CITY OF HOUSTON, TEXAS, ORDINANCE NO. 97-285

        AN ORDINANCE GRANTING A TEMPORARY PERMIT TO TVMAX COMMUNICATIONS
(TEXAS), INC., TO ENCROACH UPON AND USE THE PUBLIC WAY OF THE CITY OF HOUSTON,
TEXAS, FOR THE PURPOSE OF LAYING, CONSTRUCTING, LEASING, MAINTAINING, REPAIRING,
REPLACING, REMOVING, USING, AND OPERATING THEREIN, A TELECOMMUNICATIONS NETWORK
FOR PROVIDING AUTHORIZED TELECOMMUNICATIONS SERVICES; PROVIDING FOR RELATED
TERMS AND CONDITIONS; MAKING CERTAIN FINDINGS RELATED THERETO; AND DECLARING AN
EMERGENCY.

        WHEREAS, TVMAX Communications (Texas), Inc. (the "Permittee") wishes to
provide telecommunication services to its customers in certain portions of the
City of Houston (the "City") by use of its existing fiber optic loop, and other
facilities to be constructed and maintained hereafter; and

        WHEREAS, the Permittee has applied for, and the Permittee and the City
are currently negotiating, a franchise agreement (the "Franchise") that will
govern the long-term construction, operation and maintenance of the Permittee's
telecommunication operations in accordance with the provisions of the City
Charter and applicable law and ordinance; and

        WHEREAS, the Permittee has an existing cable television franchise, and
has requested that it be issued this Temporary Permit to specify the conditions
under which the facilities franchised thereunder, as well as extensions thereof,
may be used to provide telecommunication services, during the pendency of
negotiation and approval of the Franchise; NOW, THEREFORE,

        BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HOUSTON, TEXAS:


                                   ARTICLE I.
                         DEFINITIONS AND INTERPRETATIONS

        Section 1.01. Short title. This ordinance shall be known and may be
cited as the TVMAX Communications (Texas), Inc. Telecommunication Temporary
Permit.

        Section 1.02. Definitions. For the purpose of this Temporary Permit, the
following terms, phrases, words, and their derivations shall have the meaning
given herein unless more specifically defined within other sections of this
Temporary Permit. When not inconsistent with the context, words used in the
present tense include the future tense, words in the single number include the
plural number. The word "shall" is always mandatory, and not merely directory.


        Anniversary Date means the successive annual recurrence of the Effective
Date.

        Cable Services shall have the meaning defined for such term in the Cable
Communications Policy Act of 1984 is amended.

        City means the City of Houston, Texas, a home-rule municipal corporation
principally located in Harris County, Texas, acting by and through its governing
body, the City Council.

        City Engineer means the City Engineer for the City or a designee
thereof.

        Confidential Information is defined in Section 4.01(c).

        Construction Permit Fee is defined in Section 3.06.

        Day, whether or not capitalized, means a calendar day, unless
specifically provided otherwise,

        Director means the Director of the City's Department of Finance and
Administration, or such person as the director may designate.

        Division is defined in Section 11.02(b).

        Effective Date is defined in Section 11.17.

        Franchise means the franchise agreement under negotiation between the
City and the Permittee relating to the grant of a franchise for
telecommunication services pursuant to Article II, Section 17 of the City's
Charter.

        Gross Receipts means all Local Telecommunications Revenue (excluding (i)
Permit Fees itemized on customer billings, (ii) sales taxes, excise taxes or any
similar direct taxes upon the customer or subscriber collected by the
Permittee, (iii) receipts from the sale or trade-in value of any property used
in the provision of Services, (iv) refunds from suppliers, (v) refunds or
rebates, credits or discounts to customers or subscribers) received by Permittee
or by any affiliate, subsidiary, agent or assign of Permittee using the Public
Way that does not have a current valid franchise with City, in connection with
the provision of Services within the City of Houston, including payments
received for operating, maintaining, leasing, exchanging or using all or any
portion of the Network Facilities or for Services and payments attributable to
the operation of the Network Facilities,

        Local Office is defined in Section 4.01(c).

        Local Telecommunication Revenue means the aggregate of all receipts,
direct or indirect, for Services provided by the Permittee to its customers or
subscribers whose service address is

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physically located within the city limits of the City. Local Telecommunication
Revenue shall not include any amounts charged to customers or subscribers that
are paid to any telecommunication system operator or owner not affiliated with
the Permittee for the provision of services on the Network Facilities if such
amounts are included in the franchise fee payments of another telecommunication
provider under franchise to the City.

        Minimun, Annual Fee is defined in Section 3.01(b).

        Network Facilities means conduits, ducts, manholes, vaults, tanks,
towers, wave guides, optic fiber, microwave, dishes, and any associated
converters, electrical lines, communications lines, transmission lines, cables,
wires, amplifiers, switches, utility equipment, or other such object, device or
facilities, including attachments and encasements containing such facilities,
whether underground or overhead, which are designed, installed and constructed
within the Public Way for the purpose of producing, receiving, amplifying,
switching, transmitting or distributing audio, video, or other form of
electronic signals to or from customers, subscribers or locations within city
limits of the City in providing Services. Network Facilities does not include
such facilities to the extent that they are used to provide Cable Services.

        New Construction Permit Fee is defined in Section 3.06.

        Permittee means TVMAX Communications (Texas), Inc.

        Person includes an individual, association, corporation, firm, joint
venture, partnership, limited liability company, or other business entity or
legal representative.

        Public Way means a Street or Water Way or any other right, title or
interest in or to real property, which is owned or claimed by City for use of
the public.

        Report is defined in Section 3.03.

        Services meams telecommunication services provided by the Permittee
through its Network Facilities, excluding Cable Services (provided pursuant to
separate franchise) but including without limitation (a) interconnecting
telecommunication companies for the purpose of voice, data or non-cable video
transmission; (b) providing switched or non-switched private line point-to-point
service to end-users for voice, data and non-cable video transmission; (3)
switching, transmitting or distributing signals on behalf of other
telecommunication companies; or (4) any other telecommunication services
authorized by State or Federal law.

        Street means the entire area within the boundary lines of every public
street, avenue, road, parkway, drive, alley, highway, boulevard, bridge, tunnel
or other City roadway whether improved or unimproved, and any part thereof
including without limitation the pavement, shoulders, gutters, curbs, sidewalks,
parking areas and all other areas within street lines.

                                      -3-


        Temporary Permit means this ordinance, and includes the rights,
obligations and privileges granted to the Permittee herein.

        Temporary Permit Fee means the fees provided for payment by the
Permittee as provided in this Temporary Permit.

        Water Way means the entire area within the boundary lines of every
stream, lake, river, bayou, ditch or other body or course of water that is owned
or maintained by the City.

                                   ARTICLE II.
                           GRANT OF AUTHORITY AND TERM

        Section 2.01. Rights granted. There is hereby granted to the Permittee,
subject to the reasonable and timely compliance by the Permittee with the
provisions contained herein, the non-exclusive Temporary Permit granting the
right to encroach upon and use the Public Way for the purpose of laying,
constructing, leasing, maintaining, repairing, replacing, removing, operating or
using the Network Facilities, in whole or in part, across, along, over, above,
or under any Public Way specifically for the purpose of providing the Services.

