Black Rock Cable Franchise Agreement and Wave Broadband Merger0006.080.042
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ORDINANCE NO.3371
AN ORDINANCE OF THE CITY OF EDMONDS,
WASHINGTON, GRANTING A NON-EXCLUSIVE
FRANCHISE TO BLACK ROCK CABLE, INC. TO OPERATE
AND MAINTAIN AN OPEN VIDEO SYSTEM IN THE CITY
OF EDMONDS, SETTING FORTH THE TERMS AND
CONDITIONS ACCOMPANYING THE GRANT OF
FRANCHISE AND FIXING A TIME WHEN THE SAME
SHALL BECOME EFFECTIVE.
WHEREAS, Black Rock Cable, Inc., DBA Black Rock Cable ("Black Rock"), a
Nevada Corporation, desires to operate an open video telecommunications system in the rights -
of -way of the City of Edmonds; and
WHEREAS, negotiations between Black Rock and the City have been completed
and the franchise process followed in accordance with applicable law; and
WHEREAS, the City Council has determined that it is in the public interest to
grant Black Rock's request; and NOW, THEREFORE,
THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, DO
ORDAIN AS FOLLOWS:
Section 1. Definitions. For the purposes of this Ordinance the following terms,
phrases, words, and their derivations shall have the meaning set forth in this Section. When not
inconsistent with the context, words used in the present tense include the future, words in the
plural number include the singular number, words in the singular number include the plural
number, and the use of any gender shall be applicable to all genders whenever the sense requires.
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The words "shall' and "will" are mandatory and the word "may" is permissive. Where a term in
the Franchise is not defined in this Section and there is a definition for the term in the Cable
Communications Policy Act of 1984, or the Cable Television Consumer Protection and
Competition Act of 1992, or the Telecommunications Act of 1996, all as codified at 47 U.S.C.
§ § 521 et seq. (hereinafter collectively referred to as the "Cable Act"), the Cable Act definition
shall apply. Other terms in the Franchise, which are not defined in this Section, shall be given
their common and ordinary meaning.
(a) "Access Channels" means channels set aside by the Operator exclusively
for noncommercial public, educational, or governmental use (commonly referred to as "PEG"
channels).
(b) - The "Act" means the Cable Communications Policy Act of 1984 as
amended by the Cable Television Consumer Protection and Competition Act of 1992, the
Telecommunications Act of 1996 and any subsequent amendments.
(c) "Address ability" means the ability of a system allowing the Operator to
authorize specific equipment to receive, change or to cancel any or all specified programming.
(d) 'Basic Cable Service" means the lowest level of service regularly
provided to all Subscribers that includes the retransmission of local broadcast signals.
(e) "Cablecast" means the distribution of programming, which originates
within the facilities of the cable television system.
(f) "Cable Facilities" means equipment and wiring used to transmit audio and
video signals to subscribers.
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(g) "Cable Service" shall mean (1) the one-way transmission to Subscribers of
video programming or other services; and (2) Subscriber interaction, if any, which is required for
the selection of such video programming or other service.
(h) , "Cable system" or "Open Video System" or "system" means a facility,
consisting of a set of transmission paths and associated signal generation, reception, and control
equipment that is designed to provide cable service and other service to subscribers pursuant to
FCC rules 47 CFR 1500.
(i) . "Channel' or "cable channel" means a portion of the electromagnetic
frequency spectrum which is used in a cable system and which is capable of delivering a
television signal as defined by the Federal Communications Commission.
0) "Character generator" means a device used to generate alpha numerical
programming to be cablecast on a cable channel.
Washington.
capacity.
(k) "City" means the City of Edmonds, a municipal corporation of the State of
(1) "Council' means the City of Edmonds Council acting in its official
(m) "Data Communication" means (1) the transmission of encoded
information or (2) the transmission of data from one point to another.
(n) "Dwelling units" means residential living facilities as distinguished from
temporary lodging facilities such as hospitals, hotel and motel rooms and dormitories, and
includes single family residential units and individual apartments, condominium units, mobile
homes, extended care facilities and other multiple family residential units.
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(o) "Emergency" means a condition of imminent danger to the health, safety,
and welfare of property or persons located within the City including, without limitation, damage
to persons or property from natural consequences, such as storms, earthquakes, riots or wars.
(p) "FCC" means the Federal Communications Commission, a regulatory
agency of the United States government.
(q) "Fiber Optics" means the technology of guiding and projecting light for
use as a communications medium.
(r) "Franchise" shall mean the initial authorization, or renewal thereof, issued
by the City which authorizes construction and operation of a cable system or open video system
for the purpose of offering cable service or other service to subscribers.
(s) "Gross revenues" means any and all revenues (as that term is defined by
generally accepted accounting principles) received directly or indirectly from all sources, which
arise out of or are derived from the operation of the Operator's cable system in the City. When
the revenue of the Operator includes gross revenues from sources outside of the City, the
Operator shall prorate the gross revenues among its sources by multiplying such gross revenues
by a fraction the numerator of which is the number of the Operator's subscribers in the City and
the denominator of which is the total number of all the Operator's subscribers. "Gross
Revenues" shall not include the following:
1. Fees and payments from subscribers who do not live in the City;
2. Taxes on services furnished by the Operator, which are imposed on any
subscriber or used by any governmental unit, agency or instrumentality and which are collected
by the Operator for such entity;
3. Bad debt write-offs;
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4. Revenue from the sale of equipment or other assets of the cable system to
persons not purchasing services from the cable system;
Operator;
5. Revenue from transactions involving real property owned or leased by the
6. Amounts collected from Subscribers as a franchise fee to be paid to City.
(t) "Headend" means the electronic equipment located at the start of a cable
system, usually including antennas, preamplifiers, frequency converters, demodulators and
related equipment.
