Loading...
03-41 RESOLUTION NO. 03-41 A RESOLUTION OF THE CITY OF CLEARWATER, FLORIDA, APPROVING THE TRANSFER OF VERIZON MEDIA VENTURES INC. CABLE TELEVISION FRANCHISE TO KNOLOGY OF FLORIDA BROADBAND, INC.; AUTHORIZING EXECUTION OF THE TRANSFER AGREEMENT PROVIDING AN EFFECTIVE DATE. WHEREAS, pursuant to Ordinance 6046-96, adopted June 20, 1996, the City of Clearwater approved a cable franchise agreement with GTE Media Ventures Incorporated, a wholly-owned subsidiary of GTE Corporation; and WHEREAS, on April 6, 2000, the City of Clearwater adopted Resolution No. 00-13, approving the proposed GTE Corporation-Bell Atlantic Corporation merger; granting a change or transfer in control of the GTE Media Ventures cable franchise to Verizon Media Ventures Inc.; and WHEREAS, Verizon Media Ventures Inc. ("Franchisee"), owns, operates, and maintains a cable television system (the "System") in the City of Clearwater (the "City"), pursuant to a cable television franchise agreement (the "Franchise"); and WHEREAS, Franchisee, and Knology New Media, Inc., ("Buyer") are parties to an Asset Purchase Agreement (the "Agreement"), pursuant to which the Franchise will be transferred (the "Transfer") from Franchisee to the Assignee of the Buyer, Knology of Florida Broadband, Inc. (the "Transferee") at the consummation of the transaction contemplated by the Agreement (the "Closing"); and WHEREAS, Franchisee and Transferee have requested consent by the City to the Transfer in accordance with the requirements of the Franchise and have filed an FCC Form 394 with the City; and WHEREAS, in accordance with Section 14(b) of the cable franchise ordinance, Verizon Media Ventures is requesting approval of the change or transfer in control of the company; now therefore, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF CLEARWATER, FLORIDA: Section 1. The City hereby consents to and approves, subject to applicable law, the assignment by Franchisee of its right, title and interest in the Franchise to Transferee, and the assumption by Transferee of the obligations of Franchisee under the Franchise from and after the Closing. Resolution 03-41 Section 2. The City releases Verizon, effective upon the Closing, from all obligations and liabilities under the Franchise that accrue on and after the Closing date, except for suits, actions or claims made on or after the Closing date that result from an act or omission by Verizon prior to the Closing date; provided that Transferee shall be responsible for any obligations and liabilities under the Franchise that accrue on and after the Closing date. Section 3. The City Commission hereby authorizes execution of the Transfer Agreement attached hereto as Exhibit A. Section 4. This resolution shall be deemed effective for purposes of the Transfer upon the Closing of the Transfer. PASSED AND ADOPTED this 4th day of December ,2003. Approved as to form: JJJ~ Pamela K. Akin City Attorney , - Z. Resolution 03-41 EXHIBIT "A" November 20,2003 Page 1 TRANSFER AGREEMENT <.fir'- THIS AGREEMENT is made this &.- day of ~ ,2003, by and between: A. City of Clearwater ("CITY"); B. Verizon Media Ventures Inc. a Delaware corporation, hereinafter referred to as VERIZON; and C. Knology Inc., a Delaware corporation, hereinafter referred to as KNOLOGY INC. D. Knology Broadband of Florida, Inc. a Delaware corporation, hereinafter referred to as KNOLOGY; and E. Knology New Media, Inc. a Delaware corporation and wholly owned subsidiary of Knology Inc., hereinafter referred to as KNOLOGY NEW MEDIA. F, KNOLOGY AND KNOLOGY NEW MEDIA etc. may be referred to jointly herein as "COMPANIES" . RECITALS WHEREAS, VERIZON currently holds a cable franchise (the "FRANCHISE") from the CITY subject to the GTE Media Ventures Cable Franchise Ordinance, CITY Ordinance No. 6046-96. ("FRANCHISE AGREEMENT"), as modified and becoming a part thereof, by stipulations attendant to a nominal change in control, from GTE Media Ventures Incorporated and Bell Atlantic Corporation in Resolution No. 00-13, all of which documents, as any of them may lawfully be or may have been amended from time to time, are'collectively referred to as the "FRANCHISE DOCUMENTS"; and WHEREAS, by action of its Board Directors and stockholder, effective June 23, 2000, GTE Media Ventures Incorporated changed its name to Verizon Media Ventures Inc. ("VERIZON") and has provided cable television service to