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HomeMy WebLinkAbout9.a. Transfer of Franchise from Everest FTTH Acquisition LLC, to Velocity Telephone DBA Gigabit Minnesota 4 REISE1vtOUNJT EXECUTIVE SUMMARY CITY COUNCIL City Council Meeting: July 1, 2014 AGENDA ITEM: Transfer of Franchise from Everest FTTH AGENDA SECTION: Acquisition LLC, to Velocity Telephone DBA Gigabit New Business Minnesota PREPARED BY: Dwight Johnson, City Administrator, Kim Lindquist, Community Development AGENDA NO. Director ATTACHMENTS: Draft Resolution, Draft Ordinance, FCC APPROVED BY: 394 Transfer Application o� RECOMMENDED ACTION: There are two actions required for transfer of Everest FTTH Acquistion, LLC and its Cable Franchise to Velocity Telephone DBA Gigabit Minnesota Motion to Approve a Resolution Approving Transfer of Everest FTTH Acquisition, LLC and its Cable Franchise and System to Velocity Telephone, DBA Gigabit Minnesota AND Motion to Approve an Ordinance Repealing Ordinance No. XI.23 and as Amended by Ordinance No XI.31 and Granting a Cable Franchise to Velocity Telephone, Inc, DBA Gigabit Minnesota, to Construct, Operate, and Maintain a Cable System in the City of Rosemount, Setting Forth Conditions Accompanying the Grant of the Cable Franchise; Providing for Regulation and Use of the Cable System and the Public Rights —of-way, and Prescribing Penalties for the Violation of the Provisions Herein. DISCUSSION The City of Rosemount was contacted by Velocity Telephone and FTTH some time ago indicating both groups were exploring the sale and purchase of the cable/telephone/internet service which would require the transfer of the cable franchise agreement to a new entity-Velocity Telephone. Over the last several months Velocity Telephone has been discussing with the City modifications to the cable franchise. The most significant change is the build-out provision. Because Velocity is also a telephone company, the proposed franchise requires build-out of the cable system coterminous with their telephone service build-out. This complies with Minnesota Statute 238.08 as amended by the 2010 Legislature which no longer requires full build-out beyond the telephone service area. Specifically the franchise states: the Grantee shall provide Cable Service in all areas in the City in which the Grantee offers local exchange telephone service. In the event the Grantee is not certified as a"telephone company," or ceases to offer local exchange telephone service in the City, the Grantee shall construct and build out its Cable System throughout the City. The changes are generally intended to either comply with Federal law or avoid needlessly repeating Federal law. The City Attorney's office has approved the franchise modifications that are reflected in the attached document. Staff has asked the City Attorney and financial consultant, Ehlers and Associates, to review the application information. Ehlers is in the process of reviewing the financial information and was unable to provide the information prior to the packet going out to the Council. Staff will forward the financial review when it becomes available. The first action item for the Council is a resolution approving the transfer of the cable franchise and system to Velocity Telephone DBA Gigabit Minnesota. The resolution also notes that the City waives its right of first refusal to purchase FTTH and its system arising as a result of the transfer application. The resolution also preserves the City's rights regarding any and all compliance matters involving the Franchise and the right to enforce the Franchise. Because of all the modifications to the franchise agreement;it was recommended to repeal the existing franchise ordinance and adopt the new one in its entirety.The changes are a result of the negotiations between the City Attorney and Velocity Telephone representatives. As mentioned previously the biggest change is the language relating to the City build-out. RECOMMENDATION Staff is recommending approval of the resolution allowing the transfer of the cable franchise and its system to Velocity Telephone DBA Gigabit Minnesota,and also approval of an ordinance amending the cable franchise,pending receipt of financial information. CITY OF ROSEMOUNT,MINNESOTA RESOLUTION APPROVING TRANSFER OF EVEREST FTTH ACQUISTION, L.L.C. AND ITS CABLE FRANCHISE AND SYSTEM TO VELOCITY TELEPHONE,INC,DBA GIGABIT MINNESOTA WHEREAS, the City of Rosemount ("City") granted a cable franchise to FTTH Communications, L.L.C. ("FTTH")pursuant to Ordinance No. X1.23 and ("Franchise") and as amended by Ordinance XI.31 ; and WHEREAS, Everest FTTH Acquisition, LLC currently operates a cable communications system ("System") in the City pursuant to the Franchise; and WHEREAS, Everest FTTH Acquisition LLC, a Delaware limited liability company("Everest") and Velocity Telephone, Inc, DBA Gigabit Minnesota, (Gigabit), have filed a Federal Communications Commission Form 394 dated June 12, 2014 with the City, together with certain attachments (collectively"Transfer Application"); and WHEREAS, pursuant to the Agreement, Gigabit intends to acquire the System and substantially all assets from Everest, including the Franchise, related to operations of the City, and WHEREAS,pursuant to the Franchise, Everest and Gigabit cannot complete the transaction contemplated by the Agreement without the City's prior written consent; and WHEREAS, Everest provides telephone and other telecommunications services under the regulatory jurisdiction of the Minnesota Public Utilities Commission("MPUC"); and WHEREAS, Gigabit holds a MPUC Certificate of Authority to provide telephone and telecommunications service, and WHEREAS,the City reviews whether the applicant has the financial, technical and legal/managerial capacity to operate; and WHEREAS,the City has reviewed the Transfer Application and the Franchise; and WHEREAS, in reliance upon the Transfer Application, the City will consent subject to the conditions set forth in this Resolution. NOW, THEREFORE, BE IT RESOLVED THAT the City consents to the transaction described in the Transfer Application subject to the following conditions: 1. Everest and Gigabit shall be bound by the representations and understandings reflected in the Transfer Application; RJV-266063v1 VS 105-3 2. Gigabit shall be bound by all applicable laws, codes and regulations and the Franchise for the term thereof. 3. Gigabit will notify the City when the sale of the System from Everest is complete. BE IT RESOLVED FURTHER THAT the City waives its right of first refusal to purchase Everest and/or the System arising as a result of the Transfer Application. BE IT RESOLVED FURTHER THAT by consenting herein,the City does not waive, and expressly reserves, its rights regarding any and all compliance matters involving the Franchise and the right to enforce the Franchise, and this consent shall not affect or impact the parties' rights and obligations concerning Franchise renewal. BE IT RESOLVED FURTHER THAT Everest shall accept this Resolution, effective upon closing, as provided below. Adopted by the City Council of the City of Rosemount this day of , 2014. Mayor ATTEST: City Clerk RJV-218139v1 2 VS105-4 ACCEPTANCE The foregoing Resolution, the Franchise and all terms and conditions therein, and the amendments to the Franchise noted, are expressly accepted and agreed to. VELOCITY TELEPHONE, INC DBA GIGABIT MINNESOTA, By: Its: STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this_day of , 2014 by the for . Notary Public RJV-218139v1 3 vs 105-4 RJV-218139v1 4 VS 105-4 CITY OF ROSEMOUNT ORDINANCE NO. AN ORDINANCE REPEALING ORDINANCE NO. XI.23 AND AS AMENDED BY ORDINANCE NO X1.31 AND GRANTING A CABLE FRANCHISE TO VELOCITY TELEPHONE, INC, DBA GIGABIT MINNESOTA, TO CONSTRUCT, OPERATE, AND MAINTAIN A CABLE SYSTEM IN THE CITY OF ROSEMOUNT, SETTING FORTH CONDITIONS ACCOMPANYING THE GRANT OF THE CABLE FRANCHISE; PROVIDING FOR REGULATION AND USE OF THE CABLE SYSTEM AND THE PUBLIC RIGHTS-OF-WAY, AND PRESCRIBING PENALTIES FOR THE VIOLATION OF THE PROVISIONS HEREIN; The City Council of Rosemount(City)hereby repeals Ordinance NO. XI.23 and as amended by Ordinance XI.31, and The City Council of Rosemount(City)ordains: STATEMENT OF INTENT AND PURPOSE The City intends, by the adoption of this Cable Franchise, to bring about competition for cable services with the award of a competitive cable franchise. Such a development can contribute significantly to the communication needs and desires of residents of the City. Further,the City may achieve better utilization and improvement of public services with the development and operation of a competitive Cable System. In addition, a competitive cable franchise increases the choice for the residents of Rosemount. Past studies by the City have led the way for organizing a means of procuring and securing a Cable System which, in the judgment of the City, is best suited to meet the needs of the community. This has resulted in the preparation and adoption of this Cable Franchise. FINDINGS In the review of the request and proposal for an initial cable franchise by Velocity Telephone, Inc. DBA Gigabit Minnesota (Grantee) and negotiations related thereto, and as a result of a public hearing,the City makes the following findings: 1. The Grantee's technical, financial, legal qualifications and ability, and character were considered and approved in a full public proceeding after due notice and a reasonable opportunity to be heard; 2. Grantee's plans for constructing, upgrading, and operating the Cable System were considered and found adequate and feasible in a full public proceeding after due RS220-94 1 440890 RJV RS220-358 notice and a reasonable opportunity to be heard; 3. The Cable Franchise granted to Grantee by the City complies with the existing applicable Minnesota Statutes, federal laws and regulations; and 4. The Cable Franchise granted to Grantee is nonexclusive. SECTION 1. SHORT TITLE AND DEFINITIONS 1. Short Title. This Cable Franchise Ordinance shall be known and cited as the Cable Communications Ordinance. 2. Definitions. For the purposes of this Cable Franchise, the following terms, phrases, words, and their derivations shall have the meaning given herein. When not inconsistent with the context, words in the singular number include the plural number. The word "shall" or "must" are always mandatory and not merely directory. The word "may" is directory and discretionary and not mandatory. a. "Basic Cable Service" means any service tier, which includes the lawful retransmission of local television broadcast signals, and any public, educational, and governmental access programming required by the Cable Franchise to be carried on the basic tier. Basic Cable Service as defined herein shall not be inconsistent with 47 U.S.C. § 543(b)(7). b. "Cable System" means a system of antennas, cables, wires, lines, towers, waveguides, or other conductors, Converters, equipment, or facilities located in the City and designed and constructed for the purpose of producing, receiving, transmitting, amplifying, or distributing audio and video programming. Cable System as defined herein shall not be inconsistent with the definitions set forth in Minn. Stat. § 238.02, subd. 3 and 47 U.S.C. § 522(7). c. "Cable Programming Service"means any video programming provided over a cable system, regardless of service tier, including installation or rental of equipment used for the receipt of such video programming, other than: i. Basic Cable Service; ii. Video programming offered on a pay-per-channel or pay-per-program basis; or iii. A combination of multiple channels of pay-per-channel or pay-per-program video programming offered on a multiplexed or time-shifted basis so long as the combined service: (1) consists of commonly-identified video programming; and RS220-94 2 440890 RJV RS220-358 (2) is not bundled with any regulated tier of service. Cable Programming Service as defined herein shall not be inconsistent with the definition as set forth in 47 U.S.C. § 543(1)(2)and 47 . § 76.901(b). d. "Cable Service" means the one-way transmission to Cable Subscribers of(i) video programming, or (ii) other programming service, and subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service pursuant to 47 U.S.C. § 521 et seq., as may be amended from time to time. e. "City"means the City of Rosemount,Minnesota. f. "Class IV Channel" means a signaling path provided by a Cable System to transmit signals of any type from a Cable Subscriber terminal to another point in the Cable System. g. "Converter" means an electronic device which converts signals to a frequency acceptable to a television receiver of a Cable Subscriber and by an appropriate selector permits a Cable Subscriber to view all Cable Subscriber signals included in the service. h. "Drop" means the cable that connects the ground block on the Cable Subscriber's residence to the nearest feeder cable of the Cable System. i. "FCC" means the Federal Communications Commission and any legally appointed, designated or elected agent or successor. j. "Cable Franchise"means this ordinance and the contractual relationship established hereby. k. "Cable Franchise Fee"includes any tax, fee, or assessment of any kind imposed by a franchising authority or other governmental entity on a cable operator or cable subscriber, or both, solely because of their status as such; The term"Cable Franchise Fee"does not include: (A) any tax, fee, or assessment of general applicability (including any such tax, fee, or assessment imposed on both utilities and cable operators or their services but not including a tax, fee, or assessment which is unduly discriminatory against cable operators or cable subscribers); (B) in the case of any cable franchise granted after October 30, 1984, any payments which are required by the cable franchise to be incurred by the cable operator for public, educational,or governmental access facilities; RS220-94 3 440890 RJV RS220-358 (C) requirements or charges incidental to the awarding or enforcing of the cable franchise, including payments for bonds, security funds, letters of credit, insurance, indemnification,penalties, or liquidated damages; or (D)any fee imposed under Title 17. 1. "Grantee" is Velocity Telephone, Inc. d/b/a Gigabit Minnesota, its agents and employees, lawful successors,transferees or assignees. m. "Gross Revenue" means all revenue received directly or indirectly by the Grantee, its affiliates, subsidiaries,parent, or person in which Grantee has fmancial interest of five percent (5%) or more, from the operation of its Cable System to provide Cable Service in the City. Gross revenues shall include, but are not limited to, all fees or other payments for Basic Cable Service, Cable Programming Service, interest, Installation and reconnection fees,upgrade and downgrade fees, advertising revenue, Franchise Fee receipts, PEG fee receipts, revenues generated by sales on home shopping channel(s), leased channel fees, Converter rental fees, Lockout Device fees and all other revenues derived from operation of the Cable System to provide Cable Service within the City regardless of whether initially recorded to another entity and however characterized. Gross Revenues shall also include revenue paid to any affiliate of the Grantee for or derived from provision of Cable Service in the City including, for example, receipts derived from the sale of advertising time by an affiliate. Discounts for Cable Services bundled or packaged with non-cable services shall be apportioned fairly to each service in proportion to grantee's pricing of such service on a stand-alone basis. Gross revenues shall not include bad debt, or any taxes on services furnished by grantee which are imposed by any municipality, state, or other governmental unit and collected by grantee for such governmental unit. n. `Installation" means the connection of the Cable System from feeder cable to the point of connection with the ground block. o. "Lockout Device" means an optional mechanical or electrical accessory which inhibits the viewing of a certain program, certain channel, or certain channels provided by way of the Cable Communication System. p. "Normal business hours" means at least 8 a.m. to 5 p.m. In all cases, "normal business hours"must include some evening hours at least one night per week and/or some weekend hours. q. "Normal operating conditions" means those service conditions which are within the control of Grantee. Those conditions which are typically not within the control of Grantee include, but are not limited to, natural disasters, civil disturbances, power outages, telephone network outages, and severe or unusual weather conditions. Those conditions which are typically within the control of Grantee include, but are not limited to, special promotions, pay-per-view events, rate increases, regular peak RS220-94 4 440890 RJV RS220-358 or seasonal demand periods, and maintenance or upgrade of the Cable System. r. "PEG Access" or"PEG"means public, educational and governmental programming channels,equipment, facilities, funding, or operations as the context may require. s. "PEG Fee"means a fee to cable subscribers for support of PEG Access. t. "Pay Television" means the delivery over the Cable System of pay-per-channel or pay-per-program audio-visual signals to Cable Subscribers for a fee or charge, in addition to the charge for Basic Cable Service or Cable Programming Services. u. "Person" is any person, firm, partnership, association, corporation, company, or other legal entity. v. "Right-of-Way" or "Rights-of-Way" means the area on, below, or above any real property in the City in which the City has an interest including, but not limited to any street, road, highway, alley, sidewalk, parkway, park, skyway, or any other place, area, or real property owned by or under the control of the City, including any other Rights-of-Way dedicated for travel purposes and utility easements. w. "Right-of-Way Ordinance" means such ordinance adopted by the City creating requirements regarding regulation, management and use of Rights-of-Way, including registration and permitting requirements. x. "Service interruption" means the loss of picture or sound on one or more cable channels(for longer than a momentary period). y. "Standard Installation" means any residential installation which can be completed using a Drop of 200 feet or less. z. "Cable Subscriber" means any Person who lawfully receives service via the Cable System. SECTION 2. GRANT OF AUTHORITY AND GENERAL PROVISIONS 1. Grant of Cable Franchise. This Cable Franchise is granted pursuant to the terms and conditions contained herein. 2. Cable Franchise Required. It shall be unlawful for any Person to construct,operate or maintain a Cable System or provide Cable Service in City unless such Person shall first obtain and hold a valid Cable Franchise. 3. Grant of Nonexclusive Authority. a. The Grantee shall have the right and privilege pursuant to this Cable RS220-94 5 440890 RJV RS220-358 Franchise, subject to the requirements of any applicable ordinance, rule or procedure, to construct, erect, maintain, and operate a Cable System in, upon, along, across, above, over and under the Rights-of-Way in the City and shall have the right and privilege to provide Cable Service. The Cable System constructed and maintained by Grantee or its agents shall not interfere with other uses of the Rights-of-Way. Grantee shall make use of existing poles and other above and below-ground facilities available to Grantee to the extent it is technically and economically feasible to do so. b. Notwithstanding the above grant to use Rights-of-Way, use of such Rights- of-Way shall not be inconsistent with the terms and conditions by which such Rights-of-Way were created or dedicated and with all legal requirements related to the use of such Rights-of-Way, including the terms and conditions of any applicable Right-of-Way Ordinance. This provision in no way limits Grantee's rights pursuant to Minn. Stat. 238.35. c. This Cable Franchise shall be nonexclusive. Additional Cable Franchises granted by the City shall be granted on substantially similar substantive terms and conditions. 4. Lease or Assignment Prohibited. No Person may lease Grantee's Cable System for the purpose of providing Cable Service until and unless such Person shall have first obtained and shall currently hold a valid Cable Franchise. 5. Cable Franchise Term. This Cable Franchise shall be in effect for a period of 15 years from the original date of acceptance by the Grantee's predecessor. 6. Compliance with Applicable Laws, Resolutions and Ordinances. The Grantee shall at all times during the term of this Cable Franchise be subject to all lawful exercise of the police power, statutory rights, local ordinance-making authority, and eminent domain rights of the City. This Franchise shall comply with Minnesota Statutes, Chapter 238. 7. Territorial Area Involved. This Cable Franchise is granted for the corporate boundaries of the City as it exists from time to time. To the extent the Grantee is certified as a"telephone company"as defined in Minnesota Statutes, Section 237.01, subd. 7, the Grantee shall provide Cable Service in all areas in the City in which the Grantee offers local exchange telephone service. In the event the Grantee is not certified as a "telephone company," or ceases to offer local exchange telephone service in the City, the Grantee shall construct and build out its Cable System throughout the City. Upon completion of such Cable System construction, and in the event of annexation by City or as development occurs, any unserved territory shall thereafter become part of the territory for which this Cable Franchise is granted. Access to Cable Service shall not be denied to any group of potential residential Cable Subscribers because of the income of the residents of the area in which such group resides. Grantee shall be given a reasonable period of time to construct and activate cable plant to service annexed or newly developed areas. RS220-94 6 440890 RJV RS220-358 8. Written Notice. All notices, reports, or demands required to be given in writing under this Cable Franchise shall be deemed to be given when delivered personally to any officer of Grantee or City's Administrator of this Cable Franchise or forty-eight (48) hours after it is deposited in the United States mail in a sealed envelope, with registered or certified mail postage prepaid thereon, addressed to the party to whom notice is being given, as follows: If to City: City of Rosemount c/o City Administrator 2875 145th Street West Rosemount,MN 55068-4997 With copies to: Robert J. V. Vose,Esq. 470 U.S. Bank Plaza 200 South 6th Street Minneapolis,MN 55402 If to Grantee: Velocity Telephone, Inc. DBA Gigabit Minnesota, Attn: James A. Hickle 4050 Olson Memorial Hwy#100 Golden Valley MN 55422 Jim.hckle @velocitytelephone.com Such addresses may be changed by either party upon notice to the other party given as provided in this Section. 9. Drops to Public Buildings. Grantee shall provide, free of charge, Installation of one (1) fiber optic drop and data services to the institutions identified in Exhibit A attached and such other public or educational institutions within the cable service territory which the City may designate and which are within 200 feet of the Cable System. At minimum,the cable service delivered by Grantee shall be of a cost equal to or exceeding that of its basic video offering. The Grantee will be responsible for connecting public and educational institutions within the city as that zone is built out by the Grantee. Data service will be terminated at the DEMARC where the institution will be able to connect the data service to its distribution network (i.e. LAN). Internal distribution and use by the institution is permitted. Additional Drops in any of the above locations shall be provided by Grantee at the cost of Grantee's time and material. Drops to subsequently designated institutions in excess of 200 feet shall be provided by the Grantee at the cost of Grantee's time and materials less the cost of the 200 feet closest to the building. Grantee shall have one (1) year from the date of the City designation of additional institution(s) to complete construction of the Drop. RS220-94 7 440890 RJV RS220-358 Public and educational institutions identified in Exhibit A may elect to receive dark fiber facilities in lieu of a basic data service to permit interconnection. In such case, the Grantee shall receive a credit equal to the incremental cost of the additional fiber strands for public facilities that share a sheath with the Grantee's fiber network. In addition, the Grantee shall receive credit for fiber facilities over 200' that are placed for the exclusive use of the public or educational institution at 100% of the cost of Grantee's time and materials. Grantee shall also receive credit for annual maintenance costs associated with dark fiber provided pursuant to this paragraph which will be figured at an industry average of 6% of the construction cost of the fiber facility. SECTION 3. CONSTRUCTION STANDARDS 1. Registration,Permits and Construction Codes. a. Grantee shall strictly adhere to all state and local laws and building and zoning codes currently or hereafter applicable to location, construction, installation, operation or maintenance of the Cable System in the City. b. The City shall have the right to inspect all construction or installation work performed pursuant to the provisions of the Cable Franchise and to make such tests as it shall find necessary to ensure compliance with the terms of the Cable Franchise and applicable provisions of local, state and federal law. 2. Repair of Rights-of-Way and Property. Any and all Rights-of-Way or public property or private property, which are disturbed or damaged during the construction, repair, replacement, relocation, operation, maintenance or reconstruction of the Cable System shall be promptly and fully restored by Grantee, at its expense, to the same condition as that prevailing prior to Grantee's work, as approved by City in the case of Rights-of-Way and other public property. If, after reasonable notice, Grantee fails to promptly perform the restoration required herein, City may perform the restoration of the Rights-of-Way,public,or private property as required herein at Grantee's expense. 3. Conditions on Right-of-Way Use. a. Nothing in this Cable Franchise shall be construed to prevent the City from adopting and enforcing requirements for the usage of Rights-of-Way or from constructing, maintaining, repairing or relocating sewers; grading, paving, maintaining, repairing, relocating and/or altering any Right-of-Way; constructing, laying down, repairing, maintaining or relocating any water mains; or constructing, maintaining, relocating, or repairing any sidewalk or other public work. b. All Cable System transmission and distribution structures, lines and RS220-94 8 440890 RJV RS220-358 equipment erected by the Grantee shall be located so as not to obstruct or Y interfere with the use of Right-of-Way and to cause minimum interference with the rights of property owners who abut any of said Right-of-Way and not to interfere with existing public utility installations. The Grantee shall furnish to and file with the City the maps, plats, and permanent records of the location and character of all facilities constructed, including underground facilities and Grantee shall file with the City updates of such maps,plats and permanent records annually if changes have been made in the Cable System. c. If at any time during the period of this Cable Franchise City shall elect to alter or change the grade or location of any Right-of-Way, the Grantee shall, upon reasonable notice in a manner consistent with applicable ordinances, remove and relocate its poles, wires, cables, conduits, manholes and other fixtures of the Cable System. If the City enters into an agreement to reimburse other occupants of the Right-of-Way for such relocation or removal,Grantee shall be likewise reimbursed. d. The Grantee shall not place poles, conduits, or other fixtures of Cable System above or below ground where the same will interfere with any gas, electric,telephone,water or other utility fixtures and all such poles, conduits, or other fixtures placed in any Right-of-Way shall be so placed as to comply with all requirements of the City. Grantee shall utilize existing poles, conduits, or other wire-holding structures of existing utilities to the extent technically and economically feasible. City shall have no obligation to assist Grantee in obtaining the consent for use of existing facilities from any utility company. e. The Grantee shall, upon request of any Person holding a moving permit issued by the City, temporarily move its wires or fixtures to permit the moving of buildings with the expense of such temporary removal to be paid in advance by the Person requesting the same, and the Grantee shall be given not less than ten (10) days advance notice to arrange for such temporary changes. f. The Grantee shall have the authority to trim any trees upon and overhanging the Rights-of-Way only to the extent necessary to prevent the branches of such trees from coming in contact with the wires and cables of the Grantee. g. Nothing contained in this Cable Franchise shall relieve any person from liability arising out of the failure to exercise reasonable care to avoid injuring Grantee's facilities. 4. Undergrounding of Cable. Grantee must place newly constructed facilities underground in areas of the City where all other utility lines are placed underground. Pedestal mounted terminal boxes may be placed above ground if existing technology reasonably requires, but shall be of such size and design and shall be so located as not to be unsightly or unsafe, all as may be approved by the City in accordance with RS220-94 9 440890 RJV RS220-358 applicable requirements. 5. Drop Burial. Grantee shall bury all Drops in a reasonable time period which shall not exceed ten (10) business days, subject to weather conditions and the completion of required utility locates. In the event the ground is frozen, Grantee shall be permitted to delay burial until the ground is suitable for burial which in no event shall be later than June 30th. 6. Erection, Removal and Joint Use of Poles. No poles, conduits, amplifier boxes, pedestal mounted terminal boxes, similar structures, or other wire-holding structures shall be erected or installed by the Grantee without prior approval of the City with regard to location,height,type and other pertinent aspects. 7. Safety Requirements. a. The Grantee shall at all times employ ordinary and reasonable care and shall install and maintain in use nothing less than commonly accepted methods and devices for preventing failures and accidents which are likely to cause damage, injuries,or nuisances to the public. b. The Grantee shall install and maintain its Cable System and other equipment in accordance with all federal, state and local laws and regulations, and the requirements of the National Electric Safety Code and in such manner that they will not interfere with private radio, police and fire communications or any installations of the City or of any public utility serving the City. c. All Cable System structures, and lines, equipment and connections in, over, under and upon the Rights-of-Way, wherever situated or located, shall at all times be kept and maintained in good condition, order, and repair so that the same shall not menace or endanger the life or property of the City or any Person. 8. Emergency Use of Facilities. In the case of any emergency or disaster, the Grantee shall upon request of the City, make available its facilities to City during the period of emergency or disaster. SECTION 4. DESIGN PROVISIONS 1. Cable System Upgrade;Minimum Channel Capacity. a. Grantee shall develop, construct and continue for the term of this Cable Franchise a fiber optic system which is engineered and activated so as to be capable of delivering a minimum of 80 video programmed channels. The Grantee's Cable System design is more fully detailed in Exhibit C attached. RS220-94 10 440890 RJV RS220-358 b. All programming decisions remain the discretion of Grantee; provided, however, that any change in the broad categories of video programming or other information services shall require the approval of the City consistent with 47 U.S.C. § 544(b), which approval shall not be unreasonably withheld, and further provided that Grantee notifies the City and Cable Subscribers in writing thirty (30) days prior to any channel additions, deletions, or realignments, and further subject to Grantee's signal carriage obligations hereunder and pursuant to 47 U.S.C. § 531-536, and further provided that Grantee may not eliminate, move or renumber any PEG access or other community programming channel required hereunder without prior approval of the City. Grantee shall conduct cable programming surveys from time to time to obtain input on cable programming decisions from Cable Subscribers. c. Grantee shall interconnect with any adjoining Cable System at such time as consent from the adjoining operator is received. Nothing herein shall require Grantee to interconnect unless the operator of the adjoining Cable System agrees to pay a pro rata share of the interconnection costs. 2. Reserved Capacity for Institutional Cable Services. In the event public institutions within the City elect to utilize the Cable System for non-commercial applications, in addition to those cable services provided in Section 2.9,the Grantee shall offer cable service on reasonable terms and conditions to be agreed upon between the City and the Grantee. Grantee shall not be required to provide any particular cable service or application which Grantee lacks technological ability or regulatory approval to provide. A requesting institution may provide equipment or seek regulatory approval independent of Grantee in order to provide such cable service or application via reserved capacity. 3. Construction Timetable. Grantee shall complete construction related to the Cable System as set forth herein. 4. Operation and Maintenance of Cable System. The Grantee shall render effective service, make repairs promptly, and interrupt cable service only for good cause and for the shortest time possible. Such interruption, to the extent feasible, shall be preceded by notice in accordance with Section 2.9 herein and shall occur during periods of minimum use of the Cable System. 5. Technical Standards. The technical standards used in the operation of the Cable System shall comply where applicable, at minimum, with the technical standards promulgated by the FCC relating to Cable Systems pursuant to Code of Federal Regulations Title 47, Section 76.601 to 76.617, as may be amended or modified from time to time, which regulations are expressly incorporated herein by reference. 6. Special Cable Testing. RS220-94 11 440890 RJV RS220-358 a. The City may require cable testing of a location or locations within the Cable System or the Cable System as a whole. Demand for such special cable tests may be made on the basis of complaints received or other evidence indicating an unresolved controversy or noncompliance. The City shall endeavor to so arrange its request for such special cable testing so as to minimize hardship or inconvenience to Grantee or to the Cable Subscribers caused by such cable testing. b. Before ordering such cable tests, Grantee shall be afforded thirty(30)days to correct problems or complaints upon which cable tests were ordered. If the thirty (30)days have elapsed without correction of the matter in controversy or unresolved complaints,the cable tests shall be conducted by a qualified engineer selected by City. c. In the event that special cable testing determines that the Cable System or Grantee is the source of technical difficulties in violation of the FCC technical specifications as required by this Cable Franchise,the cost of said cable testing shall be reimbursed by the Grantee. 7. FCC Reports. The results of any cable tests required to be filed by Grantee with the FCC shall also be filed with the City or its designee within ten (10) days of the conduct of such tests. 8. Lockout Device. Upon the request of a Cable Subscriber, Grantee shall provide a Lockout Device. SECTION 5. CABLE SERVICES PROVISIONS 1. Regulation of Cable Service Rates. a. The City may regulate rates for the provision of Cable Service, provided over the System to the extent allowed under federal or state law(s). The City reserves the right to regulate rates for any future cable services to the extent permitted by law. b. A list of Grantee's current Cable Service Subscriber rates and charges shall be maintained on file with the City and shall be available for public inspection. Grantee shall give the City and Cable Subscribers written notice of any change in a rate or charge no less than thirty (30) days prior to the effective date of the change. 2. Non-Standard Cable Installations. Grantee shall install and provide Cable Service to any Person requesting other than a Standard Cable Installation provided that said Cable Service can meet FCC technical specifications. In such case, Grantee may charge for the incremental increase in material and labor costs incurred beyond the Standard Cable Installation. 3. Sales Procedures. Grantee shall not exercise deceptive sales procedures when RS220-94 12 440890 RJV RS220-358 marketing any of its cable services within City. Grantee shall have the right to market door-to-door during reasonable hours consistent with local ordinances and regulation. 4. Telephone Inquiries and Complaints. a. Availability Grantee will maintain an adequate number of local, toll-free or collect call telephone access lines which will be available to its Cable Subscribers 24 hours a day, seven days a week so as to receive Cable Subscriber complaints,requests, and inquiries. b. Other Customer Service Requirements. Grantee's Cable Service shall be subject to the FCC's customer service regulations as detailed in 47 CFR 76.309. 5. Complaint and Other Service Records Subject to Grantee's to maintain the privacy of certain information, Grantee shall prepare and maintain written records of all complaints received and the resolution of such complaints, including the date of such resolution. Such written records shall be on file at the office of Grantee. Grantee shall provide the City with a written summary of such complaints and their resolution on a quarterly basis. Grantee will also provide detailed compliance reports on a quarterly basis with respect to the objectively measurable service standards herein in a form mutually agreed upon. 6. Billing and Cable Subscriber Communications. Grantee must give Cable Subscribers thirty (30) days advance written notice with copy to City before any changes in rates, cable programming services, or cable channel positions. Bills must be clear, concise, and understandable, with itemization of all charges for Cable Services, cable equipment charges, and any optional cable services, cable charges, and other activity during the billing period. In case of a billing dispute, the cable operator must respond to a written complaint from a cable subscriber within 30 days. 7. Cable Subscriber Contracts. Grantee shall file with the City any standard form Cable Subscriber contract utilized by Grantee. If no such written contract exists, Grantee shall file with the City a document completely and concisely stating the length and terms of the Cable Subscriber contract offered to customers. The length and terms of any Cable Subscriber contract(s) shall be available for public inspection during normal business hours. 8. Refunds and Credits. In the event a Cable Subscriber establishes or terminates Cable Service and receives less than a full month's Cable Service, Grantee shall prorate the monthly rate on the basis of the number of days in the period for which Cable Service was rendered to the number of days in the billing. Refund checks will be issued promptly, but no later than the return of the cable equipment supplied by the Grantee if Cable Service is terminated. If Cable Service is interrupted or discontinued for a total of more than 48 hours in any 30 day period, Cable Subscribers shall be credited pro rata for such interruption beginning with the date of RS220-94 13 440890 RN RS220-358 interruption. Credits for will be issued no later than the Cable Subscriber's next billing cycle following the determination that a credit is warranted. 9. Late Fees. Fees for the late payment of bills shall not accrue until the normal billing cut-off for the next month's service and in no event less than one (1)month after the unpaid bill in question was sent to the Cable Subscriber customer service center and bill payment locations will be open at least during normal business hours. Payments at the cable operators drop-box location shall be deemed received on the date such payments are picked up by the cable operator which shall occur within 24 hours after every due date. The cable operators shall continue to provide a"grace period" of at least five (5) days after each due date. Late fees shall not exceed the Grantee's actual and demonstrable costs associated with collection of late payments as may be determined by a court of competent jurisdiction. 10. Drop Box. Grantee shall maintain a local drop box for receiving Cable Subscriber payments after hours. 11. Additional Customer Service Requirements. The City expressly reserves authority to adopt additional or modified customer service requirements to address Cable Subscriber concerns or complaints in accordance with law. SECTION 6. ACCESS CHANNEL(S)PROVISIONS 1. Public,Educational and Government Access. a. The City is hereby designated to operate, administer, promote, and manage community programming (public, education, and government programming) (hereinafter"PEG access")in the Cable System. b. Grantee shall dedicate five (5) channel(s) for PEG access and community programming use. Unless otherwise agreed in writing, "channel" for these purposes shall mean six (6) MHz of the available spectrum on the Cable System. All residential Cable Subscribers who receive all or any part of the total cable services offered on the Cable System shall be eligible to receive such channels at no additional charge. The channel(s) shall be activated upon the effective date of this Cable Franchise and thereafter maintained. The City may rename, reprogram, or otherwise change the use of these channels in its sole discretion, provided such use is non-commercial and retains the general purpose of the provision of community programming. Nothing herein shall diminish the City's rights to secure additional channels pursuant to Minn. Stat. § 238.084, which is expressly incorporated herein by reference. The City shall provide ninety (90) days prior written notice to Grantee of City's intent to activate access channels and shall allow Grantee reasonable time to vacate said channel(s). RS220-94 14 440890 RJV RS220-358 c. Grantee shall designate the channel locations of any other access channel(s) but may not move or otherwise change the channel number or location of any PEG access or community program channel without the written approval of the City. d. Grantee will cable cast all PEG access programming produced by the City or City's designee. The Grantee will maintain live video feed from City Hall. Grantee will cable cast ISD 196 Chanel 10 and will provide or obtain a live video feed or connection from Apple Valley City Hall and cable cast PEG access programming produced by the Apple Valley, Farmington Rosemount Cable Commission including Rosemount/Dakota County Channel 22 and Apple Valley/Farmington Channel 16 and the public access channel produced by the Cable Commission. Grantee shall present a plan and timetable for obtaining and cable casting Regional Channel 6. Grantee shall be responsible for the cost of obtaining the foregoing program feeds or connections, and the cost of any equipment necessary to cable cast such programming. e. Any PEG programming originated from Grantees' facilities will be provided to all public buildings. 2. Charges for Use. Channel time and playback of prerecorded programming on the PEG access and community program channel(s)must be provided without charge to the City and the public. 3. Access Rules. City, or its designee, shall implement rules for use of any access channel(s). 4. Access Support. Grantee shall collect from Cable Subscribers and quarterly pay to the City in support of PEG operations the full amount of revenues generated by a $.25 per month, per Cable Subscriber fee beginning upon the Effective Date of this Cable Franchise. This fee may be separately itemized as a "PEG Fee" and passed through to Cable Subscribers independent from rates regulated pursuant to FCC regulations. The City may require increases in the PEG Fee up to a limit of$1.25 increased annually by the Consumer Price Index (CPI) or three percent (3%), whichever is less. The City may not increase the PEG Fee by more than twenty-five cents ($.25) in any given year. The City shall notify Grantee of any such increase on or before September 30, assuming a January 1 implementation. Should Grantee change the date of any annual rate change from January 1, and so notify the City, then the City shall notify Grantee of any PEG increase at least ninety (90) days prior to the new Grantee rate change date. Such payment shall be separate from and in addition to the Cable Franchise Fee. The parties acknowledge and agree that all PEG access grants required by the Franchise in addition to the foregoing PEG Fee were satisfied prior to amendment of RS220-94 15 440890 RJV RS220-358 the Franchise. SECTION 7. OPERATION AND ADMINISTRATION PROVISIONS 1. Administration of Cable Franchise. The City shall have continuing regulatory jurisdiction and supervision over the Cable System and the Grantee's operation under the Cable Franchise. 2. Delegated Authority. The City may delegate to any other body or Person authority to administer the Cable Franchise and to monitor the performance of the Grantee pursuant to the Cable Franchise; provided, however, the City shall not delegate any enforcement power it may have pursuant to this Cable Franchise or any applicable laws. 3. Cable Franchise Fee. a. During the term of the Cable Franchise, Grantee shall pay to the City a Cable Franchise Fee in an annual amount equal to five percent (5%) of its Gross Cable Service Revenues. b. Any payments due under this provision shall be payable quarterly. The payment shall be made within sixty(60) days of the end of each of Grantee's current fiscal quarters together with a report in form reasonably acceptable to City and Grantee and which shows the basis for the computation. c. All amounts paid shall be subject to audit and recomputation by the City and acceptance of any payment shall not be construed as an accord that the amount paid is in fact the correct amount. 4. Access to Records. The City shall have the right to inspect, upon reasonable notice and during normal business hours, any records maintained by Grantee which relate to this Cable Franchise or Cable System operations including specifically Grantee's accounting and financial records, subject to the privacy provisions of 47 U.S.C. § 521 et seq. In addition or alternatively, Grantee shall provide copies of any such records upon request by City. 5. Reports and Maps to be Filed with the City. a. Grantee shall file with the City, at the time of payment of the Cable Franchise Fee, a report of all Cable System Gross Revenues certified by an officer of the Grantee. b. Grantee shall prepare and furnish to the City, at the times and in the form prescribed, such other reports with respect to the operations, affairs, transactions or property, as they relate to the Cable System, which Grantee RS220-94 16 440890 RJV RS220-358 and the City may agree upon. c. Grantee shall furnish to and file with the City upon request the maps, plats, and permanent records of the location and character of all facilities constructed, including underground facilities. 6. Periodic Evaluation. a. The City may require evaluation sessions at any time during the term of this Cable Franchise,upon thirty(30)days written notice to Grantee. b. All evaluation sessions shall be open to the public. Grantee shall notify its Cable Subscribers of all evaluation sessions by announcement of at least sixty (60) seconds in duration on at least one (1)-Basic Service channel of the Cable System between the hours of 7:00 p.m. and 9 00 p.m. for five (5) consecutive days preceding each session. c. Topics which may be discussed at any evaluation session may include, but are not limited to, application of new technologies, Cable System performance, Cable programming offered, access channels, Cable System facilities and support, municipal uses of cable, customer complaints, amendments to this Cable Franchise, judicial rulings, FCC rulings, line extension policies and any other topics the City and Grantee deem relevant. d. As a result of a periodic review or evaluation session, the City may request Grantee to amend the Cable Franchise to provide additional cable services or facilities as are mutually agreed upon and which are both economically and technically feasible. SECTION 8. GENERAL FINANCIAL AND INSURANCE PROVISIONS 1. Letter of Credit. a. At the time of acceptance of this Cable Franchise, Grantee shall deliver to the City an irrevocable and unconditional Letter of Credit, in form and substance acceptable to the City, from a National or State bank approved by the City, in the amount of Two Thousand Dollars ($2000.00). b. The Letter of Credit shall provide that funds will be paid to the City, upon written demand of the City, and in an amount solely determined by the City in payment for penalties charged pursuant to this section, in payment for any monies owed by Grantee pursuant to its obligations under this Cable Franchise, or in payment for any damage incurred as a result of any acts or omissions by Grantee pursuant to this Cable Franchise. RS220-94 17 440890 RJV RS220-358 c. In addition to recovery of any monies owed by Grantee to the City or damages to the City as a result of any acts or omissions by Grantee pursuant to the Franchise, the letter of credit is intended to enforce all of the sections of the Franchise. The City may impose liquidated damages for violation of this Franchise in amount not to exceed Two Hundred Dollars ($200.00) per day for each day such violation continues after written notice of such violation is provided by the City. d. Each violation of any provision of this Franchise shall be considered a separate violation for which a separate penalty can be imposed. e. Whenever the City finds that Grantee has violated one or more terms, conditions or provisions of this Franchise, a written notice shall be given to Grantee informing it of such violation. At any time after thirty (30) days following receipt of notice, provided Grantee remains in violation of one or more terms, conditions or provisions of this Franchise, in the sole opinion of the City, the City may draw from the Letter of Credit all penalties or monies due the City from the date of the local receipt of notice. The City may grant additional time beyond the initial thirty (30) days in the event the City determines such additional time is necessary to cure the alleged violation. f. Grantee may, within fifteen (15) days of receipt of such notice, notify the City in writing that there is a dispute as to whether a violation or failure has in fact occurred. Such written notice by Grantee to the City shall specify with particularity the matters disputed by Grantee. All penalties shall continue to accrue and the City may draw from the Letter of Credit at the end of the thirty (30) day cure period notwithstanding Grantee's dispute regarding the violation. i. The City shall hear Grantee's dispute at the next regularly scheduled meeting or within sixty(60)days,whichever period is longer. ii. Upon determination by the City that no violation has taken place,the City shall rescind the notice of violation and refund to Grantee, without interest, all monies drawn from the Letter of Credit by reason of the alleged violation. g. If said Letter of Credit or any subsequent Letter of Credit delivered pursuant thereto expires prior to five (5) months after the expiration of the term of this Franchise, it shall be renewed or replaced during the term of this Franchise to provide that it will not expire earlier than five (5) months after the expiration of this Franchise. The renewed or replaced Letter of Credit shall be of the same form and amount and with a bank authorized herein. h. If the City draws upon the Letter of Credit or any subsequent Letter of Credit delivered pursuant hereto, in whole or in part, Grantee shall replace the same RS220-94 18 440890 RJV RS220-358 within ten (10) days and shall deliver to the City proof of replacement of the Letter of Credit for the full amount required herein as a substitution of the previous Letter of Credit. If any Letter of Credit is not so replaced, the City may draw on said Letter of Credit for the whole amount thereof and use the proceeds as the City determines in its sole discretion. The failure to promptly replace any Letter of Credit may also, at the option of the City, be deemed a default by Grantee under this Franchise. The drawing on the Letter of Credit by the City, and use of the money so obtained for payment or performance of the obligations, duties and responsibilities of Grantee which are in default, shall not be a waiver or release of such default. j. The collection by the City of any damages, monies or penalties from the Letter of Credit shall not be deemed an exclusive remedy and shall not affect any other right or remedy available to the City,nor shall any act, or failure to act, by the City pursuant to the Letter of Credit, be deemed a waiver of any right of the City pursuant to this Franchise or otherwise. 2. Indemnification of the City. a. The City, its officers, boards, committees, commissions, elected officials, employees and agents shall not be liable for any loss or damage to any real or personal property of any Person, or for any injury to or death of any Person, arising out of or in connection with the construction, operation, maintenance, repair or removal of, or other action or event with respect to the Cable System or as to any other action or event with respect to this Cable Franchise. b. Grantee shall indemnify, defend, and hold harmless the City, its officers, boards, committees, commissions, elected officials, employees and agents, from and against all liability, damages, and penalties which they may legally be required to pay as a result of the exercise, administration, or enforcement of the Cable Franchise including, but not limited to, the reimbursement to City of any insurance deductible paid by City. c. Nothing in this Cable Franchise relieves a Person, except the City, from liability arising out of the failure to exercise reasonable care to avoid injuring the Grantee's facilities while performing work connected with grading, regrading, or changing the line of a Right-of-Way or public place or with the construction or reconstruction of a sewer or water system. 3. Insurance. a. Grantee shall file with its acceptance of this Cable Franchise, and at all times thereafter maintain in full force and effect at its sole expense, a comprehensive general liability insurance policy, including RS220-94 19 440890 RJV RS220-358 broadcaster's/cablecaster's liability and contractual liability coverage, in protection of the Grantee, and the City, its officers, elected officials, boards, commissions, agents and employees for any and all damages and penalties which may arise as a result of this Cable Franchise. The policy or policies shall name the City as an additional insured and in their capacity as such,the City officers, elected officials,boards, commissions,agents and employees. b. The policies of insurance shall be in the sum of not less than One Million Dollars ($1,000,000.00) for personal injury or death of any one Person, and Two Million Dollars ($2,000,000.00) for personal injury or death of two or more Persons in any one occurrence, One Million Dollars ($1,000,000.00) for property damage to any one person and Two Million Dollars ($2,000,000.00) for property damage resulting from any one act or occurrence. c. The policy or policies of insurance shall be maintained by Grantee in full force and effect during the entire term of the Cable Franchise. Each policy of insurance shall contain a statement on its face that the insurer will not cancel the policy or fail to renew the policy, whether for nonpayment of premium, or otherwise, and whether at the request of Grantee or for other reasons, except after sixty (60) days advance written notice have been provided to the City. SECTION 9. SALE,ABANDONMENT,TRANSFER AND REVOCATION OF CABLE FRANCHISE 1. City's Right to Revoke. a. In addition to all other rights which the City has pursuant to law or equity, the City reserves the right to revoke, terminate or cancel this Cable Franchise, and all rights and privileges pertaining thereto, if after the hearing required by 9.2(b)herein,it is determined that: i. Grantee has violated any material provision of this Cable Franchise; or II ii. Grantee has attempted to evade any of the material provisions of the Cable Franchise; or iii. Grantee has practiced fraud or deceit upon the City or Cable Subscriber; or iv. Grantee is adjudged a bankrupt. 2. Procedures for Revocation. RS220-94 20 440890 RJV RS220-358 a. The City shall provide Grantee with written notice of a cause for revocation and the intent to revoke and shall allow Grantee sixty (60) days subsequent to receipt of the notice in which to correct the violation or to provide adequate assurance of performance in compliance with the Cable Franchise. b. Grantee shall be provided the right to a public hearing affording due process before the City prior to revocation, which public hearing shall follow the sixty (60) day notice provided in subparagraph (a) above. The City shall provide Grantee with written notice of its decision together with written findings of fact supplementing said decision. c. Only after the public hearing and upon written notice of the determination by the City to revoke the Cable Franchise may Grantee appeal said decision with an appropriate state or federal court or agency. d. During the appeal period, the Grantee may continue to operate the Cable System pursuant to the terms and conditions of the Cable Franchise, unless the term thereof sooner expires. 3. Abandonment of Service. Grantee may not abandon the Cable System or any portion thereof without having first given three (3)months written notice to the City. Grantee may not abandon the Cable System or any portion thereof without compensating the City for damages resulting from the abandonment. 4. Removal After Abandonment,Termination or Forfeiture. a. In the event of termination or forfeiture of the Cable Franchise or abandonment of the Cable System, the City shall have the right to require Grantee to remove all or any portion of the Cable System from all Rights-of- Way and public property within the City provided,however,that the Grantee shall not be required to remove the Cable System if it is authorized to provide telecommunications service pursuant to state or federal law. b. If Grantee has failed to commence removal of Cable System, or such part thereof as was designated by the City, within one hundred twenty(120) days after written notice of the City demand for removal is given, or if Grantee has failed to complete such removal within twelve (12) months after written notice of the City demand for removal is given, the City shall have the right to apply funds secured by the Letter of Credit and Performance Bond toward removal and/or declare all right, title, and interest to the Cable System to be in the City with all rights of ownership including,but not limited to,the right to operate the Cable System or transfer the Cable System to another for operation by it pursuant to the provisions of 47 U.S.C. § 547. 5. Sale or Transfer of Cable Franchise. a. No sale, transfer, or corporate change of or in Grantee, including, but not RS220-94 21 440890 RJV RS220-358 limited to,the sale of a majority of the entities assets, a merger including the merger of a subsidiary and parent entity, consolidation, or the creation of a subsidiary or affiliate entity, shall take place until the parties to the sale, transfer, or corporate change file a written request with the City for its approval and such approval is granted by the City, provided, however, that said approval shall not be required where Grantee grants a security interest in its Cable Franchise and assets to secure an indebtedness. b. Any sale,transfer, exchange or assignment of stock in Grantee so as to create a new controlling interest in the Cable System shall be subject to the requirements of this Section 9.05. The term "controlling interest" as used herein is not limited to majority stock ownership, but includes actual working control in whatever manner exercised. As a minimum, "control" or "controlling interest" as used herein, means a legal or beneficial interest (even though actual working control does not exist) of at least five percent (5%). c. The City shall have such time as is permitted by applicable law in which to review a transfer request. d. The Grantee shall reimburse City for all reasonable legal, administrative,and consulting costs and fees associated with the City's review of any request to transfer. Nothing herein shall prevent Grantee from negotiating partial or complete payment of such costs and fees by the transferee. e. In no event shall a sale, transfer, corporate change, or assignment of ownership or control pursuant to Subparagraph (a) or (b) of this Section be approved without the transferee becoming a signatory to this Cable Franchise and assuming all rights and obligations hereunder, and assuming all other rights and obligations of the transferor to the City. f. In the event of any proposed sale, transfer, corporate change, or assignment pursuant to subparagraph (a) or (b) of this Section, the City shall have the right of first refusal of any bona fide offer to purchase the Cable System. Bona fide offer, as used in this Section, means an offer received by the Grantee which it intends to accept subject to the City rights under this Section. This written offer must be conveyed to the City along with the Grantees written acceptance of the offer contingent upon the rights of the City provided for in this Section. The City shall be deemed to have waived its rights under this Section in the following circumstances: i. If it does not indicate to Grantee in writing, within thirty(30) days of notice of a proposed sale or assignment, its intention to exercise its right of purchase; or RS220-94 22 440890 RJV RS220-358 ii. It approves the assignment or sale of the Cable Franchise as provided within this Section. SECTION 10. PROTECTION OF INDIVIDUAL RIGHTS 1. Discriminatory Practices Prohibited. Grantee shall not deny service, deny access, or otherwise discriminate against Cable Subscribers or general citizens on the basis of race, color, religion, national origin, sex, age, status as to public assistance, affectional preference, or disability. Grantee shall comply at all times with all other applicable federal, state, and local laws, and all executive and administrative orders relating to nondiscrimination. 2. Cable Subscriber Privacy. a. Grantee shall comply with the cable subscriber privacy-related requirements of 47 U.S.C. § 551. No signals including signals of a Class IV Channel may be transmitted from a Cable Subscriber terminal for purposes of monitoring individual viewing patterns or practices without the express written permission of the Cable Subscriber. Such written permission shall be for a limited period of time not to exceed one (1) year which may be renewed at the option of the Cable Subscriber. No penalty shall be invoked for a Cable Subscriber's failure to provide or renew such authorization. The authorization shall be revocable at any time by the Cable Subscriber without penalty of any kind whatsoever. Such permission shall be required for each type or classification of Class IV Channel activity planned for the purpose of monitoring individual viewing patterns or practices. b. No lists of the names and addresses of Cable Subscribers or any lists that identify the viewing habits of Cable Subscribers shall be sold or otherwise made available to any party other than to Grantee and its employees for internal business use, and also to the Cable Subscriber subject of that information, unless Grantee has received specific written authorization from the Cable Subscriber to make such data available. Such written permission shall be for a limited period of time not to exceed one (1)year which may be renewed at the option of the Cable Subscriber. No penalty shall be invoked for a Cable Subscriber's failure to provide or renew such authorization. The authorization shall be revocable at any time by the Cable Subscriber without penalty of any kind whatsoever. c. Written permission from the Cable Subscriber shall not be required for the conducting of Cable System wide or individually addressed electronic sweeps for the purpose of verifying Cable System integrity or monitoring for the purpose of billing. Confidentiality of such information shall be subject to the provision set forth in Subparagraph(b) of this Section. RS220-94 23 440890 RJV RS220-358 SECTION 11. MISCELLANEOUS PROVISIONS 1. Cable Franchise Renewal. Any renewal of this Cable Franchise shall be performed in accordance with applicable federal, state and local laws and regulations. The term of any renewed Cable Franchise shall be limited to a period not to exceed fifteen (15)years. 2. Work Performed by Others. All obligations of this Cable Franchise shall apply to any subcontractor or others performing any work or services pursuant to the provisions of this Cable Franchise, however, in no event shall any such subcontractor or other Person performing work obtain any rights to maintain and operate a Cable System or provide Cable Service. 3. Amendment of Cable Franchise Ordinance. Grantee and the City may agree, from time to time, to amend this Cable Franchise. Such written amendments may be made subsequent to a review session pursuant to Section 7.5 or at any other time if the City and Grantee agree that such an amendment will be in the public interest or if such an amendment is required due to changes in federal, state or local laws, provided, however, nothing herein shall restrict the City's exercise of its police powers. 4. Compliance with Federal, State and Local Laws. a. If any federal or state law or regulation shall require or permit the City or Grantee to perform any service or act or shall prohibit the City or Grantee from performing any service or act which may be in conflict with the terms of this Cable Franchise, then as soon as possible following knowledge thereof, either party shall notify the other of the point in conflict believed to exist between such law or regulation. Grantee and the City shall conform to state laws and rules regarding cable communications not later than one year after they become effective, unless otherwise stated, and to conform to federal laws and regulations regarding cable as they become effective. b. If any term, condition or provision of this Cable Franchise or the application thereof to any Person or circumstance shall, to any extent, be held to be invalid or unenforceable, the remainder hereof and the application of such term, condition or provision to Persons or circumstances other than those as to whom it shall be held invalid or unenforceable shall not be affected thereby, and this Cable Franchise and all the terms, provisions and conditions hereof shall, in all other respects, continue to be effective and complied with provided the loss of the invalid or unenforceable clause does not substantially alter the agreement between the parties. In the event such law, rule or regulation is subsequently repealed, rescinded, amended or otherwise changed so that the provision which had been held invalid or modified is no longer in conflict with the law, rules and regulations then in RS220-94 24 440890 RJV RS220-358 effect, said provision shall thereupon return to full force and effect and shall thereafter be binding on Grantee and the City. 5. Nonenforcement by City. Grantee shall not be relieved of its obligations to comply with any of the provisions of this Cable Franchise by reason of any failure or delay of the City to enforce prompt compliance. The City may only waive its rights hereunder by expressly so stating in writing. Any such written waiver by the City of a breach or violation of any provision of this Cable Franchise shall not operate as or be construed to be a waiver of any subsequent breach or violation. 6. Rights Cumulative. All rights and remedies given to the City by this Cable Franchise shall be in addition to and cumulative with any and all other rights and remedies, existing or implied, now or hereafter available to the City at law or in equity, and such rights and remedies shall not be exclusive, but each and every right and remedy specifically given by this Cable Franchise or otherwise existing or given may be exercised from time to time and as often and in such order as may be deemed expedient by the City and the exercise of one or more rights or remedies shall not be deemed a waiver of the right to exercise at the same time or thereafter any other right or remedy. 7. Grantee Acknowledgment of Validity of Cable Franchise. Grantee acknowledges that it has had an opportunity to review the terms and conditions of this Cable Franchise and that under current law Grantee believes that said terms and conditions are not unreasonable or arbitrary, and that Grantee believes the City has the power to make the terms and conditions contained in this Cable Franchise. SECTION 12. PUBLICATION EFFECTIVE DATE; ACCEPTANCE AND EXHIBITS 1. Publication: Effective Date. This Cable Franchise shall be published in accordance with applicable local and Minnesota law. The Effective Date of this Cable Franchise shall be the date of acceptance by Grantee in accordance with the provisions of Section 12.2. 2. Acceptance. a. Grantee shall accept this Cable Franchise within sixty (60) days of its enactment by the City, unless the time for acceptance is extended by the City. Such acceptance by the Grantee shall be deemed the grant of this Cable Franchise for all purposes provided. In the event acceptance does not take place, or should all ordinance adoption procedures and timelines not be completed, this Cable Franchise and any and all rights previously granted to Grantee shall be null and void. b. Upon acceptance of this Cable Franchise, Grantee shall be bound by all the terms and conditions contained herein RS220-94 25 440890 RJV RS220-358 c. Grantee shall accept this Cable Franchise in the following manner: i. This Cable Franchise will be properly executed and acknowledged by Grantee and delivered to the City. ii. With its acceptance, Grantee shall also deliver any grant payments, performance bond and insurance certificates required herein that have not previously been delivered. Passed and adopted this day of ,2014. ATTEST: CITY OF ROSEMOUNT By: By: Its: Its: ACCEPTED: This Cable Franchise is accepted and the undersigned agrees to be bound by its terms and conditions. VELOCITY TELEPHONE,INC. DBA GIGABIT MINNESOTA Dated: By: Its: RS220-94 26 440890 RJV RS220-358 CORPORATE ACKNOWLEDGMENT STATE OF MINNESOTA ) ) SS. COUNTY OF DAKOTA ) On this day of ,2014,before me ,the (Name of Notary) undersigned officer, personally appeared , known personally to me to be the of Velocity Telephone, Inc. DBA Gigabit Minnesota, and that he, as such officers, being authorized so to do, executed the foregoing City of Rosemount, Ordinance No. , for the purposes therein contained, by signing the name of the corporation by himself as such officers. IN WITNESS WHEREOF, I have hereunto set my hand and official seal. Notary Public My Commission expires: (NOTARIAL SEAL) The"foregoing instrument"referred to above is City of Rosemount Ordinance No. RS220-94 27 440890 RJV RS220-358 EXHIBIT A (Assuming all necessary permits and Right-of-Way clearances) Government Buildings in Rosemount Address Completed City Hall 2875 145th Street W. Yes Fire Station 1 14700 Shannon Parkway No Fire Station 2/P.W. Building 14425 Brazil Avenue Yes Public Works Garage 14455 Brazil Avenue Yes Community Center 13885 S. Robert Trail Yes Central Park Shelter 2875 145th Street W. Yes Family Resource Center 14521 Cimarron Avenue No Steeple Center 13885 South Robert Trail No Educational Buildings in Rosemount Rosemount St. Joseph Catholic School 14335 S. Robert Trail Yes Rosemount Elementary* 3155 W. 144th Street Yes Rosemount Middle School * 3135 W. 143`d Street Yes Rosemount High School * 3335 W. 142nd Street Yes Shannon Park Elementary * 13501 Shannon Parkway Yes Dakota County Technical College 1300 145th Street Yes District Office East 15180 Canada Ave. Yes * Rosemount Elementary, Rosemount Middle School,Rosemount High School and Shannon Park Elementary shall receive dark fiber facilities in lieu of basic data services. 440890 RJV RS220-358 EXHIBIT B [Intentionally Omitted] 440890 RJV RS220-358 EXHIBIT C Attached is a map showing the location of Grantee's cable system as constructed as of June 1 2014. The City and Grantee acknowledge that the Grantee has applied for necessary governmental permits, licenses, certificates, and authorizations in order to construct a cable system serving the City and that such cable system construction is underway as of the date of the granting of this cable franchise. Grantee shall continue to apply for permits associated with work in specific portions of the right-of-way as construction proceeds. Upon completion of cable system construction, Grantee will extend its cable system and cable services in accordance with Section 2.7 of the Cable Franchise. The requirements herein may be waived by the City upon occurrence of unforeseen events or acts of God. The City may only agree to such modifications by amendment to this Cable Franchise. 