(u) "Installation" means the connection of the Cable System from feeder cable
to subscribers' receivers.
(v), "Institutional Networks (I -Nets)" means that portion of a cable system,
which is designated principally for the provision of non -entertainment services to public schools,
or public agencies such as public libraries separate and distinct from the subscriber network, or
on secured channels of the subscriber network.
(w) "Interactive services" means services provided to subscribers where the
subscriber (i) receives information consisting of either television or other signals and transmits
signals generated by the subscriber or equipment under his/her control for the purpose of
selecting what information shall be transmitted to the subscriber or for any other purpose; and
(ii) has the ability to transmit signals to any other location for any purpose.
(x) "Office" means the person or entity designated by the City as being
responsible for the administration of a Franchise for the City.
(y) "Operator" means Black Rock Cable, Inc., a Washington corporation.
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(z) "Premium services" means video programming offered on a pay -per -
channel or pay -per -program basis.
(aa) "Property of Operator" means all property owned, installed or used by the
Operator in the conduct of its business in the City under the authority of the Franchise granted
pursuant to this Ordinance.
(bb) "Public Way," "Public Right -of -Way" or "Street" means the surface, the
air space above the surface and the area below the surface of any public street, including, but not
limited to, any public alley, boulevard, drive, easement, right-of-way or sidewalk under the
jurisdiction of the City.
(cc) "Subscriber" means a person or entity or user of the cable system who
lawfully receives cable services or other service therefrom with the Operator's express
permission.
Section 2. Purpose
This Ordinance shall establish a non-exclusive Franchise and shall constitute an
agreement between the City and Black Rock Cable, Inc., (hereinafter the "Operator"). The
Operator is authorized to construct, maintain, and operate an open video system for the
distribution of television and other electronic signals pursuant to the terms of this Franchise. The
City agrees to grant the Operator, consistent with applicable City codes, all necessary rights and
privileges to use public rights -of -way necessary for the open video system.
Section 3. Term of Franchise.
A. The length of this Franchise shall be the period of time between the
Effective Date of this Franchise, through midnight April 26, 2011 subject to the conditions
specified in Section 34: Performance Review Extension.
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B. Prior to the granting renewal of this Franchise, the City Council shall
conduct a public hearing to determine the following:
1. Whether the Operator has substantially complied with the material terms
of this Franchise and with applicable law;
2. Whether sufficient capacity continues to exist of public rights -of -way to
accommodate the Open Video System; and
3. The degree of potential disruption to existing users of the public rights -of -
way to be used by the Open Video System and the resultant inconvenience which may occur to
the public from the continued operation of the Open Video System.
Section 4. Service Area
The Operator's service area shall be the entire incorporated area of the City of
Edmonds, in its present incorporated form or in any later reorganized, consolidated, enlArged, or
re -incorporated form.
Section 5. Police Power
In accepting this Franchise, the Operator acknowledges that its rights hereunder
are subject to the legitimate rights of the police power of the City to adopt and enforce general
ordinances necessary to protect the safety and welfare of the public and it agrees to comply with
all applicable general laws enacted by the City pursuant to such power.
Section 6. Rules and Regulations by the City
In addition to the inherent powers of the City to regulate and control any franchise
it issues, the authority granted to it by the Act, and those powers expressly reserved by the City,
or agreed to and provided for in this Franchise, the right and power is hereby reserved by the
City to promulgate such additional regulations as it may find necessary in the exercise of its
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lawful powers giving due regard to the rights of the Operator. Except as noted above, the
foregoing does not allow for amendment by the City of material terms of this Franchise it issues
without the consent of the Operator. The City Council reserves the right to delegate its authority
for franchise administration to a designated agent.
Section 7. Construction Standards
All Cable Facilities constructed under this Franchise shall be placed and
maintained at such places and positions in or upon such streets, avenues, alleys and public places
as shall not interfere with the passage of traffic and the use of adjoining property, and shall
conform to the applicable section of the National Electrical Code, codes of the State of
Washington, and City codes, regulations, standards and policies pertaining to such construction.
Cable Facilities shall be placed in the Public Ways in accordance with the provisions of Section
9 hereof. At least ten (10) days prior to the intended construction of cable facilities, the Operator
shall inform all residents and businesses in the affected area that a construction project will
commence, the dates and nature of the project, and a toll -free telephone number, which may be
called for further information. A pre-printed door hanger may be used for this purpose.
Section 8. Notice of Entry on Private Property
A. General Notice. At least twenty-four (24) hours prior to entering private
property or streets or public easements adjacent to or on such private property to perform new
plant construction or reconstruction, a notice indicating the nature and location of the work to be
performed shall be physically posted upon the affected property. The Operator shall make a
good faith effort to comply with the property owner or Subscriber's preferences, if any, on
location or placement of underground installations consistent with sound engineering practices.
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B. Emergency Repairs. Notice requirements of Section 7 shall not apply to
entry upon private property to perform repairs at the Subscriber's request or in the event of
system outage repairs or other emergencies in which insufficient time is available to provide
notice to subscribers.