subscribers in the CITY; and WHEREAS, pursuant to an Asset Purchase Agreement dated July 15, 2003 ("Asset Purchase Agreement"), KNOLOGY NEW MEDIA will acquire the franchise currently held by VERIZON and the cable system serving the CITY ("SYSTEM") both of which will then be assigned to KNOLOGY (the "PROPOSED TRANSACTION"); and WHEREAS, the FRANCHISE AGREEMENT Section 14(A) provides that the prior approval of the CITY is required for the PROPOSED TRANSACTION; and WHEREAS, VERIZON and THE COMPANIES filed an FCC Form 394 with the CITY and requested that the CITY approve the PROPOSED TRANSACTION (the "TRANSFER APPLICATION"); and Exhibit "A" November 20,2003 Page 2 WHEREAS, KNOLOGY agrees to provide a guarantee, in the attached form, from KNOLOGY INC. guaranteeing performance by KNOLOGY of all of KNOLOGY'S obligations under the FRANCHISE DOCUMENTS and this Transfer Agreement; and WHEREAS, THE COMPANIES have agreed to comply with the FRANCHISE DOCUMENTS and applicable law from and after the completion of the PROPOSED TRANSACTION; and WHEREAS, relying on VERIZON, and THE COMPANIES' respective representations, the CITY is willing to grant its consent to the PROPOSED TRANSACTION, subject to the terms and conditions set forth herein. Now, THEREFORE, in consideration for the CITY's consent to the PROPOSED TRANSACTION, and subject to the terms and conditions of this Agreement and of the CITY's Resolution consenting to the PROPOSED TRANSACTION ("TRANSFER RESOLUTION"), THE PARTIES DO HEREBY AGREE as follows: Section 1. DEFINITION For purposes of this Agreement, "FRANCHISEE" shall mean VERIZON prior to the closing of the PROPOSED TRANSACTION, and KNOLOGY on and after that date. Section 2. TRANSFER OF FRANCHISE 2.1 The foregoing recitals are true and correct and are incorporated herein by reference. 2.2 The CITY has consented through the TRANSFER RESOLUTION to the PROPOSED TRANSACTION as specified in the TRANSFER APPLICATION, in consideration for the promises and performances of VERIZON and THE COMPANIES as expressed in this Transfer Agreement. Section 3. ACCEPTANCE OF FRANCHISE OBLIGATIONS 3.1 KNOLOGY hereby accepts, acknowledges, and agrees that, after the PROPOSED TRANSACTION, KNOLOGY will be bound by all the commitments, duties, and obligations, present, continuing and future, of the FRANCHISEE embodied in the FRANCHISE DOCUMENTS, and that the PROPOSED TRANSACTION will have no effect on these obligations. 3.2 VERIZON and the COMPANIES agree that neither the PROPOSED TRANSACTION nor the CITY's approval of the PROPOSED TRANSACTION shall in any respect relieve the FRANCHISEE or any of its successors in interest of responsibility for its past acts or omissions, known or unknown. VERIZON hereby agrees that, except to the extent otherwise covered by separate agreements, it shall be liable for its past acts and omissions, known and unknown, including liability for any and all previously accrued but November 20,2003 Page 3 unfulfilled obligations to the CITY, under the FRANCHISE DOCUMENTS and applicable law, for all purposes, including but not limited to review of past performance. KNOLOGY agrees that, for purposes of determining whether its FRANCHISE should be renewed, all acts and omissions of FRANCHISEE occurring prior to this Agreement will be deemed to be those of KNOLOGY. The PROPOSED TRANSACTION shall not restrict or expand the rights of the COMPANIES under or related to the FRANCHISE DOCUMENTS as compared to those that could have been exercised by the FRANCHISEE prior to the PROPOSED TRANSACTION. 3.3 VERIZON shall ensure that all records pertaining to the FRANCHISE, including financial records, shall continue to be available after the PROPOSED TRANSACTION in the same way and to the same extent such information was available prior to the PROPOSED TRANSACTION. KNOLOGY shall ensure that all records pertaining to the FRANCHISE in its possession, shall continue to be available after the PROPOSED TRANSACTION in the same way and to the same extent such information was available prior to the PROPOSED TRANSACTION. 3.4 KNOLOGY represents and warrants that it has and will have complete and actual working control over the system. 