TRANSFER AGREEMENT

EXHIBIT 10.56

 

Exhibit A

 

TRANSFER AGREEMENT

 

 

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TRANSFER AGREEMENT

 

This T RANSFER A GREEMENT is made this 7 day of January, 2004, by and between:

 

A. Pinellas County, a Florida County (“C OUNTY ”);

 

B. Verizon Media Ventures Inc., a Delaware corporation, hereinafter referred to as V ERIZON ; and

 

C. Knology Broadband of Florida Inc., a Delaware corporation, hereinafter referred to as K NOLOGY ; and

 

D. Knology New Media Inc., a Delaware corporation and wholly owned subsidiary of Knology Inc., hereinafter referred to as K NOLOGY N EW M EDIA .

 

K NOLOGY and K NOLOGY N EW M EDIA etc. may be referred to jointly herein as “C OMPANIES ”.

 

RECITALS

 

W HEREAS , V ERIZON currently holds a cable franchise (the “F RANCHISE ”) from the C OUNTY subject to the GTE Media Ventures Cable Franchise Ordinance, Pinellas County Ordinance No. 99-106. (“F RANCHISE A GREEMENT ”), 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 with respect to issues documented in Pinellas County Resolution No. 00-60, which stipulations have been confirmed in writing by GTE Media Ventures Incorporated by Acceptances dated March 20, 2000 and April 24, 2000, and which became effective upon the merger of GTE Corporation and Bell Atlantic Corporation and as further subject to the “Cable System Regulatory Ordinance”, Ordinance 99-46, as amended and codified at Chapter 30 of the Pinellas County Code (“Cable Ordinance”), 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 “F RANCHISE D OCUMENTS ”; and

 

W HEREAS , by action of its Board Directors and stockholder, effective June 23, 2000, GTE Media Ventures Incorporated changed its name to Verizon Media Ventures Inc. (“V ERIZON ” ) and has provided cable television service to subscribers in the County pursuant to the Franchise Documents, through its cable system in the County (“S YSTEM ”); and

 

W HEREAS , pursuant to an Asset Purchase Agreement dated July 15, 2003 (“Asset Purchase Agreement”), K NOLOGY N EW M EDIA will acquire the franchise currently held by V ERIZON and the

 

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cable system serving the County both of which will then be assigned to K NOLOGY (the “P ROPOSED T RANSACTION ”); and

 

W HEREAS , the F RANCHISE A GREEMENT Section 3.2.1 and the CABLE ORDINANCE Section 30-26.g.(1 & 2) provides that the prior approval of the C OUNTY is required for the P ROPOSED T RANSACTION ; and

 

W HEREAS , V ERIZON and the C OMPANIES filed an FCC Form 394 with the C OUNTY and requested that the C OUNTY approve the P ROPOSED T RANSACTION (the “T RANSFER A PPLICATION ”); and

 

W HEREAS , K NOLOGY agrees to provide a guarantee, in the attached form, from Knology Inc. and K NOLOGY N EW M EDIA guaranteeing performance by K NOLOGY of all of K NOLOGY ’s obligations under the F RANCHISE D OCUMENTS and this T RANSFER A GREEMENT ; and

 

W HEREAS , THE C OMPANIES have agreed to comply with the F RANCHISE D OCUMENTS and applicable law from and after the completion of the P ROPOSED T RANSACTION ; and

 

W HEREAS , relying on V ERIZON , and THE C OMPANIE s’ respective representations, the C OUNTY is willing to grant its consent to the P ROPOSED T RANSACTION , subject to the terms and conditions set forth herein.

 

N OW , T HEREFORE , in consideration for the C OUNTY ’s consent to the P ROPOSED T RANSACTION , and subject to the terms and conditions of this Agreement and of the C OUNTY ’ S Resolution consenting to the P ROPOSED T RANSACTION (“T RANSFER R ESOLUTION ”), THE P ARTIES DO H EREBY A GREE as follows:

 

Section 1. DEFINITION

 

For purposes of this T RANSFER A GREEMENT , “F RANCHISEE ” shall mean V ERIZON prior to the closing of the P ROPOSED T RANSACTION , and K NOLOGY 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 C OUNTY has consented through the T RANSFER R ESOLUTION to the P ROPOSED T RANSACTION as specified in the T RANSFER A PPLICATION , in consideration for the promises and performances of V ERIZON and THE C OMPANIES as expressed in this T RANSFER A GREEMENT .

 

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Section 3. ACCEPTANCE OF FRANCHISE OBLIGATIONS

 

3.1 K NOLOGY hereby accepts, acknowledges, and agrees that, after the P ROPOSED T RANSACTION , K NOLOGY will be bound by all the commitments, duties, and obligations, present, continuing and future, of the F RANCHISEE embodied in the F RANCHISE D OCUMENTS , and that the P ROPOSED T RANSACTION will have no effect on these obligations.

 

3.2 V ERIZON and the C OMPANIES agree that neither the P ROPOSED T RANSACTION nor the C OUNTY ’s approval of the P ROPOSED T RANSACTION shall in any respect relieve the F RANCHISEE or any of its successors in interest of responsibility for its past acts or omissions, known or unknown. V ERIZON 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 unfulfilled obligations to the C OUNTY , under the F RANCHISE D OCUMENTS and applicable law, for all purposes, including but not limited to review of past performance. K NOLOGY agrees that, for purposes of determining whether its F RANCHISE should be renewed, all acts and omissions of F RANCHISEE occurring prior to this Agreement will be deemed to be those of K NOLOGY . The P ROPOSED T RANSACTION shall not restrict or expand the rights of the C OMPANIES under or related to the F RANCHISE D OCUMENTS as compared to those that could have been exercised by the F RANCHISEE prior to the P ROPOSED T RANSACTION .

 

3.3 V ERIZON shall ensure that all records pertaining to the F RANCHISE , including financial records, shall continue to be available after the P ROPOSED T RANSACTION in the same way and to the same extent such information was available prior to the P ROPOSED T RANSACTION . K NOLOGY shall ensure that all records pertaining to the F RANCHISE in its possession, shall continue to be available after the P ROPOSED T RANSACTION in the same way and to the same extent such information was available prior to the P ROPOSED T RANSACTION .

 

3.4 K NOLOGY represents and warrants that it has and will have complete and actual working control over the system.

 

3.5 K NOLOGY shall execute and submit to the C OUNTY an Acceptance of Franchise by K NOLOGY in substantially the form attached hereto as Exhibit B.