C. Restoration of Property. After performance of work, the Operator shall
restore private property as nearly as practicable to its condition prior to construction. Any
disturbance of landscaping, fencing, or other improvements on private property shall, at the sole
expense of the Operator, be promptly repaired and restored (including replacement of such items
as shrubbery and fencing) to the reasonable satisfaction of the property owner or Subscriber.
Section 9. Undergrounding and Landscaping
A. The undergrounding requirements of this Section shall apply only to Cable
Facilities which are reasonably capable of being placed underground based upon standard
industry practices. This Section shall not apply to antennas, other facilities which are required to
remain above ground in order to be functional, or to active and passive electronic components
such as amplifiers, junction boxes, and tap boxes. Where there is a conflict or inconsistency
between the undergrounding provisions of this Ordinance and other ordinances of the City, the
provisions of this Ordinance shall govern.
B. In any city block (or comparably sized area) of the City in which there are
no aerial telephone or cable television facilities, other than antennas or other facilities required to
remain above ground in order to be functional, or in any Public Way in which all telephone,
electric power wires and cables capable of being placed underground have been placed
underground, the Operator shall not be permitted to erect poles or to run or suspend wires, cables
or other facilities thereon, but shall lay such wires, cables or other facilities underground in the
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manner required by the City. The Operator acknowledges and agrees that if the City does not
require the undergrounding of its Cable Facilities at the time of initial installation, the City may,
at any time in the future, require the conversion of the Operator's above -ground and/or aerial
Facilities to underground installation at the Operator's expense, in conjunction with other
affected cable television and telecommunications facilities, all as provided by applicable law.
C. Whenever the City requires the undergrounding of above -ground and/or
aerial utilities in any area of the City, the Operator shall underground its above -ground and/or
aerial Facilities in the manner specified by the City, concurrently with and in the area of all the
other affected utilities. The location of any such relocated and underground utilities shall be
approved by the City. The Operator shall underground its Facilities at its own expense to the
extent required by law. The Operator is encouraged to contact and agree with other affected
utilities so that all costs for common trenching, common utility vaults and other costs not
specifically attributable to the undergrounding of any particular facility are borne fairly and
proportionately by all the utilities involved in the underground project.
Section 10. Construction in Rights -of -Way
A. Notification of City Development Services Department The Operator
shall submit an application for permit to perform work in the City's rights -of -way. Permits to
perform work in the City's rights -of -way shall be available on the basis of the most favorable
terms and conditions of any other franchisee or utility. The City shall provide an annual master
permit process for the cable system. No work, other than emergency repairs shall commence
without such a permit. Emergency repairs may be made immediately with notification given to
the City no later than the next business day.
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B. Installation. In accordance with the permit issued, all transmission lines,
equipment, and structures shall be located and installed so as to cause minimum interference
with the rights and reasonable convenience of property owners, and at all times shall be
maintained in a safe condition, and in good order and repair. Per the Manual on Uniform Traffic
Control Devices, latest edition, suitable barricades, flags, lights, flares, or other devices shall be
used at such times and places as are reasonably required for the safety of the public. Any poles or
other fixtures placed in any street by the Operator shall be placed in such manner as not to
interfere with the usual travel on such public way.
C. lnterference with Use of Streets. The Operator must submit an application
for permit to perform work in the rights -of -way for all work performed by the Operator in such
areas. When installing, locating, laying, or maintaining facilities, apparatus, or improvements,
the Operator shall not interfere with the use of any street to any greater extent than is necessary,
and shall leave the surface of any such street in as good condition as it was prior to performance
by the Operator of such work. Any facility, apparatus, or improvement under this Franchise shall
be laid, installed, located, or maintained in conformance with City Codes and Standards, and to
the reasonable satisfaction of the City. In any event, the Operator shall, at its own expense, and
to the reasonable satisfaction of the City in accordance with the terms of the permit to perform
work in the rights -of -way, restore to City standards and specifications any damage or disturbance
caused to streets as a result of the Operator's construction or operations.
D. Relocation and Removal_ Upon receipt of thirty (30) days prior written
notice, the Operator, at its own expense, shall protect, support, temporarily disconnect, relocate,
or remove any of its property when, in the judgement of the City Engineer, the same is required
by reason of traffic conditions, public safety, and/or improvements by governmental agencies.
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Nothing herein shall be deemed a taking of the property of the Operator, and the Operator shall
be entitled to no surcharge by reason of this Section. After receipt of thirty (30) days prior
written notice, upon failure of the Operator to commence, pursue, or complete any work required
by the provisions of this Franchise to be performed on any street, within the reasonable time
prescribed and to the reasonable satisfaction of the City, the City may, at its option, cause such
work to be done, and the Operator shall pay to the City the reasonable cost thereof within thirty
(30) days after receipt of demand.
E. Location of Facilities. The Operator agrees to provide.the City with a map
or maps which shall show the vertical and horizontal location of its facilities within the Franchise
Area using a minimum scale of one inch equals one hundred feet (1' = 100'), measured from the
center line of the rights -of -way, which maps shall be in hard copy plan form acceptable to the
City and in Geographical Information System (GIS) format. This information shall be provided
within ninety (90) days of the effective date of this Franchise, or, if no facilities are installed at
that time, within ninety (90) days of installation. Said maps shall be updated at least every
twelve (12) months thereafter.