3.5 KNOLOGY shall execute and submit to the CITY an Acceptance of Franchise by KNOLOGY in substantially the form attached hereto as Exhibit B. 3.6 KNOLOGY agrees to provide a guarantee from Knology, Inc. and KNOLOGY NEW MEDIA in the form specified in Exhibit A, which is acceptable to the CITY, guaranteeing performance by KNOLOGY of all of KNOLOGY'S obligations under the FRANCHISE DOCUMENTS and this Transfer Agreement. The signed guarantees must be provided on or before the closing of the PROPOSED TRANSACTION. 3.7 VERIZON and the COMPANIES agree that, from and after the consummation of the PROPOSED TRANSACTION it shall comply with all of the terms and conditions set forth in this Transfer Agreement. VERIZON agrees that it will not take any action, without cause, that prevents KNOLOGY from complying with its obligations under the Franchise Documents or this Agreement. VERIZON agrees that it will provide the CITY 20 days prior notice of any action taken by VERIZON which may reasonably result in an interruption or degradation of service to KNOLOGY subscribers on account of a failure by KNOLOGY to meet an obligation under any agreement between KNOLOGY and VERIZON. Section 4. RESERVATION OF RIGHTS 4.1 The CITY reserves all rights not expressly granted in this Transfer Agreement, including without limitation those specified below. 4.2 The CITY waives none of its rights with respect to the FRANCHISEE', the COMPANIES' or VERIZON'S compliance with the requirements set forth in the FRANCHISE November 20, 2003 Page 4 DOCUMENTS. At no time will the COMPANIES contend, either directly or indirectly, that the CITY is barred, by reason of the PROPOSED TRANSACTION, from considering, or raising claims based on, any defaults of KNOLOGY or VERIZON, any failure by KNOLOGY or VERIZON to provide reasonable service in light of the community's needs, or any failure by KNOLOGY or VERIZON to comply with the terms and conditions of the FRANCHISE DOCUMENTS or with applicable law. The CITY approval of the PROPOSED TRANSACTION shall in no way be deemed a representation by the CITY that the FRANCHISEE is in compliance with all of its obligations under the FRANCHISE DOCUMENTS. 4.3 Neither this Transfer Agreement, nor any other action or omission by the CITY at or before the execution of this Transfer Agreement, shall be construed to grant the CITY's consent to any future transfer of the FRANCHISE and/or the System, and/or any future change in ownership and/or control of the FRANCHISE and/or the System, or to mean that the CITY's consent to any future transaction is not required. 4.4 Any consent given by the CITY to the PROPOSED TRANSACTION is made without prejudice to, or waiver of, the CITY's right to investigate and take into account any lawful considerations during any future FRANCHISE renewal or transfer process. 4.5 This Transfer Agreement does not affect and shall not be construed to affect the rights and authority of the CITY to regulate or authorize, by ordinance, license or otherwise, use of the public rights-of-way for purposes other than for cable service. Section 5. REPRESENTATIONS AND WARRANTIES 5.1 VERIZON and each of the COMPANIES hereby represents and warrants that at the time of the execution of this Agreement: (a) it is a corporation or partnership duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized; (b) the FRANCHISE DOCUMENTS and, assuming due execution hereof by the other parties hereto, this Transfer Agreement constitute legal, valid and binding obligations of such Company enforceable in accordance with their terms; (c) the execution and delivery of, and performance by such Company under, this Transfer Agreement and the FRANCHISE DOCUMENTS, where applicable, are within such Company's power and authority without the joinder or consent of any other party and have been duly authorized by all requisite corporate or partnership action on the part of such Company and are not in contravention of such Company's partnership agreement, charter, bylaws, and/or other organizational documents; and (d) no representation made to the CITY by such Company is incomplete, untrue or inaccurate in any material respect. 5.2 KNOLOGY represents and warrants that neither the PROPOSED TRANSACTION nor this Transfer Agreement will adversely affect KNOLOGY'S ability to meet the requirements of the current FRANCHISE DOCUMENTS, or to meet the CITY's future cable- related needs and interests in a renewal FRANCHISE. November 20,2003 Page 5 5.3 KNOLOGY represents and warrants that the PROPOSED TRANSACTION will not have any adverse financial effect on the System, or adversely affect performance. 