 

3.6 K NOLOGY agrees to provide a guarantee from K NOLOGY , I NC . and K NOLOGY N EW M EDIA in the form specified in Exhibit A, which is acceptable to the C OUNTY , guaranteeing performance by K NOLOGY of all of K NOLOGY ’s obligations under the F RANCHISE D OCUMENTS and this Transfer Agreement. The signed guarantees must be provided on or before the closing of the P ROPOSED T RANSACTION .

 

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3.7 V ERIZON and the C OMPANIES agree that, from and after the consummation of the P ROPOSED T RANSACTION it shall comply with all of the terms and conditions set forth in this Transfer Agreement. V ERIZON agrees that it will not take any action, without cause, that prevents K NOLOGY from complying with its obligations under the Franchise Documents or this Agreement. V ERIZON agrees that it will provide the County 20 days prior notice of any action taken by V ERIZON which may reasonably result in an interruption or degradation of service to K NOLOGY subscribers on account of a failure by K NOLOGY to meet an obligation under any agreement between K NOLOGY and V ERIZON .

 

3.8 K NOLOGY and the C OUNTY agree to the assignment, by V ERIZON , of all rights and responsibilities under terms of the Production Truck Usage Agreement, dated December 5, 2000, consistent with the terms as incorporated through the F RANCHISE A GREEMENT between Verizon Media Ventures Inc. and Pinellas County.

 

Section 4. RESERVATION OF RIGHTS

 

4.1 The C OUNTY reserves all rights not expressly granted in this Transfer Agreement, including without limitation those specified below.

 

4.2 The C OUNTY waives none of its rights with respect to the F RANCHISEE ’, the C OMPANIES ’ or V ERIZON ’ S compliance with the requirements set forth in the F RANCHISE D OCUMENTS . At no time will the COMPANIES contend, either directly or indirectly, that the C OUNTY is barred, by reason of the P ROPOSED T RANSACTION , from considering, or raising claims based on, any defaults of K NOLOGY or V ERIZON , any failure by K NOLOGY or V ERIZON to provide reasonable service in light of the community’s needs, or any failure by K NOLOGY or V ERIZON to comply with the terms and conditions of the F RANCHISE D OCUMENTS or with applicable law. The C OUNTY approval of the P ROPOSED T RANSACTION shall in no way be deemed a representation by the C OUNTY that the F RANCHISEE is in compliance with all of its obligations under the F RANCHISE D OCUMENTS .

 

4.3 Neither this T RANSFER A GREEMENT , nor any other action or omission by the C OUNTY at or before the execution of this, T RANSFER A GREEMENT , shall be construed to grant the C OUNTY ’s consent to any future transfer of the F RANCHISE and/or the S YSTEM , and/or any future change in ownership and/or control of the F RANCHISE and/or the S YSTEM , or to mean that the County’s consent to any future transaction is not required.

 

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4.4 Any consent given by the C OUNTY to the P ROPOSED T RANSACTION is made without prejudice to, or waiver of, the C OUNTY ’s right to investigate and take into account any lawful considerations during any future F RANCHISE renewal or transfer process.

 

4.5 This T RANSFER A GREEMENT does not affect and shall not be construed to affect the rights and authority of the C OUNTY 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 V ERIZON and each of the COMPANIES hereby represents and warrants that at the time of the execution of this T RANSFER A GREEMENT : (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 F RANCHISE D OCUMENTS and, assuming due execution hereof by the other parties hereto, this T RANSFER A GREEMENT 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 T RANSFER A GREEMENT and the F RANCHISE D OCUMENTS , 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 C OUNTY by such Company is incomplete, untrue or inaccurate in any material respect.

 

5.2 K NOLOGY represents and warrants that neither the P ROPOSED T RANSACTION nor this T RANSFER A GREEMENT will adversely affect K NOLOGY ’s ability to meet the requirements of the current F RANCHISE D OCUMENTS , or to meet the C OUNTY ’s future cable-related needs and interests in a renewal franchise.

 

5.3 K NOLOGY represents and warrants that the P ROPOSED T RANSACTION will not have any adverse financial effect on the System, or adversely affect performance.

 

5.4 K NOLOGY represents and warrants that after the P ROPOSED T RANSACTION , K NOLOGY ’ S financial qualifications will be such as shall enable it to maintain and operate the S YSTEM in the C OUNTY .

 

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5.5 K NOLOGY represents and warrants that the P ROPOSED T RANSACTION will not in any respect reduce the quality of customer service in the C OUNTY .

 

5.6 K NOLOGY represent and warrant that the P ROPOSED T RANSACTION will not reduce the quality of existing system maintenance or repair.

 

Section 6. ADDITIONAL COMMITMENTS

 

V ERIZON agrees to reimburse the C OUNTY for all costs, including fees and expenses, actually and reasonably incurred (including, without limitation, for attorneys and financial and technical consultants) in its review of the T RANSFER A PPLICATION , including but not limited to the costs of negotiations, evaluating the qualifications of the C OMPANIES and preparing this Agreement and related documentation, subject to the $15,000 limitation in Section 30-27(d)(1) of the CABLE ORDINANCE . The C OUNTY shall provide V ERIZON with an accounting and invoices of these fees and expenses. Payment to the C OUNTY shall be delivered within thirty (30) days of receipt of invoices, provided that no payment shall be made to the C OUNTY unless the County Commission has approved this Agreement. Such payments are in addition to any franchise fee, communications services taxes, and PEG payments and such payments shall not be treated as costs eligible for treatment as conditions of the F RANCHISE in accordance with 47 CFR _76.925. Failure to make timely payment of these costs and expenses, except to the extent that they are the subject of legitimate dispute, shall constitute a failure of performance of applicable provisions of the Pinellas County Cable System Regulatory Ordinance and the Franchise Agreement for which remedy may be sought from V ERIZON directly from its performance bond.

 

Section 7. INDEMNIFICATION

 

7.1 V ERIZON and each of the COMPANIES agree to indemnify and hold the C OUNTY 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.

 

7.2 In addition to any indemnification under the F RANCHISE D OCUMENTS , K NOLOGY shall indemnify and hold the C OUNTY harmless against any loss, claim, damage, liability or expense

 

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(including, without limitation, reasonable attorneys’ fees) incurred by the C OUNTY in connection with any action or proceeding commenced by a third party (not one of the parties to this T RANSFER A GREEMENT ) claiming or asserting any liability of the C OUNTY relating to or arising from the P ROPOSED T RANSACTION or this T RANSFER A GREEMENT .