Section 11. Safely Requirements
A. The Operator, in accordance with applicable National, State, and local
safety requirements shall, at all times, employ ordinary care and shall install and maintain and
use commonly accepted methods and devices for preventing failures and accidents which are
likely to cause damage, injury, or nuisance to the public.
B. All structures and all lines, equipment and connections in, over, under, and
upon the streets, sidewalks, alleys, and public ways or places of the franchise area, wherever
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situated or located, shall at all times be kept and maintained in a safe, suitable condition, and in
good order and repair.
C. The City reserves the general right to see that the system of the Operator is
constructed and maintained in a safe condition. If a violation of the National Electrical Safety
Code or other applicable regulation is found to exist by the City, the City will, after discussions
with the Operator, establish a reasonable time for the Operator to make necessary repairs. If the
repairs are not made within the established time frame, the City may make the repairs itself or
have them made and collect all reasonable costs thereof from the Operator.
Section 12. Building Mo ying
Whenever any person shall have obtained permission from the City to use any
street for the purpose of moving any building, the Operator, upon seven (7) days written notice
from the City, shall raise or remove, at the expense of the permittee desiring to move the
building, any of the Operator's wires or facilities which may obstruct the removal of such
building; provided that the moving of such building shall be done in accordance with regulations
and general ordinances of the City. Where more than one street is available for the moving of
such building, the building shall be moved on such street as shall cause the least interference. In
such event, the City shall be responsible for determining the path of least interference. It is
further provided that the person or persons moving such building shall indemnify and save
harmless the Operator of and from any and all damages or claims of whatsoever kind or nature
caused directly or indirectly for such temporary arrangement of the lines and poles of the
Operator.
Section 13. Tree Trirnmin
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In accordance with City ordinances, the Operator shall have the authority to trim
and remove trees upon and overhanging streets, public ways and places in the Franchise Area so
as to prevent the branches of such trees from coming into contact with wires and cables of the
Operator and, if necessary, to clear a microwave path. The Operator shall be responsible for
debris removal from such activities.
Section 14. Franchise Fee
A. - The Operator shall pay to the City quarterly, on or before the last day of
each calendar quarter, a sum equal to five percent (5%) of Gross Revenues, for the preceding
three calendar months. Gross Revenues that are derived as a portion of a national or regional
service shall be computed on a per subscriber basis if such determination cannot be achieved by
other means.
B. The franchise fee payable by the Operator to the City on Gross Revenues
derived from any non -cable television -related programming product or other communication
services such as interactive data, telephone transmission or other communications products or
services, which is delivered to the Subscriber by using public rights -of -way, shall be at the same
rate as the fee, tax, assessment or other revenue payable to the City by other providers of the
same product or services within the City.
C. The City may modify the franchise fee if so permitted by Federal and
State law. Prior to implementation of any modification in franchise fees the Operator may
request a public hearing by the City Council to discuss said modification. Following such a
hearing the City Council may require the implementation of such modification in accordance
with the provisions of this Ordinance.
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D. Any quarterly franchise fee not paid by the Operator within thirty (30)
days after the end of a calendar quarter shall bear interest at the rate of twelve percent (12%), per
annum or whatever maximum amount is allowed under State law, whichever is greater, from the
due date until paid.
E. Each franchise fee payment shall be accompanied by a financial report on
a form provided by the City showing the basis of the Operator's computation for each income
segment as indicated. Gross Revenue sources, which may not be applicable shall be clearly
delineated on the report.
F. The City shall have the right, upon reasonable notice of no less than ten
(10) working days, to inspect the books and records of the Operator during normal business
hours, for the purpose of ascertaining the actual Gross Revenues collected by the Operator
during any of the five (5) previous calendar years. In the event a discrepancy exists of more than
ten percent (10%) between the financial report submitted by the Operator with a quarterly
payment and the actual Gross Revenues collected by the Operator, the Operator agrees to pay to
the City the costs of such audit. In the event that additional franchise fees are due the City, the
Operator further agrees to pay interest as required for late payment on such additional franchise
fees computed from the date on which such additional franchise fees were due and payable.
G. Acceptance of any franchise fee payment by the City shall not be
construed as an agreement by the City that the franchise fee paid is in fact the correct amount,
nor shall acceptance of payment by the City be construed as a release or waiver of any claim the
City may have for further or additional sums payable under the provisions of this Franchise.
H. Nothing in this Section shall limit the Operator's obligation to pay
applicable local, State, or Federal taxes.
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Section 15. Technical Standards
Subject to Federal, State and local law, the Operator shall comply with FCC rules,
and, at the minimum, the following:
1. Applicable City, State and National/Federal Codes and Ordinances;
2. Applicable Utility Joint Attachment Practices;
3. The National Electric Safety Code; ANSI C2;
4. City Utility Code Requirements;
5. City Rights -of -Way Procedures;
6. Bell System Code of Pole Line Construction
The Operator shall also make available a copy of the results of the proof of
performance tests to the City at the same time as submission to the FCC.
Section 16. Reports
A. The Operator shall furnish, upon written request, made by the City not
more often than once each calendar year a report of its activities as appropriate. Such report shall
include:
1. Most recent annual report of the Operator, if the Operator is required to
file annual reports with the Securities Exchange Commission.
2. The number of homes passed.
3. The number of subscribers with basic services.
4. The number of subscribers with premium services.
5. The number of hook-ups in period.
6. The number of disconnects in period.
7. Total number of miles of cable in City.
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8. Such other reports with respect to its local operation, affairs, transactions
or property as are necessary to monitor compliance with this Agreement and the Ordinance.
