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062 of 1996 - Granting to GST Lightwave (Utah), and its successors, a telecommunication franchise0 96-1 C 96-500 SALT LAKE CITY ORDINANCE No. 62 of 1996 (Granting to GST Lightwave (Utah), and its successors, a telecommunication franchise) WHEREAS, GST Lightwave (Utah), a Delaware corporation (the "Company") desires to provide certain telecommunication services within Salt Lake City, Utah (the "City"), and in connection therewith to establish a network in, under, along, over and across present and future streets, alleys and rights -of -way of the City, consisting of telecommunication lines and cables, together with all necessary appurtenances; and WHEREAS, the City, in the exercise of its police power, ownership or use rights over and in the public rights -of -way, and pursuant to its other regulatory authority, believes it is in the best interest of the public to provide to the Company, and its successors, a non-exclusive franchise to operate its business within the City; and WHEREAS, the City and the Company propose to enter into a Franchise Agreement, the substantially final form of which has been presented to the City Council at the meeting at which this Ordinance is being considered for adoption; and WHEREAS, the City desires to approve the execution and delivery of such Franchise Agreement and to otherwise take all actions necessary to grant the referenced franchise to the Company; and WHEREAS, the City believes this Ordinance to be in the best interest of the citizens of the City, NOW, THEREFORE, be it ordained by the City Council of Salt Lake City, Utah, as follows: SECTION 1. Purpose. The purpose of this Franchise Ordinance is to grant to the Company, and its successors and assigns, a non-exclusive right to use the public streets, alleys and rights -of -way, for its business purposes, under the constraints and for the compensation enumerated in the Franchise Agreement attached hereto as Exhibit A, and by this reference incorporated herein, as if fully set forth herein (the "Franchise Agreement"). SECTION 2. Short Title. This Ordinance shall constitute the GST Lightwave (Utah) Franchise Ordinance. SECTION 3. Franchise Description. There is hereby granted to the Company, and its successors and assigns, in accordance with the terms and conditions of the Franchise Agreement, the right, privilege, and franchise (collectively, the "Franchise"), to construct, maintain and operate in, under, along, over and across the present and future streets, alleys, and rights -of -way in the City, telecommunication lines and cables, together with all the necessary or desirable appurtenances (including, but not limited to, underground conduits and structures, poles, towers, wires and cables, for its own use) for the purpose of supplying telecommunication services to the City, the inhabitants thereof and persons and corporations beyond the limits thereof, for telecommunication purposes. This Franchise Ordinance does not relate to, and does not authorize or govern the operation by the 2 Company of, cellular telephone service, personal communication service or similar wireless voice, data or video transmission service, cable service, or television or other broadcast services. SECTION 4. Term. The term of the Franchise is for a period from and after the effective date of this Ordinance and its acceptance by the Company, until January 1, 2011. The Company shall pay all costs of publishing this Ordinance. SECTION 5. Acceptance by Company. Within thirty (30) days after the effective date of this Ordinance, the Company shall file an unqualified acceptance of this Ordinance, in a form approved by the City Attorney, with the City Recorder of Salt Lake City; otherwise, this Ordinance and the rights granted hereunder shall be null and void. SECTION 6. Consideration and Payment Dates. The Company shall pay to the City for the Franchise a franchise fee (the "Franchise Fee"), equal to the greater of either: (a) The sum of Five Thousand Dollars ($5,000); provided that the Franchise Fee payable for calendar year 1996 shall be prorated on a monthly basis and payable only for the months (counting any partial month as a full month) during such calendar year for which this Franchise Ordinance is in effect. Payment for the year 1996 shall be due and tendered concurrent with the adoption hereof. Thereafter, the Franchise Fee shall be due on or before January 1 of each year, and shall be considered 3 payment in advance for use of the Franchise for the next succeeding calendar year. On each payment date, the Franchise Fee payment shall be increased or decreased by the same percentage increase or decrease, if any, in the Consumer Price Index herein specified. The Consumer Price Index unit for this purpose shall be the U.S. City Average Geographic_Index for the components including "all urban consumers" based on "all items" as published for the month of October of each year by the U.S. Department of Labor, Bureau of Labor Statistics. If publication of said Consumer Price Index should cease, such annual percentage increase shall be determined by reference to such similar index as shall replace it, or as agreed upon by the parties. OR (b) An amount equal to six percent (6%) per annum of the Company's Gross Revenue; provided, however, that any sum paid by the Company as a gross receipts based tax (including, by way of example and not limitation, the Business Occupation Revenue Tax under the provisions of Section 5.04.170 et seq. of the City Code, or successor provision), shall be credited against any fee due under this Section 6(b). In the event the statutory limit on gross receipt based taxes or other charges imposed by Section 11- 26-1, Utah Code, or any successor provision, is increased above six percent (6%), the Company shall, at the request of the City, enter into an amendment to this Franchise Ordinance and the Franchise Agreement increasing the Franchise Fee to the level requested by the City, but not to exceed the increased statutory 4 limit; provided, however, in no event shall the Company be obligated to pay a higher percentage of Gross Revenue than is paid by other similarly situated franchisees within the City. The term "Gross Revenue" as used herein is any revenue of the Company derived from the sale of its telecommunication services to its customers within the City, without regard to the billing address of the customer, except that Gross Revenue shall not include revenue derived by the Company from services provided to and used (not for resale) by its parent, subsidiaries of its parent, or affiliated companies of the Company. Without limiting the generality of the foregoing, "Gross Revenue" shall include revenue received by the Company through any interconnection or similar agreements relating to use of the Company's system. SECTION 7. Rights Reserved to the City. Without limitation upon the rights that the City might otherwise have, the City expressly reserves the following rights, powers and authorities to: (a) Exercise its governmental powers now or hereafter to the full extent that such powers may be vested in or granted to the City; (b) Grant additional franchises to the same property covered by the Franchise within the City to others, under any conditions acceptable to the City; or (c) Exercise any other rights, powers, or duties required or authorized, under the Constitution of the State of Utah, the law of Utah, or the City ordinances. SECTION 8. Extension of City Limits. Upon the annexation of any territory to the City, the right and Franchise hereby 5 granted shall extend to the territory so annexed to the extent the City has authority. All facilities owned, maintained, or operated by the Company located within, under, or over streets, alleys and rights -of -way of the territory so annexed shall thereafter be subject to all terms hereof. SECTION 9. Early Termination or Revocation of Franchise. 9.1 The City may terminate or revoke the Franchise and all rights and privileges herein provided for any of the following reasons: (a) The Company fails to make timely payments of the Franchise Fee as required under Article II of the Franchise Agreement and does not correct such failure within ten working days after written notice by the City of such failure; (b) The Company, by act or omission, materially violates a duty or obligation herein set forth or set forth in the Franchise Agreement in any particular within the Company's control, and with respect to which redress is not otherwise herein provided. In such event, the City, acting by or through its City Council, may after hearing determine that such failure is of a material nature; and thereupon, after written notice given to the Company of such determination, the Company shall, within thirty (30) days of such notice, commence efforts to remedy the conditions identified in the notice, and will have six (6) months from the date it receives notice to remedy the conditions. After 6 the expiration of such six (6) month period and failure to correct such conditions, the City may declare the Franchise forfeited, and thereupon the Company shall have no further rights or authority hereunder; provided, however, that any such declaration of forfeiture shall be subject to judicial review as provided by law, and provided further that in the event such failure is of such nature that it cannot be reasonably corrected within the six (6) months time provided above, the City shall provide additional time for the reasonable correction of such alleged failure. (c) The Company becomes insolvent, unable or unwilling to pay its debts, is adjudged bankrupt, or all or part of its facilities should be sold under an instrument to secure a debt and is not redeemed by the Company within thirty (30) days; or (d) In furtherance of the Company policy or through acts or omissions done within the scope and course of employment, a director or officer of the Company knowingly engages in conduct or makes a material misrepresentation with or to the City or the Company's customers, that is fraudulent or in violation of a felony criminal statute of the State of Utah. 9.2 Nothing contained herein shall be deemed to preclude the Company from pursuing any legal or equitable rights or remedies it may have to challenge the action of the City. 7 No Franchise revocation or termination may be effected until the City Council shall first adopt an ordinance terminating the Franchise and setting forth the reasons therefor, following not less than thirty (30) days prior written notice to the Company of the proposed date of the ordinance adoption. The Company shall have an opportunity on said ordinance adoption date to be heard upon the proposed termination. SECTION 10. Severability. 