5.4 KNOLOGY represents and warrants that after the PROPOSED TRANSACTION, KNOLOGY'S financial qualifications will be such as shall enable it to maintain and operate the System in the CITY. 5.5 KNOLOGY represents and warrants that the PROPOSED TRANSACTION will not in any respect reduce the quality of customer service in the CITY. 5.6 KNOLOGY represents and warrants that the PROPOSED TRANSACTION will not reduce the quality of existing system maintenance or repair. Section 6. INDEMNIFICATION 6.1 VERIZON and each of the COMPANIES agree to indemnify and hold the CITY harmless against any loss, claim, damage, liability or expense (including, without limitation, reasonable attorneys' fees) caused by any representation or warranty made by that Company herein which is determined by a court of competent jurisdiction or by the parties to be untrue or inaccurate in any material respect. 6.2 In addition to any indemnification under the FRANCHISE DOCUMENTS, KNOLOGY shall indemnify and hold the CITY harmless against any loss, claim, damage, liability or expense (including, without limitation, reasonable attorneys' fees) incurred by the CITY in connection with any action or proceeding commenced by a third party (not one of the parties to this Transfer Agreement) claiming or asserting any liability of the CITY relating to or arising from the PROPOSED TRANSACTION or this Transfer Agreement. 6.3 VERIZON shall indemnify, pay the cost of defense, including attorney's fees, and hold harmless the CITY from all suits, actions or claims of any character brought on account of any injuries or damages received or sustained by any person, persons or property by or from the Franchise; or by, or in consequence or of any neglect in safeguarding the work under the Franchise; or on account of act or omission, neglect or misconduct of VERIZON; or by, or on account of, any claim or amounts recovered under the Workers' Compensation Law or of any other laws, by-laws, ordinance, order or decree, except only such injury or damage as shall have been occasioned by the sole negligence of the CITY. Notwithstanding the foregoing, VERIZON'S indemnification obligation hereunder shall be limited to suits, actions, or claims resulting from acts or omissions prior to the date of Transfer. The CITY shall give VERIZON prompt notice of the making of any claim or the commencement of any action, suit or other proceeding covered by the provisions of this section. November 20,2003 Page 6 Section 7. ADDITIONAL CONDITIONS 7.1 In the event the transfer does not close by March 31, 2004, or closes on terms that are in any material respect different from the terms disclosed to the CITY in writing, then any CITY consent to the PROPOSED TRANSACTION shall be void and of no force or effect, and the PROPOSED TRANSACTION deemed to have been timely denied. 7.2 VERIZON and the COMPANIES hereby waive any and all claims that they may have that any denial of the TRANSFER APPLICATION that results from failure of the conditions herein fails to satisfy the deadlines established by applicable law including, without limitation, claims based on, arising out of, or relating to 47 U.S.C. 9537, as amended, and agree that they shall be deemed to have agreed to an extension of the time to act on the TRANSFER APPLICATION as required to make any denial effective. 7.3 KNOLOGY shall provide proof that all required insurance, bonds and letters of credit have been delivered to the CITY on or before the Closing of the Proposed Transaction. Within 20 days of KNOLOGY INC. closing its public stock offering, it shall submit proof that it has satisfied any liens or encumbrances arising out of the five million dollar Purchase Money Financing Line of Credit between KNOLOGY NEW MEDIA INC. and certain of its investors. 