B. The Operator shall have not less than sixty (60) days to prepare and
submit this report.
Section 17. Periodic Meetin s
Upon request, but not more than once during any calendar year, the Operator shall
meet with designated City officials and/or designated representative(s) of the City to review the
performance of the Operator for the preceding period. The Operator shall be given not less than
thirty (30) days' prior written notice of any such meeting. The subjects may include, but are not
limited to, Franchise compliance
Section 18. Cable System Evaluation
In addition to periodic meetings, and with written notice of not less than five (5)
business days so that the Operator can arrange to have necessary personnel present, the City may
require reasonable evaluation sessions at any time during the term of this Franchise. It is
intended that such evaluations cover areas such as the Operator's performance under and
compliance with the terms of this Franchise.
Section 19. Record Inspection
Subject to statutory and constitutional limits and upon not less than ten (10)
business days' advance written notice, the City reserves the right to inspect the records of the
Operator, which are not a part of its public files but which are necessary for the enforcement of
this Franchise, during normal business hours provided that the City shall maintain the
confidentiality of any trade secrets or other proprietary information in the possession of the
Operator. Such documents shall include such information as financial records, subscriber
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records and plans pertaining to the Operator's operation in the City. Provided, nothing in this
Franchise shall be read to require the Operator to violate state or federal law respecting
Subscriber privacy, nor shall this Franchise be read to require the Operator to disclose
confidential or proprietary information without adequate safeguards to protect its confidential or
proprietary nature.
Section 20. External Franchising Costs
Prior to expenditure of capital for any Franchise -related requirements that would
be treated as an external cost passed through to Subscribers, the Operator shall notify the City of
its intent to exercise its right and the amount to be passed through to Subscribers. The City may
waive the Franchise -related requirement if, in the City's opinion, the increase in rates would be a
burden on City ratepayers.
Section 21. Transfer of Ownership
A. This Franchise shall not be sold, transferred, leased, assigned, or disposed
of in whole or in part either by sale, voluntary or involuntary merger, consolidation or otherwise,
unless approval is granted by the City Council to ensure a review of unforeseen circumstances
not present at the time of the original Franchise approval. The City's approval shall not be
unreasonably withheld. Such costs associated with this review process shall be reimbursed to the
City by a new prospective Franchisee.
B. An assignment of this Franchise shall be deemed to occur if there is an
actual change in control or where ownership of fifty percent (50%) or more of the beneficial
interests, singly or collectively, are obtained by other parties. The word "control" as used herein
is not limited to majority stock ownership only, but includes actual working control in whatever
manner exercised.
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C. The Operator shall promptly notify the City prior to any proposed change
in, or transfer of, or acquisition by any other party of control of the Operator's company. Every
change, transfer, or acquisition of control of the Operator's company shall cause a review of the
proposed transfer. In the event that the City adopts a resolution denying its consent and such
change, transfer or acquisition of control has been effected, the City may cancel this Franchise.
Approval shall not be required for mortgaging purposes or if said transfer is from the Operator to
another person or entity controlling, controlled by, or under common control with the Operator.
D. The City will exercise such regulatory control as it has under the Act to
monitor ownership, control, utilization and transfer of this Franchise.
Section 22. Removal & Abandonment of Property of Franchisee
A. The City may direct the Operator to temporarily disconnect or bypass any
equipment of the Operator in order to complete street construction or modification, install and
remove underground utilities, or for other reasons of public safety and efficient operation of the
City. Such removal, relocation or other requirement shall be at the sole expense of the Operator.
B. In the event that the use of any part of the cable system is discontinued for
any reason for a continuous period of twelve (12) months, or in the event such system or
property has been installed in any street or public place without complying with the requirements
of this Franchise or other City ordinances or the Franchise has been terminated, cancelled or has
expired, the Operator shall promptly, upon being given ten (10) days' notice, remove within
ninety (90) days from the streets or public places all such property and poles of such system
other than any which the City may permit to be abandoned in place which permission shall not
be unreasonably withheld. In the event of such removal, the Operator shall promptly restore the
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street or other areas from which such property has been removed to a condition reasonably
satisfactory to the City.
C. Any property of the Operator remaining in place ninety (90) days after the
termination or expiration of this Franchise shall be considered permanently abandoned unless the
Franchisee has commenced removal within a reasonable time.
D. Any property of the Operator to be abandoned in place shall be abandoned
in such manner as the City shall prescribe. Upon permanent abandonment of the property of the
Operator in place, the property shall become that of the City, and the Operator shall submit to the
City Clerk an instrument in writing, to be approved by the City Attorney, transferring to the City
the ownership of such property. None of the foregoing affects or limits the Operator's rights to
compensation for an involuntary abandonment of its property under State, or Federal law.
Section 23. Revocation for Cause
This Franchise may be terminated during its term for repeated failure by the
Operator to comply with material provisions hereof or FCC Regulations.
The procedure to be followed resulting in termination for any of the above
reasons, save the Operator's request, shall be:
1. The City Council shall identify the deficiencies or noncompliance and
shall direct the Operator, in writing, to correct such deficiencies or comply with such regulations
within thirty (30) days or a reasonable period of time.
2. Failure to comply with the provision of (a) above will cause the matter of
noncompliance to be brought before the City Council for hearing.
3. At such hearing the Operator and other interested Parties shall be given
fair opportunity for full participation, including the right to introduce evidence, to require the
{RJM438278.DOC;1/00006.080042/} - 20 -
production of evidence, and to question witnesses. The City Council, or its designee, acting as
hearings officer, will make the determination as to whether any non-compliance or deficiency
was without just cause. In the event the City Council finds that such non- compliance or
deficiency was without just cause, the City Council may in its sole discretion fix an additional
time period to cure such deficiency(ies). If the deficiency has not been cured at the expiration of
any additional time period or if the Council does not grant any additional period, the City
Council may by ordinance declare the franchise to be terminated and forfeited.
4. If the Operator appeals revocation and termination, such revocation may
be held in abeyance pending judicial review by a court of competent jurisdiction, provided the
Operator is otherwise in compliance with this Franchise.
5. Nothing contained in the above subsections of this Section shall prevent
the issuance of a new franchise containing terms substantially the same or identical to a franchise
which previously was revoked, upon satisfactory assurances made to the City Council that the
terms and conditions of this Ordinance can be met by the new Operator.
Section 24. Effect of Termination for Non-Com fiance
This Franchise is terminated by the City by reason of the Operator's non-
compliance, that part of the system under this Franchise located in the streets and public
property, shall, at the election of the City, become the property of the City in accordance with the
City's as well as the Operator's rights and remedies under State and Federal law. If the City, or a
third party, does not purchase the system, the Operator shall, upon order of the City Council,
remove the system as required under Section 22: Removal & Abandonment of Property of
Franchisee of this Ordinance.
Section 25. Penalties
MM438278.DOC;1/00006.080042/) - 21 -
A. The City shall notify the Operator in writing stating the nature of any
perceived failure by the Operator to comply with conditions of this Franchise and setting forth a
reasonable time within which the Operator will be allowed to rectify such alleged improper
condition. The Operator may request an extension of time if construction or other performance is
suspended or delayed by the City, or where unusual weather, acts of God (e.g. earthquakes,
floods, etc.), extraordinary acts of third parties, or other circumstances which are reasonably
beyond the control of the Operator delay or impair performance provided that the Operator has
not, through its own actions or inactions, contributed to the delay. The extension of time in any
case shall not be greater than the extent of the actual non-contributory delay experienced by the
Operator.
B. Failure of the Operator to correct these deficiencies, except in those
circumstances cited above, may result in the City calling a hearing with reasonable prior notice
to the Franchise, to determine if penalties should be imposed upon the Operator or if a violation
of this Franchise has occurred in accordance with Section 23 Revocation for Cause.
C. Such hearing shall be informal and shall be conducted by the City's
designated department head or other person in a way which provides the Operator with an
opportunity to be heard prior to a finding by the City regarding violation of this Franchise. The
decision shall be in writing and include findings of fact and conclusions. The City's decision
shall be based upon a preponderance of the evidence and only substantial and competent
evidence shall be considered. The Operator shall have the right to seek de novo judicial review
of any adverse finding by filing a written notice of appeal with the Snohomish County Superior
Court within twenty (20) calendar days of receipt of the'written decision. If federal jurisdictional
standards are met, the Operator may alternatively seek review of any federal question in the
MM438278.DOC;1/00006.080042/} - 22 -
United States District Court for the Western District of Washington at Seattle within said twenty
(20) day period. In the event of an appeal, the prevailing party shall be entitled to its reasonable
costs and attorney fees.
D. If a final determination is made that the Operator is in violation of this
Franchise, monetary penalties of five hundred dollars ($500.00) per day shall be imposed for
each day beyond thirty (30) days that the Operator has not fulfilled the requirement(s):
1. PEG access channel allocations as required by Section 32: PEG Access
Channels & Cablecasting Equipment.
2. Public access facilities as required Section 32: PEG Access Channels &
Cablecasting Equipment.
3. Provision of equipment and funds for educational access cablecasting as
required by Section 32: PEG Access Channels & Cablecasting Equipment.
4. Provision of equipment and funds for government access cablecasting as
required Section 32: PEG Access Channels & Cablecasting Equipment.
E. Monetary penalties may be assessed retroactive to the date that was
provided to the Operator in such cases where the Operator has been non- responsive in correcting
the situation or in the case of flagrant violations. If payment of any of these penalties is
delinquent by three (3) months or more, the City may require partial or total forfeiture of any
performance bond or other surety posted by the Operator. These provisions benefit the City. All
damage awards or penalties shall be paid to the City. This Section does not create a private right
of action for the benefit of subscribers.
Section 26. Indemnity _& Hold Harmless
{RJM438278.D0C;1/00006.080042/} - 23 -
The Operator shall indemnify and hold harmless the City from any and all
liabilities, fees, costs and damages, except in the case of judicially determined gross negligence
and/or willful misconduct of the City, whether to person or property, or expense of any type or
nature which may occur to the City by reason of the construction, operation, maintenance, repair
and alteration of the Operator's facilities or any other actions of the Operator in the City. In any
case in which suit or action is instituted against the City by reason of damage or injury caused by
the Operator, the City shall cause written notice thereof to be given to the Operator and the
Operator thereupon shall have the duty to appear and defend any such suit or action, without cost
or expense to the City.
Section 27. Insurance
A. The Operator shall, concurrently with the filing of an acceptance of this
Franchise, furnish to the City and file with the City Clerk and at all times during the existence of
this Franchise, maintain in full force and effect, at its own cost and expense, a general
comprehensive liability insurance policy, for the purpose of protecting the City and all persons
against liability for loss or damage, for personal injury, death and property damage, and errors or
omissions, occasioned by the operations of the Operator under this franchise, such policy to
provide minimum limits of One Million Dollars ($1,000,000.00) for both personal injury and/or
property damage.
B. The policies mentioned in the foregoing paragraph shall name the City as
additional insured and shall contain a provision that a written notice of cancellation or reduction
in coverage of said policy shall be delivered to the City thirty (30) days in advance of the
effective date thereof. If such insurance is provided by a policy which also covers the Operator
{RJM438278.DOC;1/00006.080042/} - 24 -
or any other entity or person other than those above named, then such policy shall contain the
standard cross -liability endorsement.
Section 28. Performance Bond
The Operator shall promptly repair or cause to be repaired any damage to City
property caused by the Operator or any agent of the Operator. The Operator shall comply with
all present and future ordinances and regulations regarding excavation or constriction and, if
deemed necessary by the City, shall be required to post a performance bond or other surety
acceptable to the City in an amount specified by the City in favor of the City warranting that all
restoration work will be done promptly and in a workmanlike manner and that penalties, if any,
after final adjudication are paid to tie City within ninety (90) days of such finding.
Section 29. Recourse Against Bonds and Other Security
A. Bonds and other security may be utilized by the City for the purposes,
including, but not limited to, reimbursement of the City by reason of the Operator's failure to pay
the City any sums due under the terms of this Franchise, reimbursement of the City for
reasonable costs borne by the City to correct franchise violations not corrected by the Operator
after due notice; and monetary remedies or damages assessed against the Operator due to default
or violations of the franchise requirements or this Franchise.
B. In the event the Operator has been declared to be in default by the City
under Section 23, and if the Operator fails, within thirty (30) days of mailing of the City's
finding, to pay the City any franchise fee, penalties, or monetary sanctions, or fails to perform
any of the conditions of this Franchise, or fails to file for judicial review of the City's findings,
the City may thereafter foreclose against the performance bond and/or withdraw from any other
security an amount sufficient to compensate the City's damages, with interest at the legal rate.
WM438278.DOC;1/00006.080042/} - 25 -
Upon such foreclosure or withdrawal, the City shall notify the Operator in writing, by First Class
Mail, postage prepaid, of the amount and date thereof.
C. Within thirty (30) days after mailing notice to the Operator that the City
has foreclosed Operator's performance bond or that any amount has been withdrawn by the City
from the other security pursuant to subsection B above, the Operator shall deposit such further
bond or sum of money, or other security, as the City may require, sufficient to meet the
requirements of this Franchise.
D. The rights reserved to the City with respect to any bond or security are in
addition to all other rights of the City whether reserved by this Franchise or authorized by law,
and no action, proceeding, or exercise of a right with respect to any bond or other security shall
constitute an election or waiver of any rights or other remedies the City may have.
Section 30. Inconsistency
If any portion of this Franchise should be inconsistent or conflict with any rule or
regulation now or hereafter adopted by the FCC or other Federal law, then to the extent of the
inconsistency or conflict, the rule or regulation of the FCC or other Federal law shall control for
so long, but only for so long, as such rule, regulation, or law shall remain in effect; provided the
remaining provisions of this Franchise shall not be effected thereby.
Section 31. Emergency Override
Pursuant to FCC rules, the Operator shall comply with FCC Regulations requiring
installation of an Emergency Alert System (EAS) and provide an audio interrupt on all channels
and video message on at least one channel during an emergency. The Operator shall establish a
process, which will provide a character generated scroll and will make its best effort to furnish a
voice override notifying viewers and listeners of an emergency. Subject to federal and state laws
(RJM438278.DOC;1/00006.080042/) - 26 -
and regional planning authorities, the City may preempt the operation of the Open Video System
in the event of an emergency. The City, at its option may elect to share this service with
adjoining communities in the event of an emergency if such sharing is feasible with then existing
technology in the system. The City shall hold the Operator, its agents, employees, officers,
directors, shareholders and assigns harmless from any claims arising out of the emergency use of
its transmitting facilities by the City.
Section 32. PEG Access Channels & Cablecasting Equipment
Pursuant to FCC rules, 47 CFR 1505, the Operator must satisfy the same public,
educational and governmental access obligations as the local cable operator by providing the
same amount of channel capacity for public, educational and governmental access and by
matching the local cable operator's annual financial contributions towards public, educational
and governmental access services, facilities and equipment that are actually used for public,
educational and governmental access services, facilities and equipment. For in -kind contributions
(e.g., cameras, production studios), the Operator may satisfy its obligations by negotiating
mutually agreeable terms with the local cable operator, so that public, educational and
governmental access services to the community is improved or increased. If such terms cannot
be agreed upon, the Operator shall pay the City the monetary equivalent of the local cable
operator's depreciated in -kind contribution, or, in the case of facilities, the annual amortization
value. Any matching contributions provided by the Operator must be used to fund activities
arising under Section 611 of the Communications Act. Any monetary equivalent required under
this Section shall be applied only when the Operator's construction permits are approved and
allow the Operator to construct its Facilities in accordance with applicable state and federal law.
Section 33. Interconnection
WM438278.DOC;1/00006.080042/1 - 27 -
A. Pursuant to FCC rules, 47 CFR 1505, the local cable operator is required
to permit the Operator to connect with its public, educational and governmental access channel
feeds. The Operator and the cable operator may decide how to accomplish this connection,
taking into consideration the exact physical and technical circumstances of the cable and open
video systems involved. If the cable and open video system operator cannot agree on how to
accomplish the connection, the City may decide. The City may require that the connection occur
on government property or on public rights -of -way.