 

7.3 V ERIZON shall indemnify, pay the cost of defense, including attorney’s fees, and hold harmless the C OUNTY 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 F RANCHISE ; or by, or in consequence or of any neglect in safeguarding the work under the F RANCHISE ; or on account of act or omission, neglect or misconduct of V ERIZON ; 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 C OUNTY . Notwithstanding the foregoing, V ERIZON ’ S indemnification obligation hereunder shall be limited to suits, actions, or claims resulting from acts or omissions prior to the date of Transfer. The C OUNTY shall give V ERIZON 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.

 

Section 8. ADDITIONAL CONDITIONS

 

8.1 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 C OUNTY in writing, then any C OUNTY consent to the P ROPOSED T RANSACTION shall be void and of no force or effect, and the P ROPOSED T RANSACTION deemed to have been timely denied.

 

8.2 V ERIZON and the COMPANIES hereby waive any and all claims that they may have that any denial of the T RANSFER A PPLICATION 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. _537, as amended, and agree that they shall be deemed to have agreed to an extension of the time to act on the T RANSFER A PPLICATION as required to make any denial effective.

 

8.3 K NOLOGY shall provide proof that all required insurance, bonds and letters of credit have been delivered to the C OUNTY on or before the Closing of the P ROPOSED T RANSACTION .

 

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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 K NOLOGY N EW M EDIA I NC . and certain of its investors.

 

8.4 Except to the extent provided below all required insurance, bonds and letters of credit currently provided by V ERIZON shall remain in full force until K NOLOGY provides proof to the C OUNTY that all insurance, bonds and letters of credit as required under the F RANCHISE have been obtained. V ERIZON shall maintain in full force and effect a faithful performance bond running to the C OUNTY , with a good and sufficient surety approved by the C OUNTY , in the amount of $100,000.00, conditioned that V ERIZON shall well and truly observe, fulfill, and perform each term and condition of the F RANCHISE which V ERIZON is obligated to observe, fulfill, and perform until and including the Closing of the P ROPOSED T RANSACTION , 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 P ROPOSED T RANSACTION , the C OUNTY 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 C OUNTY , approximately resulting from the failure of V ERIZON to well and faithfully observe and perform any and all of the provisions of the F RANCHISE which V ERIZON was obligated to observe and perform prior to and including the Closing of the P ROPOSED T RANSACTION . 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 T RANSFER A GREEMENT .

 

Section 9. BREACHES

 

Any breach of this T RANSFER A GREEMENT on or after Closing by K NOLOGY shall be deemed a breach of the F RANCHISE A GREEMENT and shall be subject to all remedies available for a breach of the F RANCHISE A GREEMENT , in addition to any other remedies the parties may have under this T RANSFER A GREEMENT at law or equity.

 

Section 10. MISCELLANEOUS PROVISIONS

 

10.1 Effective Date: This T RANSFER A GREEMENT shall be effective and binding upon the signatories once it has been signed by all signatories.

 

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10.2 Binding Acceptance: This T RANSFER A GREEMENT 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 T RANSFER A GREEMENT is void without the express written consent of the signatories.

 

10.3 Voluntary Agreement: This T RANSFER A GREEMENT 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 T RANSFER A GREEMENT . Neither any of the COMPANIES , nor any of their affiliates, nor the C OUNTY , will take any action to challenge any provision of this T RANSFER A GREEMENT ; nor will they participate with any other person or entity in any such challenge.

 

10.4 Severability: If any term, condition, or provision of this T RANSFER A GREEMENT 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.

 

10.5 Counterparts: This T RANSFER A GREEMENT 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.

 

10.6 Conforming Amendments to Franchise Agreement: K NOLOGY agrees to accept F RANCHISE amendments to the extent necessary to reflect the P ROPOSED T RANSACTION or the provisions of this T RANSFER A GREEMENT .

 

10.7 Governing Law: This T RANSFER A GREEMENT shall be governed in all respects by the law of the State of Florida.

 

10.8 Captions and References: The captions and headings of sections throughout this T RANSFER A GREEMENT are intended solely to facilitate reading and reference to the sections and provisions of this T RANSFER A GREEMENT . Such captions shall not affect the meaning or interpretation of this T RANSFER A GREEMENT .

 

END OF SUBSTANTIVE PROVISIONS

SIGNATURE PAGE AND EXHIBITS TO FOLLOW

 

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AGREED TO THIS 7 DAY OF January, 2004.

 

[SEAL]

 

ATTEST						Pinellas County, Florida
/s/ Illegible						By:		/s/ Illegible
Clerk of the Circuit Court								County Administrator
						Approved as to Form
						/s/ Illegible
						County Attorney
						Verizon Media Ventures, Inc.
				By:		/s/ Anna Marie Moran
				Name/Title :		Anna Marie Moran Vice President/General Manager

 

STATE OF __ Texas______:

 

I HEREBY CERTIFY, that on this 17 day of December, 2003, before me, the subscriber, a Notary Public of the State of Texas, in and for Dallas County, _________, aforesaid personally appeared Anna Marie Moran of Verizon Media Ventures Inc. and acknowledged the foregoing Transfer Agreement by Verizon Media Ventures Inc.in Dallas County, Texas, to be the act and deed of said company.

 

Dallas County, Texas

 

AS WITNESS my hand and Notary Seal

 

 

My Commission Expires: 11/3/2007

 

 

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STATE OF GEORGIA:

 

I HEREBY CERTIFY, that on this 9th day of December, 2003, before me, the subscriber, a Notary Public of the State of Georgia, in and for Troup County, Georgia, aforesaid personally appeared Felix L. Boccucci, Jr., Vice President Business Development of Knology, Inc. and acknowledged the foregoing Acceptance of Franchise by Franchisee in Pinellas County, Florida, to be the act and deed of said company.

 

Troup County, Georgia

 

AS WITNESS my hand and Notary Seal

 

 

My Commission Expires: MY COMMISSION EXPIRES JUNE 21, 2005

 

 

STATE OF GEORGIA:

 

I HEREBY CERTIFY, that on this 9th day of December, 2003, before me, the subscriber, a Notary Public of the State of Georgia, in and for Troup County, Georgia, aforesaid personally appeared Felix L. Boccucci, Jr., Vice President Business Development of Knology, Inc. and acknowledged the foregoing Acceptance of Franchise by Franchisee in Pinellas County, Florida, to be the act and deed of said company.