7.4 Except to the extent provided below all required insurance, bonds and letters of credit currently provided by VERIZON shall remain in full force until KNOLOGY provides proof to the CITY that all insurance, bonds and letters of credit as required under the FRANCHISE have been obtained. VERIZON shall maintain in full force and effect a faithful performance bond running to the CITY, with a good and sufficient surety approved by the CITY, in the amount of $100,000.00, conditioned that VERIZON shall well and truly observe, fulfill, and perform each term and condition of the FRANCHISE which VERIZON is obligated to observe, fulfill, and perform until and including the Closing of the PROPOSED TRANSACTION, and that, in case of any breach which may be discovered and for which a claim may be made before or after the Closing of the PROPOSED TRANSACTION, the CITY shall be entitled to recover from the principal and sureties thereof the amount of all damages, including all costs and attorney's fees incurred by the CITY, approximately resulting from the failure of VERIZON to well and faithfully observe and perform any and all of the provisions of the FRANCHISE which VERIZON was obligated to observe and perform prior to and including the Closing of the PROPOSED TRANSACTION. Such bond shall be maintained in full force and effect for a term or succession of terms ending 18 months after the effective date of this Agreement. Section 8. BREACHES Any breach of this Transfer Agreement on or after Closing by KNOLOGY shall be deemed a breach of the FRANCHISE AGREEMENT and shall be subject to all remedies available for a breach of the FRANCHISE AGREEMENT, in November 20,2003 Page 7 addition to any other remedies the parties may have under this Transfer Agreement at law or equity. Section 9. MISCELLANEOUS PROVISIONS. 9.1. Effective Date: This Transfer Agreement shall be effective and binding upon the signatories once it has been signed by all signatories. 9.2 Bindino Acceptance: This Transfer Agreement shall bind and benefit the parties hereto and their respective heirs, beneficiaries, administrators, executors, receivers, trustees, successors and assigns, and the promises and obligations herein shall survive the expiration date hereof. Any purported assignment of this Transfer Agreement is void without the express written consent of the signatories. 9.3 Voluntary Aoreement: This Transfer Agreement is freely and voluntarily given by each party, without any duress or coercion, and after each party has consulted with its counsel. Each party has carefully and completely read all of the terms and provisions of this Transfer Agreement. Neither any of the COMPANIES, nor any of their affiliates, nor the CITY, will take any action to challenge any provision of this Transfer Agreement; nor will they participate with any other person or entity in any such challenge. 9.4 Severabilitv: If any term, condition, or provISion of this Transfer Agreement shall, to any extent, be held to be invalid, preempted, or unenforceable, the remainder hereof shall be valid in all other respects and continue to be effective. 9.5 Counterparts: This Transfer Agreement may be executed in several counterparts, each of which when so executed shall be deemed to be an original copy, and all of which together shall constitute one agreement binding on all parties hereto, notwithstanding that all parties shall not have signed the same counterpart. 9.6 Conformino Amendments to Franchise Aoreement: KNOLOGY agrees to accept FRANCHISE amendments to the extent necessary to reflect the PROPOSED TRANSACTION or the provisions of this Transfer Agreement. 9.7 Governino Law: This Transfer Agreement shall be governed in all respects by the law of the State of Florida. 9.8 Captions and References: The captions and headings of sections throughout this Transfer Agreement are intended solely to facilitate reading and reference to the sections and provisions of this Transfer Agreement. Such captions shall not affect the meaning or interpretation of this Transfer Agreement. END OF SUBSTANTIVE PROVISIONS SIGNATURE PAGE AND EXHIBITS TO FOLLOW AGREED TO THIS IIJ~ DAY OF ~~~ , 2bQ3 . November 20, 2003 Page 8 Countersigned: FLORIDA CITY OF CLEARWATER, :~... ...::B. ~-rJ. William B. Horne II City Manager Approved as to form: Attest: RJlA- Pamela K. Akin City Attorney Verizon By: [title] Knology New Media, Inc. By: [title] Knology Broadband of Florida, Inc. By: [title] November 20, 2003 Page 1 EXHIBIT A GUARANTEE OF PERFORMANCE WHEREAS, the City of Clearwater, Florida ("CITY") granted a franchise ("FRANCHISE") to Verizon Media Ventures Inc., to erect, construct, operate, and maintain a cable system in the CITY pursuant to the GTE Media Ventures Incorporated. Cable Franchise Ordinance, City of Clearwater Ordinance No. 6046-95 and as subsequently amended, all of which documents, as any of them may lawfully be or may have been amended from time totime, are collectively referred to as the "FRANCHISE DOCUMENTS"; and WHEREAS, the City of Clearwater, Florida ("CITY") consented to a transfer of a CITY FRANCHISE from VERIZON to KNOLOGY ("FRANCHISEE") conditioned upon execution of a transfer agreement and related documents including this Guarantee; and WHEREAS, Knology Inc.