        Section 2.02. Term and automatic termination.

        a. This Temporary Permit shall become effective on the Effective Date
and the receipt by the City of the Acceptance Letter, and shall terminate on
September 1, 1997, unless it is terminated earlier pursuant to the terms of this
Temporary Permit Ordinance. BY ITS ACCEPTANCE HEREOF, THE PERMITTEE ACKNOWLEDGES
THAT THE GRANT OF THIS TEMPORARY PERMIT CREATES NO OBLIGATION TO EXTEND OR RENEW
THIS PERMIT OR OTHERWISE EXTEND THE AUTHORIZATION GRANTED HEREBY, OR TO PASS OR
APPROVE THE FRANCHISE BY VIRTUE OF ITS APPROVAL OF THIS TEMPORARY PERMIT. ANY
CONSTRUCTION OR OTHER EXPENDITURE BY OR ON BEHALF OF THE PERMITTEE IN
CONNECTION WITH THIS TEMPORARY PERMIT IS UNDERTAKEN SOLELY AT THE RISK OF THE
PERMITTEE. Notwithstanding the above, the City agrees to offer the Franchise to
the Permittee on the same basis as offered to similarly situated applicants at
such time, in accordance with the applicable provisions of State and Federal
law; provided that the Permittee is and remains qualified therefor. The
provisions of this Temporary Permit shall not be construed as binding or
precedential with respect to the terms of the Franchise.

        b. Unless earlier terminated as provided elsewhere in this Temporary
Permit Ordinance, this Temporary Permit shall automatically terminate upon the
effective date of the Franchise.

        Section 2.03. Specific limitations. This Temporary Permit does not grant
the Permittee the right to provide, directly or indirectly, any services not
specifically authorized by the terms of this Temporary Permit. This Temporary
Permit does not authorize the provision of Cable

                                       -4-


Services, and the Permittee may provide Cable Services through the Network
Facilities only if authorized specifically by a separate franchise either
already in existence as of the Effective Date or later granted at the discretion
of City Council.

        Section 2.04. Use of the Network by other Persons.

        a. The Permittee acknowledges and agrees that this Temporary Permit
authorizes specific use of Public Ways only by the Permittee and it agrees that,
except as specifically authorized herein or otherwise specifically authorized by
the City, it will not allow the use, by lease or otherwise, of the Network
Facilities by any other Person (other than an affiliate, subsidiary, or other
entity controlled by the Permittee if such other Person's gross receipts are
included in the Gross Receipts for purposes of the Temporary Permit Fee) to
provide the Services or for any other purpose. Use of the Network Facilities by
any Person for any purpose not specifically authorized hereunder shall be
considered to be use thereof by the Permittee and is prohibited.

        b. The Permittee agrees to notify its customers or subscribers making
sales of telecommunications services of their possible need for a certificate
from the Texas Public Utility Commission, an FCC license, other state or federal
authorization, or City franchise, in the form provided in Exhibit A, attached
hereto. Such notice shall be given to existing customers or subscribers within
60 days of the Effective Date and to new customers or subscribers within 30 days
of the acquisition of such customer or subscriber.

         Section 2.05. Use of the Public Way by other Persons.

         a. Nothing in this Temporary Permit shall ever be held or construed to
confer upon the Permittee exclusive rights or privileges of any nature
whatsoever. The City may permit other Persons to, and the Permittee acknowledges
that the City or such other Persons may, lay, construct, operate, lease repair,
maintain or make use of, any sewer, gas, water and other pipes or pipelines,
cables, conduits, electrical lines, communications lines, transmission lines,
utility equipment or any other object, improvement, facility or device across,
along, over, above or under any Public Way. The City may also permit soil boring
into and the installation of monitoring wells in or under any Public Way
occupied by the Permittee, and authorize any other lawful use of the Public Way.

         b. In permitting such work to be done, City shall not be liable to the
Permittee for any damages arising out of the performance of any such work by
such third parties, provided that nothing herein shall relieve any Person other
than the City or those operating on its behalf, from liability for damage to the
Network or Network Facilities.

         c. If the City requires the Permittee to remove, alter, change, adapt
or conform its Network to enable any Person except the City to use the Public
Way, the Permittee shall be obligated to make such changes to its Network
Facilities only if the Person obtains a cash bond prior to such work to
reimburse Permittee for any loss and expense that will be caused by or

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which will arise out of such changes to the Network Facilities. The City shall
not be liable for any reimbursement, loss, or expense caused by or arising out
of such changes to the Network Facilities.

                                  ARTICLE III.
                                      FEES

        Section 3.01. Temporary Permit Fee, generally.

        a. In consideration for the rights and privileges herein granted, the
Permittee shall pay to the City those fees set forth herein in the manner and
within the time limitations specifically provided. Time is of the essence with
regard to payments required hereby.
                 
        b. The Permittee shall pay to City a basic Temporary Permit Fee equal to
four percent of Gross Receipts.

        Section 3.02. Timing of payment. Following the Effective Date, the
Temporary Permit Fee shall be paid with respect to each calendar quarter, or
portion thereof, within 45 days immediately following the end of the quarter.

        Section 3.03. Report to director; audit.

        a. On the same date that Temporary Permit Fee payments are to be paid,
the Permittee shall file with the Director a report showing all revenue,
detailed by category, from the operations of the Network Facilities for the
preceding calendar quarter. The Permittee shall submit such report in the form
of the City of Houston Temporary Permit Fee Remittance Form, set forth in
Exhibit B, attached hereto (the "Report").

        b. The City may, at its discretion, upon no less than 30 days prior
written notice, require that the Permittee's records related to this Temporary
Permit be audited by the Director to ascertain the correctness of any Report. If
the audit determines that payment of Temporary Permit Fees was not made in
accordance with the terms of this Temporary Permit and that such payment
represents an underpayment of at least 10 percent of Temporary Permit Fees due,
the Permittee shall reimburse the City for all reasonable audit costs, and pay
all Temporary Permit Fees determined to be due and payable to the City
hereunder. Such costs and fees shall be paid within 30 days after determination
of amount due is made.

        Section 3.04. [Reserved.]

        Section 3.05. Late payment. If any quarterly payment is not received by
the City on or before five days immediately following the due date, the
Permittee shall pay interest at the annual rate of 10 percent, compounded daily.
The Permittee agrees to pay all costs of collection for any amounts due
hereunder, including reasonable attorney fees.

                                       -6-


        Section 3.06. Temporary Permit Fee not in lieu of certain permit fees.
When submitting application for a New Construction Permit as provided in Article
V, the Permittee shall pay the permit fees provided herein. Such permit fees
are in addition to the Temporary Permit Fees and are non-refundable. Each
application for a New Construction Permit shall be accompanied by a drawing and
specification review fee of $1,005 ("New Construction Permit Fee"). The New
Construction Permit Fee is only required for work in the Public Way other than
routine maintenance or emergency repairs, as described in Section 5.02.

                                   ARTICLE IV.
                        RECORDS AND FILING REQUIREMENTS

        Section 4.01. Record keeping. In addition to other records or filings
required hereunder or by law, the Permittee shall:

        a. Maintain a list, for review by the Director or City Engineer upon
request, of all entities that use any portion of the Network Facilities.

        b. File copies, upon the Director's request, of all requested reports
made to federal and state authorities pertaining to the regulation of any
activity of the Permittee in the Public Way.

        c. Retain all records pertaining to any use of the Public Way for a
period of not less than 10 years at a location in Texas that is acceptable to
the Director (the "Local Office") and make the same available to the Director
for inspection, or copying from the Local Office during regular business hours
upon 24 hours written notice.

        d. Maintain and provide a current map, upon request by the Director or
City Engineer, certified by a registered professional engineer to be true and
correct, showing the locations of the Network Facilities in the Public Ways.

        e. Maintain records, accounts, and financial and operating reports in a
manner that will allow the City to determine the actual Gross Receipts. The
Director may require the keeping of additional records or accounts reasonably
necessary to determine the Permittee's compliance with the terms of this
Temporary Permit.

        Section 4.02. Confidential information.

        a. The Director will not reproduce any customer lists, confidential
contracts or confidential financial information clearly designated to be
confidential or proprietary ("Confidential information") not specifically
required for documentation of audit issues. Except as provided by law, thc City
shall not disclose any Confidential Information to any Person. The Permittee
agrees that it will permit the Director to remove Confidential Information from
its Local Office for a period of 10 working days for the purpose of review to
determine Temporary Permit

                                       -7-


compliance, Upon expiration of 10 working days or the completion of the
Director's Temporary Permit compliance review, whichever is first to occur, the
Director shall return all Confidential Information removed from the Local
Office; provided that the Director may retain copies of documents deemed by the
Director to be reasonably necessary for purposes of determining compliance with
this Temporary Permit.

        b. The Director shall not disclose any Confidential Information
reproduced for documentation of audit issues unless the City has received a
request to review or copy Confidential Information under the Texas Open Records
Act or related law (the "Act"). Upon receipt of such request, the City shall (i)
timely submit a request to the Attorney General of the State of Texas (or other
appropriate official if the Attorney General is not the proper official) for an
opinion as to whether the requested Confidential Information must be disclosed
under the Act, and (ii) notify the Permittee that a request to review or copy
Confidential Information has been submitted to the City. Confidential
Information deemed subject to disclosure under the Act shall be disclosed.

        Section 4.03. Enforcement. The City Attorney, or the City Attorney's
designee, shall have the right to enforce all legal rights and obligations
under this Temporary Permit without further authorization. The Permittee agrees
to provide the City access to all documents and records that the Director, the
Controller or the City Attorney deem reasonably necessary to assist in
determining the Permittee's compliance with this Temporary Permit.

                                   ARTICLE V.
              REGULATION OF CONSTRUCTION AND USE OF THE PUBLIC WAY

        Section 5.01. Interference with public use prohibited. The Permittee
shall lay, construct, operate, lease, maintain, repair and replace the Network
Facilities so as not to unreasonably interfere with use of the Public Way.
Insofar as possible, the Permittee shall use existing Network Facilities in the
provision of the Services. The Permittee shall provide any information
reasonably related to location or operation of the Network or Services
determined to be necessary by the City Engineer or the Director. The Permittee
shall maintain, the Network Facilities in good order and condition, subject to
ordinary wear and tear.

        Section 5.02. Permitting and plan approval.

        a. New Construction Permit. Before commencing any work in the Public Way
other than routine maintenance or emergency work (as described in Subsections b
and c below) the Permittee shall apply for and obtain a New Construction
Permit. The application shall include the application fee described in Section
3.06, a written work description, including scale drawings, showing the Network
Facilities' location (or proposed location) and estimated depth of the Network
Facilitics (existing and proposed) in the immediate area of the proposed new
construction. Such drawings and specifications shall be prepared, executed and
sealed by a registered professional engineer. Such drawings and specifications
will be reviewed by the City

                                       -8-


Engineer and any comments will be provided to the Permittee as soon as
practicable. The Permittee agrees to make any changes to the drawings and
specifications requested by the City Engineer.

        b. Routine maintenance. Before the Permittee performs any routine
maintenance or repairs on any Network Facilities, the Permittee shall give at
least 30 days written notice to the City Engineer as to the time and location of
the proposed maintenance or repair. Unless waived by the City Engineer in
writing, daily work schedules shall be provided to the City by 8:30 a.m. each
day any such routine maintenance or repair is performed. Written approval from
the City Engineer of all routine maintenance or repair of the Network Facilities
must be obtained prior to beginning work. Such approval by City Engineer shall
constitute full authority for the issuance of permits.

        c. Emergency repairs. When an emergency occurs that could not reasonably
have been foreseen and requires immediate work on the Network Facilities located
in the Public Way, repairs may be performed by the Permittee and notice shall be
given to City Engineer within 24 hours following the commencement of such
emergency repairs. Such notice shall state the nature of the emergency repairs
and the length of time estimated necessary to complete the emergency repairs.
The Permittee shall apply for the proper permits as soon as reasonably
practicable, and any work performed that is not consistent with then-applicable
City standards shall be corrected upon notice thereof from the City.

        d. Payment of fees required. The City is not required to grant any
permit or approval to the Permittee unless and until all fees due and payable
pursuant to this Temporary Permit have been paid in full, including any permit
fees.
                 
        e. Other licenses and fees. The Permittee shall obtain and pay the cost
of all licenses, permits, and certificates required by any statute, ordinance,
rule or regulation of any local, state or federal regulatory body having
jurisdiction over the conduct of its operations hereunder. The Permittee shall
give notice to the Director of any revocation or failure to obtain any such
license, permit or certificate affecting its performance hereunder within 15
days of such revocation or of the day upon which the Permittee received actual
or constructive notice of its failure to obtain such license, permit or
certificate.

        Section 5.03. Work standards. All work in the Public Way shall be
performed in accordance with the City's Standard Specifications for Street and
Storm Drainage & Street Paving Construction, as such may be amended from time
to time, and shall be subject to the regulation, control and direction of the
City Engineer. All work done in connection with the laying, construction,
operation, maintenance, repair and replacement of the Network and Network
Facilities shall be in compliance with all applicable laws, ordinances, rules
and regulations of City, the applicable county, the State of Texas, and the
United States.

        Section 5.04. Work in the Public Ways.

                                       -9-


        a. The Permittee's work affecting the Public Ways shall be performed in
a manner calculated to cause the least inconvenience to the City and the public
as may be reasonable possible under the circumstances. When the Permittee
performs or causes to be performed any work in any Public Way, or so closely
adjacent thereto as to create hazards for the public or themselves, the
Permittee shall provide construction and maintenance signs and sufficient
barricades and flagmen at work sites to protect the public, equipment and
workmen. The application of such traffic control devices shall be consistent
with the standards and provisions of the latest addition to the Texas Manual on
Uniform Traffic Control Devices. Appropriate warning lights shall be used at all
construction and maintenance zones where one or more traffic lanes are being
obstructed during nighttime conditions.

        b. If the Permittee's work requires the closure of any part of any
Street, such closure shall be performed in a manner approved in writing by the
City Engineer. The Permittee shall not wholly close any Public Way, but shall at
all times maintain a route of travel along and within any roadway that is within
a Public Way; provided that, in cases of emergency, the City Engineer may
authorize a temporary closing of any Public Way or sidewalk to allow the
Permittee to complete any emergency repairs if in the opinion of the City
Engineer, such closing is necessary to protect the safety of the public.

        Section 5.05. Restoration.

        a. At its sole cost and expense, the Permittee shall repair, clean up
and restore the Public Way disturbed or affected during the maintenance,
construction, repair, replacement or removal of the Network Facilities and shall
warrant the repair and restoration of such Public Way and other surfaces for a
period of two years from the date of completion of same. The City Engineer may
require a bond as may be required under then-current City regulations; in the
absence thereof, the Permittee shall to provide a surface correction bond in an
amount estimated by the City Engineer to be the cost of repair of the Public
Way. The terms and conditions of the bond will be substantially similar to those
required by the City of other Persons performing similar work in the Public
Ways. Such repairs, clean up and restoration shall be carried out pursuant to
standards promulgated by the City Engineer, and shall return the Public Way and
other disturbed surfaces to substantially the same condition as before the
Permittee's work began.

        b. Any excavation in any portion of the Public Way shall be replaced
with materials of the same kind as those removed unless the City Engineer
approves of some other type of fill or material. Without limitation of the
above, if after refilling an excavation the earth within the excavated area
settles so as to leave a depression, and the depression is related to the
Permittee's work, the Permittee shall make further necessary fills or other
repair work from time to time to correct the problem as ordered by the City
Engineer. The determination that the Public Way and other surfaces have been
returned to substantially the same condition shall be within the reasonable
excercise of the City Engineer's discretion.

                                      -10-


        Section 5.06. Relocation or removal. The Permittee may be required to
lower, relocate or remove any Network Facility in any Public Way without cost to
the City if reasonably necessary as determined by the City Engineer to abate a
condition actually or potentially dangerous to the public health or safety, or
as may be reasonably necessary to accommodate any public works project in the
Public Way including, but not limited to, water, sanitary sewer, storm drains,
street lights and traffic signal conduits, or any other facilities in or under
the Public Way. In the alternative, where the City Engineer determines it to be
feasible, the Permittee may be allowed to pay any additional costs incurred for
the design or construction of such public works project in a manner that will
avoid the relocation or removal of the Network Facilities. In determining the
feasibility, the City Engineer shall be guided by the principles of economic
waste.

        Section 5.07. Timely completion. If the Permittee fails to either (i)
commence or thereafter to diligently prosecute any repair, refilling, lowering,
relocation, or other work required by the City, or (ii) diligently complete any
work that disturbs the Public Ways, the City may cause the work to be done or
completed at the expense of the Permittee and may recover all such expense from
the Permittee together with all costs and reasonable attorney fees.

        Section 5.08. Subsequent rules and regulations. The City Council or the
City Engineer may make such other reasonable rules and regulations for the
placement and manner of the Network Facilities as they may deem appropriate for
the protection of the public and the Public Way and to avoid unreasonable
interference with other uses or contemplated uses of the Public Way. Without
limitation of the above, the City Engineer may amend the rules or regulations to
require that all Network Facilities constructed after the effective date of such
amended rules be placed underground.

        Section 5.09. Inspections. The City Engineer may perform inspections of
any Network Facility located in the Public Way from time to time as the City
Engineer may deem appropriate. The Permittee may have a representative present
during such inspection.

        Section 5.10. Abandonment of obsolete facilities.

        a. When the Permittee opens a trench, accesses a conduit, bores, or is
working on other locations it shall determine if the Network Facilities located
therein, if any, are obsolete, and shall remove such obsolete Network Facilities
from such locations, subject to the City Engineer's approval pursuant to
Subsection (e), which shall include consideration of structural integrity of
the Public Way.

        b. When the Permittee opens a trench, accesses a conduit or bores, it
shall notify all other permittees or franchisees with facilities in the area of
such work, so that all the other permittees or franchisees may remove their
obsolete facilities, if any, from such location, at their sole cost. The
Permittee may request a list of such other permittees or franchisees from the
City Engineer, and may rely thereon for purposes of this Section. The Permittee
shall cooperate with

                                      -11-


the other in their efforts to remove obsolete facilities. Nothing in this
section shall require the Permittee to delay its work in order to accommodate
other permittees or franchisees.

        c. When the Permittee receives notification from another Permittee that
it plans to open a trench, access a conduit or bore and the Permittee determines
that the Network Facilities contained therein, if any, are obsolete, the
Permittee may remove obsolete Network Facilities from such locations pursuant to
Subsection (e) without causing a delay to the other Permittee, subject to the
City Engineer's written approval, which shall include consideration of
structural integrity of the Public Way.

        d. [Reserved].

        e. Whenever the Permittee intends to abandon any Network Facility within
the Public Way, the Permittee shall submit to the City Engineer for the City
Engineer's approval a completed application describing the Network Facilities
and the date on which the Permittee intends to abandon such Network Facilities.
The Permittee may remove the Network Facilities or request that the City permit
it to remain in place. If the Network Facilities remain in place, they shall be
subject to all terms and conditions of this Temporary Permit as though it were
in use by the Permittee.

        f. The City may require the Permittee to perform a combination of
modification and removal of any Network Facilities determined by the Permittee
to be obsolete under this section. The Permittee shall complete such
modification or removal in accordance with a schedule approved in writing by the
City Engineer. Until such time as the Permittee removes, modifies or replaces
any obsolete Network Facilities as directed by the City Engineer, the Permittee
shall be responsible for all necessary repairs, relocations of such Network
Facilities, and maintenance of the Public Way occupied by such Network
Facilities in the same manner and degree as if the Network Facilities were in
active use.

        Section 5.11. Acquisition of property adjacent to Public Way.

        a. Before the Permittee acquires any interest in real property for the
installation or relocation of Network Facilities along or adjacent to any Public
Way, the Permittee shall give the City Engineer written notice of such planned
acquisition no later than 30 days before the date of such acquisition. The City
Engineer will review the proposed acquisition to see that same does not conflict
or interfere with any proposed street or thoroughfare expansion.

        b. If the City Engineer determines that the proposed acquisition will
unreasonably conflict or interfere with any proposed street or thoroughfare
expansion, the City Engineer will notify Permittee of the potential conflict or
interference within 30 days after receipt of notice from the Permittee, and the
Permittee shall be required to accommodate the requirements of the City Engineer
with regard to the use of the property.

                                      -12-


        c. If the Permittee fails to notify the City within the prescribed 30
day period, the City may require the Permittee to relocate its Network
Facilities at no cost to the City to avoid unreasonable interference with such
proposed street or thoroughfare expansion.

        Section 5.15. Abandonment of Public Way. If the City conveys, closes,
abandons, or releases its interest in any Public Way containing Network
Facilities installed or operated pursuant to this Temporary Permit, any such
conveyance, closure, abandonment or release shall be subject to the rights of
the Permittee under this Temporary Permit.

        Section 5.16. Bonding. The Permittee shall comply with all applicable
requirements relating to the provision of bonds or other security to the City in
connection with its work in the Public Ways.


                                   ARTICLE VI.
                                   [Reserved]

                                  ARTICLE VII.
                          INDEMNIFICATION AND INSURANCE

        Section 7.01. Indemnification. THE Permittee COVENANTS AND WARRANTS THAT
IT WILL PROTECT, DEFEND, AND HOLD HARMLESS THE CITY, ITS EMPLOYEES, OFFICERS,
AND LEGAL REPRESENTATIVES (COLLECTIVELY, THE "CITY") FROM ANY AND ALL THIRD
PARTY CLAIMS, DEMANDS, AND LIABILITY, INCLUDING DEFENSE COSTS, RELATING IN ANY
WAY TO DAMAGES, CLAIMS, OR FINES ARISING BY REASON OF OR IN CONNECTION WITH THE
PERMITTEE'S ACTUAL OR ALLEGED NEGLIGENCE OR OTHER ACTIONABLE PERFORMANCE OR
OMISSION OF THE PERMITTEE IN CONNECTION WITH OR DURING THE PERFORMANCE OF ITS
DUTIES UNDER THIS TEMPORARY PERMIT. THE PERMITTEE FURTHER EXPRESSLY COVENANTS
AND AGREES TO PROTECT, DEFEND, INDEMNIFY, AND HOLD HARMLESS CITY FROM ALL
CLAIMS, ALLEGATIONS, FINES, DEMANDS, AND DAMAGES RELATING IN ANY WAY TO THE
ACTUAL OR ALLEGED JOINT AND/OR CONCURRENT NEGLIGENCE OF THE CITY AND THE
PERMITTEE, WHETHER THE PERMITTEE IS IMMUNE FROM LIABILITY OR NOT.

        NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIABILITY OF THE
PERMITTEE UNDER THIS INDEMNITY PROVISION SHALL NOT EXCEED $1,000,000 PER
OCCURRENCE.

        IF THE TEMPORARY PERMIT GRANTED BY THIS ORDINANCE IS TERMINATED OR IS
NOT RENEWED, AND THE PERMITTEE DOES NOT REMOVE ITS NETWORK FACILITIES FROM THE
PUBLIC WAY, THE PERMITTEE SHALL

                                      -13-


CONTINUE TO INDEMNIIFY AND HOLD HARMLESS THE CITY PURSUANT TO THIS ARTICLE AS
LONG AS ITS FACILITIES ARE LOCATED IN THE PUBLIC WAY, AND FOR SAID PURPOSE, THIS
SECTION SHALL SURVIVE THE TEMPORARY PERMIT.

        Section 7.02. Insurance. The Permittee shall maintain the following
insurance coverage and the respective policies thereof shall cover all risks
related to the Permittee's use and occupancy of the Public Way and all other
risks associated with this Temporary Permit:

        a. Description of Insurance Coverage and Limits



       Coverage                                         Limit of Liability
- ---------------------                          -----------------------------------
                                                
Workers' Compensation                            Statutory for Workers' Compensation.

Employer's Liability                             Bodily Injury by Accident $1,000,000 (each accident)
                                                 Bodily Injury by Disease $1,000,000 (policy limit)
                                                 Bodily Injury by Disease $1,000,000 (each employee)

Commercial General Liability:                    Combined single limits of $1,000,000
        Including Broad Form                     per occurrence and $1,000,000 aggregate
        Coverage, Contractual
        Liability, Bodily
        and Personal Injury,
        and Completed
        Operations

Products and Completed Operations                $1,000,000 aggregate

Automobile Liability insurance                   $1,000,000 combined single limit
(for automobiles used by the                     per occurrence
Permittee in the course of
its performance under this
Temporary Permit including Employer's
Non-Ownership and Hired Auto
Coverage)

Excess Coverage                                  $1,000,000 per occurrence/
                                                 combined aggregate in excess of
                                                 limits specified for Employer's Liability,
                                                 Commercial General Liability and
                                                 Automobile Liability


        Aggregate limits are per 12-month policy period, unless otherwise
indicated.

        b. Other insurance-related requirements

              1. The City shall be named an additional insured, by endorsement,
                 on all applicable insurance policies.



                                      -14-



 2.   Applicable insurance policies shall each be endorsed with a waiver of
      subrogation in favor of the City

 3.   Insurers shall have a rating of B+ or better and a financial size of Class
      VI or better according to the current year's Best's rating. Each issuer
      must be responsible and reputable, must have financial capability
      consistent with the risks covered, and shall be subject to approval by
      the Director in the Director's discretion as to conformance with these
      requirements.

 4.   Deductible limits on insurance policies and/or self insured retention
      exceeding $50,000 require approval of the City.

 5.   Certificates of insurance shall state that the City shall be notified a
      minimum of 30 days prior to the insurer's action in the event of
      cancellation, non-renewal or material change in coverage regarding any
      insurance policy required in this Temporary Permit.

 6.   Full limits of insurance required in Subsection (a) shall be available for
      claims arising out of this Temporary Permit.

 7.   Certificates of insurance shall be provided by the Permittee to the City
      upon the Permittee's execution of this Temporary Permit. Any failure on
      the part of the City to request such documentation shall not be construed
      as a waiver of insurance requirements specified herein.

 8.   The City shall be entitled, upon request and without incurring expense, to
      review the insurance policies (or certified copies thereof) including
      endorsements thereto which relate to the insurance requirements specified
      herein and, at its discretion, to require proof of payment for policy
      premiums.

 9.   The City reserves the right to revise insurance requirements specified
      herein and require the Permittee to comply therewith within 60 days of the
      City's official notice of the revision. Such notice shall be in writing
      and shall state the particular revisions required, and the reasons
      therefor.

10.   The City shall not be responsible for paying the cost of insurance
      coverage required herein.

11.   Notice of any actual or potential claim and/or litigation that would
      affect insurance coverage required herein shall be provided to the City in
      a timely manner. In the alternative, a policy may by endorsement,
      establish a policy

                                      -15-






      aggregate for this Temporary Permit which meets the aggregate requirements
      specified herein.

12.   Each insurance policy required herein shall be primary insurance to any
      other insurance available to the City with respect to any claims arising
      hereunder.

13.   The Permittee shall agree to either require its contractors to maintain
      the same insurance coverage and limits thereof as specified herein or such
      coverage on the Permittee's contractors shall be provided by the
      Permittee.

The Permittee shall continuously and without interruption, maintain in force the
required insurance coverage and limits set forth above. Failure to do so will
be a default under this Temporary Permit, allowing the City, at its option, to
terminate this Temporary Permit in accordance with the provisions of Article IX.

                                  ARTICLE VIII.
                                  CITY NETWORK

      Section 8.01. Installation of City fiber. In the case of new construction
of the Network, the Permittee, at its sole cost and expense, shall upon written
request of the City at the time of the issuance of the New Construction Permit,
provide to City for internal governmental purposes four dark fiber strands 
throughout the portion of the Network Facilities being constructed, as required
by the City Engineer and suitable for City's needs. In addition, where such
new construction is located directly adjacent to municipal buildings used by
City for governmental purposes, the Permittee shall provide lateral lines
connecting such locations to the Network as required by the City Engineer at 
110 percent of the Permittee's direct cost, to be reimbursed by the City. The
City shall be responsible for providing the Permittee with access to such
locations. The City Engineer shall notify the Permittee of such locations
prior to the commencement of construction of the applicable portions of the
Network Facilities. The City reserves the right to obtain bids from vendors,
other than the Permittee, for construction work not requiring access to the
Network Facilities.

      Section 8.02. Additional innerduct work. In addition to the requirements
of Section 8.01, the Permittee shall provide to the City without charge, and
solely for governmental telecommunications purposes, and solely for governmental
telecommunication purposes, a 1-1/4 inch innerduct in all of the Permittee's
conduit facilities constructed under this Temporary Permit. Prior to such
construction, the Permittee shall provide the City with written notice of the
proposed location of the conduit. The City shall have 30 days after receipt of
such notice to designate in writing the segments of conduit in which it desires
such an innerduct. If there is sufficient space in the Public Way for the
Permittee to reasonably size its conduit to allow for the City's innerduct
without interference with the Permittee's use of the Public Way, then the
Permittee shall grant the City's request. Additionally, the Permittee shall
provide adequate space on all its own non-ducted

                                      -16-






facilities constructed on, over, or within the Public Way, for the City to
attach transmission media for governmental use, subject to the City obtaining
necessary approvals. However, the Permittee shall not he required to disrupt or
otherwise compromise service to its customers in order to meet the requirements
of this subsection.

                                   ARTICLE IX.
                             DEFAULT AND TERMINATION

      Section 9.01. Defaults. The occurrence of any of the following shall be
an event of default under this Temporary Permit:

      i.   failure of the Permittee to comply with any material term, condition
           or provision of this Temporary Permit;

      ii.  any intentional false statement or misrepresentation as to a material
           fact in the Permittee's application for this Temporary Permit;

      iii. the Permittee's loss of or failure to obtain all licenses, permits,
           and certification lawfully required by any statute, ordinance, rule
           or regulation of any regulatory body having jurisdiction over the
           Permittee's operations under this Temporary Permit and pay all fees
           associated therewith; or

      iv.  acts or omissions of the Permittee constituting evasion of payment of
           Temporary Permit Fees, including evasion by means of not reporting
           actual Gross Receipts, bartering or any other means.

      Section 9.02. Cure period. If the Permittee continues to violate or fails
to comply with the material terms and provisions of this Temporary Permit for a
period of 30 days after the Permittee has been notified in writing by the City
to cure such specific alleged violation or failure to comply, then the City may
follow the procedures set forth herein to declare that the Permittee has
terminated all rights and privileges consented to in this Temporary Permit;
provided that if the Permittee is alleged to be in violation of any material
provisions of this Temporary Permit other than the payment of any fee due
hereunder and if the Permittee commences efforts to cure such alleged
violation(s) within 30 days after receipt of written notice and shall thereafter
prosecute such curative efforts with reasonable diligence until such curative
efforts are completed, then such alleged violation(s) shall cease to exist and
no further action will be taken at that time.

      Section 9.03. Termination. Termination of this Temporary Permit shall be
by City ordinance. The City shall provide written notice of such ordinance to
terminate to the Permittee at least 60 days prior to such ordinance being
included on City Council's agenda. Such notice shall set forth the causes and
reasons for termination. The Permittee shall be provided the opportunity to
appear before the City Council prior to the City Council's consideration of such
termination of the Temporary Permit and such opportunity to speak shall be no
less than 60 days

                                      -17-






following receipt of notice of termination. Such notice shall set forth the
time, date, and place of such time when the Permittee may appear before the City
Council. Upon any termination of this Temporary Permit, all amounts due by the
Permittee to City shall immediately become due and payable.

                                   ARTICLE X.
               TRANSFER OF TEMPORARY PERMIT OR LEASE OF FACILITIES

      Section 10.01. Prohibition. The rights, privileges and Temporary Permit
granted hereunder may not be assigned, in whole or in part, without the prior
consent of the City expressed by resolution or ordinance, and then only under
such conditions as may therein be prescribed, except as otherwise provided in
Section 10.04. No assignment in law or otherwise shall be effective until the
assignee has filed with the Director an instrument, duly executed, reciting the
fact of such assignment, accepting the terms hereof, and agreeing to comply with
all of the provisions hereof, A mortgage or other pledge of assets in a bona
fide lending transaction shall not be considered an assignment of this Temporary
Permit for the purposes of this Article.

      Section 10.02. Process. Upon receipt of a request for consent to an
assignment, the Director shall diligently investigate the request in a timely
manner and place the request on the City Council agenda at the earliest
practicable time. The City Council shall proceed to act on the request within a
reasonable period of time.

      Section 10.03. Scope of Review. In reviewing a request for assignment, the
City may inquire into the legal, technical and financial qualifications of the
prospective assignee, and the Permittee shall assist the City in so inquiring.
The City may condition said assignment upon such terms and conditions as it
deems reasonably necessary, provided its approval and any such terms and
conditions so attached shall be related to the legal, technical, and financial
qualifications of the assignee as well as the Permittee's compliance with the
terms hereof.

      Section 10.04. Assignments not Requiring Approval. Notwithstanding
anything to the contrary contained in this article, the prior approval of the
City shall not be required for any assignment to (i) any entity controlling,
controlled by, or under common control with the Permittee, as long as such
entity has expertise in the operation of the Network Facilities; (ii) any entity
with which the Permittee or an affiliate of the Permittee shares joint
ownership of the Network Facilities; or (iii) any entity that is a holder of a
then-current comprehensive telecommunication (as distinguished from a Cable
Services) franchise. The Permittee shall give written notice of such assignment
and provide documentation demonstrating the assignee's financial resources to
the Director.

      Section 10.05. Release. Upon receiving the City's consent to an
assignment, or, in the event of an assignment qualifying under Section 10.04,
upon giving notice under Section 10.04,

                                      -18-






the Permittee shall be relieved of all conditions, obligations, and
liabilities arising or which might arise hereunder that are assumed by the
assignee.

      Section 10.06. Lease or use of the Network Facilities by other Persons.
The Permittee shall have the right to lease the Network, or otherwise make the
Network Facilities available, in whole or in part, to its customers in the
ordinary conduct of the provision of Services, if:

      i.   The Permittee retains responsibility for servicing and repairing the
           Network; and,

      ii.  The lessee or customer has a valid franchise granted by City, if one
           is required, and such lessee or customer is not in default under the
           terms of such franchise. The Director shall determine whether a
           franchise is required.

                                   ARTICLE XI.
                                  MISCELLANEOUS

      Section 11.01. Discrimination prohibited.

      a. The Permittee shall not give unreasonable preference or advantage as
to rates or services to anyone within a service classification; nor shall
Permittee discriminate against anyone in the furnishing of Services under this
Temporary Permit, or the charges therefor, on account of race, color,
religion, sex or national origin.

      b. The Permittee shall comply with all laws, standards, orders and
regulations regarding equal employment which are applicable to the Permittee.

      Section 11.02 [Reserved.]

      Section 11.03 Drug-free workplace.

      a. It is the policy of the City to achieve a drug-free work force and to
provide a workplace that is free from the use of alcohol and illegal drugs. It
is also the policy of the City that the manufacture, distribution, dispensation,
possession, sale or use of alcohol or illegal drugs by contractors while on City
premises is prohibited. By accepting this Temporary Permit, the Permittee agrees
that it shall require any contractor working for or on behalf of the Permittee
in the Public Way to comply with all applicable federal and state laws and
regulations, as well as the requirements and procedures set forth in the Mayor's
Policy on Drug Detection and Deterrence, City Council Motion No. 92-1971 and
the Mayor's Drug Detection and Deterrence Procedures for Contractors,
Executive Order No. 1-31, both of which are on file in the Office of the City
Secretary.

      b. In addition, the Permittee shall require that any subcontractor working
for or on behalf of Permittee's contractor(s) in the Public Way shall also be
required to comply with the provisions

                                      -19-






of this section, The City may require that the Permittee produce evidence that
Permittee's contractors, as well as any subcontractors, are in compliance with
this provision of this Temporary Permit.

      Section 11.04 Notice.

      a. All notices required or permitted hereunder shall be in writing and
shall be deemed delivered when actually received or, if earlier, on the third
day following deposit in a United States Postal Service post office or
receptacle with proper postage affixed (certified mail, return receipt
requested) addressed to the respective other party at the address prescribed
below or at such other address as the receiving party may have theretofore
prescribed by notice to the sending party.

      b. Any notice or communication required or permitted in the administration
of this Temporary Permit may be sent by personal delivery, United States mail
or courier and shall be sent as follows:

      Notice to the City Engineer will be to:

           City Engineer
           Director, Department of Public Works and Engineering
           City of Houston
           1801 Main
           Houston, Texas 77002

      Notice to the City or the Director will be to:

            Director, Department of Finance and Administration
            City of Houston
            900 Bagby, 2nd Floor
            Houston, Texas 77002

      Notice to the Permittee will be to:

             TVMAX Communications (Texas), Inc.
             1111 West Mockingbird Lane, Suite 1130
             Dallas, Texas 75247
             Attention: Mr. Mike Katzenstein, Vice President and General Counsel

             and

             Mr Robert J. Collins
             Andrews & Kurth, L.L.P.
             4200 Texas Commerce Tower
             Houston, Texas 77002

                                      -20-







or to such other address as the Director, the City Engineer or the Permittee may
designate in writing from time to time. Any notice sent by facsimile
transmission must, subsequent to such facsimile transmission, also be given by
any other means provided for hereunder.

      Section 11.05. Force Majeure. Other than the Permittee's failure to pay
amounts due and payable under this Temporary Permit, the Permittee shall not be
in default or be subject to sanction under any provision of this Temporary
Permit when its performance is prevented by Force Majeure. Force Majeure means
an event caused by strike or other labor problem; embargo; epidemic; act of God;
fire; flood; adverse weather conditions, or other major environmental
disturbance, act of military authority; war or civil disorder. Provided,
however, that such causes are beyond the reasonable control and without the
willful act, fault, failure or negligence of the Permittee. Performance is not
excused under this section following the end of the applicable event of Force
Majeure.

      Section 11.06. Controlling laws. This ordinance and the Temporary Permit
granted herein are subject to the applicable provisions of the Constitution and
laws of the United States and of the State of  Texas, the Charter of the City of
Houston, and the Code of Ordinances, City of Houston of general applicability.
All obligations of the parties hereunder are performable in Harris County,
Texas. In the event that any legal proceeding is brought to enforce the terms
of this Temporary Permit, the same shall be brought in Harris County, Texas.

      Section 11.07 Cumulative effect. This Temporary Permit shall be cumulative
of all provisions of the Code of Ordinances, City of Houston, as amended, except
in those instances where the provisions of this Temporary Permit are in direct
conflict with the provisions of such Code, in which instances the provisions of
this Temporary Permit shall supersede the conflicting provisions of such Code as
they apply to the City.

      Section 11.08. Severability. It is hereby declared to be the intention of
the City Council that the phrases, clauses, sentences, paragraphs and sections
of this Temporary Permit are severable, and, if any phrase, clause, sentence,
paragraph or section of this Temporary Permit shall be declared void ineffective
or unconstitutional by the valid judgment or final decree of a court of
competent jurisdiction, such voidness, ineffectiveness or unconstitutionality
shall not affect any of the remaining phrases, clauses, sentences, paragraphs
and sections of this Temporary Permit since the same would have been enacted by
the City Council without the incorporation herein of any such void, ineffective
or unconstitutional phrase, clause, sentence, paragraph or section.

                                      -21-






      Section 11.09. Entire agreement. This Temporary Permit merges the prior
negotiations and understandings of the parties hereto and embodies the entire
agreement of the parties, and there are not other agreements, assurances,
conditions, covenants (expressed or implied) or other terms with respect to the
Network Facilities whether written or verbal, antecedent or contemporaneous with
the execution hereof.

      Section 11.10. Captions. Captions contained in this Temporary Permit are
for reference purposes only, and therefore will be given no effect in construing
this Temporary Permit and are not restrictive of the subject matter of any
section of this Temporary Permit. Any reference to gender shall include the
masculine, feminine and neutral.

      Section 11.11. Acceptance and approval. An approval by the Director,
the City Engineer, or any other instrumentality of City, of any part of the
Permittee's performance shall not be construed to waive compliance with this
Temporary Permit or to establish a standard of performance other than required
by this Temporary Permit or by law. Where this Temporary Permit contains a
provision that either party approve or consent to any action of the other party,
such approval or consent shall not be unreasonably withheld or delayed.

      Section 11.12. Non-waiver. Failure of either party hereto to insist on
the strict performance of any of the terms and conditions hereof or to exercise
any rights or remedies accruing hereunder upon default or failure of performance
shall not be considered a waiver of the right to insist on, and to enforce by
any appropriate remedy, strict compliance with any other obligation hereunder
or to exercise any right or remedy occurring as a result of any future default
or failure of performance except as specifically conceded herein.

      Section 11.13. Written amendment. Unless otherwise provided herein, this
Temporary Permit may be amended only by an ordinance duly adopted by the City
Council.

      Section 11.14. [Reserved].

      Section 11.15. Duties upon termination. Unless this Temporary Permit is
replaced by the Franchise as provided in Section 2.02, above, the Permittee
shall notify the Director Engineer in writing of any of the Network Facilities
that are constructed under the terms of this Temporary Permit and are not used
or useful for providing service under the Permittee's existing cable television
franchise, and that it wishes to remove from the Public Way within 90 days after
the termination of this Temporary Permit. If the Permittee does not timely
provide such notice, such Network Facilities shall, at the City's election, be
and become property of the City, without the payment of other or further
compensation to the Permittee, or the City may, at its option, elect to have
all such property, if any, of the Permittee in or under the Public Way removed
by the Permittee at the Permittee's sole cost and expense. If the property is to
be removed, the Permittee shall have a reasonable time to remove the Network
Facilities and the Permittee shall cause the Public Way to be restored to the
same condition, or in as good a state of repair or condition, as

                                      -22-






same was in prior to removal of the Network Facilities. The removal and
restoration work shall proceed diligently to completion. All work incident to
the removal of the Network Facilities or restoration of Public Way shall be done
at the sole cost and expense of the Permittee, and shall be done under the
supervision and satisfaction of the City Engineer, Notwithstanding anything to
the contrary contained herein, following the completion of such removal, the
Permittee shall not remove additional property at any time for any reason
without the prior written approval of the Director, such approval to be at the
sole discretion of the Director.

      Section 11.16. [Reserved].

      Section 11.17. Acceptance. The Permittee shall, within 30 days from the
Effective Date, file with the City Secretary a written statement executed in its
name by an officer of the Permittee duly appointed and authorized to make such
statement, in the form provided in Exhibit C.

      Section 11.18. Representations and warranties. In addition to the
representations, warranties, and covenants of the Permittee to the City set
forth elsewhere herein, the Permittee represents and warrants to the City and
covenants and agrees (which representations, warranties, covenants and
agreements shall not be affected or waived by any inspection or examination made
by or on behalf of the City) that, as of the closing and throughout the term
of this Temporary Permit.

      a. Organization, standing and power. The Permittee is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation and is duly authorized to do business in the State of Texas
and in the City. The Permittee has all requisite power and authority to own or
lease its properties and assets, to conduct its businesses as currently
conducted and to execute, deliver and perform this Temporary Permit and all
other agreements entered into or delivered in connection with or as contemplated
hereby.

      b. Compliance with law. The Permittee is, to the best of its knowledge
and belief, in compliance with all laws, ordinances, decrees and governmental
rules and regulations applicable to the System and has obtained all government
licenses, permits, and authorizations necessary for the operation and
maintenance of the Network Facilities.

      c. Full disclosure. Without limiting the specific language of any other
representation and warranty herein, all information furnished by the Permittee
to the City in connection with this Temporary Permit, or otherwise related to
System matters by authorized officers of the Permittee, to the best of the
Permittee's knowledge and belief is accurate and complete in all material
respects on the date ot passage of this Temporary Permit, and includes all
material facts required to be stated therein and does not contain any untrue
statement of a material fact or omit any material fact necessary to make the
statements therein not misleading. There is no fact known to the Permittee, to
the best of its knowledge, which materially and adversely affects or in the
future could reasonably be expected to materially and adversely affect the
business, operations, properties, assets or financial condition of the Network,
or any part thereof, which has not been

                                      -23-






set forth in this Temporary Permit or the other documents, certificates, and
instruments delivered to the City by or on behalf of the Permittee specifically
for use in connection with the transactions contemplated by this Temporary
Permit.

      d. Truthful statements. The Permittee warrants, to the best of its
knowledge and belief, that information provided and statements made in its
application for this Temporary Permit were true and correct when made and are
true and correct upon execution hereof.

      e. Survival of representations and warranties. All representations and
warranties contained in this Temporary Permit shall survive the term of the
Temporary Permit.

      Section 11.17. Emergency; Effective Date. A public emergency exists
requiring that this ordinance be passed finally on the date of its introduction
as requested in writing by the Mayor; therefore, this ordinance shall take
effect immediately upon its passage and approval by the Mayor, provided that if
the Mayor fails to sign this ordinance within five days after its passage and
adoption, it shall take effect in accordance with HOUSTON, TEX., CITY CHARTER,
art. VI, Section 6.

          PASSED AND ADOPTED, this 12th day of March 1997.

          APPROVED, this__________ day of __________, 1997.


                                               ______________________________
                                               Mayor of the City of Houston

Pursuant to HOUSTON, TEX., CITY CHARTER, art. VI, Section 6, the effective date
of the foregoing ordinance is March 18, 1997.



                                                        /s/ Anna Russell
                                                        --------------------
                                                        City Secretary


(Prepared by Legal Department /s/ XXXXXXX)
(TA 2-25-97)
(Requested by Richard Lewis, Director, Department of Finance & Administration)
(LD File No.______________)







                                      -24-






Section 2.04(b)                    EXHIBIT A

      Letter to Be Sent to Customers Who May Require Franchise Agreements*


Dear ____________:

      Pursuant to the Temporary Permit between _________________ and the City of
Houston (the "City") City Ordinance No. ______________________, this letter is
to notify you that you may require authorization from the City of Houston to
provide services via _________________ facilities located within City streets
and rights-of-way.

      Information regarding applicability, procedures, and requirements for such
authorization may be obtained by calling the City of Houston Division of Revenue
and Regulatory Affairs at (713) 247-1353.

                                    [Company]
                                   ---------------------------------------------

cc: City of Houston




Note to Exhibit A:

*    Pursuant to Section 2.04(b) of Ordinance No. ________, this letter is to be
     sent to entities whose use of the Network should reasonably require
     certification, authorization, or licensing by the FCC, Texas Public Utility
     Commission, or such other federal or state regulatory authority.








             






Section 3.03                              EXHIBIT B

                                 CITY OF HOUSTON
                       TELECOMMUNICATION FEE PAYMENT FORM

Period Ending:_____________________________________

Permittee:_________________________________________

No. of Customers By Class

      Business (private)                                   __________________
    
      Business (public)                                    __________________

      Residential                                          __________________

Sales and Revenues in City of Houston

             Local Service Revenue                         __________________
             (5,000 to 5,069) 40 CFR Part 32

             Network Access Services Revenue               __________________
             (5080-5084)

             Long Distance Revenue                         __________________
             (5010-5169)

             Miscellaneous Revenues                        __________________
             (5230-5270)

             Uncollectible                                 __________________

             TOTAL                                         __________________

             Temporary Permit Fee @ 4% of Gross Receipt    __________________

* Attached supporting quarterly revenue reports.



            






      I, ANNA RUSSELL, City Secretary of the City of Houston, Texas, do hereby
certify that the within and foregoing is a true and correct copy of Ordinance
No. 97-285, passed and adopted by the City Council of said City on the 12th day
of March, 1997 as the same appears in the records in my office.

      WITNESS my hand and the Seal of said City this 19th day of March,

AD 1997.

                                  /s/ Anna Russell
                                  ----------------------------------------------
                                  City Secretary of the City of Houston
                                  Anna Russell