 

Troup County, Georgia

 

AS WITNESS my hand and Notary Seal

 

 

My Commission Expires: MY COMMISSION EXPIRES JUNE 21, 2005

 

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EXHIBIT A- Knology Inc.

 

GUARANTEE OF PERFORMANCE

 

W HEREAS , the County of Pinellas, Florida (“C OUNTY ”) granted a franchise (“F RANCHISE ”) to Verizon Media Ventures Inc., to erect, construct, operate, and maintain a cable system in the C OUNTY pursuant to the GTE Media Ventures Incorporated. Cable Franchise Ordinance, Pinellas County Ordinance No. 99-106 as modified and becoming a part thereof, by stipulation attendant to a nominal change in control, from GTE Media Ventures Incorporated with respect to issues documented in Pinellas County Resolution No. 00-60, which stipulations have been confirmed in writing by GTE Media Ventures Incorporated on March 20, 2000 and April 24, 2000, were accepted for filing by the Board of County Commissioners on May 2, 2000 and which became effective upon the merger of GTE Corporation and Bell Atlantic Corporation and as further subject to the “Cable System Regulatory Ordinance”, Ordinance 99-46, as amended and codified at Chapter 30 of the Pinellas County Code, 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 “F RANCHISE D OCUMENTS ”; and

 

W HEREAS , the County of Pinellas, Florida (“C OUNTY ”) consented to a transfer of a C OUNTY franchise from V ERIZON to K NOLOGY (“F RANCHISEE ”) conditioned upon execution of a transfer agreement and related documents including this Guarantee; and

 

W HEREAS , Knology Inc. (“G UARANTOR ”) is an indirect parent of the F RANCHISEE and will have a substantial interest in the F RANCHISE , in the conduct of the F RANCHISEE , and in the F RANCHISE D OCUMENTS , which are incorporated herein by this reference;

 

N OW , T HEREFORE , the G UARANTOR hereby unconditionally guarantees the due and timely performance of any and all obligations of the F RANCHISEE required by the F RANCHISE D OCUMENTS . The G UARANTOR also promises that no company in the chain of ownership between it and the F RANCHISEE will take any action that would prevent the F RANCHISEE from performing its obligations under the F RANCHISE . This Guarantee, unless terminated, substituted or canceled as hereinafter provided, shall remain in full force and effect for the term of the F RANCHISE , as it may be renewed or extended and as provided by the F RANCHISE D OCUMENTS ; provided, however, that upon the C OUNTY ’ 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 G UARANTOR to the C OUNTY and the F RANCHISEE . Any such substitution of the G UARANTOR will be implemented in a manner that ensures that the substitute guarantee is in place

 

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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 C OUNTY Administrator with a copy to the F RANCHISEE . Such termination shall not affect liability incurred or accrued under this Guarantee prior to the effective date of such termination or cancellation.

 

 

STATE OF GEORGIA:

 

I HEREBY CERTIFY, that on this 13 ^th day of February, 2004, before me, the subscriber, a Notary Public of the State of Georgia, in and for Troup County, Georgia, aforesaid personally appeared Felix L. Boccucci of Knology, Inc. West Point, GA acknowledged the foregoing Acceptance of Franchise by Franchisee in Pinellas County, Florida, to be the act and deed of said company.

 

Troup County, Georgia

 

AS WITNESS my hand and Notary Seal

 

 

My Commission Expires: MY COMMISSION EXPIRES JUNE 21, 2005

 

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EXHIBIT A- Knology New Media Inc.

 

GUARANTEE OF PERFORMANCE

 

W HEREAS , the County of Pinellas, Florida (“C OUNTY ”) granted a franchise (“F RANCHISE ”) to Verizon Media Ventures Inc., to erect, construct, operate, and maintain a cable system in the C OUNTY pursuant to the GTE Media Ventures Incorporated. Cable Franchise Ordinance, Pinellas County Ordinance No. 99-106 as modified and becoming a part thereof, by stipulation attendant to a nominal change in control, from GTE Media Ventures Incorporated with respect to issues documented in Pinellas County Resolution No. 00-60, which stipulations have been confirmed in writing by GTE Media Ventures Incorporated on March 20, 2000 and April 24, 2000, were accepted for filing by the Board of County Commissioners on May 2, 2000, and which became effective upon the merger of GTE Corporation and Bell Atlantic Corporation and as further subject to the “Cable System Regulatory Ordinance”, Ordinance 99-46, as amended and codified at Chapter 30 of the Pinellas County Code, 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 “F RANCHISE D OCUMENTS ”; and

 

W HEREAS , the County of Pinellas, Florida (“C OUNTY ”) consented to a transfer of a C OUNTY franchise from V ERIZON to K NOLOGY (“F RANCHISEE ”) conditioned upon execution of a transfer agreement and related documents including this Guarantee; and

 

W HEREAS , Knology New Media Inc. (“G UARANTOR ”) is an indirect parent of the F RANCHISEE and will have a substantial interest in the F RANCHISE , in the conduct of the F RANCHISEE , and in the F RANCHISE D OCUMENTS , which are incorporated herein by this reference;

 

N OW , T HEREFORE , the G UARANTOR hereby unconditionally guarantees the due and timely performance of any and all obligations of the F RANCHISEE required by the F RANCHISE D OCUMENTS . The G UARANTOR also promises that no company in the chain of ownership between it and the F RANCHISEE will take any action that would prevent the F RANCHISEE from performing its obligations under the F RANCHISE . This Guarantee, unless terminated, substituted or canceled as hereinafter provided, shall remain in full force and effect for the term of the F RANCHISE , as it may be renewed or extended and as provided by the F RANCHISE D OCUMENTS ; provided, however, that upon the C OUNTY ’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 G UARANTOR to the C OUNTY and the F RANCHISEE . Any such substitution of the G UARANTOR will be implemented in a manner that ensures that the substitute guarantee is in place

 

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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 C OUNTY Administrator with a copy to the F RANCHISEE . Such termination shall not affect liability incurred or accrued under this Guarantee prior to the effective date of such termination or cancellation.

 

 

STATE OF GEORGIA

 

I HEREBY CERTIFY, that on this 13 ^th day of February, 2004, before me, the subscriber, a Notary Public of the State of Georgia, in and for Troup County, Georgia, aforesaid personally appeared Felix L. Boccucci of Knology, Inc. West Point, Georgia and acknowledged the foregoing Acceptance of Franchise by Franchisee in Pinellas County, Florida, to be the act and deed of said company.

 

Troup County, Georgia

 

AS WITNESS my hand and Notary Seal

 

 

My Commission Expires: MY COMMISSION EXPIRES JUNE 21, 2005

 

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EXHIBIT B

 

ACCEPTANCE OF FRANCHISE BY THE FRANCHISEE

 

Knology (“F RANCHISEE ”) hereby accepts the franchise to erect, construct, maintain, and operate a cable system offered by the GTE Media Ventures Cable Franchise Ordinance, Pinellas County Ordinance No. 99-106 (“F RANCHISE A GREEMENT ”), as modified and becoming a part thereof, by stipulation attendant to a nominal change in control, from GTE Media Ventures Incorporated with respect to issues documented in Pinellas County Resolution No. 00-60, which stipulations have been confirmed in writing by GTE Media Ventures Incorporated on March 20, 2000 and April 24, 2000, were accepted for filing by the Board of County Commissioners on May 2, 2000, and which became effective upon the merger of GTE Corporation and Bell Atlantic Corporation and as further governed by Ordinance No. 99-46 (“ FRANCHISE ORDINANCE ”). By this acceptance, F RANCHISEE agrees that, as set forth in the FRANCHISE ORDINANCE , it shall be bound by the terms and conditions of the F RANCHISE A GREEMENT , any amendments thereto, and subject to the “Cable System Regulatory Ordinance”, Ordinance 99-46, as amended and codified at Chapter 30 of the Pinellas County Code, and the Transfer Agreement dated January 7, 2004 (collectively, the “F RANCHISE D OCUMENTS ”).

 

By accepting the franchise, the F RANCHISEE further: (1) acknowledges and accepts the C OUNTY ’s legal right to issue and enforce the franchise; (2) agrees that it will not oppose the C OUNTY ’s intervention in any proceeding affecting its franchise or obligations thereunder; (3) accepts and agrees to comply with each and every provision of the F RANCHISE D OCUMENTS ; 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 F RANCHISEE declares that it has carefully read all of the terms and conditions of the F RANCHISE D OCUMENTS , and accepts and agrees to abide by same.

 

The F RANCHISEE is bound to maintain and operate a cable system under the terms, conditions and limitations set forth in the F RANCHISE D OCUMENTS and other applicable law, as of the time and date it files this written acceptance with Stephen M. Spratt, Pinellas County Administrator.

 

E ND OF S UBSTANTIVE P ROVISIONS , S IGNATURE P AGE TO F OLLOW

 

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AGREED TO THIS 13 ^th DAY OF February, 2004.

 

Knology
By:		/s/ Illegible
Its:		VP BUSINESS DEVELOPMENT

 

STATE OF GEORGIA:

 

I HEREBY CERTIFY, that on this 13 ^th day of February, 2004, before me, the subscriber, a Notary Public of the State of [State] , in and for Troup County, [State] , aforesaid personally appeared Felix L. Boccucci of Knology, Inc. West Point, GA and acknowledged the foregoing Acceptance of Franchise by Franchisee in Pinellas County, [Florida], to be the act and deed of said company.

 

Troup County, Georgia

 

AS WITNESS my hand and Notary Seal

 

 

My Commission Expires: MY COMMISSION EXPIRES JUNE 21, 2005

 

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RESOLUTION NO. 03–237

 

A R ESOLUTION C ONCERNING THE T RANSFER OF THE C ABLE T ELEVISION F RANCHISE FOR THE P URPOSE OF G RANTING THE CONSENT OF THE C OUNTY TO THE A SSIGNMENT AND T RANSFER OF THE C ABLE T ELEVISION F RANCHISE AND C ABLE T ELEVISION S YSTEM FROM V ERIZON M EDIA V ENTURES I NC . TO K NOLOGY B ROADBAND OF F LORIDA , I NC .

 

Whereas, Pinellas County, Florida (“County”) granted a franchise (“Franchise”) to GTE Media Ventures Incorporated, to erect, construct, operate, and maintain a cable television system in the County pursuant to GTE Media Ventures Incorporated Cable Franchise Ordinance, Pinellas County Ordinance No. 99-106 (“Franchise Agreement”), as modified and becoming a part thereof, by stipulation attendant to a nominal change in control, from GTE Media Ventures Incorporated with respect to issues documented in Pinellas County Resolution No. 00-60, which stipulations have been confirmed in writing by GTE Media Ventures Incorporated on March 20, 2000 and April 24, 2000 and which became effective upon the merger of GTE Corporation and Bell Atlantic Corporation and as further subject to the “Cable System Regulatory Ordinance,” Ordinance 99-46, as amended and codified at Chapter 30 of the Pinellas County Code (“Cable Ordinance”), 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 of 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 County pursuant to the Franchise Documents, through its cable system in the County (“System”); and

 

Whereas, pursuant to an Asset Purchase Agreement dated July 15, 2003 (“Asset Purchase Agreement”), by and between Verizon and Knology New Media, Inc. (“Knology New Media”), Verizon will transfer the franchise currently held by Verizon and the cable system serving the County (“System”) to Knology Broadband of Florida, Inc. (“Knology”) (the “Proposed Transaction”); and

 

Whereas Verizon, Knology New Media and Knology filed an FCC Form 394 with the County and requested that the County approve the Proposed Transaction (the “Transfer Application”); and

 

Whereas, Knology is a wholly-owned subsidiary of Knology New Media; and

 

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Whereas, the Cable Ordinance requires the County’s prior consent to a transfer affecting the Franchise; and

 

Whereas, the County has reviewed the Transfer Application and examined the financial responsibility, technical expertise and legal qualifications of Knology in accordance with applicable laws and the Franchise Documents; and

 

Whereas, Knology agrees to provide a guarantee of performance from Knology, Inc., and Knology New Media guaranteeing performance by Knology of all of Knology’s obligations under the Franchise Documents and the Transfer Agreement attached hereto as Exhibit A; and

 

Whereas, Knology has agreed to comply with the Franchise Documents and applicable law from and after the completion of the Proposed Transaction; and

 

Whereas, Verizon has agreed to provide security in the form of performance bonds and indemnification to the County for actions or omissions by Verizon or GTE Media Ventures. Inc. as Franchisee under both the existing and preceding franchises; and

 

Whereas, relying on Verizon, Knology New Media, and Knology’s respective representations, the County is willing to grant its consent to the Proposed Transaction, subject to the terms and conditions which are attached hereto as Exhibit A; and

 

N OW , T HEREFORE , B E IT R ESOLVED THAT :

 

Section 1. The County’s consent to, and approval of, the Proposed Transaction is hereby granted in accordance with Pinellas County Code Section 30-26(g)(l & 2) of the Cable Ordinance, subject to the following conditions:

 

(a) that on or before March 31, 2004, Verizon and Knology enter into and execute a Transfer Agreement, substantially in the form of Exhibit A, attached hereto;

 

(b) that the Proposed Transaction is consummated on or before March 31, 2004; and

 

(c) that the Proposed Transaction is consummated on terms and conditions identical in all material respects to those described in the Transfer Application and the Transfer Agreement.

 

Section 2. The County releases Verizon, effective upon the closing of the Proposed Transaction, 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 Knology shall be responsible for any obligations and liabilities under the Franchise that accrue on and after the closing date.

 

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Section 3. If any of the conditions specified in this Resolution or in Exhibit A are not satisfied as of the date of dosing of the Proposed Transaction, then the County’s consent to, and approval of the Transfer is hereby denied as of the date hereof.

 

Section 4. If any representations made to the County by Verizon, Knology or Knology New Media prove to be incomplete, untrue or inaccurate in any material respect, it shall be deemed a material breach of the Franchise Documents and the County shall have available to it all remedies provided under the Franchise Documents and applicable law including, without limitation, revocation or termination of the Franchise.

 

Section 5. The County Administrator is hereby authorized to execute a Transfer Agreement as specified in this Resolution on behalf of the County.

 

In the regular meeting duly assembled on the 2 day of December 2003, Commissioner Harris offered the foregoing Resolution and moved its adoption, which was seconded by Commissioner Latvala and upon roll call the vote was:

 

AYES: Seel, Latvala, Stewart, Harris, Morroni and Welch.

 

NAYS: None.

 

ABSENT AND NOT VOTING: Todd.

 

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GTE M EDIA V ENTURES I NCORPORATED F RANCHISE A GREEMENT

T ABLE OF C ONTENTS

 

 

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PINELLAS COUNTY ORDINANCE NO. 99-106

 

A N O RDINANCE A PPROVING A C ABLE S YSTEM F RANCHISE A GREEMENT WHICH G RANTS A C ABLE S YSTEM F RANCHISE TO GTE M EDIA V ENTURES I NCORPORATED ; P ROVIDING FOR INCORPORATION OF AND E XCEPTIONS TO THE C ABLE S YSTEM R EGULATORY O RDINANCE ; P ROVIDING FOR CONDITIONS TO AND A T ERM OF T EN Y EARS IN THE G RANT ; P ROVIDING FOR C OMPLIANCE WITH OTHER LAWS AND D ISPUTE R ESOLUTION ; P ROVIDING FOR S ECURITY ; P ROVIDING FOR P UBLIC , E DUCATIONAL AND G OVERNMENTAL A CCESS INCLUDING A LLOCATION OF AND R ESTRICTION ON USE OF C HANNEL C APACITY ; P ROVIDING FOR G RANTEE S UPPORT OF PEG A CCESS AND I NSTITUTIONAL N ETWORKS , I NTERCONNECTION , A CQUISITION AND D ISTRIBUTION OF PEG A CCESS P ROGRAMMING ; P ROVIDING FOR P AYMENTS TO G RANTOR AND F INANCIAL R ECORDS AND R EPORTS ; P ROVIDING G RANTOR A RIGHT TO P URCHASE THE S YSTEM ; P ROVIDING FOR ADDITIONAL R EPORTS ; P ROVIDING FOR R ATES TO BE CHARGED BY G RANTEE ; P ROVIDING FOR Q UALITY OF S ERVICE ; P ROVIDING FOR S YSTEM A DDITIONS ; P ROVIDING FOR G RANTEE R ULES ; P ROVIDING FOR A F RANCHISE A REA ; P ROVIDING FOR S EVERABILITY ; P ROVIDING FOR C ONFLICTING O RDINANCES ; P ROVIDING FOR AN E FFECTIVE D ATE

 

B E IT ORDAINED BY THE B OARD OF C OUNTY C OMMISSIONERS OF P INELLAS C OUNTY , F LORIDA :

 

S ECTION 1. F INDINGS Unless otherwise defined herein or unless context clearly indicates to the contrary, all capitalized terms used herein shall have the same meaning as is ascribed to them in Chapter 30 of the Pinellas County Code, which is hereafter referred to as the “Cable System Regulatory Ordinance.” Pursuant to the procedures in the Cable Act, G RANTOR has held a public hearing in which:

 

1.1. Criteria for Granting The following criteria for granting a Cable System franchise to G RANTEE were considered;

 

1.1.1 whether G RANTEE has substantially complied with the material terms of the existing franchise and with applicable law; and

 

1.1.2 whether the quality of G RANTEE ’s service, including signal quality, response to consumers’ complaints and billing practices but without regard to the mix or quality of cable or other services provided over the system, has been reasonable in light of community needs; and

 

1.1.3 whether G RANTEE has the financial, legal and technical ability to provide the services, facilities and equipment called for in this proposed ordinance; and

 

1.1.4 to the extent that this ordinance contains an offer on the part of G RANTEE , whether that offer is reasonable to meet future cable-related community needs and interests, taking into account the cost of meeting such needs.

 

1.2. Effect of Competition For purposes of Section 30-66.a.4 of the Cable System Regulatory Ordinance, this Franchise was negotiated under competitive conditions. G RANTEE has entered this Agreement with a full understanding that G RANTOR intends to encourage the development of competition.

 

G RANTOR has determined to grant a renewal Cable System franchise to GTE MEDIA VENTURES I NCORPORATED (G RANTEE ) on the terms and conditions set forth in this Ordinance, and G RANTEE agrees to such terms and conditions.

 

S ECTION 2. S HORT T ITLE This Ordinance shall be known and may be cited as the “GTE Media Ventures Incorporated Cable Franchise Ordinance” or referred to herein as “A GREEMENT ” and is the Franchise Agreement for G RANTEE .

 

S ECTION 3. I NCORPORATION OF C ABLE S YSTEM R EGULATORY O RDINANCE ; E XCEPTIONS

 

3.1 Full Incorporation The provisions of the Cable System Regulatory Ordinance are incorporated herein by reference as if set out in full, and form part of the terms and conditions of this A GREEMENT unless specifically modified or waived herein in this Section 3.

 

3.2 Exceptions Pursuant to Section 30-26.k.1 of the Cable System Regulatory Ordinance, the following provisions expressly govern over conflicting provisions in the Cable System Regulatory Ordinance.

 

3.2.1 Right to Renegotiate Upon a finding by the B OARD that there has been a loss of E FFECTIVE C OMPETITION for any Franchise negotiated under competitive conditions, or a loss or substantial diminution of a material benefit to G RANTOR such as franchise fees, PEG access support or security, G RANTOR reserves the right to require good faith negotiation of new franchise terms. For purposes of this A GREEMENT :

 

A. In the event of a loss of effective competition, if G RANTEE fails to negotiate in good faith or if the negotiations fail, in the judgment of G RANTOR , reasonably exercised, G RANTOR may reduce the term to a term of three remaining years or the remaining unexpired term, whichever is shorter and require negotiations for a new F RANCHISE A GREEMENT . All terms of the F RANCHISE A GREEMENT shall remain unchanged except for the ability of G RANTOR to negotiate issues that the B OARD determines were both actively influenced by the competitive environment at the time of the negotiations and that were inadequate under the Franchise Agreement to meet the needs of G RANTOR .

 

B. In the event of a loss of franchise fees, PEG access support or security, all terms of the F RANCHISE A GREEMENT shall remain unchanged except for the ability to require good faith negotiation on the issue that was lost or substantially diminished.

 

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3.2.2 Exceptions to Mandatory Extension Rule

 

A. Municipal Gaps G RANTOR acknowledges that there are areas within the F RANCHISE A REA that are accessible, for purposes of providing C ABLE S ERVICES , through contiguous areas(s) governed by authorities from whom G RANTEE has not obtained a franchise or other access rights. Accordingly, subject to the thresholds found in Section 15.1.l.C, below, G RANTOR agrees that such areas within the F RANCHISE A REA are not subject to the construction requirements of this franchise unless and until:

 

i. G RANTEE is granted adequate and acceptable franchise rights from the franchising authority for the relevant contiguous areas; or

 

ii. G RANTEE is granted access rights in the public right-of-way through the contiguous areas from the appropriate authority which provides G RANTEE access for purposes of providing C ABLE S ERVICES to these portions of the F RANCHISE A REA .

 

These areas include but are not limited to the areas as identified by G RANTOR and G RANTEE which are identified in Exhibit “A” and which may be modified as additional areas are identified or as such areas no longer qualify under this provision.

 

B. Multiple Dwelling Unit Area In areas where the predominant habitation consists of multiple dwelling unit complexes, to which the cable service is provided through exclusive contracts, G RANTEE shall not be required to provide but is not prevented from providing C ABLE S ERVICE until the remaining service contract term of that exclusive contract between the incumbent cable service provider and the complex owner expires.

 

C. Enclaves In municipal areas in which G RANTEE does not have a municipal franchise, contingent upon obtaining access through the municipality, on terms acceptable to G RANTEE , in its sole discretion which discretion shall not be unreasonably exercised, G RANTEE shall provide C ABLE S ERVICE to all enclaves of 300 or more residential units. Terms from a municipality that require that G RANTEE obtain a municipal franchise in order to obtain access to enclaves are not reasonable.

 

D. Internet and Like Services Subject to Section 30-3.2.c of the Pinellas County Code, for either residential or non-residential service, two-way or one way access to computer based on-line services including but not limited to Internet access need not be provided in portions of the Franchise Area in which G RANTEE or G RANTEE ’ S affiliate is otherwise providing broadband services or where G RANTEE has determined that provision of such access services is not technically or financially feasible. Grantee’s determination may not be either arbitrary or capricious.

 

3.2.3 Audit Limitations Notwithstanding the provisions of the Cable System Regulatory Ordinance to the contrary, in the event that audits conducted pursuant to this section reveal a

 

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consistent pattern of underpayment, audits may be annual with the costs of the additional two audits being borne by G RANTEE . A consistent pattern of underpayment shall be defined as an underpayment of greater than 5% for two consecutive years out of any given five year period.

 

S ECTION 4. C ONDITIONS AND T ERM OF G RANT

 

4.1 Granting of Franchise In accordance with the laws and regulations of the United States of America and the State of Florida and the ordinances and regulations of the County of Pinellas, Florida, now in effect or hereafter enacted, G RANTOR hereby grants to G RANTEE , the nonexclusive right and privilege to install, maintain and operate within the rights-of-way, except as hereinafter limited, of all public streets, parkways, alleys and utility easement strips within the Franchise Area, described in Section 15 of this Ordinance, herein for convenience called “street” or “streets,” cables and other conductors, not including antennas, with the necessary appurtenances; and, in addition, so to use and operate similar facilities or properties including, but not limited to, any public utility, rented or leased from other persons, including, but not limited to, other grantees franchised or permitted to do business in Pinellas County, for the construction, maintenance and operation of a Cable System.

 

4.2 Conditions of Grant Granting of this Franchise is subject to the terms and conditions of this A GREEMENT and the Cable System Regulatory Ordinance. Without limitation, neither party waives any rights it may have under State or Federal law.

 

4.3 Length of Term The term of the grant herein contained shall commence on the effective date of this Ordinance and shall continue for a term often (10) years.

 

S ECTION 5. C OMPLIANCE WITH O THER L AWS ; D ISPUTE R ESOLUTION

 

5.1 Compliance With Laws and Standards The construction, maintenance and operation of the cable system by G RANTEE shall be in full compliance with the National Electric Safety Code, as from time to time amended and revised, and with all other applicable rules and regulations now in effect or hereafter adopted by the Federal Communications Commission, the Florida Public Service Commission, the State of Florida, G RANTOR (limited as set forth in Section 5.3 below), or any other agency which now or hereafter has jurisdiction over the activities of G RANTEE .

 

5.2 Conflicts with Franchise Terms Subject to the waiver provisions of Section 30-66.b of the Cable System Regulatory Ordinance, any conflict between the provisions of this franchise and any other present or future lawful exercise of G RANTOR ’ S police powers shall be resolved in favor of the latter, except that any such exercise that is not of general application and which contains provisions inconsistent with this franchise shall prevail only if upon such exercise, G RANTOR has found an emergency to exist, constituting a danger to health, safety, property or

 

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general welfare, or such exercise is required by law. In the event any exercise of G RANTOR ’ S police power creates circumstances which are not competitively neutral or nondiscriminatory with respect to a similarly situated franchised cable system operating within G RANTOR ’ S jurisdiction, it will not be enforced against G RANTEE to the extent necessary to maintain competitively neutral and nondiscriminatory treatment.