("GUARANTOR") is an indirect parent of the FRANCHISEE and will have a substantial interest in the FRANCHISE, in the conduct of the FRANCHISEE, and in the FRANCHISE DOCUMENTS, which are incorporated herein by this reference; Now, THEREFORE, the GUARANTOR hereby unconditionally guarantees the due and timely performance of any and all obligations of the FRANCHISEE required by the FRANCHISE DOCUMENTS. The GUARANTOR also promises that no company in the chain of ownership between it and the FRANCHISEE will take any action that would prevent the FRANCHISEE from performing its obligations under the FRANCHISE. This Guarantee, unless terminated, substituted or canceled as hereinafter provided, shall remain in full force and effect for the term of the FRANCHISE, as it may be renewed or extended and as provided by the FRANCHISE DOCUMENTS; provided, however, that upon the CITY's prior written approval of a substitute guarantor, which approval shall not be unreasonably withheld, this Guarantee may be terminated, substituted or canceled upon written notice from the GUARANTOR to the CITY and the FRANCHISEE. Any such substitution of the GUARANTORS will be implemented in a manner that ensures that the substitute guarantee is in place and effective prior to or contemporaneously with the termination, substitution or cancellation of this Guarantee so that there is no breach in coverage. Any notice of such a substitution as required by law shall be addressed to the CITY Administrator with a copy to the FRANCHISEE. Such termination shall not affect liability incurred or accrued under this Guarantee prior to the effective date of such termination or cancellation. END OF SUBSTANTIVE PROVISIONS, SIGNATURE PAGE TO FOLLOW November 20, 2003 Page 2 Knology, Inc. By: Name: Title: STATE OF I HEREBY CERTIFY, that on this _ day of me, the subscriber, a Notary Public of the State of Georgia, in and for Georgia, aforesaid personally , before CITY, appeared of and CITY, acknowledged the foregoing Acceptance of Franchise by Franchisee in Georgia, to be the actand deed of said company. CITY, Georgia AS WITNESS my hand and Notary Seal Notary Public My Commission Expires: EXHIBIT B ACCEPTANCE OF FRANCHISE BY THE FRANCHISEE Knology ("FRANCHISEE ") hereby accepts the franchise to erect, construct, maintain, and operate a cable system offered by the GTE Media Ventures Cable Franchise Ordinance, City of Clearwater Ordinance No. 6046-96 ("FRANCHISE AGREEMENT"), as assigned and modified by that Resolution No. 00-13 ("FRANCHISE ORDINANCE"). By this acceptance, FRANCHISEE agrees that, as set forth in the FRANCHISE ORDINANCE, it shall be bound by the terms and conditions of the FRANCHISE AGREEMENT, any amendments thereto, (collectively, the "FRANCHISE DOCUMENTS"). By accepting the franchise, the FRANCHISEE further: (1) acknowledges and accepts the CITY's legal right to issue and enforce the franchise; (2) agrees that it will not oppose the CITY's intervention in any proceeding affecting its franchise or obligations thereunder; (3) accepts and agrees to comply with each and every provision of the FRANCHISE DOCUMENTS; and (4) agrees that the franchise was granted pursuant to processes and procedures consistent with applicable law, and that it will not raise any claim to the contrary. The FRANCHISEE declares that it has carefully read all of the terms and conditions of the FRANCHISE DOCUMENTS, and accepts and agrees to abide by same. The FRANCHISEE is bound to maintain and operate a cable system under the terms, conditions and limitations set forth in the FRANCHISE DOCUMENTS and other applicable law, as of the time and date it files this written acceptance with William B. Horne, II, Clearwater City Manager END OF SUBSTANTIVE PROVISIONS, SIGNATURE PAGE TO FOllOW AGREED TO THIS DAY OF Knology, Inc. By: Name: Title: STATE OF I HEREBY CERTIFY, that on this _ day of me, the subscriber, a Notary Public of the State of _' aforesaid personally appeared of and acknowledged the foregoing Acceptance of Franchise by Franchisee to be the act and deed of said company. , , in and for , before AS WITNESS my hand and Notary Seal Notary Public My Commission Expires: