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The licensee shall provide continuous service for the entire term of the license agreement to all subscribers and users in return for payment of the established rates, fees and charges. If the licensee overbuilds, rebuilds, modifies, or seeks permission to transfer the system; or if the city revokes, fails to renew, or otherwise terminates the license agreement or declares it forfeited, or elects to purchase the system; or if for any reason the license becomes void, the licensee shall continue to operate the system in a normal and orderly manner until an orderly and lawful change of operation is effectuated. This period of operation shall not exceed thirty-six (36) months from the date of occurrence of any of the above events, or the date any appeals of the same are finally concluded, whichever is later. During such interim period, the licensee shall not make any material, administrative or operational change that would tend to (1) degrade the quality of service, (2) decrease revenues, or (3) materially increase expenses, without the express written permission of the city. In addition to providing grounds for termination, if the licensee fails to operate the system for ninety-six (96) consecutive hours without prior approval of the city or fails to continue operation on the occurrence of any of the events stated in this section, the city shall have the right to operate the system, either directly or through a designate, until such time as a new operator is selected. If the city is required to fulfill this obligation for the licensee, the licensee shall reimburse the city for any and all costs, fees or damages incurred by the city.
(Ord. No. 8937, § 2, 9-2-97)
(1) Rights To purchase. In the event the city terminates, or revokes the license agreement or declares the license forfeited pursuant to any provisions of this chapter, or at the normal expiration of the license agreement (referred to collectively and individually in this section by use of the term terminate or termination), the city shall have the first option, directly or as an intermediary, to purchase the system. The city shall have ninety (90) days prior to the effective date of termination and an additional ninety (90) days following the conclusion of any appeal of the termination, to notify the licensee of the city's intent to exercise the option to purchase stated herein.
(2) Valuation. In the event of a termination of the license agreement by the city for cause, the city may purchase the system for an equitable price. "Equitable price" means fair market value adjusted downward for the harm to the city or subscribers, if any, resulting from Licensee's breach of its license agreement, or violation of this chapter, and as further adjusted to account for other equitable factors that may be considered consistent with 47 U.S.C. § 547. Upon other termination of the license agreement the value of the system shall be solely based on the fair market value of the system.
(a) No value shall be assigned to the license itself whether termination is or is not for cause.
(b) "Valuation" as referred to above shall be determined by audit of system assets pursuant to generally accepted auditing principles. Procedures for valuation may be specified in a license agreement.
(3) Date of valuation. The date of valuation shall be ninety (90) days after city gives licensee notice of its intent to exercise the option to purchase.
(4) Transfer to city. Upon exercise of the city's option to purchase and written notice of such action by the city to the licensee, the licensee shall, immediately upon payment of the purchase price by the city, transfer to the city possession and legal title to all system facilities and property, both real and personal, free from any and all liens and encumbrances not agreed to be assumed by the city in lieu of a portion of the purchase price; and the licensee shall execute such warranty deeds or other instruments of conveyance to the city as shall be necessary to effectuate this transfer.
(Ord. No. 8937, § 2, 9-2-97)
(1) In the case of a foreclosure or other judicial sale or termination of lease of the plant, property or equipment of the licensee, or any substantial part thereof, or any rights under the license agreement, the licensee shall serve written notice upon the city of any such event; and the city may serve written notice of termination upon the licensee and the successful bidder at such sale, in which event the license and the license agreement and all rights and privileges of the licensee thereunder shall cease and terminate thirty (30) days after service of such notice, unless:
(a) The mayor and council have approved the transfer of ownership of the license, in accordance with all pertinent provisions of section 7A-28 ("Transfers and Assignments"); and
(b) Such successful bidder shall have covenanted and agreed with the city, in writing in a form approved by the city attorney, to assume and be bound by all the terms and conditions of this chapter and the license agreement.
(2) The license shall terminate one hundred twenty (120) days after the appointment of a receiver, or trustee, to take over and conduct the business of the licensee, whether in receivership, reorganization, bankruptcy or other related action or proceeding.
(3) Failure to comply with the provisions of paragraph (1) of this section shall be deemed an unauthorized transfer pursuant to the provisions of section 7A-28 ("Transfers and Assignments").
