 of this
Franchise, the Franchisee shall furnish proof to the Village that the
insurance policies required by this Subsection have been obtained,
along with written evidence of payment of the required premiums, in
the form of a certificate of insurance.
5. Maintenance of Insurance Policies. The insurance policies required by
this Subsection shall be carried and maintained by the Franchisee
throughout the term of this Franchise and such other period of time
during which the Franchisee operates or is engaged in the removal of
the Cable System as subject to Village inspection and approval. Each
such insurance policy shall contain the following endorsement: "It is
hereby understood and agreed that this policy may not be cancelled nor
the intention not to renew be stated until 30 days after receipt by
the Village of Vernon Hills, by registered mail, of a written notice
addressed to the Village Administrator of such intent to cancel or not
to renew."
6. No Limit of Liability. The legal liability of the Franchisee to the
Village and any Person for any of the matters that are the subject of
the insurance policies required by this Subsection shall not be
limited by said insurance policies nor by the recovery of any amounts
thereunder.
D. Performance Bond
The Franchisee shall maintain through the term of this Ordinance, a
faithful performance bond running to the Village, with a good and
sufficient surety to be approved by the Village, in the penal sum of
$100,000 on the condition that the Village shall well and truly observe,
fulfill and perform in connection with each provision, term and condition
of this Ordinance, and that in case of any breach, the Village shall be
entitled to recover from the principal and sureties on such bond that
amount of any damages and all costs and attorney's fees incurred by the
Village,
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proximately resulting from the failure of the Village to well and
faithfully observe and perform under any and all of the provisions, terms
and conditions which this Ordinance requires it to perform.
4-9: Sale, Transfer, and Similar Actions
A. Village Approval Required. In the event of a change of control of
Franchisee, the parties to the sale or transfer shall make a written
request to the Village for its approval of the sale or transfer. The
written request shall be accompanied by information required by FCC rules
and shall be presented on a form as prescribed by FCC rules.
B. In accordance with the Cable Act, the Village shall have 120 days from
receipt of the information referred to in Subsection (a) above to act upon
the request for approval. If the Village fails to render a final decision
on the request within that time, the request shall be deem granted unless
the Franchisee and the Village agree, in writing, to an extension of the
time.
C. During the review period described in Subsection (b) above, the Village may
advise Franchisee that a public hearing is deemed necessary to evaluate any
potential adverse effect of the sale or transfer upon Franchisee's
subscribers. In such event, Franchisee shall receive written notice of the
hearing, and of the opportunity to participate fully in it, as far in
advance as possible, in no event less than fourteen (14) days before the
start of the hearing.
D. A decision of the Village upon a request pursuant to this Section shall be
in writing and subject to review and appeal as provided for in the Cable
Act.
E. In reviewing a request for a sale or transfer pursuant to this Section, the
Village may inquire into the technical, legal and financial qualifications
of the prospective controlling party, and the Franchisee shall assist the
Village in so inquiring. The Village shall not unreasonably withhold its
approval. In no event shall a transfer or assignment of ownership or
control be approved without the transferee or assignee assuming, in
writing, the obligations of Franchisee under this Agreement.
F. Notwithstanding anything to the contrary in this Agreement, no consent or
approval by the Village shall be required for a transfer or assignment for
any (1) assignment, pledge, lease, sublease, mortgage, hypothecation, or
other transfer of all or any part of the Franchise, or any right or
interest therein, for solely financing purposes, or (2) any assignment or
transfer to any parent, affiliate, or subsidiary company of the Franchisee.
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4-10: Foreclosure, Condemnation, and Receivership.
A. Foreclosure. The Franchisee shall notify the Village immediately whenever
the Franchisee becomes aware of (1) any foreclosure or other judicial sale
of all of any part of the Cable System, or (2) the termination of any
lease or mortgage covering all or any part of the Cable System. Said
notification shall be treated as a notification of a Consent Action, as
defined in Subsection 4-9 of this Franchise, and the terms, conditions,
and provisions of Section 4-9 of this Franchise, including the
requirement for Village approval, shall apply to any such Consent Action.
B. Condemnation. If the Cable System, or any part thereof, is taken,
appropriated, or condemned pursuant to law, and if any such taking,
appropriation, or condemnation materially frustrates or impedes the
ability of the Franchisee to comply with the terms, conditions, and
provisions of this Franchise, then the Village may revoke the Franchise in
accordance with the applicable provisions of this Franchise.
C. Receivership.
1. Franchisee Notification. The Franchisee shall immediately notify the
Village, in writing, if any of the following occur:
A. The Franchisee files a voluntary bankruptcy petition, a
voluntary petition to reorganize its business, or a voluntary
petition to effect a plan or other arrangement with creditors.
B. The Franchisee files an answer admitting the jurisdiction of the
court and the material allegations of an involuntary petition
filed pursuant to the Bankruptcy Code.
C. The Franchisee is adjudicated bankrupt, makes an assignment for
the benefit of creditors, applies for or consents to the
appointment of any receiver or trustee of all or any part of its
property, including specifically, but without limitation, all or
any part of the Cable System.
D. The Franchisee institutes dissolution or liquidation proceedings
with respect to its business.
E. An order is entered (i) approving an involuntary petition to
reorganize the business of the Franchisee, (ii) to effect a
plan or other arrangement with creditors of the Franchisee, or
(iii) appointing for the Franchisee a receiver or trustee of all
or any part of the Franchisee's property, including
specifically, but without limitation, all or any part of the
Cable System.
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F. A writ or warrant of attachment, execution, distraint, levy,
possession, or any similar process is issued by any court against
all or any part of the Franchisee's property, including
specifically, but without limitation, all or any part of the
Cable System.
2. Revocation and Exceptions. If any of the events set forth in Paragraph
4-10(C)(1) of this Franchise are not dismissed, stayed, rescinded, or
terminated, as the case may be, within 60 days after the issuance,
making, or commencement thereof, and if the effect thereof is to
materially frustrate or impede the ability of the Franchisee to comply
with the terms, conditions, and provisions of this Franchise, as
determined by the Village in its reasonable discretion, then the
Village may revoke this Franchise, unless: (A) within 120 days after a
receiver or trustee has been elected or appointed, the receiver or
trustee of the Franchisee, or, within 120 days after the commencement
thereof, the Franchisee itself as a debtor in possession in connection
with any such reorganization or similar proceedings, shall have
remedied any uncured failure to comply with any of the terms,
conditions, and provisions of this Franchise; and (B) within said 120
days, said receiver or trustee, or the Franchisee itself as debtor in
possession, shall have executed an agreement, duly approved by the
Village and the court having jurisdiction over the premises, whereby
said receiver or trustee or the Franchisee, in said capacity, assumes
all obligations and agrees to be bound fully by each and every one of
the terms, conditions, and provisions of this Franchise.
PART V: CABLE SYSTEM OPERATIONS
5.1: Cable System Requirements.
A. Channel Capacity. Franchisee will, by no later than forty-eight (48) months
after the effective date of this Agreement, make available to all
subscribers the option to receive eighty-five (85) channels.
B. Franchisee will by no later than August 1, 1996, add two (2) new video
programming products to the Cable System.
C. Dedicated Access Channel:
1. Commencing no later than sixty (60) days after the effective date of
this Agreement, the Franchisee shall dedicate at least one (1)
Community Access Channel to the Village of Vernon Hills, to be used
for the following purposes:
a. Municipal Access
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b. Educational Access
c. Public Access
d. Local Origination Programming
2. At such time as the Franchisee increases channel capacity to eighty-
five (85) channels, Franchisee shall make a second Community Access
Channel available to the Village.
D. Studio:
1. Facilities and Equipment: Franchisee shall make available an
------------------------
access and local origination studio for use by Subscribers and
Village educational and governmental personnel for the
production of programming (PEG programming) to be shown on the
Community Access Channel, until such time as the Village
establishes a Village-owned and operated Studio, or in no
event later than May 31, 1997. Franchisee will provide in
addition to the equipment currently in place in the Vernon
Hills Studio, the new equipment specified on Exhibit A to this
Agreement. Franchisee agrees to maintain this equipment and
promptly repair and/or replace this equipment as needed during
such time as the studio continues to be used for PEG
production programming.
2. Hours of Operation and Production Assistance: During such time
--------------------------------------------
as the Subscribers, Village educational and governmental
personnel continue to use the Franchisee's Studio, as provided
for in paragraph 1 above, subject to change at the
Franchisee's sole discretion, Franchisee guarantees that the
access production studio will be available for use by access
users at the following times: Monday - Thursday: 10:00 a.m. -
4:00 p.m.; and 6:00 p.m. - 9:00 p.m.; and Saturdays 10:00
a.m. - 2:00 p.m. Franchisee production personnel will be
available during these times to assist access producers.
E. Access Programming. By no later than June 1, 1997, the Village shall be
required to completely take over the production requirements for all PEG
programming to be shown on Franchisee's Community Access Channels at no
charge to Franchisee. As of the effective date of this Franchise, the
Village brings tapes of governmental access programming to the
Franchisee's access studio for showing on the Community Access Channel. As
long as the Village continues this arrangement (or a change in this
arrangement is initiated by the Franchisee) even after such time as the
Village takes over the production requirements for all PEG programming,
the Village will incur no additional costs for distributing PEG
programming over the Franchisee's Community Access Channels.
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F. Provision of Cable Service
1. Mandatory Extension of Service. The Franchisee shall design and
construct the Cable System to provide Cable Service to all
residential areas within the Village, provided that all such
permission as may be required from the owner of the property is
reasonably available, and that service can be provided in accordance
with the following requirements: in new housing districts, areas with
occupancy densities of more than twenty-five (25) homes per mile
which are contiguous to the system will be provided service as soon
as it is technically feasible. For housing areas less than twenty-
five (25) homes per mile, service will be provided on a cost-sharing
basis with the Franchisee, as soon as it is technically and
economically feasible. Further, Franchisee will be required to
provide service to multi-dwelling units, so long as the owner of the
facility consents to the following:
A. To Franchisee's providing of the service to units of the
facility;
B. To reasonable conditions and times for installation,
maintenance, and inspection of the system on the facility
premises;
C. To reasonable conditions promulgated by Franchisee to
protect Franchisee's equipment and to encourage widespread
use of the system; and
D. To not demand or accept payment from Franchisee for
permitting Franchisee to provide service to the facility
and to not discriminate in rental charges, or otherwise,
between tenants who receive Cable Service and those who do
not.
2. Joint Trench Agreements. Franchisee shall cooperate in the planning,
locating and construction of its Cable System in utility joint
trenches or common duct banks with other telecommunications
providers. The Village will provide advance notice to any Franchisee
when it plans to open a trench or when a utility or other Franchisee
plans to open a trench. The Village will make every effort within its
power to ensure that the open trench is available to the Franchisee.
Provided that the Franchisee can enter such trench on reasonable
terms, Franchisee will be obligated to enter any joint trench for
which it has sufficient prior notice.
3. Service to Cuneo and Ranney Developments. Franchisee shall enter any
open trench servicing these properties, at the soonest possible time,
provided that Franchisee can gain entrance on reasonable terms. If
Franchisee gains entrance to these trenches, Franchisee shall make
every effort to provide cable television service to the homes in
these developments at occupancy, however, barring any
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unforeseen circumstances, or occurrence beyond Franchisee's control,
Franchisee shall guarantee service within sixty (60) days at the
latest after occupancy and request for service.
4. Free Installation and Basic Service. Franchisee shall provide one
Drop and Basic Service, at no charge, to all present and future
governmental buildings in the Village, including without limitation,
two drops for each school, Village Hall, Fire Department, Police
Department and 911 Center.
5. Request for Cable Service and Connection. After service has been
established by Activation of the trunk cables for any area, the
Franchisee shall provide Cable Service and Connection to any Person
requesting Cable Service within that area not later than 30 days
after the date of the request.
6. Standard Installations: For standard installations, as defined by
Federal Communication Commission rules, barring any unforeseen
circumstances, Franchisee will complete these installations within
seven (7) days of request for service.
E. Maintenance. The Franchisee shall employ or have available to it, on a
full-time basis, a professional engineer or its equivalent, and a service
and repair force of competent technicians.
F. Emergency Requirements.
1. Emergency Override. The Franchisee shall provide a local "Emergency
Alert System" that shall at a minimum, be capable of overriding all
audio on all Channels of the Cable System. The "Emergency Alert
System" shall be capable of being activated and utilized by any
official designated by the Village. The control equipment necessary
for the override function shall be provided and installed by the
Franchisee without charge.
2. Emergency Power. At a minimum, the headed facility shall be equipped
with standby generator. The Franchisee shall provide continuous and
uninterrupted service and operation during any and all emergency
conditions.
G. Converter Locking Device. The Franchisee shall provide to all Subscribers,
upon the Subscribers request a control locking device or a code that
permits the Subscriber to prevent the viewing of a particular Service or
Channel.
H. Basic Service. The Cable System and Cable Service shall be maintained,
constructed, and provided so that Subscribers with cable ready televisions
receiving Basic Service can receive the Basic Service without using a
Converter.
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I. Noninterference With Existing Reception. The Cable System shall be
designed to operate, and shall be operated by the Franchisee, in such a
manner as to avoid causing interference with reception of the off-the-air
signals by non-Subscribers of the Franchisee.
PART VI: CONSTRUCTION
6-1: Plans and Permits.
A. Right to Review. Except for line extensions, the Village shall have the
right to review the Franchisee's construction plans and specifications
prior to the commencement of any new construction to assure compliance
with the standards specified in this Franchise and to inspect all aspects
of Cable System construction. The Village shall not, however, be required
to review or approve such plans and specifications or to make such
inspections and specifically disclaims such obligation. The Franchisee
shall be solely responsible for taking all steps necessary to assure
compliance with such standards and to ensure that the Cable System is
installed in a safe manner and pursuant to the terms and conditions of
this Ordinance.
B. Construction Briefings and Progress Reports. Except for line extensions,
before beginning new construction of or on any part of the Cable System,
the Franchisee's chief engineer or designated individual shall meet with,
the Village Administrator or designated individual to explain the
Franchisee's construction plans and work program in detail. Similar
briefings shall be held from time to time as deemed necessary by either
the Village or the Franchisee until the Cable System is fully constructed
in accordance with this Ordinance.
C. "As-Built" Plans. The Franchisee shall, within 90 days after the Effective
Date, furnish to the Village complete "as-built" plans of the Cable System
and shall, thereafter, upon request, furnish to the Village amendments to
such plans within 45 days.
D. Construction Codes and Permits. The Franchisee shall obtain permits from
the Village before commencing any new construction except as provided for
in section 6-1:(A)&(B). of or within the Cable System, with specific
permission being required for the opening or disturbance of any Public Way
within the Village. The Franchisee shall also, before the commencement of
construction of the Cable System, become a member of the J.U.L.I.E.
system. Emergency locates shall be done immediately.
6-2: General Construction Standard. All work involved in the construction,
operation, maintenance, repair, and removal of the Cable System, or any part
thereof, shall be performed in a workmanlike manner using materials of good and
durable quality. If, at any time, it is determined by the Village or any other
agency or authority of competent jurisdiction that any
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part of the Cable System, including, without limitation, any means used to
distribute signals over or within the Cable System, is harmful to the health or
safety of any Person, then the Franchisee shall, at its sole cost and expense,
promptly correct all such conditions. Any contractor, subcontractor, or other
Person proposed to be employed for the installation, maintenance, relocation, or
repair of Cable System equipment or facilities shall be licensed in accordance
with applicable laws and shall be thoroughly experienced in the work for which
he or she is retained.
6-3: Cable Drops.
A. Standards.
1. Personnel. Only employees of the Franchisee or qualified independent
contractors under the direct supervision and control of the
Franchisee shall be used to Install cable and connect Subscriber
facilities on a Subscriber's property. All such personnel shall be
bonded and shall be covered by liability and property damage
insurance in the amounts specified in Section 4-8 of this Ordinance.
2. Compliance with Applicable Law. Cable Drops shall be installed in
compliance with the National Electric Code, as the same may be
amended from time to time, and in compliance with all other
applicable law.
3. Notice to Subscriber. Except in cases requiring emergency repair, or
related to a specific Service problem, or installation of regular
subscription Services at the Subscribers residence or business, the
Franchisee shall give each Subscriber at least three days advance
notice before attempting to perform any construction, reconstruction,
or installation within the Subscriber's residence or business. Such
notice shall be by door hanger or by mall.
6-4: Construction On and In Public Ways. Unless expressly provided otherwise in
this Franchise, the Franchisee shall at all times comply with any and all rules
and regulations enacted or to be enacted by the Village with reference to
construction activity in Public Ways. All poles, wires, conduits, cables,
equipment, pipes, appurtenances, structures, and other facilities of the Cable
System shall be installed and located in compliance with all applicable Village
ordinances and the applicable provisions of this Franchise so as to cause
minimum interference with the rights and reasonable convenience of the general
public, all as determined by the Village in reasonable discretion. All such
facilities shall at all times be kept and maintained in a safe condition and in
good order and repair. The Franchisee shall at all times employ reasonable care
and shall install, maintain, and use commonly accepted methods and devices for
preventing failures and accidents that are likely to cause damage, injuries, or
nuisances to the general public. Suitable barricades, flags, lights, flares, or
other devices shall be used at such times and places as are required by
applicable ordinances and at such additional times and places as are required
for the safety of all members of the general
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public, as determined by the Village in its sole and absolute discretion. Any
such facilities placed in any Public Way by the Franchisee shall be placed and
maintained in such a manner as not to interfere with the usual travel or other
existing or projected uses of such Public Way.
6-5: Damage to Public or Private Property. The Franchisee shall arrange its
lines, cables, and other appurtenances on Public Ways, Public Property and
private property in such a manner prevent failures and accidents which are
likely to cause damage or injury to the Public Ways, Public Property, or Private
Property by any person. In the event of such damage, any public right-of-way,
public property or private property that is disturbed or damaged shall be
promptly repaired by Franchisee, at its sole expense.
6-6: Excavation Work and Time Periods.
A. Excavation Restricted. No excavation on or in any Public Way, Public
Property, or private property in the Village permitted hereunder in
connection with the installation of any Cable System facilities shall be
made more than 24 hours immediately before installation of such
facilities.
B. Prior Notification. The Franchisee shall notify the Village Administrator
at least 72 hours before any excavation on or in any Public Way, Public
Property, or private property so that the Village Administrator will have
the opportunity to inspect such excavation work.
C. Excavations in Lawns and Parkways. All excavations in lawns or grassy
parkways shall be promptly backfilled, tamped, and restored with sod in
accordance with the applicable provisions of this Ordinance.
6-7: Location of Cables. The principles set forth in Subsections A through D of
this Section, in that order of priority, shall govern the location of the
Franchisee's cables, wires, and other appurtenance.
A. All of Franchisee's facilities except Cable Drops shall be located within
existing public easements only, except only as provided in, and subject to
the limitations established in, Section 6-8 of this Franchise.
B. Wherever existing utility poles can physically accommodate, with or
without modification, the Franchisee's cables, wires, or other
appurtenances, or whenever existing utility conduits, ducts, vaults, or
other existing utility facilities can physically accommodate the
Franchisee's cables, wires, or other appurtenances, the Franchisee shall
utilize such existing utility facilities and shall not construct or
install any new, different, or additional facilities.
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C. For new installations, if either or both of the existing electric or
telephone utility facilities are above ground at a particular location,
then the Franchisee may install its facilities above ground.
D. For new installations, if both the electric and telephone utilities are
underground at a particular location, then the Franchisee shall install
its facilities underground.
6-8: Franchisee Use of Public Ways Not Exclusive. The right of the Franchisee
to use and occupy the Public Ways pursuant to this Franchise shall not be
exclusive. The Village reserves the right to grant the right to use of such
Public Ways to any Person in accordance with the terms and conditions of
Section 3-6.
6-9: Establishment of Easements and Dedications. The Franchisee shall have the
use of any easement or right-of-way dedicated for use by the Village, general
public or use compatible with the cable system operation, and this Franchise
shall be construed to authorize the construction of a cable system over such
public ways and through easements in accordance with Section 621(a)(2) of the
Cable Act, and to grant access to such easements and public way whether or not
such easements, and public way, whether or not such easements and public ways,
specifically contemplate or designate "Cable TV". The Village shall also include
this grant in future easements, licenses and public ways as they are created
6-10: Reservations of Public Way Rights. The following reservations in the use
of the Public Ways shall be complied with by the Franchisee notwithstanding the
grant to use Public Ways pursuant to this Franchise:
A. Sewers, Public Ways, Water Mains, and Public Works. Nothing in this
Franchise shall be construed to prevent the Village from constructing
sewers in, or from grading, paving, repairing, or altering any Public Way,
or laying down, repairing, or removing water mains or constructing or
establishing any other public work. All such work shall be done, insofar
as practicable in such manner as not to obstruct, injure, or prevent the
free use and operation of the poles, wires, conduits, cables, equipment,
pipes, appurtenances, or other facilities of the Franchisee. If any such
property of the Franchisee shall interfere with the construction or repair
of any Public Way or public improvement, whether it is the construction,
repair, or removal of a sewer or water main or the construction, repair,
or removal of a Public Way or any other public improvement, the Village
shall give the Franchisee 30 days written notice, and such poles, wires,
conduits, equipment, pipes, appurtenances, or other facilities of the
Franchisee shall be relocated, removed, or replaced by the Franchisee in
such a manner as shall be reasonably directed by the Village so that the
same shall not interfere with the public work of the Village. Franchisee
shall be reimbursed for such relocation, removal or replacement to the
extent any utilities are reimbursed.
B. Creation or Dedication of Public Way. No Public Way shall be used by the
Franchisee if the Village, in its sole and absolute discretion, determines
that such use
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is inconsistent with the terms, conditions, or provisions by which such
Public Way was created or dedicated, or is then being used.
C. Improvements or Changes on Public Way. If the Village shall make
improvements or changes on all or any part of any Public Way, over, under,
or along which any part of the Cable System has been installed, then and
in every case the Franchisee shall, at its sole expense after 45 days
written notice from the Village, alter, change, vacate, or remove from the
Public Way any part of the Cable System necessary to conform with said
Village improvements or changes. Franchise shall be reimbursed for such
work to the extent any utilities are reimbursed.
D. Construction and Use. All construction upon, over, or under or other use
of Public Ways by the Franchisee shall comply with all applicable
ordinances of the Village.
6-11: Public Way Vacation or Abandonment. If any Public Way or portion thereof
used by the Franchisee shall be vacated by the Village, or the use thereof
discontinued by the Village or the Franchisee, during the term of this
Franchise, then the Franchisee shall forthwith at its sole cost and expense
remove its facilities therefrom unless specifically permitted to continue to use
the same and, on the removal thereof, and restore, repair or reconstruct the
Public Way area where such removal has occurred to its original condition as
required by the Village. In the event of any failure, neglect, or refusal by the
Franchisee, after 30 days written notice from the Village to repair, improve, or
maintain such Public Way, the Village may, but shall be under no obligation to,
conduct such work, or cause it to be conducted, at cost and shall be reimbursed
by the Franchisee.
6-12: Movement or Removal. If it is necessary to move or remove temporarily any
of the Franchisee's poles, wires, conduits, cables, equipment, pipes,
appurtenances, or other facilities to move a large object, vehicle, building, or
other structure over the Public Ways of the Village, the Franchisee shall, upon
45 days written notice, move or remove such poles, wires, conduits, cables,
equipment, pipes, appurtenances, or other facilities. If requested by the
Village or other public body, such movement or removal shall be at the
Franchisee's sole cost and expense. Franchise shall be reimbursed for this work
to the extent any utility is reimbursed. If requested by a private Person, such
movement or removal shall be at said Person's sole cost and expense. Any service
interruption limitations of this Franchise shall not apply if such movement or
removal of the Franchisee's facilities results in reasonably temporary service
interruptions.
6-13: Village Right of Inspection. The Village shall have the right to inspect
and approve all construction. All construction shall comply with all Village,
State of Illinois, and federal laws, ordinances, rules, and regulations,
including specifically, but without limitation, State and national electrical
codes.
6-14: Trimming Trees. Franchisee shall have the prior right to cut or trim any
tree, shrub, or other vegetation in or on any Public Way except that the Village
shall have the right to
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review any proposed tree trimming in the public way, prior to the Franchisee
performing such work. The Village does not have, however, the authority under
this provision to prevent the Franchisee from conducting such tree trimming not
in accordance with the Village review. This provision does not supersede any
rights the Village may have in this regard pursuant to its police powers. The
Franchisee may cut or trim trees, shrubs, or other vegetation on private
property as necessary with the express prior written consent and permission of
the owner of the property on which any such tree, shrub, or vegetation is
located. All such trimming shall be in accordance with standard horticultural
practices, and no trimming shall occur until the wires, cables, or other
fixtures have first been attached to the poles in order to ensure trimming to
the minimum extent necessary. All trimming debris shall be removed from the work
area on a reasonable basis.
6-15: Restoration.
A. Franchisee Obligation. If the Franchisee destroys, damages, or disturbs
any Public Way, Public Property, or private property in the Village, or
any improvement on any of them, then the Franchisee shall, at its sole
cost and expense and in a manner approved in advance by the Village or the
affected property owner, as the case may be, promptly repair, replace, and
restore such Public Way, Public Property, private property, or improvement
in as good a condition as existed before the destruction, damage, or
disturbance took place. If it becomes practically impossible to repair,
replace, or restore any such Public Way, Public Property, private
property, or improvement, then the Franchisee shall cause the Village or
the owner of the property, as the case may be, to be justly compensated.
B. Continuing Responsibility. If the destruction, damage, or disturbance of
any Public Way, Public Property, private property, or improvement located
thereon is not immediately discovered; or if any subsequent restoration
effort does not comply with the standards set forth in this Ordinance, the
Franchisee shall have a continuing responsibility to perform or re-perform
all necessary restoration work.
C. Failure, Neglect, or Refusal to Repair. If, after 30 days written notice
from the Village, the Franchisee fails, neglects, or refuses to repair any
destroyed, damaged, or disturbed Public Way, Public Property, private
property, or any improvement located thereon, then the Village may, but
shall be under no obligation to, do such work, or cause it to be done, at
cost, and shall be paid by the Franchisee in the time and manner as
directed by the Village. The Village may recover the costs of any such
Village work by court action, or otherwise.
6-16: Time for Notice. In the event of an emergency involving life or property,
as determined by the Village in its reasonable the Village may reduce or
eliminate the notice requirements set forth in Part VI of this Franchise, and
otherwise take all necessary action to protect the public health, safety and
welfare.
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6-17: Pedestals and Vaults. For all installations or reinstallations Franchisee
shall cause all pedestals and vaults to be maintained in a vertical position
with no material leaning or listing. Franchisee shall use best efforts to ensure
that all existing pedestals and vaults in the Village are also maintained in a
vertical position, with no material leaning or listing.
PART VII: OPERATION AND MAINTENANCE
7-1: Ownership Restrictions; Books and Records.
A. Ownership Restrictions Governed by Cable Act. To the extent applicable,
Section 533 of the Cable Act, and any FCC regulations promulgated
thereunder, shall govern and restrict ownership of this Franchise.
B. Ownership Records. The Franchisee shall (1) within 30 days after the
Effective Date, and (2) within 30 days after the change of ownership of 5
percent or more of any class or series of the outstanding voting stock or
equivalent ownership interest of the Franchisee, furnish the Village with
a list, showing the names and addresses of Persons owning 5 percent or
more of any class or series of the outstanding voting stock or equivalent
ownership interest of the Franchisee, together with a roster of the
Franchisee's officers and directors (or equivalent managerial personnel)
and their addresses.
C. Financial Records. The Franchisee shall maintain books and records of its
operations within and related to the Village and the Cable System in
sufficient detail to show Gross Revenue, by service category, consistent
with generally accepted accounting principles. The Franchisee shall,
annually within 90 days after the close of the Franchisee's fiscal year,
prepare in accordance with generally accepted accounting principles, and
submit to the Village, a statement of Gross Revenues covering the
Franchisee's operations in and relating to the Village and the Cable
System. Said books and records shall be retained during the entire term of
this Franchise.
D. Operating Records. The Franchisee shall maintain reasonable records
pertaining to the operation of the Cable System, Cable System performance,
Cable System complaints, Cable System testing, Cable System use, Cable
System programming, and any other records specifically required to be
maintained by this Ordinance. Unless otherwise required by this Franchise,
all such records shall be retained during the entire term of this
Franchise. Upon a request for confidentiality by the Franchisee, Franchise
information obtained by the Village pursuant to this shall be made
available only to persons needing access to the materials in order to
perform their responsibilities on behalf of or for the Village, and as to
all other persons, shall to the extent permitted by laws, be treated as
confidential. Franchisee also maintain the right to require that the
Village execute a confidentiality and/or non-appropriation agreement prior
to gaining access to any materials under this Franchise.
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E. Village Access to Records. The Village shall have the right to inspect and
audit any or all of such books and records at any time during normal
business hours upon reasonable request. Upon a request for confidentiality
by the Franchisee, Franchise information obtained by the Village pursuant
to this shall be made available only to persons needing access to the
materials in order to perform their responsibilities on behalf of or for
the Village, and, as to all other persons, shall to the extent permitted by
law, be treated as confidential. Franchisee also maintain the right to
require that the Village execute a confidentiality and/or non-appropriation
agreement prior to gaining access to any material under this Franchise.
F. Franchisee Forms, Policies, Rules, and Similar Documents. Copies of the
Franchisee's (1) schedule of charges, (2) application forms for Subscriber
services, (3) policies regarding the processing of Subscriber complaints,
(4) delinquent Subscriber disconnect and reconnect procedures, (5) Cable
System rules and regulations, and (6) all other terms and conditions
adopted as the Franchisee's policy in connection with its Subscribers,
shall be filed with the Village and shall be made available for inspection
by the public at the Franchisee's local office during normal business
hours.
7-2: Reports and Documents. The Franchisee shall submit to the Village a copy
of the annual performance tests report required by the FCC within 5 days after
such report is submitted to the FCC. Upon request, the Franchisee shall also
submit to the Village copies of all other correspondence, petitions, reports,
applications, and other documents filed by the Franchisee with the FCC, the
Securities and Exchange Commission, or any other federal or state regulatory
commission or agency having jurisdiction with respect to matters affecting the
Cable System, or received by the Franchisee from any such commission or agency,
within 5 days after any such request.
7-3: Annual Reports. On each annual anniversary of the Effective Date during
the term of this Franchise, the Franchisee shall file with the Village, at the
Franchisee's sole cost and expense, (A) financial statements certified by the
Franchisee, consisting of a balance sheet, income statement, and statement of
any changes in the financial position of the Franchisee as of the end of each
calendar year; and (B) a current copy of the Franchisee's Subscriber service
contract if any, and, (C) the Franchisee's complaint procedures.
7-4: Audits. The Village shall have the right to arrange for and conduct an
audit of the Franchisee, and shall have the right to copy the books and records
of the Franchisee; provided, however, that the Village shall not conduct more
than one such audit during each calendar year. The Village shall give the
Franchisee 10 days written notice of the Village's audit request, the
description and purpose of the audit, and a description, to the best of the
Village's ability, of the books, records, and documents that the Village desires
to review. In the event that said audit discloses an underpayment in the
Franchise Fee by an amount in excess of 10 percent of the applicable Franchise
Fee, then the Franchisee shall pay the full cost of such audit.
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7-6: Subscriber Practices.
A. Initial Installation. The Franchisee shall fill all requests for standard
installation of Cable System Service within seven (7) days after the date
of any such request. The Franchisee shall keep a record of all such
requests at all times during the term of this Franchise.
B. Disconnection and Reconnection. Unless the Subscriber agrees otherwise,
said disconnection shall be made as soon as practicable, and in no case
later than 30 days after the Subscribers written request to the Franchisee.
If a Subscriber fails to pay the properly due monthly subscription fee, or
any other property due fee or charge, then the Franchisee may disconnect
the Subscribers Service, provided that such disconnection shall not take
place until 20 days after delivery to such Subscriber of a written notice
of the intent to disconnect. Such notice shall not be sent until at least
30 days after the due date of the delinquent fees or charges. The
Franchisee shall not disconnect service to a Subscriber so long as the
Subscriber pays all amounts due before the later to occur of either of the
foregoing dates. After disconnection, upon payment in full of the
delinquent fee or charge and the payment of a reconnection charge, if any,
the Franchisee shall promptly reinstate and reconnect the Subscribers
Service. The Franchise maintains the right not to reconnect in the event of
subscriber fraud or deceit.
C. Refunds. Refunds to Subscribers shall be made or determined in the
following manner
1. If the Franchisee fails, upon request of a Subscriber, to provide any
Cable Service then being offered, then the Franchisee shall promptly
refund all deposits or advance charges paid for such Cable Service by
said Subscriber. This provision does not alter the Franchisee's
responsibility to Subscribers under any separate contractual agreement
or relieve the Franchisee of any other liability or obligation.
2. If a Subscriber terminates any Cable Service prior to the end of a
prepaid period, then the Franchisee shall refund to the Subscriber a
proportionate portion of any prepaid Subscriber Cable Service Fee,
using the number of days, based on a 365-day year, as a basis. The
Franchisee shall make such refund within 30 days after disconnection
of the terminated Cable Service.
D. Advance Payments. Except as expressly otherwise approved by the Village, no
Cable Service shall be offered that requires payment more than one month in
advance; provided, however, that the Franchisee may offer longer advance
payment programs as an option in connection with any Cable Service.
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7-7: Service and Subscriber Contracts and Information.
A. Provision of Information to Subscribers. The Franchisee shall, prior to or
at the time of installation of any Cable Service, provide the Subscriber,
at a minimum, with, (1) a description of all Services offered, (2)
instructions on the use of the Cable System, (3) billing and collection
practices, and (4) Subscriber complaint and service procedures.
B. Statement. All Subscriber contracts shall contain the following statement:
"The Franchisee shall not, as to rates, charges, service facilities,
rules, regulations, or in any other respect, make or grant any preference
or advantage to any Person, nor subject any Person to any prejudice,
disadvantage, or discrimination. The Franchisee is not prohibited,
however, from establishing special contracts for nonprofit organizations,
employees of the Franchisee residing in the Village, or discounts
available to all persons for promotional campaigns"
C. Franchisee Authority. The Franchisee shall have the authority to
promulgate such rules, regulations, terms, and conditions governing the
conduct of its business as shall be reasonably necessary to enable the
Franchisee to exercise its rights and to perform its obligations under
this Franchise and to ensure uninterrupted Service to each and all of its
Subscribers; provided, however, that no such rules, regulations, terms, or
conditions shall be in conflict with the any of the terms, conditions, or
provisions of this Franchise, or with any ordinances of the Village or the
laws of the State of Illinois or the United States.
D. Items to be Provided. If a Subscriber contract is utilized, then all items
required to be provided pursuant to this Section shall be provided to each
new Subscriber at the time a contract is entered into or at the time any
Service begins, whichever is earlier. All items required to be provided
pursuant to this Section shall be provided to all existing Subscribers not
less than once each year.
7-8: Complaints and Service Calls.
A. Notice of Procedures. The Franchisee shall furnish each Subscriber, at the
time Cable Service is installed, written instructions that clearly set
forth procedures for registering a complaint, placing a service call,
requesting a billing adjustment, or otherwise obtaining information or
assistance from the Franchisee. Said instructions shall include the
telephone number described in Subsection B of this Section.
B. Telephone Number. The Franchisee shall have a publicly listed, toll free
telephone number, operated to efficiently receive Subscriber complaints
and requests for repairs or Service, 24 hours-a-day, 7 days-a-week. Said
telephone extension shall be manually operated during all regular business
hours to personally answer all incoming calls in accordance with federal
requirements. At all other times the extension shall be operated by an
answering service or answering machine designed to answer all
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incoming calls in accordance with federal requirements. The telephone
number shall be made available no later than the Effective Date.
C. Service Interruption. The Franchisee shall prevent Service interruptions,
render efficient Service, and make repairs promptly. The Franchisee shall
not interrupt Cable Service after 7:00 a.m. and before 1:00 a.m., except
for good cause and for the shortest time possible and, except in emergency
situations, only after cablecasting notice of such Service interruption at
least 24 hours in advance of the interruption if practicable. Service may
be interrupted between 1:00 a.m. and 7:00 a.m. for routine testing,
maintenance, and repair on any day except Saturdays, Sundays, and legal
holidays, but only after notice of such interruption shall be cablecast at
least 24 hours in advance of the interruption. The Franchise shall maintain
a written log for all planned and unplanned Service interruptions.
D. Franchisee Response; Rebates Required. The Franchisee shall maintain a
repair force of technicians that shall respond to Subscriber complaints or
requests for Service within 24 hours after receipt of the complaint or the
request. All repairs necessary to correct a malfunction of the System shall
be made as soon as possible, the Franchisee shall give a rebate to any
affected Subscriber equal to a pro rata share of the Subscriber's monthly
bill for each day or fraction thereof in excess of the repair time limit
during which the malfunction goes uncorrected.
E. Bill Payment Locations. Bill payment locations will be open at least during
normal business hours, and at least four (4) hours during the week shall be
during the evening or Saturday. Franchisee will make reasonable efforts to
assure that bill payment locations will be conveniently located.
F. Identification. During construction or repair, all employees, contractors,
and subcontractors of the Franchisee shall carry a photo identification
card at all times.
G. Service Records. The Franchisee shall keep a record of all written
complaints and service calls received. Said record shall include copies of
all written complaints and service calls and complete reports concerning
all written complaints and service calls showing when said call was
received, the time of disposition, the service technician employed, and the
nature of the problem. The Franchisee shall also maintain a record of the
nature, time, duration, and probable cause of all Cable System failures
reported to or discovered by the Franchisee. Said records, which may be
combined by the Franchisee, shall be available for public inspection at the
Franchisee's local office during normal business hours. A summary of said
records shall be prepared by the Franchisee and submitted to the Village on
request. All records required to be maintained under this subsection shall
be maintained for a period of at least three years.
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7-9: Safety.
A. Standard of Care. The Franchisee shall at all times utilize the standard
of care attendant to the risks involved and shall install and maintain in
use commonly accepted methods and devices for preventing failures and
accidents that are likely to cause damage, injury, or nuisance to the
public or to employees of the Franchisee.
B. Equipment Installation and Maintenance. All Cable System installations
shall be made so as not to impair the fire integrity of any building or
structure. The Franchisee shall install and maintain its wires, cables,
fixtures, and other equipment in accordance with the requirements of all
applicable codes, and in such manner that they will not interfere with any
installations of the Village or any public utility. All lines, equipment,
and connections in, over, under, and upon the Public Ways, Public
Property, and private property within the Village, wherever situated or
located, shall at all times be kept and maintained in a safe and suitable
condition and in good order and repair.
7-10: Motor Vehicle Operation. All operators of vehicles under the Franchisee's
control shall have, at the time of their employment, and throughout the term of
their employment, a valid drivers license issued by the State of Illinois.
7-11: Tests and Performance Monitoring. All Cable System testing procedures
shall be in accordance with the most recent edition of "Standards of Good
Engineering Practices for Measurements on Cable Television System," published by
the National Cable Television Association, or such other generally accepted
industry procedures. Properly calibrated, state-of-the-art equipment shall be
used in all testing.
PART VIII: RIGHTS OF INDIVIDUALS PROTECTED
8-1: Employment Requirement; No Discrimination.
A. Equal Employment Opportunity; Discrimination Governed by Cable Act. To the
extent applicable, Section 554 of the Cable Act, and the federal
regulations promulgated thereunder, shall govern the employment practices
of the Franchisee.
B. Equal Employment Opportunity; Discrimination Where Cable Act Not
Applicable. To the extent Section 554 of the Cable Act is repealed,
modified, or otherwise not applicable, the Franchisee shall conform to
applicable federal, State of Illinois, and Village laws, ordinances,
resolutions, rules, and regulations.
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8-2: No Discrimination. The Franchisee shall not deny any Service, deny access,
or otherwise discriminate against Subscribers or other Persons on the basis of
age, sex, race, color, creed, national origin, or on any other basis prohibited
by law. The Franchisee shall comply at all times with all applicable federal,
State of Illinois, and Village laws, and all executive and administrative
regulations, rules, and orders, and any provisions of this Franchise, relating
to nondiscrimination. The Franchisee shall not deny any Service or access to any
individual or group of potential residential Subscribers on the basis of income.
8-3: Subscriber Privacy. The Franchisee shall comply at all times with all
applicable federal rules, and orders, and any provisions of this Franchise
relating to the protection of privacy of any Subscriber.
8-4: Permission of Property Owner Required. To the extent that the Cable Act,
the Illinois Municipal Code, or this Franchise allow the Franchisee to place its
equipment within easements where utility equipment exists without the permission
of this applicable property owner then the Franchisee may place its equipment in
such easements without such permission provided that such placement is in
accordance with the provisions of this Franchise. If the Franchisee desires to
place its equipment in a location on private property where no utility equipment
exists, then the Franchisee shall secure a written authorization from the
applicable property owner, its authorized agent, or a duly elected or appointed
representative of the property involved.
PART IX: GENERAL PROVISIONS
9-1: Work Performed by Others.
A. Written Notice. Upon request the Franchisee shall give written notice to
the Village specifying the name and address of any Person other than the
Franchisee who perform any obligations of the Franchisee pursuant to this
Franchise; provided, however, that all provisions of this Franchise shall
remain the responsibility of the Franchisee.
B. Additional Workers. All provisions of this Franchise shall apply to any
contractor, subcontractor, or other Person performing any work or other
activity required pursuant to this Franchise.
9-2: Release.
A. No Extraneous Inducements. The Franchisee acknowledges that it has not
been induced to accept this Franchise 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 Franchise not otherwise expressed herein. The
Franchisee shall further be deemed to warrant that no promise or
inducement, oral or written, has been made to any Village employee or
official regarding receipt of this Franchise, other than as contained in
this Franchise.
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B. Statute of Limitations. Any claim or legal action arising from or in
connections with any failures in the operation or the performance or non-
performance of any obligation under this Agreement including payment of any
amounts due must be brought within two (2) years after the case of action
accrues.
9-3: Compliance With Law. The Franchisee shall, at all times during the term of
this Franchise, comply with all applicable federal, State of Illinois and local
laws, rules, and regulations, regardless of whether such law, rule, or
regulation is expressly referenced in this Franchise.
9-4: Subsequent Action by Federal, State, or Local Authorities.
A. Subsequent Law, Agreement, or Regulation. If any subsequent law, ordinance,
regulation, controlling judicial review, or decision shall require or
permit the Franchisee to perform any act or shall prohibit the Franchisee
from performing any act such that the Franchisee may not be in compliance
with the terms and conditions of this Franchise, then, as soon as possible
after knowledge thereof, the Franchisee shall so notify the Village. If the
Village determines, in agreement with the Franchisee that a material
provision of this Franchise is affected by such changed or new law,
ordinance, or regulation, then the Village and the Franchisee shall enter
into good faith negotiations to modify this Franchise to conform with such
changed requirements.
B. Change in Federal or State Laws or Regulations. If any federal or State of
Illinois law or regulation, including without limitation the Cable Act, is,
at any time after the Effective Date, changed, modified, interpreted in a
final and nonreviewable decision by a court of competent jurisdiction or
appropriate administrative agency, amended, repealed, or invalidated so as
to allow for greater regulation by the Village of the Franchisee or a Cable
Communication System, or so as to permit greater benefits to the Village,
the Franchisee and the Village shall enter into good faith negotiations to
modify this Franchise.
9-5: Nonenforcement by Village. The Franchisee shall not be excused from
complying with any of the terms and conditions of this Franchise by any
failure of the Village, on any one or more occasions, to insist on the
Franchisee's performance of, or to seek the Franchisee's compliance with,
any one or more of said terms or conditions except as may be permitted by
federal law.
9-6: Village Right to Delegate Authority and Functions. The Village shall have
the right to delegate any or all of its authority or rights under this
Franchise to any Person, department, board, commission, or agency within or
outside the Village or to designate any Person, department, board,
commission, or agency within or outside the Village to act on its behalf
under this Franchise; provided, however, that no such delegation or
designation shall be effective to bind the Village, or for any other
purpose, unless evidenced by an ordinance or resolution duly adopted by the
President and Board of
39
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Trustees of the Village and provided further that no such delegation or
designation shall be effective to authorize any authority or action beyond
those expressed in said ordinance or resolution. When and to the extent so
delegated or designated, said Person, department, board, commission, or
agency shall be deemed to be an Authorized Agent of the Village or its
Board of Trustees as this term is used in this Franchise.
9-7: Unauthorized Reception and Reselling Prohibited.
A. Unauthorized Reception and Reselling Where Cable Act Applicable. To the
extent applicable, the Cable Act shall govern the prohibitions against and
penalties for unauthorized reception and reselling of Cable Service.
B. Unauthorized Reception and Reselling Where Cable Act Not Applicable. To the
extent the Cable Act is modified, repealed, or otherwise do not apply, the
following standards shall govern the unauthorized receipt or reselling of
Cable Service:
1. Unauthorized Connection. No Person shall make any unauthorized
connection, whether physically, electrically, acoustically,
inductively, or otherwise, with any part of the Cable System existing
in the Village for the purpose of enabling said Person or others to
use or receive television signals, radio signals, pictures, programs,
sounds, or any other information or intelligence transmitted over the
Cable System without payment to the Franchisee.
2. Tampering, Removal, or Injury. Except as otherwise provided in this
Franchise, no Person shall, without the consent of the Franchisee,
willfully tamper with, remove, or injure any cable, wires, or other
equipment used for the distribution of television signals, radio
signals, pictures, programs, sounds, or any other information or
intelligence transmitted over the Cable System.
3. Unauthorized Use or Receipt. The existence of any connection, wire,
conduct or, or other device whatsoever that enables any Person to use
or receive the cable television service without such use or receipt
being specifically authorized by, or compensation paid to, the
Franchisee may be considered as evidence of intent to violate this
Section.
4. Reselling. No Person in the Cable Service Area receiving any Cable
Service, program, or signal transmitted over the Cable System shall
resell such Cable Service, program, or signal without the express
written consent of the Franchisee and the Village.
9-8: Time Essence of Agreement. Except as provided in Section 9-10 of this
Franchise, whenever this Franchise sets forth any time for any act to be
performed by the Village or the Franchisee, said time shall be deemed to be of
the essence.
40
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9-9: Force Majeure. Whenever a period of time is provided for in this
Franchise for either the Village or the Franchisee to do or perform any act or
obligation, neither party shall be liable for any delays or inability to perform
due to causes beyond the control of said party such as war, insurrection,
rebellion, strike, lockout, unavoidable casualty or damage to personnel,
materials or equipment, fire, flood, storm, earthquake, tornado, or any act of
God; provided, however, that said time period shall be extended for only the
actual amount of time said party is so delayed.
9-10: Severability. If any section, subsection, sentence, clause, phrase, or
other portion or provision of this Franchise, or its application to any Person,
is for any reason declared invalid, in whole or in part, by any court, agency,
commission, legislative body, or other authority of competent jurisdiction, said
decision shall not affect the validity of the remaining portions hereof.
9-11: Most Favored Nations Clause. Franchisee will make available in the Village
any additional cable television channel capacity which Franchisee or its
affiliates are required to provide to the Villages of Mundelein or Libertyville
as part of a renewal franchise with either community for so long as the
Franchisee or its affiliate remains the franchised cable television operator in
the Village of Vernon Hills and in said Villages. If an additional Franchisee
activates a Cable Communications System or Cable System in the Village of Vernon
Hills, then the requirements of this section shall terminate completely.
9-12: Franchisee Acknowledgement The Franchisee acknowledges that: (A) it has
carefully read the terms, conditions, and provisions of this Franchise; (B) it
unequivacally accepts the obligations imposed by said terms, conditions, and
provisions; (C) it agrees to accept unequivocally the validity of said terms,
conditions, and provisions; (D) it unequivocally agrees to abide by said terms,
conditions, and provisions.
Section 4. Effective Date.
A. This Franchise shall be in full force and effect only on, and not before,
the Passage and approval, of Vernon Hills Ordinance No.96-58
B. This Franchise granted pursuant to Vernon Hills Ordinance No. shall be of
no force or effect and shall be rendered null and void in the event that
the Franchise does not file with the Village Clerk (1) the Franchise
Acceptance Agreement required pursuant to Section 3-2 of this Franchise,
and the certificates of insurance required pursuant to Paragraph 4-8 C(l)
of this Franchise, within 60 days after the date of final passage of this
Ordinance by the Village Board of Trustees.
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Passed this 17 day of September 1996
AYES: 4-Cashman, Emery, Hebda, Koch
NAYS: O-None
ABSENT: 2-Henley, Hook
APPROVED this 17 day of September 1996
/s/[SIGNATURE ILLEGIBLE]
-----------------------------
Village President
ATTEST:
/s/[SIGNATURE ILLEGIBLE]
- ------------------------------
Village Clerk
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EXHIBIT A
VILLAGE OF VERNON HILLS
CABLE FRANCHISE ACCEPTANCE AGREEMENT
Pursuant to Section 3-2 of the Village of Vernon Hills Ordinance
dated, Sept. 17, 1996 the undersigned hereby acknowledge that they have read and
understand all of the provisions of this Franchise, do hereby acknowledge the
validity of each of the conditions and provisions of this Franchise and do
hereby unconditionally consent to and agree to accept and be bound by all of the
terms, conditions, and limitations of this Franchise.
Accepted this 18th day of November 1996
CABLE TV FUND 15-A, LTD.
(d/b/a Jones Intercable, Inc.)
By: Its General Partner
Jones Intercable
By: /s/ Michael Lovett
--------------------------------------
Name: Michael Lovett
Title: Vice President/Operations
ATTEST:
By: /s/ Nancy L. Mann
-------------------------
Name: Nancy L. Mann
-------------------------
Its: Assistant Secretary
-------------------------
43
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ORDINANCE NO. 1110
------
AN ORDINANCE REGULATING CABLE TELEVISION SYSTEMS
WITHIN THE VILLAGE OF UNIVERSITY PARK, ILLINOIS,
PROVIDING FOR VILLAGE REGULATION OF THE USE THEREOF
CONSISTENT WITH FEDERAL COMMUNICATIONS COMMISSION
RULES AND REGULATIONS; AWARDING A CABLE TELEVISION
FRANCHISE; SETTING FORTH CONDITIONS ACCOMPANYING THE
GRANTING OF A CABLE TELEVISION SYSTEM FRANCHISE,
PROVIDING FOR OPERATIONAL STANDARDS; ESTABLISHING
CONDITIONS FOR THE USE OF VILLAGE PUBLIC RIGHTS OF WAY AND OTHER
VILLAGE-OWNED PROPERTY; PROVIDING FOR PENALTIES AND VIOLATIONS
THEREOF; AND AMENDING ORDINANCES NOS. 499, 698 AND 794
WHEREAS, the Village of University Park (the "Village") is a home rule,
Illinois municipal corporation located in Cook and Will Counties; and
WHEREAS, on August 25, 1981 the President and Board of Trustees of the
Village adopted Ordinance No. 499 granting a 15-year, non-exclusive franchise to
Centel Communications Company ("Centel") to construct, install, maintain and
operate a community antenna television system in the Village of University Park;
and
WHEREAS, on September 12, 1989, the President and Board of Trustees of the
Village adopted University Park Resolution No. 794 approving the transfer of the
franchise granted pursuant to Ordinance No. 499 from Centel to Cable TV Fund
15-A, Ltd. ("Jones Intercable"); and
WHEREAS, the franchise granted pursuant to Ordinance No. 499 expires on
August 25, 1996; and
WHEREAS, the Village and Jones have approved an extension of the existing
franchise through September 25, 1996 (Bd. mt. Aprvd. July 23, 1996); and
WHEREAS, Jones Intercable has requested that the Village renew the existing
franchise; and
<PAGE>
WHEREAS, as part of the renewal process, the Village and Jones Intercable
have jointly developed, agreed to, and accepted a new franchise agreement, the
terms, conditions, and provisions of which are set forth in this Ordinance and
in the exhibits attached hereto; and
WHEREAS, pursuant to the Federal Cable Communications Policy Act of 1984,
as amended, 47 U.S.C. (S)(S) 521 et seq. (the "Cable Act") and Section 11-42-11
of the Illinois Municipal Code, 65 ILCS 5/11-42-11, the President and Board of
Trustees are authorized to license, franchise, and impose charges in connection
with the business of operating a cable communication system within the Village;
and
WHEREAS, the President and Board of Trustees believe that it is appropriate
and necessary to enact this Ordinance comprehensively amending and superseding
Ordinance Nos. 499, 698 and 794:
NOW, THEREFORE, BE IT ORDAINED by the President and Board of Trustees of
the Village of University Park, Lake County and State of Illinois, as follows:
Section 1, Recitals. The foregoing recitals are incorporated herein as findings
- -------------------
of the President and Board of Trustees.
Section 2. Short Title. This Ordinance shall be known and referred to as the
- ----------------------
University Park Cable Communication Ordinance.
Section 3. New Cable Franchise. University Park Ordinance Nos. 499, 698 and 794
- ------------------------------
including all amendments thereto, shall be, and it is hereby, comprehensively
amended, replaced and superseded by this Ordinance to establish and create a new
University Park Cable
2
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Communication Franchise as set forth on Exhibit "A", which is attached hereto
and by this reference, incorporated herein as follows:
Section 4. Home Rule Authority. This Ordinance is an exercise of the powers of a
- ------------------------------
home rule unit of local government.
Section 5. Effective Date. This Ordinance shall become effective upon its
- -------------------------
passage in the manner provided by law.
ADOPTED: This 24th day of September, 1996.
---- ---------
AYES: Trustees Johnson, Simpson, Bernd, Hodgkin, Palmer, McCalip &
President Williams
NAYES: None
ABSENT: None
APPROVED: This 24th of September, 1996.
---- ---------
/s/ Rudolph Williams
----------------------------------
RUDOLPH WILLIAMS
Village President
ATTEST:
/s/ Irma Berry
- ---------------------------
IRMA BERRY
Village Clerk
3
<PAGE>
EXHIBIT A
VILLAGE 0F UNIVERSITY PARK
CABLE COMMUNICATION FRANCHISE
PART 1: PURPOSES AND POLICIES
1-1: Purposes and Policies. The purposes and policies of this Franchise are to:
A. Provide assurance that cable television and communication systems are
responsive to the needs and interests of the Village and its residents; and
B. Grant to Jones Intercable a franchise to permit the use of Village streets
and other public ways for a cable communication system, but only to the
extent and only in the manner provided in this Franchise; and
C. Provide for the regulation by the Village of the erection, construction,
reconstruction, installation, operation, maintenance, dismantling, testing,
repair, and use of the cable communication system authorized pursuant to
this Franchise, in, upon, along, across, above, over, or under, or in any
other manner connected with, the streets and other public ways in the
Village; and
D. Provide for the payment by Jones Intercable of fees and other valuable
consideration to the Village (1) in exchange for the privilege of having
been granted the Franchise and the use permitted herein of Village streets
and other public ways; and (2) to compensate the Village for the costs
associated with such use and with the regulation and administration of the
Franchise; and
E. Provide for the development of a cable communication system as a means to
improve communications between and among, and to otherwise serve the
present and future needs of, the government, the citizens, the private and
public institutions and organizations, and the commercial enterprises of
the Village and surrounding communities; and
F. Provide for remedies and prescribe penalties for violations of this
Franchise.
PART 11: DEFINITIONS AND INTERPRETATION
2-1: Definitions
A. The following terms, phrases, words, and their derivations shall have the
meanings hereafter ascribed to them.
1. "Activation" of a Cable Communication System shall be deemed to occur,
------------
unless otherwise provided herein, on the first date that trunk and feeder
cable have been
1
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installed and constructed so as to be available to serve any potential
Subscriber at levels of equipment and service standards in compliance with
the provisions of this Ordinance.
2. "Authorized Agent" means any Person, department, board, commission, or
------------------
agency that is delegated authority or designated by the Board of Trustees
of the Village to act for the Village in matters related to cable
communications. "Authorized Agent" shall include such Person, department,
board, commission, or agency only when he, she, or it is acting within the
scope of authority granted by the Board of Trustees.
3. "Basic Service" means any level of service which includes the
---------------
retransmission of local television signals.
4. "Board" or "Board of Trustees" means the President and Board of Trustees of
------------------------------
the Village or their Authorized Agent.
5. "Cable Communication System" or "Cable System" means all or any part of any
--------------------------- --------------
facility operating by means of coaxial cable, optical fiber, or other
transmission, and associated equipment, devices, and facilities, the
primary function of which is to receive, through any means including
without limitation coaxial cable, optical fiber, or satellite or microwave
transmission, and to distribute the signals of one or more broadcast
television or radio stations and of other sources of video, audio, voice,
or data signals. Said facility, or any part thereof, also may be one that
distributes to, from, or among Subscribers or other Persons such other
video, audio, voice, or data signals as may originate within the Village or
elsewhere.
6. "Cable Drop" means the cable or other wires extending from the attachment
------------
pole to the subscriber receiving cable service, and that conducts the cable
system signal from the attachment pole to the subscribers receiving or
transmitting equipment. "Cable Drop" shall include the cable that is
installed within the structure receiving the Cable Service and the
transformer that matches the impedance of the cable to the input leads of
the receiving equipment.
7. "Cable Ordinance" or "Ordinance" means University Park Ordinance No.___,
----------------- -----------
being the University Park Cable Communication Ordinance, including all
exhibits, modifications, and amendments thereto.
8. "Cable Service" Shall mean: (1) the one-way transmission to subscribers of
---------------
video programming and (ii) subscriber interaction, if any, which is
required for the selection of such video programming.
9. "Cable Service Area" means all residential areas within the Village to be
--------------------
provided with access to cable service in accordance with the Franchisee's
provision of service policies contained in this Franchise.
2
<PAGE>
10. "Channel" means a band of frequencies, in the electromagnetic spectrum, or
---------
any other means of transmission (including, without limitation, optical
fibers or any other now available or that may become available) capable of
carrying a video signal, an audio signal, a voice signal, or a data signal.
11. "Connection" means the attachment of the Cable Drop to the radio or
------------
television receiver of a Subscriber, including the installation of a
Converter where applicable and necessary.
12. "Community Access Channel" means a Channel specifically designated,
--------------------------
intended, and reserved for noncommercial, origination programming on a
first-come, first-served, nondiscriminatory basis, to provide the general
public with maximum availability of low-cost access to television
production, transmission, and communication capability.
13. "Control" or "Controlling Interest" means actual working control in
--------- ----------------------
whatever manner exercised.
14. "Converter" means an electronic device that converts, signals to a
-----------
frequency not susceptible to off-air interference, within the receiver of a
Subscriber, and that, by an appropriate Channel selector, also permits a
Subscriber to view or use all signals delivered in the Basic Service and
all other Services delivered at designated converter dial locations for
which the Subscriber pays a fee.
15. "FCC" means the Federal Communications Commission as constituted by the
-----
Communications Act of 1934, or any successor agency created by the United
States Congress.
16. "Franchise" means the nonexclusive right to make use of the Public Ways in
-----------
the Village, or within specified areas of the Village, for the purpose of
constructing and operating a Cable Communication System, as granted to
Franchisee pursuant to University Park Ordinance No. ___ "Franchise" does
not include any license or permit required for the privilege of transacting
and carrying on a business within the Village as may be required by Village
ordinances and laws.
17. "Franchisee" means Cable TV Fund, 15-A, Ltd. and any and ail of its agents,
------------
employees, lawful successors, transferees, or assignees.
18. "Franchise Fee" means the fee required to be paid by the Franchisee
---------------
pursuant to Subsection 4-7A of this Franchise.
19. "Gross Revenue" means all revenue, as determined in accordance with
---------------
generally accepted accounting principles, that is derived, directly or
indirectly, by the Franchisee from or in connection with the provision of
Cable Service including without limitation
3
<PAGE>
(a) the distribution of any Cable Service over the Cable System; (b)
installation, reconnection, and similar fees; (c) Converter rentals and
sales; (d) studio and other facility or equipment rentals; (e) advertising
revenues. "Gross Revenue" shall not include any taxes imposed directly on
any Subscriber or user by a state, local, or other governmental unit; bad
debts; Franchise Fees; and subscriber deposits.
20. "Installation" means the process of installing a Cable Drop and completing
--------------
a Connection of the Cable System.
21. "Person" means any natural person, or any association, firm, partnership,
--------
joint venture, corporation, or other legally recognized entity or
organization, whether for-profit or not-for-profit, but excluding the
Village.
22. "Public Property" means any real property owned by any governmental unit,
-----------------
other than a Public Way.
23. "Public Way" means, except where expressly limited by this Ordinance and,
------------
in any event, only to the extent necessary to permit the installation and
maintenance of a Cable System, 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, conduit, tunnel,
park, parkway, waterway, utility easement (as defined in Section 541 of the
Cable Act) or other public right-of-way now or hereafter held by the
Village or dedicated for use by the Village, use by the general public. No
reference in this Ordinance to "Public Way" shall be deemed to be a
representation or guarantee by the Village that its title or interest in
any property is sufficient to permit its use for such purpose, and this
Ordinance shall, by the use of such term, be deemed to grant only such
rights to use property in the Village as the Village may have the right and
power to grant in this Ordinance.
24. "Resident" means any Person residing in the Village or as otherwise defined
----------
by applicable law.
25. "Service" means any Cable Service, non-cable or any other service, whether
---------
originated by the Franchisee or any other person.
26. "Subscriber" means any Person who lawfully receives, or has legally
------------
contracted for the right to receive, any Cable Service by means of or in
connection with the Cable System, and does not further distribute said
Cable Service.
27. "Village" means the Village of University Park and its Board of Trustees.
---------
Unless the Board of Trustees shall have designated an Authorized Agent to
act for the Village, references in this Franchise to actions by the Village
shall be construed to refer to actions by the Board of Trustees.
4
<PAGE>
B. Any word or term defined in the Cable Act but not defined in
Subsection 2.lA of this Franchise shall have the meaning set forth in the Cable
Act.
2-2: Interpretation.
A. Word Use. When not inconsistent with the context, any word used in the
present tense includes the future tense, any word used in plural includes
the singular, and any word used in the singular includes the plural.
"Shall" and "will" are always mandatory and not merely directory. "May" is
permissive.
B. Federal and State Law. This Franchise is adopted pursuant to the authority
of the Village under the Cable Act and the Constitution and statutes of the
State of Illinois. Where any provision of this Franchise conflicts with any
provision of federal or State law, this Franchise shall control to the full
extent permitted by law.
C. Prior Drafts. In no event shall prior drafts of this Franchise, or any
exhibits to this Franchise, if any, be used, considered, or relied upon in
any way to interpret or construe any provision of this Franchise, or any
exhibit to this Franchise.
D. Headings. The headings contained in this Franchise are to facilitate
reference only, do not form a part of this Franchise, and shall not be
used, considered, or relied on in any way to interpret or construe any
provision of this Franchise or any exhibit to this Franchise.
PART III: GRANT AND ACCEPTANCE OF FRANCHISE
3-1: Grant of Franchise. Pursuant to and in strict accordance with the terms,
provisions, and conditions set forth in this Franchise, the Village hereby
grants to the Franchisee this nonexclusive Franchise to construct, install,
maintain and operate a Cable System in the Village and to use the Public Ways in
furtherance thereof. The franchise is hereby made subject to the codified
ordinances of the Village now in effect or hereafter made effective. Nothing in
this franchise shall be deemed to waive the requirements of the various codes
and ordinances of the Village regarding permits, fees to be paid or manner of
consideration.
3-2: Franchise Term. The Franchise granted pursuant to this Ordinance shall be
effective for a period of twelve (12) years from and after the Effective Date.
3-3: Nonexclusivity of Grant. Village reserves the right to award additional
Franchises; provided, however that in the event another person uses the public
rights-of-way to construct, operate or maintain a Cable System, or otherwise
uses the streets for the delivery of any Service on material terms and
conditions which are more favorable or less burdensome than those applied to
Franchisee, with respect to the following matters: (1) the term of any such
5
<PAGE>
authorization shall be no more than the term of this Franchise; (2) the
Franchise fee assessed on any such other person shall be no less, as a percent
of the portion of the persons Gross Revenues that are attributable to its
provision of any Service, than the fee Franchisee pays under this Franchise; and
(3) the channels, support and facilities for public, educational and government
access channels provided by any such other person shall be no less than the
channels, support and facilities provided by the Franchisee.
PART IV: FRANCHISE CONDITIONS
4-1: Franchise Variance.
Variance Initiated by Franchisee. Applications for a Variance to this Franchise,
to accommodate a significant change in circumstances, to prevent unreasonable
hardship to the Franchisee, or to permit technical variations which will
satisfy the purpose of this Franchise, may be made by the Franchisee to the
Village. The Village shall review the application within thirty (30) calendar
days, or earliest meeting of the Village Board of Trustees and the Cable
Advisory Commission, and/or shall hold a public hearing on the Franchisee's
Application, if the Village determines that a public hearing would be in the
best interests of the public. The Village shall render a decision on the
Application within no later than forty five (45) days after the Franchisee
submitted an Application for Variance to the Village, and the Village will issue
a written report of the findings of the Village. The Franchisee may appeal a
final determination by the Village to a court of competent jurisdiction.
4-2: Performance Evaluation Meetings.
A. Regular Evaluation Meetings. The Village and the Franchisee shall hold
regular performance evaluation meetings within 30 days after the third
anniversary date of the Effective Date. Ail such evaluation meetings shall
be noticed in advanced and open to the public.
B. Special Evaluation Meetings. Special evaluation meetings may be held at any
time during the term of this Franchise on the written request of either the
Village or the Franchisee.
C. Elements of Evaluation. Topics that may be discussed at any regular or
special evaluation meeting may include specifically, but without
limitation, programming, Subscriber rate structures, Franchise Fees, free
or discounted Service, penalties, application of new technologies, Cable
System performance, Services provided, Subscriber and community complaints,
privacy, modification to this Ordinance, judicial and FCC rulings, line
extension policies, and the Franchisee or Village rules and regulations.
6
<PAGE>
D. Franchisee Cooperation. The Franchisee shall fully cooperate with the
Village in all matters relating to any regular or special evaluation
pursuant to this Section and shall, provide such reasonable information,
data, and documents as the Village may reasonably request in connection
with any such evaluation.
4-3: Franchise Renewal.
A. Renewal Request Requirements. The Franchisee may file a written request to
renew the Franchise; provided, however, that unless the Village shall
consent to some lesser notice, the Franchisee's renewal request shall be
filed in accordance with federal law. The Franchisee's renewal request
shall include all data and information that the Franchisee considers
pertinent in support of the request and the Franchisee's specific
proposals, if any, for revision or modification of this Franchise.
B. Franchise Renewal Standards. This Franchise may be renewed if:
1. the Franchisee has substantially complied with the material terms of
the existing Franchise and with applicable laws;
2. the quality of the Franchisee's service has been reasonable in light
of community needs;
3. the Franchisee has the financial, legal, and technical ability to
provide the services, facilities, and equipment set forth in the
Franchisee's proposal, and
4. Franchisee's proposal is reasonable to meet the future cable-related
community needs and interests, taking into account the cost of meeting
such needs and interests.
C. Renewal Proceeding. In any renewal proceeding, the Franchisee shall be
afforded adequate notice and the Franchisee and the Village, or its
designee, shall be afforded fair opportunity for full participation,
including the right to introduce evidence, to require the production of
evidence, and to question witnesses. A transcript shall be made of any such
proceeding at Franchisee's expense.
1. A proceeding under this subsection shall be completed within twelve
(12) months of its commencement, within which time the Village shall
issue a written decision granting or denying the proposal for renewal
based upon the record of such proceeding, and transmit a copy of such
decision to the Franchisee. Such decision shall state the reasons
therefor.
2. Any denial of a proposal for renewal shall be based on one or more
adverse findings made with respect to the factors described in
subsection B, pursuant to
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the record of the proceeding under this subsection. Village may not
base a denial of renewal on a failure to substantially comply with the
material terms of the Franchise under subsection B or on events
considered under subsection B unless the Village has provided
Franchisee with notice and the opportunity to cure, or in any case in
which it is documented that the Village has waived its right to
object, or Franchisee gives written notice of a failure or inability
to cure and the Village fails to object within a reasonable time after
receipt of such notice.
3. Franchisee is reserved expressly its rights of appeal under federal
and state law. In addition to such rights, this Franchise shall remain
in effect at all times during which a renewal proceeding or appeal
remains pending. Notwithstanding the provisions of subsections A
through C of this Section, Franchisee may submit a proposal for the
renewal of the Franchise, and Village may, after affording the public
adequate notice and opportunity for comment, grant or deny such
proposal at any time (including after proceedings pursuant to this
Section have commenced). The denial of a renewal pursuant to this
subsection shall not affect action on a renewal proposal that is
submitted in accordance with subsections A through C.
4. Village may not, upon the expiration of this Franchise, or otherwise,
acquire an ownership interest in the System, or require a sale of the
System to any other person, unless Village or such other person
acquires the ownership interest at not less than fair market value for
the System as a going concern.
D. Franchise Expiration; Temporary Extensions. If no request for renewal is
filed pursuant to this Section, and in any case in which such a request is
filed but denied or not yet granted, this Franchise shall expire according
to its terms; provided, however, that the Village may extend the term of
this Franchise in such increments as is reasonable while considering a
franchise renewal request filed pursuant to this Section or while
negotiating a new franchise with another Person.
E. Village Rights on Expiration and Nonrenewal. If this Franchise expires
according to its terms, or if the Village exercises its right not to renew
the Franchise pursuant to Subsection 4-3D of this Franchise, then the
Village shall have the option to:
1. Approve a sale by the Franchisee to a successor; or
2. Require the Franchisee to remove all such assets from the Public Ways
in the manner and within the times set forth in Subsection 4-6 of this
Ordinance.
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4-4: Termination.
A. Date of Termination. The termination of the Franchise granted pursuant to
this Ordinance and all of the rights granted to the Franchisee pursuant
hereto shall take place on the earlier of:
1. the revocation of the Franchise by action of the Village, as provided
in Section 4-5 of this Ordinance;
2. the abandonment of the Cable System (for purposes of this section
abandonment of the Cable System shall take place when the Franchisee
fails to provide any Cable Service over the Cable System for a period
greater than 7 days) in whole or material part, by the Franchisee
without the express, prior written approval of the Village; or
3. the expiration of the term of the Franchise, if not renewed pursuant
to Section 4-3 of this Franchise.
B. Rights Upon Termination. If, on the date that this Franchise terminates
pursuant to Section 4-4 of this Ordinance, the Franchisee is in possession
or control of the Franchise or the Cable System, then, as of that date: (1)
the Village shall have the right to order the removal in accordance with
Subsection 4-6 of this Ordinance, or to effect a (2) transfer of the Cable
System.
4-5: Franchise Revocation.
A. Grounds for Revocation. The Village may revoke this Franchise only after a
declaration of intent to revoke and only for the following reasons:
1. the Franchisee willfully or excessively violates any material
provision of the franchise; or
2. the Franchisee's construction schedule is delayed for over 18 months;
or
3. the Franchisee becomes insolvent, unable or unwilling to pay its
debts, or is adjudged a bankrupt; or
4. the Franchisee is found to have practiced any fraud or deceit upon the
Village.
B. Revocation Procedures. If the Village determines that grounds for
revocation exist or have existed, then the Village shall notify the
Franchisee in writing of its intent to revoke and the lawful grounds
therefore. If, within 60 days after such written notification, the
Franchisee does not furnish evidence satisfactory to the Village that the
grounds for revocation have been eliminated or that corrective action has
been
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taken or is being actively and expeditiously pursued, or that the alleged
grounds did not exist, or that the alleged grounds were caused by a Force
Majeure, then the Village shall call, notice, and conduct a public hearing
to consider revocation of the Franchise. The Village shall give the
Franchisee no fewer than 15 days written notice of the revocation hearing.
Such hearing shall provide Franchisee with full due process rights. Any
decision shall be in writing and shall be based upon written findings of
fact. If the Village, after such hearing, finds that grounds for revocation
exist, then the Village may thereon and in lieu of or in addition to any
other rights or remedies available to it, revoke, by ordinance duly
adopted, this Franchise.
C. Review and Appeal. In the event the Village orders termination of the
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Franchise, the Franchisee shall have the right to appeal the determination
of the Village in accordance with the Illinois Administrative Review Act,
735 ILCS 5/3-101, et. seq, or in accordance with the Cable Act. The
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Village's determination to terminate this Franchise shall not be effective
until final resolution of all appeals under this Section.
D. No Election of Remedies. The revocation of this Franchise pursuant to this
Section shall in no way affect any other rights the Village may have under
this Franchise or any applicable law.
4-6: Removal After Termination.
Upon termination of this Franchise, the Village shall have the right to direct
the Franchisee to remove, at the Franchisee's sole cost and expense, all or any
portion of the Cable System from all Public Ways and other Public Property
within the Village, subject to the following terms and conditions:
1. In removing the Cable System, or any portion thereof, the Franchisee
shall refill and compact, at its sole cost and expense, any resulting
excavation and shall leave all Public Ways and other property in as
good a condition as that prevailing immediately prior to the
Franchisee's removal activities or excavation.
2. The Village shall have the right to inspect and approve the condition
of all Public Ways and property affected by any of the Franchisee's
removal activities.
3. The financial security, liability, indemnification, and insurance
provisions of this Franchise shall remain in full force and effect
until the Village has inspected and approved the completion of all of
Franchisee's removal obligations required pursuant to this Subsection.
4. The Franchisee shall commence removal activities no later than 30 days
after the Franchisee receives the Village's removal order.
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5. The Franchisee shall complete all removal activities no later than 180
days after the date on which the Franchisee is required to commence
removal activities pursuant to this Subsection 4-6 of this Franchise.
6. If the Franchisee fails to substantially complete such removal within
180 days after the date on which the Franchisee is required to
commence removal activities pursuant to this subsection, then, to the
extent not inconsistent with applicable law, the Village shall have
the right to: (a) declare all rights, title, and interest to the Cable
System, and any portion thereof, to belong to the Village along with
all rights of ownership including, without limitation, the right to
operate the Cable System or to effect a transfer of the Cable System
to another Person for operation; or (b) authorize another Person,
including the Village, to remove the Cable System, or portion thereof
as designated by the Village, at the Franchisee's sole cost and
expense.
4-7: Franchise Fee and Other Payments.
A. Franchise Fee.
1. Amount of Fee. The Franchisee shall pay to the Village a franchise
fee in an amount equal to 5 percent of the Franchisee's annual Gross
Revenues (the "Franchise Fee"). The Franchise Fee shall be in
consideration of the privilege granted pursuant to this Ordinance to
the Franchisee to use the valuable Public Ways and the expense of
regulation and administration of the Franchise.
2. Time of Payment. The Franchisee shall pay Franchise Fees on a
quarterly basis, for the preceding quarter, as of March 31, June 30,
September 30, and December 31. Each quarterly payment shall be due and
payable no later than thirty (30) days after the dates listed in the
previous sentence. Each payment shall be accompanied by a brief report
showing the basis of the computation and such other relevant facts as
may be required by the Village.
3. Village Inspection and Audit. The Village shall have the right to
inspect and audit the Franchisee's books and records upon reasonable
request during normal business hours at the Franchisee's local office
for a period of two years after receipt of the Franchise fee payment,
after which payments shall be final. Based on any such inspection and
audit, the Village shall have the right to recompute any Franchise Fee
due. Whenever an independent auditor shall certify that the results of
any such Village inspection, audit, or recomputation demonstrate that
the Franchise Fee due in any fiscal year was underpaid the Franchisee
shall pay the amount due and interest thereon, calculated at the rate
of three (3) percentage points over the then prevailing Chicago prime
rate. In addition, if the amount underpaid is more than ten (10)
percent, the Franchisee
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shall reimburse the Village, in addition to paying the amount due plus
interest, for the costs of such inspection, audit, or recomputations.
4. Acceptance by Village. The acceptance by the Village of any Franchise
Fee payment shall not in any way be construed as an accord that the
amount paid is in fact the correct amount, nor shall such acceptance
of any payment be construed as a release of any claim the Village may
have for further or additional sums payable under the provisions of
this Ordinance.
5. Change in Franchise Fee. In the event that the maximum allowable
Franchise Fee is increased by the FCC and the Village desires an
increase in its franchise fee payment, the Village shall provide the
Franchisee with written notice of its desire to increase the fee, and
the Franchisee shall increase the franchisee fee payment in accordance
with the new federal limit. The Franchisee reserves the right to
request a public hearing to debate the proposed increase in the
Franchise Fee payment. The Franchisee shall increase the Franchise Fee
payment on the next Franchise Fee payment to the Village, as long as
the written request of the Village, or the public hearing on the
issue, is held, before the end of the current calendar quarter for
which the franchise fee payment is due. In the event the written
request is not received prior to the end of the calendar quarter, or
the Village is not able to hold a public hearing on the issue by the
end of the calendar quarter, then the increase to the franchisee fee
shall be due on the next calendar quarter, with no monies owing to the
Village due to the requested increase in the franchisee fee payment,
for the previous calendar quarter. In the event another provider of
video programming, including video dialtone, uses the Public rights-
of-way for purposes of constructing, operating and maintaining a
facility for the distribution of Video programming, the Franchisee
shall not be required to pay a franchise fee on the portion of its
Gross Revenues derived from its provision of any service unless such
other provider is also required to pay a franchise fee or local
telecommunications tax on the same portion of its gross revenues
attributable to its provision of that service. The fee payable by the
Franchisee, as a percentage of any portion of its Gross Revenues,
shall not exceed the percentage payable by the other provider on the
same portion of its Gross Revenue.
B. Other Payments.
1. Acknowledgment by the Franchisee. The Franchisee acknowledges that all
contributions, Services, equipment, facilities, support, resources,
and other activities to be paid or supplied by the Franchisee pursuant
to this Franchise are for the benefit of all Subscribers and the
public at large. The Franchisee also acknowledges that said
contributions, Services, equipment, facilities, support, resources,
and other activities shall not be deemed to be a part of the
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Franchise Fee or chargeable against the Franchise Fee, except as
federal law allows. The Franchise Fee shall take precedence over all
other payments, contributions, services, equipment, facilities,
support, resources, and other activities to be paid or supplied by the
Franchisee.
2. Scholarship Payment. Franchisee shall make an annual payment to the
Village of five hundred dollars ($500.00), for the duration of this
Franchise, to fund a scholarship for a Village of University Park
student demonstrating the aptitude and commitment for a career in
Telecommunications or Electronic Journalism. The Village and the
Franchisee shall agree to the criteria and process for selection of
such student and payment of the scholarship amount.
3. Continuation of Service. In the event the Franchisee continues to
operate all or any part of the Cable System after this Franchise
expires, then the Franchisee shall continue to comply with all
applicable provisions of this Franchise, including specifically, but
without limitation, all Franchise Fee and other payment provisions
throughout the period of such continued operation.
4-8: Liability, Indemnification, Insurance, and Performance Bond.
A. Liability.
1. Franchisee. The Franchisee shall be responsible for any and all
damage or loss to any real or personal property of the Village or of
any Person, and for any injury to or death of any individual Person,
or any officer, employee, or agent of the Village, arising out of or
in connection with the Franchisee's construction, operation,
maintenance, repair, or removal of the Cable System. The Franchisee
shall, at its sole cost and expense, replace, repair, and restore all
such property to its prior condition, and shall pay all legal damages
in the event of any such injury to or death of any individual or any
injury to property.
2. Village. Neither the Village nor its officers, employees, or agents
shall be liable for any loss or damage to any real or personal
property of any Person, or for any injury to or death of any
individual Person, arising out of or in connection with the
Franchisee's construction, operation, maintenance, repair, or removal
of, or other action or event with respect to the Cable System, or the
distribution of Cable Service over the Cable System.
3. Emergency and Other Actions.
a. The Village may, at any time in case of fire, disaster, or other
emergency as determined by the Village in its reasonable
discretion, cut or move any of the wires, cables, amplifiers,
poles, appurtenances, or
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other parts of the Cable System as necessary to respond to the
fire, disaster, or other emergency. If the Village takes any such
emergency action, then the Village shall not be liable therefor
to the Franchisee or any affiliate of the Franchisee. When
practical in the Village's reasonable discretion, the Village
shall consult with the Franchisee before the Village takes any
such emergency action, and the Village shall give the Franchisee
reasonable opportunity to perform such emergency work itself.
b. The Village shall consult with the Franchisee at least fifteen
(15) days before undertaking any public work, public improvement,
alteration of any municipal structure, any change in the grade or
line of any public way, or the elimination or discontinuation,
and closing of any public way, that may result in the breaking
through, movement, removal, alteration, or relocation of any part
of the Cable System. The Franchisee shall be given the
opportunity to perform such work pertaining to the cable system
itself.
c. Neither the Village nor its officers, employees, or agents shall
be liable to the Franchise or any affiliate of the Franchisee for
any special, incidental, consequential, punitive, or other
damages as a result of the exercise of any right of the Village
pursuant to this Franchise, including without limitation the
right of the Village to terminate this Franchise and to take any
action subsequent thereto.
B. Indemnification.
1. Hold Harmless. The Franchisee shall save, indemnify, and hold the
Village and its corporate authorities, elected and appointed
officials, officers, boards, commissions, legal counsel, employees,
and agents harmless from any injury, claim, demand, suit, judgment,
execution, liability, debt, damages, or penalty (the "Claims") arising
out of, resulting from, or alleged to arise out of or result from the
Franchisee's construction, operation, maintenance, repair, or removal
of the Cable System, whether such acts or omissions are those of the
Franchisee or its officers, employees, agents, or contractors, and
whether any such act or omission is authorized, allowed, or prohibited
by this Franchise.
2. Defense. The Franchisee shall pay ail expenses incurred in defense of
any claims. The Village must give the Franchisee timely written notice
of the making of any claim or of the commencement of any action, suit
or other proceeding for which coverage is requested pursuant to the
indemnity provisions of this Section. In the event such claim arises,
the Village or any other indemnified party shall tender the defense
thereof to the Franchisee and
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the Franchisee shall have the right to defend, settle or compromise
any claims arising hereunder and the Village shall cooperate fully
therein.
C. Insurance.
1. General Liability. The Franchisee shall carry and maintain, throughout
the term of this Franchise, liability insurance insuring the
Franchisee, the Village, and the Village's officers, boards,
commissions, elected and appointed officials, agents, and employees
with regard to any of the matters listed in Paragraphs 1 and 2 of
Subsection 4-9B of this Franchise, and in the minimum amounts as
follows:
a. $2,000,000 for bodily injury or death to each Person.
b. $2,000,000 for property damage resulting from any one accident.
c. $2,000,000 for all other types of liability.
2. Automobile. The Franchisee shall carry and maintain in its own name
automobile liability insurance with a limit of $2,000,000 for each
Person and $2,000,000 for each accident for property damage with
respect to owned and non-owned automobiles for the operations of which
the Franchisee is responsible.
3. Hazard. Because the Franchisee is authorized by this Franchise to
undertake certain work within the Public Ways, the Franchisee's
insurance shall cover comprehensive form, premises-operations,
explosions and collapse hazard, underground hazard and products
completed hazard, in the minimum amount of $2,000,000, or whatever
limits are permitted by the State of Illinois for bodily injury and
property damage combined.
4. Evidence of Insurance Policies. Within thirty (30) days of the
effective date of this Franchise, Franchisee shall furnish proof to
the Village that the insurance policies required by this Subsection
have been obtained, along with written evidence of payment of the
required premiums, in the form of a certificate of insurance.
5. Maintenance of Insurance Policies. The insurance policies required by
this Subsection shall be carried and maintained by the Franchisee
throughout the term of this Franchise and such other period of time
during which the Franchisee operates or is engaged in the removal of
the Cable System as subject to Village inspection and approval. Each
such insurance policy shall contain the following endorsement: "It is
hereby understood and agreed that this policy may not be canceled nor
the intention not to renew be stated until
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30 days after receipt by the Village of University Park, by registered
mail, of a written notice addressed to the Village Administrator of
such intent to cancel or not to renew."
6. No Limit of Liability. The legal liability of the Franchisee to the
Village and any Person for any of the matters that are the subject of
the insurance policies required by this Subsection shall not be
limited by said insurance policies nor by the recovery of any amounts
thereunder.
D. Performance Bond
The Franchisee shall maintain through the term of this Ordinance, a
faithful performance bond running to the Village, with a good and
sufficient surety to be approved by the Village, in the penal sum of
$100,000 on the condition that the Village shall well and truly observe,
fulfill and perform in connection with each provision, term and condition
of this Ordinance, and that in case of any breach, the Village shall be
entitled to recover from the principal and sureties on such bond that
amount of any damages and all costs and attorney's fees incurred by the
Village, proximately resulting from the failure of the Village to well and
faithfully observe and perform under any and ail of the provisions, terms
and conditions which this Ordinance requires it to perform.
4-9: Assignments, Transfers, and Similar Actions
A. Village Approval Required. Except as provided in Subsection E of this
Section, neither this Franchise nor any rights or obligations of the
Franchisee, or any portion thereof, shall be assigned, transferred, pledged
leased, sublet, hypothecated, or mortgaged, in any manner, in whole or in
part, to any Person; nor shall title thereto, either legal or equitable, or
any right or interest therein, or any property or assets relating to this
Franchise, pass to or vest in any Person; nor shall any change in control
of the Franchisee occur, either by act of the Franchisee, by operation of
law, or otherwise, without the prior written approval of the Village. The
Village shall not unreasonably withhold its approval.
B. Notice to Village. The Franchisee shall submit a petition ("Transfer
Petition") to the Village Board requesting the Village's approval of the
Transfer Petition at least 120 days before the proposed effective date of
the Transfer. The Village shall have 120 days following the submission of
the Transfer Petition to render a decision. If the Village does not render
a decision within this 120 time period, the transfer shall be deemed
approved. The Transfer Petition shall fully describe the proposed transfer,
assignment or similar action, and shall be accompanied by a justification
for the Transfer Petition and such additional supporting information as the
Village may require in order to review and evaluate the Transfer Petition.
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C. Village Review. After receipt of the Transfer Petition, the Village may,
in its reasonable discretion, conduct a public hearing on the proposed
Transfer Petition. The Franchisee shall provide all requested assistance
to the Village in connection with any such public hearing and the
Village's review and consideration of the Transfer Petition. The
Franchisee shall cause all Persons involved in the proposed Transfer
Petition to cooperate with and provide assistance to the Village. In
determining whether to approve any Transfer Petition, the Village shall
consider the following factors:
1. The financial, technical, and business qualifications of each Person
involved in the Transfer Petition; and
2. The cable television experience of each Person involved in the
Transfer Petition.
D. Conditions. As a condition precedent to Village approval of any Transfer
Petition, the Franchisee shall pay all money that the Franchisee owes to
the Village pursuant to this Ordinance, including specifically, but
without limitation, all fees, penalties, and damages. In addition, as a
condition to approving any Transfer Petition, the Village may require that
each Person involved in the proposed Transfer Petition shall execute an
unconditional agreement and consent, in a form approved by the Village
Attorney that provides that the Person assumes and agrees to be bound by
all of the terms, conditions, and provisions of this Franchise.
E. Permitted Actions. For purposes of this Section any (1) assignment,
pledge, lease, sublease, mortgage, or other transfer of all or any part of
the Franchise, or any right or interest therein, for solely financing
purposes, or (2) any assignment or transfer to any parent, affiliate, or
subsidiary company of the Franchisee, shall not be considered an
assignment or transfer under this Franchise and is not subject to the
Assignment and Transfer provisions of this Section, provided that each
such assignment, pledge, lease, sublease, mortgage, or other transfer
shall be subject and subordinate to the rights of the Village pursuant to
this Franchise, or applicable law. The Franchisee shall provide the
Village with notice of any action described in number 2 of this
Subparagraph.
4-10: Foreclosure, Condemnation, and Receivership.
A. Foreclosure. The Franchisee shall notify the Village immediately whenever
the Franchisee becomes aware of (1) any foreclosure or other judicial sale
of all or any part of the Cable System, or (2) the termination of any
lease or mortgage covering all or any part of the Cable System. Said
notification shall be treated as a notification of a Transfer Petition, as
defined in Subsection 4-9(B) of this Franchise, and the terms, conditions,
and provisions of Section 4-9 of this Franchise, including the requirement
for Village approval, shall apply to any such Consent Action.
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B. Condemnation. If the Cable System, or any part thereof, is taken,
appropriated, or condemned pursuant to law, and if any such taking,
appropriation, or condemnation materially frustrates or impedes the ability
of the Franchisee to comply with the terms, conditions, and provisions of
this Franchise, then the Village may revoke the Franchise in accordance
with the applicable provisions of this Franchise.
C. Receivership.
1. Franchisee Notification. The Franchisee shall immediately notify the
Village, in writing, if any of the following occur:
a. The Franchisee files a voluntary bankruptcy petition, a voluntary
petition to reorganize its business, or a voluntary petition to
effect a plan or other arrangement with creditors.
b. The Franchisee files an answer admitting the jurisdiction of the
court and the material allegations of an involuntary petition
filed pursuant to the Bankruptcy Code.
c. The Franchisee is adjudicated bankrupt, makes an assignment for
the benefit of creditors, applies for or consents to the
appointment of any receiver or trustee of all or any part of its
property, including specifically, but without limitation, all or
any part of the Cable System.
d. The Franchisee institutes dissolution or liquidation proceedings
with respect to its business.
e. An order is entered (i) approving an involuntary petition to
reorganize the business of the Franchisee, (ii) to effect a plan
or other arrangement with creditors of the Franchisee, or (iii)
appointing for the Franchisee a receiver or trustee of all or any
part of the Franchisee's property, including specifically, but
without limitation, all or any part of the Cable System.
f. A writ or warrant of attachment, execution, distant, levy,
possession, or any similar process is issued by any court against
all or any part of the Franchisee's property, including
specifically, but without limitation, all or any part of the
Cable System.
2. Revocation and Exceptions. If any of the events set forth in Paragraph
4-10A-C, of this Franchise are not dismissed, stayed, rescinded, or
terminated, as the case may be, within 60 days after the issuance,
making, or commencement thereof, and if the effect thereof is to
materially frustrate or impede the ability of the Franchisee to comply
with the terms, conditions, and provisions of this
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Franchise, as determined by the Village in its reasonable discretion,
then the Village may revoke this Franchise, unless: (a) within 120
days after a receiver or trustee has been elected or appointed, the
receiver or trustee of the Franchisee, or, within 120 days after the
commencement thereof, the Franchisee itself as a debtor in possession
in connection with any such reorganization or similar proceedings,
shall have remedied any uncured failure to comply with any of the
terms, conditions, and provisions of this Franchise; and (b) within
said 120 days, said receiver or trustee, or the Franchisee itself as
debtor in possession, shall have executed an agreement, duly approved
by the Village and the court having jurisdiction over the premises,
whereby said receiver or trustee or the Franchisee, in said capacity,
assumes ail obligations and agrees to be bound fully by each and every
one of the terms, conditions, and provisions of this Franchise.
PART V: CABLE SYSTEM OPERATIONS
5.1: Cable System Requirements.
A. Channel Capacity. Franchisee will construct a cable system capable of
providing at least 54 channels.
B. Access Channel: Franchisee shall provide the Village with at least one
Access Channel to be used for the following purposes:
1. Municipal Access
2. Educational Access
3. Public Access
C. Local Origination Programming: Franchisee shall provide the Village with at
least one Local Origination channel to be programmable by the Franchisee.
D. Access Channels: Facilities and Equipment; and Local Origination
Programming
1. Studio: Franchisee will provide at the Franchisee's sole cost, in
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addition to the equipment currently in place in the University Park
Studio, and in addition to the equipment that may be purchased by the
Village from the annual access payment of $16,000, made pursuant to
University Park Ordinance 698, the new equipment specified on Exhibit
A to this Agreement. Further, University Park Ordinance No. 698 is
amended by deleting Sections 2(a), (b) and (c), and replacing these
sections with the following language, and by redesignating Section
2(d) and (e) as Section 2 (b) and (c) respectively:
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(a) Access Payment. Franchisee will provide the Village with a total
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annual access payment of $16,000.00. This payment shall be adjusted
annually for inflation by the percentage increase, if any, by which
the Consumer Price Index for the U.S.-All Urban Consumers-U.S. City
Average, (or such successor index as the U.S. Department of Labor,
Bureau of Labor Statistics may develop as a successor index),
increased during the twelve month period ending on the first
anniversary date (and each anniversary date thereafter) for the
calendar year immediately preceding the effective date of this
Franchise Agreement for the duration of this Franchise. This annual
access payment shall be used to fund new equipment purchases,
maintenance of the studio equipment, and to reimburse the Village, in
part, for the operational expenses of the Village Studio UPTV. In
addition, Franchisee shall continue to make available to the residents
of the Village interested in production of local programming, the
Franchisee's mobile van for those residents who are certified to use
such facilities.
2. Local Origination Coverage. Franchisee agrees that at a minimum, it
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shall air five (5) University Park events per annum, on the
Franchisee's regional local origination channel.
E. Parental Control Lockout Device. Franchisee shall provide Subscribers, upon
request at no cost, with a parental control locking device or digital code
that permits inhibiting the viewing of premium channels.
F. Provision of Cable Service
1. Mandatory Extension of Service. The Franchisee shall design and
construct the Cable System to provide Cable Service to all residential
areas within the Village, provided that all such permission as may be
required from the owner of the property is reasonably available, and
that service can be provided in accordance with the following
requirements: in new housing districts, areas with occupancy densities
of more than twenty-five (25) homes per mile which are contiguous to
the system will be provided service as soon as it is technically
feasible. For housing areas less than twenty-five (25) homes per mile,
service will be provided on a cost-sharing basis with the Franchisee,
as soon as it is technically and economically feasible. Further,
Franchisee will be required to provide service to multi-dwelling
units, so long as the owner of the facility consents to the following:
1. To Franchisee's providing of the service to units of the
facility;
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2. To reasonable conditions and times for installation,
maintenance, and inspection of the system on the facility
premises;
3. To reasonable conditions promulgated by Franchisee to
protect Franchisee's equipment and to encourage widespread
use of the system; and
4. To not demand or accept payment from Franchisee for
permitting Franchisee to provide service to the facility and
to not discriminate in rental charges, or otherwise, between
tenants who receive Cable Service and those who do not.
4. Governmental Units. Franchisee shall provide one cable television
service connection and Basic Service, at no charge, Village Hall, the
Police Department, Fire Department Station 1, Public Schools located
within University Park, Rigel Farm, and the Village library.
5. Transmission Sites. The Franchisee shall provide the capability to
provide live transmissions from Village Hall and the UPTV Studio.
6. Standard Installations: For standard installations, as defined by
Federal Communication Commission rules, barring any unforeseen
circumstances, Franchisee will complete these installations within
seven (7) days of request for service.
G. Maintenance. The Franchisee shall employ or have available to it, on a
full-time basis, a professional engineer or its equivalent, and a service
and repair force of competent technicians.
H. Emergency Requirements.
1. Emergency Override. The Franchisee shall provide a local "Emergency
Alert System" that shall, at a minimum, be capable of overriding all
audio on all Channels of the Cable System. The "Emergency Alert
System" shall be capable of being activated and utilized by any
official designated by the Village. The control equipment necessary
for the override function shall be provided and installed by the
Franchisee without charge.
2. Emergency Power. At a minimum, the headend facility shall be equipped
with standby generator. The Franchisee shall provide continuous and
uninterrupted service and operation during any and all emergency
conditions.
I. Village Messages and Announcements. The Franchisee shall make available
to the Village, free of charge, at least one alphanumeric character
generator to program
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visual messages and announcements and a modulator to inject programming
into the Cable System.
J. Basic Service. The Cable System and Cable Service shall be maintained,
constructed, and provided so that Subscribers with cable ready televisions
receiving Basic Service can receive the Basic Service without using a
Converter.
K. Noninterference With Existing Reception. The Cable System shall be designed
to operate, and shall be operated by the Franchisee, in such a manner as to
avoid causing interference with reception of the off-the-air signals by
non-Subscribers of the Franchisee.
L. Customer Service Audits. Franchisee will conduct monthly telephone customer
survey audits. In addition, Franchisee will conduct with the Village
written surveys at least once every two (2) years, or longer, as may be
mutually agreed to by the Village and the Franchisee. The Franchisee and
the Village shall work together to determine the subject matter of the
survey, but it is intended that Subscribers will be asked about their
satisfaction with the Cable Service and suggested improvements. The
Franchisee shall share the results of the survey with the Village and the
Franchisee and the Village shall share the costs of the survey.
PART VI: CONSTRUCTION
6-1: Plans and Permits.
A. Right to Review. Except for line extensions, the Village shall have the
right to review the Franchisee's construction plans and specifications
prior to the commencement of any new construction to assure compliance with
the standards specified in this Franchise and to inspect all aspects of
Cable System construction. The Village shall not, however, be required to
review or approve such plans and specifications or to make such inspections
and specifically disclaims such obligation. The Franchisee shall be solely
responsible for taking all steps necessary to assure compliance with such
standards and to ensure that the Cable System is installed in a safe manner
and pursuant to the terms and conditions of this Ordinance.
B. Construction Briefings and Progress Reports. Except for line extensions,
before beginning new construction of or on any part of the Cable System,
the Franchisee's chief engineer or designated individual shall meet with,
the Village Administrator or designated individual to explain the
Franchisee's construction plans and work program in detail. Similar
briefings shall be held from time to time as deemed necessary by either the
Village or the Franchisee until the Cable System is fully constructed in
accordance with this Ordinance.
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C. "As-Built" Plans. The Franchisee shall, furnish to the Village complete
"as-built" plans of the Cable System upon request.
D. Construction Codes and Permits. The Franchisee shall obtain permits from
the Village before commencing any new construction except as provided for
in section 6-1 :(A)&(B), of or within the Cable System, with specific
permission being required for the opening or disturbance of any Public Way
within the Village. The Franchisee shall also, before the commencement of
construction of the Cable System, become a member of the J.U.L.I.E. system.
Emergency locates shall be done immediately.
6-2: General Construction Standard. All work involved in the construction,
operation, maintenance, repair, and removal of the Cable System, or any part
thereof, shall be performed in a workmanlike manner using materials of good and
durable quality. If, at any time, it is determined by the Village or any other
agency or authority of competent jurisdiction that any part of the Cable System,
including, without limitation, any means used to distribute signals over or
within the Cable System, is harmful to the health or safety of any Person, then
the Franchisee shall, at its sole cost and expense, promptly correct all such
conditions. Any contractor, subcontractor, or other Person proposed to be
employed for the installation, maintenance, relocation, or repair of Cable
System equipment or facilities shall be licensed in accordance with applicable
laws and shall be thoroughly experienced in the work for which he or she is
retained.
6-3: Cable Drops.
A. Standards.
1. Personnel. Only employees of the Franchisee or qualified independent
contractors under the direct supervision and control of the Franchisee
shall be used to install cable and connect Subscriber facilities on a
Subscriber's property. All such personnel shall be bonded and shall be
covered by liability and property damage insurance in the amounts
specified in Section 4-9 of this Ordinance.
2. Compliance with Applicable Law. Cable Drops shall be installed in
compliance with the National Electric Code, as the same may be amended
from time to time, and in compliance with all other applicable law.
3. Notice to Subscriber. Except in cases requiring emergency repair, or
related to a specific Service problem, or installation of regular
subscription Services at the Subscribers residence or business, the
Franchisee shall give each Subscriber at least three days advance
notice before attempting to perform any construction, reconstruction,
or installation within the Subscriber's residence or business. Such
notice shall be by door hanger or by mail.
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6-4: Construction On and In Public Ways. Unless expressly provided otherwise in
this Franchise, the Franchisee shall at all times comply with any and all rules
and regulations enacted or to be enacted by the Village with reference to
construction activity in Public Ways. All poles, wires, conduits, cables,
equipment, pipes, appurtenances, structures, and other facilities of the Cable
System shall be installed and located in compliance with all applicable Village
ordinances and the applicable provisions of this Franchise so as to cause
minimum interference with the rights and reasonable convenience of the general
public, all as determined by the Village in reasonable discretion. All such
facilities shall at all times be kept and maintained in a safe condition and in
good order and repair. The Franchisee shall at all times employ reasonable care
and shall install, maintain, and use commonly accepted methods and devices for
preventing failures and accidents that are likely to cause damage, injuries, or
nuisances to the general public. Suitable barricades, flags, lights, flares, or
other devices shall be used at such times and places as are required by
applicable ordinances and at such additional times and places as are required
for the safety of all members of the general public, as determined by the
Village in its sole and absolute discretion. Any such facilities placed in any
Public Way by the Franchisee shall be placed and maintained in such a manner as
not to interfere with the usual travel or other existing or projected uses of
such Public Way.
6-5: Damage to Public or Private Property. The Franchisee shall arrange its
lines, cables, and other appurtenances on Public Ways, Public Property and
private property in such a manner prevent failures and accidents which are
likely to cause damage or injury to the Public Ways, Public Property, or Private
Property by any person. In the event of such damage, any public right-of-way,
public property or private property that is disturbed or damaged shall be
promptly repaired by Franchisee, at its sole expense.
6-6: Excavation Work and Time Periods.
A. Excavation Restricted. No excavation on or in any Public Way, Public
Property, or private property in the Village permitted hereunder in
connection with the installation of any Cable System facilities shall be
made more than 24 hours immediately before installation of such
facilities.
B. Prior Notification. The Franchisee shall notify the Village Administrator
at least 72 hours before any excavation on or in any Public Way, Public
Property, or private property so that the Village Administrator will have
the opportunity to inspect such excavation work.
C. Excavations in Lawns and Parkways. All excavations in lawns or grassy
parkways shall be promptly backfilled, tamped, and restored with sod in
accordance with the applicable provisions of this Ordinance.
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6-7: Location of Cables. The principles set forth in Subsections A through D of
this Section, in that order of priority, shall govern the location of the
Franchisee's cables, wires, and other appurtenances.
A. All of Franchisee's facilities except Cable Drops shall be located within
existing public easements only, except only as provided in, and subject to
the limitations established in, Section 6-8 of this Franchise.
B. Wherever existing utility poles can physically accommodate, with or
without modification, the Franchisee's cables, wires, or other
appurtenances, or whenever existing utility conduits, ducts, vaults, or
other existing utility facilities can physically accommodate the
Franchisee's cables, wires, or other appurtenances, the Franchisee shall
utilize such existing utility facilities and shall not construct or
install any new, different, or additional facilities.
C. For new installations, if either or both of the existing electric or
telephone utility facilities are above ground at a particular location,
then the Franchisee may install its facilities above ground.
D. For new installations, if both the electric and telephone utilities are
underground at a particular location, then the Franchisee shall install
its facilities underground.
6-8: Franchisee Use of Public Ways Not Exclusive. The right of the Franchisee
to use and occupy the Public Ways pursuant to this Franchise shall not be
exclusive. The Village reserves the right to grant the right to use of such
Public Ways to any Person in accordance with the terms and conditions of Section
3-1.
6-9: Establishment of Easements and Dedications. The Franchisee shall have the
use of any easement or right-of-way dedicated for use by the Village, general
public or use compatible with the cable system operation.
6-10: Reservations of Public Way Rights. The following reservations in the use
of the Public Ways shall be complied with by the Franchisee notwithstanding the
grant to use Public Ways pursuant to this Franchise:
A. Sewers, Public Ways, Water Mains, and Public Works. Nothing in this
Franchise shall be construed to prevent the Village from constructing
sewers in, or from grading, paving, repairing, or altering any Public Way,
or laying down, repairing, or removing water mains or constructing or
establishing any other public work. All such work shall be done, insofar
as practicable in such manner as not to obstruct, injure, or prevent the
free use and operation of the poles, wires, conduits, cables, equipment,
pipes, appurtenances, or other facilities of the Franchisee. If any such
property of the Franchisee shall interfere with the construction or repair
of any Public Way or public improvement, whether it is the construction,
repair, or removal of a sewer or water
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main or the construction, repair, or removal of a Public Way or any other
public improvement, the Village shall give the Franchisee 30 days written
notice, and such poles, wires, conduits, equipment, pipes, appurtenances,
or other facilities of the Franchisee shall be relocated, removed, or
replaced by the Franchisee in such a manner as shall be reasonably
directed by the Village so that the same shall not interfere with the
public work of the Village. Franchisee shall not be reimbursed for such
relocation, removal or replacement.
B. Creation or Dedication of Public Way. No Public Way shall be used by the
Franchisee if the Village, in its sole and absolute discretion, determines
that such use is inconsistent with the terms, conditions, or provisions by
which such Public Way was created or dedicated, or is then being used.
C. Improvements or Changes on Public Way. If the Village shall make
improvements or changes on all or any part of any Public Way, over, under,
or along which any part of the Cable System has been installed, then and
in every case the Franchisee shall, at its sole expense after 30 days
written notice from the Village, alter, change, vacate, or remove from the
Public Way any part of the Cable System necessary to conform with said
Village improvements or changes. Franchise shall be reimbursed for such
work to the extent any utilities are reimbursed.
D. Construction and Use. All construction upon, over, or under or other use
of Public Ways by the Franchisee shall comply with all applicable
ordinances of the Village.
6-11: Public Way Vacation or Abandonment. If any Public Way or portion thereof
used by the Franchisee shall be vacated by the Village, or the use thereof
discontinued by the Village or the Franchisee, during the term of this
Franchise, then the Franchisee shall forthwith at its sole cost and expense
remove its facilities therefrom unless specifically permitted to continue to use
the same and, on the removal thereof, and restore, repair or reconstruct the
Public Way area where such removal has occurred to its original condition as
required by the Village. In the event of any failure, neglect, or refusal by the
Franchisee, after 30 days written notice from the Village to repair, improve, or
maintain such Public Way, the Village may, but shall be under no obligation to,
conduct such work, or cause it to be conducted, at cost and shall be reimbursed
by the Franchisee.
6-12: Movement or Removal. If it is necessary to move or remove temporarily any
of the Franchisee's poles, wires, conduits, cables, equipment, pipes,
appurtenances, or other facilities to move a large object, vehicle, building, or
other structure over the Public Ways of the Village, the Franchisee shall, upon
10 days written notice, move or remove such poles, wires, conduits, cables,
equipment, pipes, appurtenances, or other facilities. If requested by the
Village or other public body, such movement or removal shall be at the
Franchisee's sole cost and expense. Franchise shall be reimbursed for this work
to the extent any utility is reimbursed. If requested by a private Person, such
movement or removal shall be at said Person's sole cost and expense. Any service
interruption limitations of this Franchise shall
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not apply if such movement or removal of the Franchisee's facilities results in
reasonably temporary service interruptions.
6-13: Village Right of Inspection. The Village shall have the right to inspect
and approve all construction. All construction shall comply with all Village,
State of Illinois, and federal laws, ordinances, rules, and regulations,
including specifically, but without limitation, State and national electrical
codes.
6-14: Trimming Trees. Franchisee shall have the prior right to cut or trim any
tree, shrub, or other vegetation in or on any Public Way. The Franchisee may not
cut or trim trees, shrubs, or other vegetation on private property as necessary
without the express prior written consent and permission of the owner of the
property on which any such tree, shrub, or vegetation is located. All such
trimming shall be in accordance with standard horticultural practices, and no
trimming shall occur until the wires, cables, or other fixtures have first been
attached to the poles in order to ensure trimming to the minimum extent
necessary. All trimming debris shall be removed from the work area on a
reasonable basis.
6-15: Restoration.
A. Franchisee Obligation. If the Franchisee destroys, damages, or disturbs
any Public Way, Public Property, or private property in the Village, or
any improvement on any of them, then the Franchisee shall, at its sole
cost and expense and in a manner approved in advance by the Village or the
affected property owner, as the case may be, promptly repair, replace, and
restore such Public Way, Public Property, private property, or improvement
in as good a condition as existed before the destruction, damage, or
disturbance took place. If it becomes practically impossible to repair,
replace, or restore any such Public Way, Public Property, private
property, or improvement, then the Franchisee shall cause the Village or
the owner of the property, as the case may be, to be justly compensated.
B. Continuing Responsibility. If the destruction, damage, or disturbance of
any Public Way, Public Property, private property, or improvement located
thereon is not immediately discovered, or if any subsequent restoration
effort does not comply with the standards set forth in this Ordinance, the
Franchisee shall have a continuing responsibility to perform or re-perform
all necessary restoration work.
C. Failure, Neglect, or Refusal to Repair. If, after 30 days written notice
from the Village, the Franchisee fails, neglects, or refuses to repair any
destroyed, damaged, or disturbed Public Way, Public Property, private
property, or any improvement located thereon, then the Village may, but
shall be under no obligation to, do such work, or cause it to be done, at
cost, and shall be paid by the Franchisee in the time and manner as
directed by the Village. The Village may recover the costs of any such
Village work by court action, or otherwise.
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6-16: Time for Notice. In the event of an emergency involving life or property,
as determined by the Village in its reasonable the Village may reduce or
eliminate the notice requirements set forth in Part VI of this Franchise, and
otherwise take all necessary action to protect the public health, safety and
welfare.
PART VII: OPERATION AND MAINTENANCE
7-1: Ownership Restrictions; Books and Records.
A. Ownership Restrictions Governed by Cable Act. To the extent applicable,
Section 533 of the Cable Act, and any FCC regulations promulgated
thereunder, shall govern and restrict ownership of this Franchise.
B. Ownership Records. The Franchisee shall (1) within 30 days after the
Effective Date, and (2) once annually furnish the Village with a list,
showing the names and addresses of Persons owning 5 percent or more of any
class or series of the outstanding voting stock or equivalent ownership
interest of the Franchisee, together with a roster of the Franchisee's
officers and directors (or equivalent managerial personnel) and their
addresses.
C. Financial Records. The Franchisee shall maintain books and records of its
operations within and related to the Village and the Cable System in
sufficient detail to show Gross Revenue, by service category, consistent
with generally accepted accounting principles. The Franchisee shall,
annually within 90 days after the close of the Franchisee's fiscal year,
prepare in accordance with generally accepted accounting principles, and
submit to the Village, a statement of Gross Revenues covering the
Franchisee's operations in and relating to the Village and the Cable
System. Said books and records shall be retained during the entire term of
this Franchise.
D. Operating Records. The Franchisee shall maintain reasonable records
pertaining to the operation of the Cable System, Cable System performance,
Cable System complaints, Cable System testing, Cable System use, Cable
System programming, and any other records specifically required to be
maintained by this Ordinance. Upon a request for confidentiality by the
Franchisee, Franchise information obtained by the Village pursuant to this
shall be made available only to persons needing access to the materials in
order to perform their responsibilities on behalf of or for the Village,
and as to all other persons, shall to the extent permitted by laws, be
treated as confidential. Franchisee also maintain the right to require
that the Village execute a confidentiality and/or non-appropriation
agreement prior to gaining access to any materials under this Franchise.
E. Village Access to Records. The Village shall have the right to inspect and
audit any or all of such books and records at any time during normal
business hours upon reasonable request. Upon a request for confidentiality
by the Franchisee, Franchise
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information obtained by the Village pursuant to this shall be made
available only to persons needing access to the materials in order to
perform their responsibilities on behalf of or for the Village, and, as to
all other persons, shall to the extent permitted by law, be treated as
confidential. Franchisee also maintain the right to require that the
Village execute a confidentiality and/or non-appropriation agreement prior
to gaining access to any material under this Franchise.
F. Franchisee Forms, Policies, Rules, and Similar Documents. Copies of the
Franchisee's (1) schedule of charges, (2) application forms for Subscriber
services, (3) policies regarding the processing of Subscriber complaints,
(4) delinquent Subscriber disconnect and reconnect procedures, (5) Cable
System rules and regulations, and (6) all other terms and conditions
adopted as the Franchisee's policy in connection with its Subscribers,
shall be filed with the Village and shall be made available for inspection
by the public at the Franchisee's local office during normal business
hours.
7-2: Reports and Documents. The Franchisee shall submit to the Village a copy
of the annual proof of performance tests report required by the FCC within 30
days after tests are conducted. Upon request, the Franchisee shall also submit
to the Village copies of all other correspondence, petitions, reports,
applications, and other documents filed by the Franchisee with the FCC, the
Securities and Exchange Commission, or any other federal or state regulatory
commission or agency having jurisdiction with respect to matters affecting the
Cable System, or received by the Franchisee from any such commission or agency,
within 5 days after any such request.
7-3: Monthly System Reports. The Franchisee shall submit monthly reports to the
Village documenting, monthly system activity, written complaints received and
resolution of these complaints, and outage activity.
7-4: Annual Reports. On each annual anniversary of the Effective Date during
the term of this Franchise, the Franchisee shall file with the Village, at the
Franchisee's sole cost and expense, (A) financial statements certified by the
Franchisee, consisting of a balance sheet, income statement, and statement of
any changes in the financial position of the Franchisee as of the end of each
calendar year; and (B) a current copy of the Franchisee's Subscriber service
contract if any, and, (C) the Franchisee's complaint procedures.
7-5: Audits. The Village shall have the right to arrange for and conduct an
audit of the Franchisee, and shall have the right to copy the books and records
of the Franchisee; provided, however, that the Village shall not conduct more
than one such audit during each calendar year. The Village shall give the
Franchisee 10 days written notice of the Village's audit request, the
description and purpose of the audit, and a description, to the best of the
Village's ability, of the books, records, and documents that the Village desires
to review. In the event that said audit discusses an underpayment in the
Franchise Fee by an amount in excess of 10 percent of the applicable Franchise
Fee, then the Franchisee shall pay the full cost of such audit.
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7-6: Subscriber Practices.
A. Initial Installation. The Franchisee shall fill all requests for standard
installation of Cable System Service within seven (7) days after the date
of any such request. The Franchisee shall keep a record of all such
requests at all times during the term of this Franchise.
B. Disconnection and Reconnection. Unless the Subscriber agrees otherwise,
said disconnection shall be made as soon as practicable, and in no case
later than 30 days after the Subscribers written request to the Franchisee.
If a Subscriber fails to pay the properly due monthly subscription fee, or
any other property due fee or charge, then the Franchisee may disconnect
the Subscribers Service, provided that such disconnection shall not take
place until 20 days after delivery to such Subscriber of a written notice
of the intent to disconnect. Such notice shall not be sent until at least
30 days after the due date of the delinquent fees or charges. The
Franchisee shall not disconnect service to a Subscriber so long as the
Subscriber pays all amounts due before the later to occur of either of the
foregoing dates. After disconnection, upon payment in full of the
delinquent fee or charge and the payment of a reconnection charge, if any,
the Franchisee shall promptly reinstate and reconnect the Subscribers
Service. The Franchise maintains the right not to reconnect in the event of
subscriber fraud or deceit.
C. Refunds. Refunds to Subscribers shall be made or determined in the
following manner
1. If the Franchisee fails, upon request of a Subscriber, to provide any
Cable Service then being offered, then the Franchisee shall promptly
refund all deposits or advance charges paid for such Cable Service by
said Subscriber. This provision does not alter the Franchisee's
responsibility to Subscribers under any separate contractual agreement
or relieve the Franchisee of any other liability or obligation.
2. If a Subscriber terminates any Cable Service prior to the end of a
prepaid period, then the Franchisee shall refund to the Subscriber a
proportionate portion of any prepaid Subscriber Cable Service Fee,
using the number of days, based on a 365-day year, as a basis. The
Franchisee shall make such refund within 30 days after disconnection
of the terminated Cable Service.
D. Advance Payments. Except as expressly otherwise approved by the Village, no
Cable Service shall be offered that requires payment more than one month in
advance; provided, however, that the Franchisee may offer longer advance
payment programs as an option in connection with any Cable Service.
7-7: Service and Subscriber Contracts and Information.
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A. Provision of Information to Subscribers. The Franchisee shall, prior to or
at the time of installation of any Cable Service, provide the Subscriber,
at a minimum, with, (1) a description of all Services offered, (2)
instructions on the use of the Cable System, (3) billing and collection
practices, and (4) Subscriber complaint and service procedures.
B. Statement. All Subscriber contracts shall contain the following statement:
"The Franchisee shall not, as to rates, charges, service facilities, rules,
regulations, or in any other respect, make or grant any preference or
advantage to any Person, nor subject any Person to any prejudice,
disadvantage, or discrimination. The Franchisee is not prohibited, however,
from establishing special contracts for nonprofit organizations, employees
of the Franchisee residing in the Village, or discounts available to all
persons for promotional campaigns."
C. Franchisee Authority. The Franchisee shall have the authority to promulgate
such rules, regulations, terms, and conditions governing the conduct of its
business as shall be reasonably necessary to enable the Franchisee to
exercise its rights and to perform its obligations under this Franchise and
to ensure uninterrupted Service to each and all of its Subscribers;
provided, however, that no such rules, regulations, terms, or conditions
shall be in conflict with the any of the terms, conditions, or provisions
of this Franchise, or with any ordinances of the Village or the laws of the
State of Illinois or the United States.
D. Items to be Provided. If a Subscriber contract is utilized, then all items
required to be provided pursuant to this Section shall be provided to each
new Subscriber at the time a contract is entered into or at the time any
Service begins, whichever is earlier. All items required to be provided
pursuant to this Section shall be provided to all existing Subscribers not
less than once each year.
7-8: Complaints and Service Calls.
A. Notice of Procedures. The Franchisee shall furnish each Subscriber, at the
time Cable Service is installed, written instructions that clearly set
forth procedures for registering a complaint, placing a service call,
requesting a billing adjustment, or otherwise obtaining information or
assistance from the Franchisee. Said instructions shall include the
telephone number described in Subsection B of this Section.
B. Telephone Number. The Franchisee shall have a publicly listed, toll free
telephone number, operated to efficiently receive Subscriber complaints and
requests for repairs or Service, 24 hours-a-day, 7 days-a-week.
C. Service Interruption. The Franchisee shall prevent Service interruptions,
render efficient Service, and make repairs promptly. The Franchisee shall
not interrupt Cable
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Service after 7:00 a.m. and before 1:00 a.m., except for good cause and for
the shortest time possible and, except in emergency situations.
D. Franchisee Response, Rebates Required. The Franchisee shall maintain a
repair force of technicians that shall respond to Subscriber complaints or
requests for Service within twenty-four (24) hours after receipt of the
complaint or request. All repairs necessary to correct a malfunction of the
System shall be made as soon as possible. The Franchisee shall, with notice
from the Subscriber, credit a Subscriber's bill for any interruption of
service effecting the Subscriber and which occurs during the billing period
except for such interruption as may occur between the hours of 1:00 a.m.
and 7:00 a.m.
E. Customer Service Office. The Franchisee shall maintain a customer service
office in close proximity to the Village. The office shall be open and
accessible to the public during normal business hours.
F. Identification. During construction or repair, all employees, contractors,
and subcontractors of the Franchisee shall carry a photo identification
card at all times.
G. Service Records. The Franchisee shall keep a record of all service calls
received. Said record shall include copies of all service calls and
complete reports showing when said call was received, the time of
disposition, the service technician employed, and the nature of the
problem. The Franchisee shall also maintain a record of the nature, time,
duration, and probable cause of all Cable System failures reported to or
discovered by the Franchisee. Said records, which may be combined by the
Franchisee, shall be available for public inspection at the Franchisee's
local office during normal business hours. All records required to be
maintained under this subsection shall be maintained for a period of at
least three years.
7-9: Safety.
A. Standard of Care. The Franchisee shall at all times utilize the standard of
care attendant to the risks involved and shall install and maintain in use
commonly accepted methods and devices for preventing failures and accidents
that are likely to cause damage, injury, or nuisance to the public or to
employees of the Franchisee.
B. Equipment Installation and Maintenance. All Cable System installations
shall be made so as not to impair the fire integrity of any building or
structure. The Franchisee shall install and maintain its wires, cables,
fixtures, and other equipment in accordance with the requirements of all
applicable codes, and in such manner that they will not interfere with any
installations of the Village or any public utility. All lines, equipment,
and connections in, over, under, and upon the Public Ways, Public Property,
and private property within the Village, wherever situated or located,
shall at
32
<PAGE>
7-10: Motor Vehicle Operation. All operators of vehicles under the Franchisee's
control shall have, at the time of their employment, and throughout the term
of their employment, a valid drivers license issued by the State of Illinois.
7-11: Tests and Performance Monitoring. All Cable System testing procedures
shall be in accordance with the most recent edition of "Standards of Good
Engineering Practices for Measurements on Cable Television System," published by
the National Cable Television Association, or such other generally accepted
industry procedures. Properly calibrated, state of-the-art equipment shall be
used in all testing.
33
<PAGE>
PART VIII: RIGHTS OF INDIVIDUALS PROTECTED
8-1: Employment Requirement; No Discrimination.
A. Equal Employment Opportunity; Discrimination Governed by Cable Act. To the
extent applicable, Section 554 of the Cable Act, and the federal
regulations promulgated thereunder, shall govern the employment practices
of the Franchisee.
B. Equal Employment Opportunity; Discrimination Where Cable Act Not
Applicable. To the extent Section 554 of the Cable Act is repealed,
modified, or otherwise not applicable, the Franchisee shall conform to
applicable federal, State of Illinois, and Village laws, ordinances,
resolutions, rules, and regulations.
8-2: No Discrimination. The Franchisee shall not deny any Service, deny access,
or otherwise discriminate against Subscribers or other Persons on the basis of
age, sex, race, color, creed, national origin, or on any other basis prohibited
by law. The Franchisee shall comply at all times with all applicable federal,
State of Illinois, and Village laws, and all executive and administrative
regulations, rules, and orders, and any provisions of this Franchise, relating
to nondiscrimination. The Franchisee shall not deny any Service or access to any
individual or group of potential residential Subscribers on the basis of income.
8-3: Subscriber Privacy. The Franchisee shall comply at all times with all
applicable federal rules, and orders, and any provisions of this Franchise
relating to the protection of privacy of any Subscriber.
8-4: Permission of Property Owner Required. To the extent that the Cable Act,
the Illinois Municipal Code, or this Franchise allow the Franchisee to place its
equipment within easements where utility equipment exists without the permission
of this applicable property owner then the Franchisee may place its equipment in
such easements without such permission provided that such placement is in
accordance with the provisions of this Franchise. If the Franchisee desires to
place its equipment in a location on private property where no utility equipment
exists, then the Franchisee shall secure a written authorization from the
applicable property owner, its authorized agent, or a duly elected or appointed
representative of the property involved.
PART IX: GENERAL PROVISIONS
9-1: Work Performed by Others.
Written Notice. Upon request, the Franchisee shall give notice to the Village
specifying the name and address of any Person other than the Franchisee who
perform any obligations of the Franchisee pursuant to this Franchise; provided,
however, that all provisions of this Franchise shall remain the responsibility
of the Franchisee.
34
<PAGE>
9-2: Limits on the Franchisee Recourse.
A. Release and Waiver of Claims. The Franchisee shall have no recourse
against the Village for any loss, expense, or damage resulting from the
terms and conditions of this Franchise nor because of the Village's
enforcement thereof. The Franchisee shall be deemed to expressly agree
that it accepts this Franchise relying solely on its own investigation and
understanding of the power and authority of the Village to grant said
Franchise and that, in partial consideration of the grant of the
Franchise, the Franchisee waives and releases all claims of damages of any
kind whatsoever, either known or unknown, existing or future, that it may
have in connection with any matter specified in this Subsection.
B. No Extraneous Inducements. The Franchisee acknowledges that it has not
been induced to accept this Franchise 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 Franchise not otherwise expressed herein. The
Franchisee shall further be deemed to warrant that no promise or
inducement, oral or written, has been made to any Village employee or
official regarding receipt of this Franchise, other than as contained in
this Franchise.
9-3: Compliance With Law. The Franchisee shall, at all times during the term of
this Franchise, comply with all applicable federal State of Illinois and local
laws, rules, and regulations, regardless of whether such law, rule, or
regulation is expressly referenced in this Franchise.
9-4: Subsequent Action by Federal, State, or Local Authorities.
A. Subsequent Law, Agreement, or Regulation. If any subsequent law,
ordinance. regulation, controlling judicial review, or decision shall
require or permit the Franchisee to perform any act or shall prohibit the
Franchisee from performing any act such that the Franchisee may not be in
compliance with the terms and conditions of this Franchise, then, as soon
as possible after knowledge thereof, the Franchisee shall so notify the
Village. If the Village determines, in agreement with the Franchisee that
a material provision of this Franchise is affected by such changed or new
law, ordinance, or regulation, then the Village and the Franchisee shall
enter into good faith negotiations to modify this Franchise to conform
with such changed requirements.
B. Change in Federal or State Laws or Regulations. If any federal or State of
Illinois law or regulation, including without limitation the Cable Act,
is, at any time after the effective Date, changed, modified, interpreted
in a final and nonreviewable decision by a court of competent jurisdiction
or appropriate administrative agency, amended, repealed, or invalidated so
as to allow for greater regulation by the Village of the Franchisee or a
Cable Communication System, or so as to permit greater benefits to
35
<PAGE>
the Village, the Franchisee and the Village shall enter into good faith
negotiations to modify this Franchise.
9-5: Nonenforcement by Village. The Franchisee shall not be excused from
complying with any of the terms and conditions of this Franchise by any
failure of the Village, on any one or more occasions, to insist on the
Franchisee's performance of, or to seek the Franchisee's compliance with,
any one or more of said terms or conditions except as may be permitted by
federal law.
9-6: Rights and Remedies. In the event of a violation or an alleged violation
of this Franchise by the Franchisee, the Village, by suit, action,
mandamus, or other proceeding, in law or in equity, may enforce or compel
the performance of the terms of this Franchise to the full allowable
extent. In the event of a judicial proceeding by the Franchisee against
the Village of all costs and expenses, including reasonable attorneys
fees, incurred in connection with such judicial proceeding shall be
determined by the court or other authority in charge of rendering
decisions in the case.
9-7: Village Right to Delegate Authority and Functions. The Village shall have
the right to delegate any or all of its authority or rights under this
Franchise to any Person, department, board, commission, or agency within
or outside the Village or to designate any Person, department, board,
commission, or agency within or outside the Village to act on its behalf
under this Franchise; provided, however, that no such delegation or
designation shall be effective to bind the Village, or for any other
purpose, unless evidenced by an ordinance or resolution duly adopted by
the President and Board of Trustees of the Village and provided further
that no such delegation or designation shall be effective to authorize any
authority or action beyond those expressed in said ordinance or
resolution. When and to the extent so delegated or designated, said
Person, department, board, commission, or agency shall be deemed to be an
Authorized Agent of the Village or its Board of Trustees as this term is
used in this Franchise.
9-8: Unauthorized Reception and Reselling Prohibited.
A. Unauthorized Reception and Reselling Where Cable Act Applicable. To the
extent applicable, the Cable Act shall govern the prohibitions against and
penalties for unauthorized reception and reselling of Cable Service.
B. Unauthorized Reception and Reselling Where Cable Act Not Applicable. To
the extent the Cable Act is modified, repealed, or otherwise do not apply,
the following standards shall govern the unauthorized receipt or reselling
of Cable Service:
1. Unauthorized Connection. No Person shall make any unauthorized
connection, whether physically, electrically, acoustically,
inductively, or otherwise, with any part of the Cable System existing
in the Village for the purpose of enabling
36
<PAGE>
said Person or others to use or receive television signals, radio
signals, pictures, programs, sounds, or any other information or
intelligence transmitted over the Cable System without payment to the
Franchisee.
2. Tampering, Removal, or Injury. Except as otherwise provided in this
Franchise, no Person shall, without the consent of the Franchisee,
willfully tamper with, remove, or injure any cable, wires, or other
equipment used for the distribution of television signals, radio
signals, pictures, programs, sounds, or any other information or
intelligence transmitted over the Cable System.
3. Unauthorized Use or Receipt. The existence of any connection, wire,
conduct or, or other device whatsoever that enables any Person to use
or receive the cable television service without such use or receipt
being specifically authorized by, or compensation paid to, the
Franchisee may be considered as evidence of intent to violate this
Section.
4. Reselling. No Person in the Cable Service Area receiving any Cable
Service, program, or signal transmitted over the Cable System shall
resell such Cable Service, program, or signal without the express
written consent of the Franchisee and the Village.
9-9: Time Essence of Agreement. Except as provided in Section 9-10 of this
Franchise, whenever this Franchise sets forth any time for any act to be
performed by the Village or the Franchisee, said time shall be deemed to be of
the essence.
9-10: Force Majeure. Whenever a period of time is provided for in this
Franchise for either the Village or the Franchisee to do or perform any act or
obligation, neither party shall be liable for any delays or inability to perform
due to causes beyond the control of said party such as war, insurrection,
rebellion, strike, lockout, unavoidable casualty or damage to personnel,
materials or equipment, fire, flood, storm, earthquake, tornado, or any act of
God; provided, however, that said time period shall be extended for only the
actual amount of time said party is so delayed.
9-11: Severability. If any section, subsection, sentence, clause, phrase, or
other portion or provision of this Franchise, or its application to any Person,
is for any reason declared invalid, in whole or in part, by any court, agency,
commission, legislative body, or other authority of competent jurisdiction, said
decision shall not affect the validity of the remaining portions hereof.
9-12: Franchisee Acknowledgment. The Franchisee acknowledges that: (A) it has
carefully read the terms, conditions, and provisions of this Franchise; (B) it
unequivocally accepts the obligations imposed by said terms, conditions, and
provisions; (C) it agrees to accept unequivocally the validity of said terms,
conditions, and provisions; (D) it unequivocally agrees to abide by said terms,
conditions, and provisions.
37
<PAGE>
9-13: Effective Date
This Franchise shall be in full force and effect only on, and not before, the
Passage and approval, of University Park Ordinance No. ____.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on its behalf in accordance with the effective date stated above.
VILLAGE UNIVERSITY PARK, ILLINOIS
ATTEST: BY: /s/ Rudolf Will
--------------------------
/s/ Irma Berry TITLE: Village President
- ------------------- -----------------------
CABLE TV FUND 15-A, LTD.
a Colorado limited partnership
BY: Jones Intercable, Inc.
a Colorado corporation as
its General Partner
ATTEST: BY: /s/ Rick Wime
----------------------------------
/s/ Nancy L. Mann TITLE: Group Vice President/Operation
- ------------------- --------------------------------
ASST. SECRETARY
38
<PAGE>
ORDINANCE NO. 96-0-732
--------
AN ORDINANCE AMENDING AND
RENEWING THE VILLAGE 0F KILDEER
COMMUNITY ANTENNA TELEVISION ORDINANCE
WHEREAS, the Board of Trustees of the Village of Kildeer, Illinois
(the "Village"), granted a franchise to construct, own, operate and maintain a
cable television system within the Village of Kildeer (the "System") pursuant to
Ordinance No. 81-0-324, dated August 6, 1981, (the "Franchise") to Centel Cable
Television Company of Illinois; and
WHEREAS, the Board of Trustees of the Village, approved a transfer of
the Franchise to Jones Intercable, Inc., a Colorado corporation ("Jones" or
"Operator") or any affiliate of Jones, including any limited partnership or
partnerships of which Jones or any affiliate of Jones is a general partner, or
any joint venture or general partnership or partnerships of which Jones, any
affiliate of Jones, or any such limited partnership or partnerships is a
constituent partner, pursuant to Resolution No. 89-R-18, adopted by the Board of
Trustees of the Village on July 6, 1989; and
WHEREAS, the Franchise was scheduled to expire on August 6, 1996; and
WHEREAS, on July 1, 1996, the Board of Trustees of the Village
extended the term of Jones' Franchise to November 4, 1996; and
WHEREAS, it is the desire of Jones and the Village to renew the
current terms and conditions of the Franchise subject to the following
modifications.
1. Section 1.04 is amended to add the word "Cable" before the word "services"
in the second sentence of this Section.
<PAGE>
2. Section 6.01 is amended to add a subsection (a) to the first line of this
Section, and to replace the last sixteen lines of Section 6.01 with the
following language:
"(b) The Operator shall establish and maintain in close proximity to the
Village limits of Kildeer a studio for local programming, consisting of at least
one view finder color video camera, switcher fader controls, audio system,
lighting system, and one video tape recorder. In addition, the Operator has
purchased and added new equipment to this studio as listed on Attachment A to
this Agreement. All equipment is remotely controlled from a master control unit.
These facilities shall be available on a time sharing basis to the Village, its
agencies, public service organizations, and schools districts lying wholly or
partly within the Village. Operator shall maintain all equipment in proper
working order at all times.
(c) Nothing in this Ordinance shall be construed to prohibit the
enforcement of any federal, state or local law or regulation concerning customer
service or consumer protection that imposes customer service standards or
consumer protection requirements that exceed the customer service standards set
out in this Ordinance or that address matters not addressed in this chapter.
(d) The Operator shall maintain a local or toll-free telephone access line
which is available to its subscribers and shall have knowledgeable, qualified
representatives available to respond to customer telephone inquiries twenty-four
(24) hours per day, seven (7) days per week.
(e) Under normal operating conditions, telephone answer time, including
wait time and the time required to transfer the call, shall not exceed thirty
(30) seconds. This standard shall be met no less than ninety percent (90%) of
the time as measured on a quarterly basis.
2
<PAGE>
(f) Under normal operating conditions, the customer will receive a busy
signal less than three percent (3%) of the total time that the office is open
for business.
(g) Bill payment locations will be open for walk-in customer transactions
during normal business hours. Normal business hours shall mean those hours of
operation in existence as of the effective date of this Franchise.
(h) Under normal operating conditions, each of the following standards
will be met no less than ninety-five percent (95%) of the time as measured on
an annual basis.
(1) Standard installations will be performed within seven (7) business
days after an order has been placed. A standard installation is one
that is within one two hundred and ten (210) feet of the existing
system.
(2) Excluding those situations that are beyond its control, the
Operator will respond to any service interruption promptly and in
no event later than twenty-four (24) hours from the time of initial
notification. All other regular service requests will be responded
to within thirty-six (36) hours during the normal work week for
that system. The appointment window alternatives for installations,
service calls and other installation activities will be: "morning"
or "afternoon"; not to exceed a four-hour "window" during normal
business hours for the system, or at a time that is mutually
acceptable. The Operator shall schedule supplemental hours during
which appointments can be scheduled based on the needs of the
community. If at any time an installer or technician is running
late, an
3
<PAGE>
attempt to contact the customer will be made and the appointment
rescheduled as necessary at a time that is convenient to the
customer".
(3) In the case of a complete loss of picture or sound on all,
channels, that remains uncorrected for longer than twenty-four
hours after reported to the Operator by the customer, then upon
request by the customer, the Operator shall give a rebate to any
affected customer equal to a pro rata share of the customer's
monthly bill for each day or fraction thereof in excess of the
repair time limit during which the malfunction goes uncorrected."
3. Section 7 of Ordinance No. 81-0-324 is hereby deleted in its entirety.
4. Section 8.01 of Ordinance No. 81-0-324 is hereby deleted in its entirety and
replaced as follows:
"The CATV System shall have a single trunk (54) channel capacity; and shall
be capable of receiving and transmitted all VHF, UHF and FM signals and carry
all available local television stations as required by the FCC; and shall carry
at least one channel for the following purposes:
(a) Municipal Access
(b) Educational Access
(c) Public Access
In Addition, as of the effective date of this Agreement, Operator has added
two new video programming products to the CATV system.
4
<PAGE>
5. Sections 8.12 and 8.13 of Ordinance No. 81-0-324 are deleted in their
entirety, and the subsequent sections of the Ordinance are renumbered
accordingly..
6. Section 9.01 of Ordinance No. 81-0-324 is deleted and replaced with the
following language:
"The Operator shall pay to the Village for the privilege of operating
a CATV system under this franchise an amount equal to five percent (5%) of the
Operator's gross revenues."
7. Section 15 of Ordinance No. 81-0-324, entitled Term of Franchise, is hereby
deleted and replaced as follows:
"The term of this Franchise shall remain in effect for a period of
four (4) years beginning August 7, 1996, and expiring August 7, 2000.
If on or before August 7, 2000, the CATV Operator makes available
eighty-five (85) video programming channels, or such other number of
channels on a comparable basis as is provided to the Subscribers of
Lake Zurich, the term of this franchise shall be automatically
extended, without further Village action, to August 7, 2008".
8. A new Section 23 is added to the Ordinance to read as follows:
"Section 23: Evaluation of Grantee's Performance
-----------
Section 23.1: Schedule for Evaluation
-------------------------------------
The Franchising Authority shall evaluate the performance of the Grantee for
purposes of determining compliance with this Ordinance and to provide for
consideration of technological changes in the state of the art of cable
television. The Village and the
5
<PAGE>
Grantee shall hold performance evaluation sessions within ninety (90) days
of the second, third, fifth, seventh, and ninth anniversary dates of the
Grantee's award of the Franchise (in accordance with the term of the
Franchise Agreement).
Section 23.2: Information Required of Grantee for Evaluation
------------------------------------------------------------
Upon request by the Village during the evaluation of Grantee's performance,
Grantee shall cooperate fully with the Village and provide such documents,
records, schedules, logs, reports, memoranda, ledgers, and other pertinent
information which the Village may request in order that a reasonable review
of the Cable System can be performed. The Village may inquire in particular
whether the Grantee is supplying at a level and variety of services
equivalent to those being generally offered at the time in the industry in
comparable market situations.
Section 23.3: Topics for Discussion During the Evaluation Process
-----------------------------------------------------------------
Topics which may be discussed during the evaluation process or at
evaluation sessions shall include, but not be limited to the following:
service rate structures, Franchise Fees, penalties, applications of new
technologies, repair and maintenance services, billing procedures, service
provided by Customer Service Representatives, system performance,
programming offered, programming desired by Subscribers, Subscriber
complaints, rights of privacy, above and below ground extension of cables
and equipment, modifications to the Franchise, rulings of the Federal
Communications Commission, Federal and State Courts of Law, and Grantee or
Village ordinances and other topics of concern in a mutually beneficial
business relationship. Franchising
6
<PAGE>
Authority shall provide Grantee with a listing of topics for discussion
fourteen (14) calendar days prior to the date of a scheduled evaluation
session.
Section 23.4: Public Notice
---------------------------
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 sessions.
Grantee shall provide notification of the sessions on the local origination
Channel on the system no less than two times between the hours of ten
o'clock (10:00) a.m. and ten o'clock (10:00) p.m. for two (2) weeks prior
to the week preceding the scheduled evaluation meeting or session."
9. This Amendatory Ordinance shall be in full force and effect from and after
its passage, approval, publication as provided by law and acceptance by Jones,
and in the event of any conflict between this amendatory ordinance and any
previous ordinance the provisions of this ordinance shall govern.
7
<PAGE>
PASSED THIS 7th day of October , 1996
--- -------
APPROVED THIS 7th day of October , 1996
--- -------
/s/ [SIGNATURE APPEARS HERE]
-------------------------
VILLAGE PRESIDENT
ATTESTED AND FILED this,
17th day of October, 1996
- -- -------
/s/ [SIGNATURE APPEARS HERE]
------------------------
Village Clerk
8
<PAGE>
ATTACHMENT A
EQUIPMENT ADDED TO THE
LOCAL ORIGINATION STUDIO
<TABLE>
<CAPTION>
Quantity Item
- -------- ----
<S> <C>
1 Sony DXL- 327AL Production Application Camera
1 Sony CA-327 General Camera Accessories
2 Sony CCU-M5 Camera Control Units
2 Sony CCQ-25AM Camera Cables
2 Sony YH13x7.5BKRS 13x1 lenses
2 Sony DXF-50B 5" Viewfinders
2 Canon MS 15M Studio Conversion kits
1 Panasonic AG456-U Proline SVHS Camcorder
</TABLE>
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 452,484
<SECURITIES> 0
<RECEIVABLES> 850,977
<ALLOWANCES> 58,936
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 80,368,193
<DEPRECIATION> (38,212,602)
<TOTAL-ASSETS> 61,956,101
<CURRENT-LIABILITIES> 2,721,375
<BONDS> 83,824,072
0
0
<COMMON> 0
<OTHER-SE> (24,589,346)
<TOTAL-LIABILITY-AND-EQUITY> 61,956,101
<SALES> 0
<TOTAL-REVENUES> 37,280,733
<CGS> 0
<TOTAL-COSTS> 46,496,721
<OTHER-EXPENSES> 526,030
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,451,648
<INCOME-PRETAX> (16,193,666)
<INCOME-TAX> 0
<INCOME-CONTINUING> (16,193,666)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (16,193,666)
<EPS-PRIMARY> (75.20)
<EPS-DILUTED> (75.20)
</TABLE>