 

5.3 Challenge Provisions Nothing contained in this franchise shall impair any of the rights or remedies of G RANTOR or G RANTEE under applicable law or regulation, subject in each case to the terms and conditions of this franchise. G RANTOR or G RANTEE may challenge any provision of this franchise based on a change in law, should the law pertaining to a particular provision change subsequent to the adoption of this franchise.

 

5.4 State of Execution This franchise shall be construed to have been executed in Pinellas County, Florida.

 

S ECTION 6. S ECURITY

 

6.1 Indemnification and Insurance Requirements Indemnification and insurance requirements shall be as established through the Cable System Regulatory Ordinance.

 

6.2 Security Fund, Construction and Performance Bond Security fund requirements are established in the Cable System Regulatory Ordinance.

 

6.2.1 Establishment Within thirty (30) days after the effective date of this A GREEMENT , G RANTEE shall establish and provide to G RANTOR a security fund, as security for the faithful performance by G RANTEE of all material requirements of this A GREEMENT and of Chapter 30 of the Pinellas County Code. G RANTOR herein finds that G RANTEE has no established record of failure to comply with notices of noncompliance with its preceding franchise with G RANTOR or other franchising authorities under other franchise agreements and there are no outstanding noticed noncompliance issues, G RANTEE , subject to the provisions of the Cable System Regulatory Ordinance, may provide its initial security fund in the form of a performance bond.

 

6.2.2 Amount of Security Fund Regardless of the form of the security fund, the security fund shall be in the face amount of one hundred thousand dollars ($100,000.00), in form and substance acceptable to the County Attorney.

 

6.2.3. Assessment from Security Fund The Security Fund may be assessed by G RANTOR as provided for in the Cable TV Regulatory Ordinance.

 

6.2.4 Non-waiver of Ordinance Requirements Nothing herein shall be deemed a waiver of the normal permit and bonding requirements made of all contractors working within the Rights-of-Way.

 

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6.2.5 Procedure for Remedying Franchise Violations The procedure for remedying violations of this Franchise Agreement shall be as provided in the Cable System Regulatory Ordinance.

 

S ECTION 7. P UBLIC , E DUCATIONAL AND G OVERNMENTAL (“PEG”) A CCESS

 

7.1 PEG Generally At no cost to G RANTOR , G RANTEE shall promote ongoing community awareness of PEG access channels, public access facilities and training opportunities for public and educational access, at a minimum in its preview guide and in any program guides containing listings of the local off-air broadcast signals in G RANTEE ’ S Basic Service tier, provided that the publisher of any such program guide consents to the inclusion of information at no cost to G RANTEE ; at no cost to G RANTOR (except for additional postage), concerning PEG access programming carried by G RANTEE based upon the good faith efforts of G RANTEE to secure such listings, in an annual bill stuffer supplied by G RANTOR , and in public service announcements supplied by G RANTOR , all in such places and at such times as G RANTEE in its sole discretion shall determine. G RANTEE shall provide G RANTOR , on reasonable request, with a summary of its activities in this regard.

 

7.1.1 Initial Grant G RANTEE shall provide G RANTOR with a one time grant in the amount of $96,764.85, payable to G RANTOR not later than thirty (30) days after enactment of this Franchise. Such grant shall be, in addition to the payments provided in Section 7.1.4(A). This payment is in full satisfaction of any and all claims which G RANTOR may have against G RANTEE with respect to the original grant of a Cable System franchise by G RANTOR to G RANTEE as the same has been extended from time to time through December 31, 1997. With respect to the time period December 31, 1997 through December 31, 1999 the initial grant resolves all PEG payment obligations under the initial franchise agreement and any extensions thereto.

 

7.1.2 Allocation of PEG Access Channel Capacity Generally

 

A. Restrictions on Use Any channel that is designated for public, government or educational access is (except as may hereinafter be provided) for those purposes only and not for commercial purposes and shall not contain advertising for commercial/non-governmental products or services. The solicitation and on air acknowledgment of funding for the purposes of producing material of a nature consistent with public, government or educational access programming shall not be construed as soliciting advertising in violation of this subsection.

 

i. Provision in Accordance with Applicable Law Any provision by G RANTEE and utilization by G RANTOR of these designated channels shall be in accordance with all applicable federal, state, and local laws.

 

ii. Provision upon Request Except for the four PEG channels being provided under the immediately preceding franchise agreement, G RANTEE is specifically not required to

 

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provide a fifth PEG channel unless and until so requested by G RANTOR and not until the lowest tier of basic service [or that level of service on which PEG access channels are required by law to be located] is digital.

 

iii. Editorial Control Except as allowed under Federal law, G RANTEE shall not be responsible for editorial control of any public access programming.

 

iv. Number of PEG Channels Generally A maximum of five (5) channels may be required to be provided by G RANTEE . Said channels may be allocated among Public, Educational, or Government access as deemed appropriate by G RANTOR .

 

v. Leased Access At any time during the term of this A GREEMENT , G RANTEE agrees to negotiate with G RANTOR in good faith, on reasonably favorable terms, and on a nondiscriminatory basis for one (1) digital access channel on a leased access basis.

 

B. Grantee Use of PEG Channels Nothing in this Franchise Agreement shall impede G RANTEE ’ S use of unused public, government or educational access channel capacity for commercial purposes provided that Section 7.1.2.C is satisfied. G RANTEE shall have the right to assume use of any PEG access channel abandoned by G RANTOR . Abandonment shall be deemed to have occurred if G RANTOR , for other than technical reasons, fails to provide at least twenty (20) hours of non-repeat programming in any sixty (60) day period. Previous abandonment shall not preclude G RANTOR from subsequently requesting use of a PEG access channel and G RANTEE ’ S obligation under this franchise to provide such channel capacity shall resume.

 

C. Grantee Use of Unused Air Time on PEG Channels Unused air time on channels allocated to G RANTOR , including public, government access and educational channels, may be used by G RANTEE provided:

 

i. G RANTOR agrees to such use in writing; and

 

ii. G RANTEE and G RANTOR agree in writing to the schedule of such use.

 

Neither G RANTEE nor G RANTOR shall unreasonably withhold agreement.

 

D. Change of Channel Designations If G RANTEE decides to change the channel designations for PEG Access Channels, it must provide six months notice to G RANTOR prior to doing so, and shall reimburse G RANTOR and/or PEG users for any reasonable costs incurred for purchasing or modifying any equipment or for making logo changes necessitated solely by the channel designation changes. Alternatively, G RANTEE may choose to supply such equipment itself, provided suc