(Ord. No. 8937, § 2, 9-2-97)
The procedures for transfers and assignments of the license agreement will conform to the requirements as set forth in federal law and applicable FCC regulations and will include the following requirements:
(1) The licensee shall not sell, transfer, assign, exchange or release, or permit the sale, transfer, assignment, exchange or release of more than five (5) percent of the ownership of the system or rights in the license agreement to a person (hereinafter "proposed transferee"), without the prior written authorization of the mayor and council. For purposes of this section, a merger or consolidation shall be deemed a transfer or assignment. Any transaction in which actual working control of a licensee or its system, in whatever manner exercised, is transferred, shall be deemed a transfer. The mayor and council specifically reserve the right to deny, restrict or condition authorization to transfer upon the criteria stated in this section and any other lawful criteria the mayor and council determine to be necessary in the public interest.
(2) The licensee shall provide the following information to the city:
(a) All information and forms required under federal law or the equivalent of such forms if no longer required by federal law;
(b) Any contracts or other documents that constitute the proposed transaction and all documents, schedules, exhibits, or the like referred to therein;
(c) Any shareholder reports or filings with the Securities and Exchange Commission that discuss the transaction;
(d) Complete information regarding any potential impact of the transfer on subscriber rates and service and system debt; and
(e) A brief summary of the proposed transferee's plans for at least the next five (5) years regarding line extension, plant and equipment upgrades, channel capacity, expansion or elimination of services, and any other changes affecting or enhancing the performance of the cable system.
(3) Once the required information has been provided, the transfer application shall be subject to review by the city and any approval shall be subject to the city's determination that:
(a) The proposed transferee has the qualifications to construct, operate and repair the system proposed in conformity with applicable law;
(b) The proposed transferee will accept the conditions established by the city on the transfer; and the proposed transferee will enter into a license and comply with any conditions precedent to its effectiveness. This section does not authorize the city to exercise authority it does not otherwise have under applicable law.
(4) Any approval will also be subject to a determination by the city that:
(a) There will be no adverse effect on subscribers, the public, or the city's interest in the license;
(b) Transferee will agree to be bound by all the conditions of the license and to assume all the obligations of its predecessor;
(c) Any outstanding compliance and compensation issues will be resolved or preserved to the satisfaction of the city; and
(d) The proposed transferee and the current licensee have provided all required information so that the city may act on the application.
(5) Any proposed transferee shall execute an agreement, in such form as acceptable to the city attorney, that it will assume and be bound by all of the provisions, terms and conditions of this chapter, the license agreement and any other conditions the mayor and council may have established in granting authorization as contemplated by subsections (1) through (4).
(6) No transfer under paragraph (1) of this section shall be permitted within fifteen (15) months prior to the expiration date of the license agreement.
(7) The occurrence of an unauthorized transfer or assignment may, at the option of the city, provide the mayor and council with cause to immediately terminate the license agreement and accelerate all of the obligations and rights as provided in section 7A-24.
(8) From and after any occurrence constituting an unauthorized transfer or assignment, the putative transferee shall not make, execute or enter into any deed, deed of trust, mortgage, contract, conditional sales contract or any loan, lease, pledge, security agreement, sale, pole agreement or any other agreement or hypothecation concerning any system facilities or property, whether real or personal, without the written approval of the mayor and council.
(9) Nothing in this section shall be deemed to prohibit the use of the licensee's property as collateral for security in regard to construction financing. However, any such financing arrangements shall be subject to all provisions of this chapter and the license agreement. In no case may any person, including the institution holding the system as collateral, succeed to the ownership or control of the system or the license without the prior approval of the city.
(10) Nothing in this section shall be read to prohibit licensee from providing information subject to the protections for proprietary information under this chapter or a license agreement.
(Ord. No. 8937, § 2, 9-2-97)
(1) The licensee shall indemnify, save harmless and defend the city, its mayor and council, appointed boards and commissions, officers and employees, individually and collectively from all fines, liens, suits, claims, demands, actions, costs of litigation, attorneys' fees, judgments or liability of any kind (including but not limited to libel, slander, invasion of privacy, unauthorized use of any trademark, trade name or service mark, copyright infringement, injury, death or damage to person or property) arising out of or in any way connected with the installation, construction, operation, maintenance or condition of the system. The licensee shall assume all risks in the operation of the system and shall be solely responsible and answerable for any and all accidents or injuries to persons or property arising out of the performance of the license agreement. The amounts and types of insurance coverage requirements set forth in section 7A-31 ("insurance") shall in no way be construed as limiting the scope of indemnity set forth in this section. The city shall give the licensee timely written notice of the making of any claim or the commencement of any action, suit or other proceeding covered by the indemnity of this section, where the licensee is not a party thereto.
(2) Disputes regarding issuance of license:
(a) Licensee shall indemnify save harmless and defend the city, its mayor and council, appointed boards and commissions, officers and employees, individually and collectively from all fines, liens, suits, claims, demands, actions, costs of litigation, attorneys' fees, judgments or liability of any kind arising from the defense of any litigation brought by third parties challenging the right of the city to issue the license under state law. The city shall give the licensee timely written notice of the making of any claim or the commencement of any action, suit or other proceeding covered by the indemnity of this section, where the licensee is not a party thereto. In the event that any such litigation ensues, the city may, but is not required to, tender the defense of such litigation to licensee, which shall then defend the litigation; provided, however, that if the city tenders such defense to licensee, licensee shall have the right to retain counsel of its own choice, to settle all or any part of the litigation on terms acceptable to licensee (and as determined in the sole discretion of the city, acceptable to the city), or at any time of its election, to terminate its license under the termination terms provided in the license and withdraw from any such litigation.
(b) Licensee shall assume the risk of, and shall relinquish any claim against the city in connection with any final, non-appealable determination by a court of competent jurisdiction that the city lacked the current statutory authority to issue the license.
(Ord. No. 8937, § 2, 9-2-97)
Within thirty (30) days after written notification of the award of a license by the city, the licensee shall file with the city manager and maintain in full force and effect throughout the term of the license agreement insurance policies issued by an insurer duly authorized to conduct business in the state, insuring with respect to the installation, construction, operation and maintenance of the system as follows:
(1) Comprehensive general and automobile liability coverage including, but not limited to: (a) blanket contractual liability; (b) completed operations liability; (c) broad form property damage endorsement, including but not limited to coverage for explosion, collapse and underground hazard; and (d) automobile non-ownership liability. This insurance shall be written in the following minimum amounts:
(a) For bodily injury, including death: Five hundred thousand dollars ($500,000.00) combined single limit;
(b) Property damage: Five hundred thousand dollars ($500,000.00) combined single limit;
(c) Comprehensive automobile liability; bodily injury: Five hundred thousand dollars ($500,000.00) combined single limit;
(d) Excess umbrella liability in the minimum amount of five million dollars ($5,000,000.00).
(2) Workers' compensation coverage as required by the laws, rules and regulations of the state.
(3) All insurance policies required herein shall include the city as an additional insured.
(4) With respect to the insurance required herein, the licensee shall be solely responsible for all premiums due and payable.
(5) The insurance policies required by this section shall contain the following endorsement, or substantially similar language approved by the city attorney:
It is hereby understood and agreed that this policy of insurance may not be canceled by the insurer nor the intention not to renew be stated by the insurer until sixty (60) days after receipt by the City of Tucson, by registered mail, of written notice of such intent to cancel or not to renew.
(6) It is each licensee's responsibility to ensure that every insurance policy conforms to the city's requirements. Each licensee must provide a standard insurance certificate or other adequate proof required by the city attorney, updated whenever there is a change in the policy or insurer, showing that the policies conform to all the requirements herein, without condition or exception. No licensee may initiate or begin construction until such proof has been provided.