10.1. If any section, sentence, paragraph, term or provision of the Franchise Agreement or this Franchise Ordinance is for any reason determined to be or rendered illegal, invalid, or superseded by other lawful authority including any state or federal, legislative, regulatory or administrative authority having jurisdiction thereof or determined to be unconstitutional, illegal or invalid by any court of competent jurisdiction, such portion shall be deemed a separate, distinct, and independent provision and such determination shall have no effect on the validity of any other section, sentence, paragraph, term or provision hereof, all of which will remain in full force and effect for the term of the Franchise or any renewal or renewals thereof, except for Section 6 hereof and Article II of the Franchise Agreement. 10.2 Section 6 hereof and Article II of the Franchise Agreement are essential to the adoption of this Ordinance and should they be challenged by the Company, or determined to be 8 illegal, invalid, unconstitutional or superseded, in whole or in part, the entire Franchise shall be voided and terminated, subject to the following: (a) In the event of a judicial, regulatory or administrative determination that Section 6 hereof or Article II of the Franchise Agreement is illegal, invalid, unconstitutional or superseded, such termination shall be effective as of the date of a final appealable order, unless otherwise agreed upon by the City and the Company; (b) in the event of any legislative action that renders Section 6 hereof or Article II of the Franchise Agreement unconstitutional, illegal, invalid or superseded, such termination shall be effective as of the effective date of such legislative action. 10.3 Notwithstanding the foregoing, if the City stipulates in writing to judicial, administrative or regulatory action that seeks a determination that Section 6 hereof or Article II of the Franchise Agreement is invalid, illegal, superseded or unconstitutional, then a determination that Section 6 hereof or Article II of the Franchise Agreement is invalid, illegal, unconstitutional or superseded shall have no effect on the validity or effectiveness of any other section, sentence, paragraph, term or provision of the Franchise, which shall remain in full force and effect. 9 10.4 In the event this Franchise Ordinance or the Franchise Agreement is terminated pursuant to paragraph 10.2 hereof or paragraph 21.2 of the Franchise Agreement, the City grants to the Company a lease according to the same terms and conditions as set forth in the Franchise Agreement. Accordingly, the Company shall pay, as fair market rental value, the same amounts, at the same times, required for the payment of the Franchise Fee pursuant to Section 6 hereof and Article II of the Franchise Agreement and shall be bound by all other terms and conditions contained herein; provided, however, that in no event will the Company be obligated to pay a higher percentage of revenues derived from the sale of telecommunication services within the City than is paid by other fixed public utilities serving within the City. SECTION 11. The City is currently considering the preparation and adoption of a telecommunications ordinance which shall address various aspects of the telecommunications industry. Such ordinance may affect the manner in which franchises such as the Franchise are issued, and may affect the terms and conditions of such franchises. The Franchise is being issued, and this Ordinance is being adopted, prior to the adoption of such ordinance as an accommodation to the Company so as to avoid delay pending the adoption of the ordinance. Accordingly, the Company 10 recognizes and agrees that this Ordinance and the Franchise Agreement are and shall be subject to the terms and conditions of such ordinance; provided, however, that the Company shall have the right to terminate the Franchise Agreement upon ninety days (90) prior written notice in the event the terms and conditions of the ordinance are unacceptable to the Company, and provided further that the provisions of such ordinance shall apply to the Company only to the extent that (i) such provisions are generally applicable to other similarly situated providers of telecommunication services, or (ii) if such is not the case, application of the ordinance to the Company does not place the Company at an appreciable competitive disadvantage as to those telecommunication providers to which the provisions of such ordinance does not apply. SECTION 12. This ordinance shall take effect immediately upon publication. Passed by the City Council of Salt Lake City, Utah, this 13th day of August 19 96 C IRPE SON 11 CHIEF DEPU Mayor's Action: ATTEST AND COUNTERSIGN: CHIEF EPUTY ITY‘I CORDER Transmitted to the Mayor on \ V/ ATTEST AND COUNTERSIGN: r, TY 'ECO'D R Bill No. 62 of 1996 Published 9-11-96 8-13-96 Approved 12 Vetoed ACKNOWLEDGMENT AND ACCEPTANCE GST Lightwave (Utah), a Delaware corporation, in satisfaction of Section of the Franchise Ordinance to which this acceptance is attached, does hereby acknowledge and accept the terms and conditions of such Franchise Ordinance. Dated: doll l`s- 2 j�/�1k> i Approved as to form: Assistant City Attorney G:\IlC6753\DOCS\GST.ORD 13 GST Lightwave (Utah) a Delaware corporation By C. Its ORIGINAL DOCUMENT PROPERTY OF SALT LAKE CITY RECORDER'S OFFKI 451 SO. STATE, RM. 415 : LT LAKE CITY, UTAH 84111