440890 RJV RS220-358 Federal Communications Commission Approved By OMB Washington,DC 20554 3060-0573 FCC 394 APPLICATION FOR FRANCHISE AUTHORITY CONSENT TO ASSIGNMENT OR TRANSFER OF CONTROL OF CABLE TELEVISION FRANCHISE FOR FRANCHISE AUTHORITY USE ONLY SECTION I. GENERAL INFORMATION DATE 6/12/2014 1. Community Unit Identification Number: 2. Application for: ❑ Assignment of Franchise ® Transfer of Control 3. Franchising Authority: City of Rosemount Minnesota 4. Identify community where the system/franchise that is the subject of the assignment or transfer of control is located: State of Minnesota,County of Dakota,City of Rosemount 5. Date system was acquired or(for system's constructed by the transferor/assignor)the date on which service was provided to the first subscriber in the franchise area: 6/24/2014 6. Proposed effective date of closing of the transaction assigning or transferring ownership of the system to transferee/assignee: 6/24/2014 7. Attach as an Exhibit a schedule of any and all additional information or material filed with this Exhibit No. application that is identified in the franchise as required to be provided to the franchising authority when requesting its approval of the type of transaction that is the subject of this application. PART I - TRANSFEROR/ASSIGNOR 1. Indicate the name,mailing address,and telephone number of the transferor/assignor. Legal name of Transferor/Assignor(if individual,list last name first) FTTH Communications Mailing street address or P.O.Box 2930 146th St W Ste 105 City State ZIP Code Telephone No.(include area code) Rosemount MN 55068 6519254250 2.(a) Attach as an Exhibit a copy of the contract or agreement that provides for the assignment or Exhibit No. transfer of control(including any exhibits or schedules thereto necessary in order to understand the 1 terms thereof). If there is only an oral agreement,reduce the terms to writing and attach. (Confidential trade,business,pricing or marketing information,or other information not otherwise publicly available, may be redacted). (b) Does the contract submitted in response to(a)above embody the full and complete agreement © Yes 111 No between the transferor/assignor and the transferee/assignee? If No,explain in an Exhibit. Exhibit No. N/A FCC 394(Page 1) September 1996 PART II -TRANSFEREE/ASSIGNEE 1.(a) Indicate the name, mailing address, and telephone number of the transferee/assignee. Legal name of Transferee/Assignee(if individual, list last name first) Velocity Telephone, Inc. Assumed name used for doing business(if any) Gigabit Minnesota LLC Mailing street address or P.O. Box 4050 Olson Memorial Hwy#100 City State ZIP Code Telephone No. (include area code) Golden Valley MN 55422 7632221004 (b) Indicate the name, mailing address, and telephone number of person to contact, if other than transferee/assignee. Name of contact person(list last name first) Hickle,James(Jim) Firm or company name(if any) Velocity Telephone, Inc. Mailing street address or P.O. Box 4050 Olson Memorial Hwy#100 City State ZIP Code Telephone No. (include area code) Golden Valley MN 55422 7632221004 (c) Attach as an Exhibit the name, mailing address,and telephone number of each additional person who Exhibit No. should be contacted, if any. N/A (d) Indicate the address where the system's records will be maintained. Street address 4050 Olson Memorial Hwy#100 City State ZIP Code Golden Valley MN 55422 2. Indicate on an attached exhibit any plans to change the current terms and conditions of service and Exhibit No. operations of the system as a consequence of the transaction for which approval is sought. N/A FCC 394(Page 2) September 1996 SECTION II. TRANSFEREE'S/ASSIGNEE'S LEGAL QUALIFICATIONS 1. Transferee/Assignee is: © Corporation a.Jurisdiction of incorporation: d. Name and address of registered agent in Minnesota jurisdiction: b. Date of incorporation: 5/1/2000 c. For profit or not-for-profit: Profit ❑ Limited Partnership a.Jurisdiction in which formed: c. Name and address of registered agent in iurisdiction: b. Date of formation: ❑ General Partnership a.Jurisdiction whose laws govern forma b. Date of formation: O Individual O Other. Describe in an Exhibit. Exhibit No. N/A 2. List the transferee/assignee,and, if the transferee/assignee is not a natural person,each of its officers,directors,stockholders beneficially holding more than 5%of the outstanding voting shares,general partners,and limited partners holding an equity interest of more than 5%. Use only one column for each individual or entity. Attach additional pages if necessary. (Read carefully-the lettered items below refer to corresponding lines in the following table.) (a) Name, residence,occupation or principal business,and principal place of business. (If other than an individual,also show name,address and citizenship of natural person authorized to vote the voting securities of the applicant that it holds.) List the applicant first,officers,next,then directors and,thereafter, remaining stockholders and/or partners. (b) Citizenship. (c) Relationship to the transferee/assignee(e.g.,officer,director,etc.). (d) Number of shares or nature of partnersihp interest. (e) Number of votes. (f) Percentage of votes. (a) James Lundberg Ron Cleven Jim Hickle (b) USA USA USA (c) CEO COO/CTO President (d) (e) (f) FCC 394(Page 3) September 1996 3. If the applicant is a corporation or a limited partnership, is the transferee/assignee formed under the © Yes ❑ No laws of,or duly qualified to transact business in,the State or other jurisdiction in which the system operates? If the answer is No,explain in an Exhibit. Exhibit No. N/A 4. Has the transferee/assignee had any interest in or in connection with an applicant which has been ❑ Yes © No dismissed or denied by any franchise authority? If the answer is Yes, describe circumstances in an Exhibit. Exhibit No. N/A 5. Has an adverse finding been made or an adverse final action been taken by any court or n Yes © No administrative body with respect to the transferee/assignee in a civil,criminal or administrative proceeding, brought under the provisions of any law or regulation related to the following: any felony; revocation, suspension or involuntary transfer of any authorization (including cable franchises)to provide video programming services; mass media related antitrust or unfair competition;fraudulent statements to another government unit; or employment discrimination? If the answer is Yes, attach as an Exhibit a full description of the persons and matter(s)involved, Exhibit No. including an identification of any court or administrative body and any proceeding (by dates and file N/A numbers, if applicable), and the disposition of such proceeding. 6. Are there any documents, instruments,contracts or understandings relating to ownership or future ❑ Yes © No ownership rights with respect to any attributable interest as described in Question 2(including, but not limited to, non-voting stock interests, beneficial stock ownership interests,options,warrants, debentures)? If Yes, provide particulars in an Exhibit. 7. Do documents, instruments,agreements or understandings for the pledge of stock of the © Yes ❑ No transferee/assignee, as security for loans or contractual performance, provide that: (a)voting rights will remain with the applicant, even in the event of default on the obligation; (b) in the event of default,there will be either a private or public sale of the stock;and (c) prior to the exercise of any ownership rights by a purchaser at a sale described in (b), any prior consent of the FCC and/or of the franchising authority, if required pursuant to federal,state or local law or pursuant to the terms of the franchise agreement will be obtained? If No,attach as an Exhibit a full explanation. Exhibit No. N/A SECTION III. TRANSFEREE'S/ASSIGNEE'S FINANCIAL QUALIFICATIONS 1. The transferee/assignee certifies that it has sufficient net liquid assets on hand or available from © Yes ❑ No committed resources to consummate the transaction and operate the facilities for three months. 2. Attach as an Exhibit the most recent financial statements, prepared in accordance with generally Exhibit No. accepted accounting principals, including a balance sheet and income statement for at least one full 2 year,for the transferee/assignee or parent entity that has been prepared in the ordinary course of business, if any such financial statements are routinely prepared. Such statements, if not otherwise publicly available, may be marked CONFIDENTIAL and will be maintained as confidential by the franchise authority and its agents to the extent permissible under local law. SECTION IV. TRANSFEREE'S/ASSIGNEE'S TECHNICAL QUALIFICATIONS Set forth in an Exhibit a narrative account of the transferee's/assignee's technical qualifications,experience Exhibit No. and expertise regarding cable television systems, including, but not limited to, summary information about 3 appropriate management personnel that will be involved in the system's management and operations. The transferee/assignee may, but need not, list a representative sample of cable systems currently or formerly owned or operated. FCC 394(Page 4) September 1996 SECTION V-CERTIFICATIONS Part I-Transferor/Assignor All the statements made in the application and attached exhibits are considered material representations,and all the Exhibits are a material part hereof and are incorporated herein as if set out in full in the application. Signature I CERTIFY that the statements in this application are true, complete and correct to the best of my knowledge and belief and Jeffrey Feldman are made in good faith. Electronic Signature Date WILLFUL FALSE STATEMENTS MADE ON THIS FORM ARE 6/24/2014 PUNISHABLE BY FINE AND/OR IMPRISONMENT. U.S. CODE, Print full name TITLE 18, SECTION 1001. Jeffrey Feldman,CEO/President Check appropriate classification: Individual — General Partner X Corporate Officer Other.Explain: (Indicate Title) Part II-Transferee/Assignee All the statements made in the application and attached Exhibits are considered material representations,and all the Exhibits are a material part hereof and are incorporated herein as if set out in full in the application. The transferee/assignee certifies that he/she: (a) Has a current copy of the FCC's Rules governing cable television systems. (b) Has a current copy of the franchise that is the subject of this application,and of any applicable state laws or local ordinances and related regulations. (c) Will use its best efforts to comply with the terms of the franchise and applicable state laws or local ordinances and related regulations,and to effect changes,as promptly as practicable,in the operation system, if any changes are necessary to cure any violations thereof or defaults thereunder presently in effect or ongoing. Signature I CERTIFY that the statements in this application are true, complete and correct to the best of my knowledge and belief and James A. Hickle are made in good faith. Electronic Signature Date WILLFUL FALSE STATEMENTS MADE ON THIS FORM ARE 6/24/2014 PUNISHABLE BY FINE AND/OR IMPRISONMENT. U.S. CODE, Print full name TITLE 18, SECTION 1001. James A. Hickle, President Check appropriate classification: El Individual General Partner © Corporate Officer Other. Explain: (Indicate Title) FCC 394(Page 5) September 1996