(Ord. No. 8937, § 2, 9-2-97)
(1) Performance bond. Within thirty (30) days after written notification of the award of a license by the city, the licensee shall file with the city a performance bond for the benefit of the city in the amount of one million dollars ($1,000,000.00) to be effective upon the execution of the license agreement and conditioned that in the event that the licensee fails to comply with any provision of this chapter, the license agreement or other law applicable to the license, then there shall be recoverable jointly and severally from the principals and surety any and all damages or costs suffered or incurred by the city, including but not limited to attorney's fees and costs of any action or proceeding, and including the full amount of any compensation, indemnification, cost of removal or abandonment of any property or other costs due and owing the city up to the full principal amount of such bond. The performance bond shall be maintained in full as a continuing obligation during the entire term of the license agreement and thereafter until the licensee shall have satisfied in full any and all obligations to the city which arise out of or pertain to the license agreement. The performance bond shall be issued by a surety company authorized to do business in the state and shall be in a form approved by the city attorney.
(a) The performance bond shall contain the following endorsement:
It is hereby understood and agreed that this bond may not be canceled by the surety nor the intention not to renew be stated by the surety until sixty (60) days after receipt by the City of Tucson, by registered mail, of written notice of such intent to cancel or not to renew.
(b) None of the provisions of this section or section 7A-33 ("Security Fund"), nor any damages recovered by the city thereunder, shall be construed to excuse the faithful performance by or limit the liability of the licensee.
(c) Upon application to the city, the licensee shall be entitled to the return of the performance bond at the expiration of the license agreement, or any renewal thereof provided there is then no outstanding default or moneys due the city by the licensee; provided that, nothing herein shall be read to excuse a licensee from its obligation to have a performance bond during the renewal term.
(Ord. No. 8937, § 2, 9-2-97)
(1) Within thirty (30) days after written notification of the award of a license by the city, the licensee shall deposit with the finance director of the city, and maintain on deposit throughout the term of the license agreement, a security fund in the sum of fifty thousand dollars ($50,000.00) in cash as security for the faithful performance by the licensee of all provisions of this chapter and the license agreement and compliance with all orders, permits and directions of any agency or department of the city having jurisdiction over the licensee's operations. In lieu of the cash deposit, a licensee may provide an irrevocable and unconditional fifty thousand dollar ($50,000) letter of credit with a local financial institution, in a form acceptable to the city attorney. Both the letter of credit and the cash deposit are referred to by the term "security fund" in subsections (2) through (6).
(2) Within fifteen (15) days after written notice to the licensee by the city that the city has withdrawn any amount from the security fund, the licensee shall deposit or pay to the finance director a sum of money sufficient to restore such security fund to the original amount of fifty thousand dollars ($50,000.00), or, in the case of a letter of credit, restore the letter of credit to its full amount.
(3) If the licensee fails to pay the city any moneys due within the time fixed in this chapter or the license agreement; or fails after ten (10) days' written notice to pay to the city any taxes due and unpaid; or fails to repay to the city after ten (10) days' written notice any damages, penalties, costs or expenses which the city may be compelled to pay by reason of any act, omission or default of the licensee; or fails, after ten (10) days' written notice, to comply with any provision of this chapter or the license agreement which the city reasonably determines can be remedied or partially cured by an expenditure from the security fund, the finance director may immediately withdraw the amount thereof, with interest and any penalties, from the security fund. Upon such withdrawal, the finance director shall in writing notify the licensee of the amount and date thereof. In the event the security fund is insufficient to pay the city for any compensation, damage, penalties, costs or expenses owing to the city pursuant to this chapter or the license agreement, the performance bond may be drawn upon by the city for any amount due the city over and above the amount in the security fund.
(4) The security fund, including any interest that may have accrued, shall become the property of the city in the event that a license agreement is terminated by the city by reason of a violation of this chapter or breach of the license agreement pursuant to the provisions of section 7A-24 ("renewal and termination").
(5) Upon application to the city, the licensee shall be entitled to the return of all moneys remaining in the cash security fund, including accrued interest, at the expiration of the license agreement or any renewal thereof, provided there is then no outstanding default or moneys owing on the part of the licensee to the city; provided that, nothing herein shall be read to excuse a licensee from its obligation to have a security fund during the renewal term.
(6) The rights reserved to the city with respect to the security fund are in addition to all other rights of the city, whether reserved by this chapter or authorized by law; and no action, proceeding or exercise of a right with respect to such security fund shall affect any other right the city may have.
(Ord. No. 8937, § 2, 9-2-97)
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