B. The costs of connection to the cable operator's public, educational and
governmental access channel feed shall be borne by the Operator. Such costs shall be counted
towards the Operator's matching financial contributions as mandated in FCC rules, 47 CFR 1505
Section 34. Performance Review Extension
One year prior to the expiration of this Franchise, the City and the Operator shall
meet for the purpose of reviewing, and at the option of either party, renegotiating any of the
terms hereof, consistent with applicable federal and state laws. The City and the Operator shall
also review of the current state of federal regulation and its impact on the Franchise to determine
whether issues not grandfathered under the existing Franchise have impaired the Franchise's
ability to meet current public need and necessity or the Operator's ability to meet business
competition and receive a reasonable return on its investment in the system.
The parties shall use their best efforts to reach agreement. Failure of the parties to
reach agreement on any item found by the City to negatively impact public need and necessity
may result in notification by the City of its intent to commence the franchise renewal process. In
the event negotiation does not result in agreement, the City and Operator agree that the City may
{RJM438278.DOC;1/00006.080042/} - 28 -
initiate such review in advance of federal guidelines. Provided, however, the provisions of this
Franchise shall continue in full force and effect until its expiration or the effective date of a new
Franchise.
Section 35. Independent Contractors
This Franchise shall not be construed to provide that the Operator is the agent or
legal representative of the City for any purpose whatsoever. The Operator is not granted any
express or implied right or authority to assume or create any obligation or responsibility on
behalf of or in the name of the City or to bind the City in any manner whatsoever.
Section 36. Franchising Casts
The Operator shall reimburse the City for franchising costs at a sum not to exceed
$2,500.00. Reimbursement required under this Section shall only become due and payable when
the Operator's construction permits are approved and allow the Operator to construct its
Facilities in accordance with applicable state and federal law.
Section 37. Entire Agreement
This Franchise represents all of the covenants, promises, agreements, and
conditions, both oral and written, between the parties. However, the City reserves the right to
waive any of these requirements without affecting the applicability of other sections not so
specifically waived. Waiver of any Franchise requirement by the City must be in writing in order
to be effective.
assigns.
Section 38. Successors or Assigns
This Franchise shall be binding upon the Operator, its heirs, successors, and
Section 39. Acceptance
WM438278.DOC;1/00006.080042/} - 29 -
This Franchise and its terms and provisions shall be accepted by the Operator by
the submission of a written instrument, executed and sworn to by a corporate officer of the
Operator before a Notary Public, and filed with the City within thirty (30) days after the effective
date of this Franchise. Such instrument shall evidence the unconditional acceptance of this
Franchise and the promise to comply with and abide by all its lawful provisions, terms and
conditions.
Section 40. Notice
Written notices shall be deemed to have been duly served if delivered in person to
the individual or entity for whom it was intended, or if delivered at or sent by registered or
certified United States mail to the last business address known to the party who gives the notice.
All notices and requests shall be addressed to the City of Edmonds and the Operator as follows:
CITY OF EDMONDS
121 Fifth Avenue North
Edmonds, WA 98020
BLACK ROCK CABLE
2544 Mt. Baker Highway
Bellingham, WA 98226
Section 41. Effective Date. This ordinance, being an exercise of a power specifi-
cally delegated to the City legislative body, is not subject to referendum, and shall take effect
five (5) days after passage and publication of an approved summary thereof consisting of the
title, provided, however, the Franchise granted by this Ordinance shall not become effective until
the Operator files written acceptance thereof..
MA OR, G HAAKENSON
ATTEST/AUTHENTICATED:
�xt.
CITY CLERK, SANDRA S. CHASE
{RJM438278.DOC;1/00006.080042/) - 30 -
APPROVED AS TO FORM:
OFFICE OF Y AT Y:
BY
FILED WITH THE CITY CLERK: 07/13/2001
PASSED BY THE CITY COUNCIL: 07/31/2001
PUBLISHED: 08/15/2001
EFFECTIVE DATE: Upon receipt of written acceptance from Operator: 09/07/2001
ORDINANCE NO. 3371
{RJM438278.DOC;1/00006.080042/} - 31 -
SUMMARY OF ORDINANCE NO.3371
of the City of Edmonds, Washington
On the 31st day of July, 2001, the City Council of the City of Edmonds, passed
Ordinance No. 3371. A summary of .the content of said ordinance, consisting of the title,
provides as follows:
AN ORDINANCE OF THE CITY OF EDMONDS,
WASHINGTON, GRANTING A NON-EXCLUSIVE
FRANCHISE TO BLACK ROCK CABLE, INC. TO OPERATE
AND MAINTAIN AN OPEN VIDEO SYSTEM IN THE CITY
OF EDMONDS, SETTING FORTH THE TERMS AND
CONDITIONS ACCOMPANYING THE GRANT OF
FRANCHISE AND FIXING A TIME WHEN THE SAME
SHALL BECOME EFFECTIVE.
The full text of this Ordinance will be mailed upon request.
DATED this 1 st day of August, 2001.
CITY CLERK, SANDRA S. CHASE
{RJM438278.DOC;1/00006.080042/}- 32 -
(t) l-LV E
BROADBAND
Cable - Internet • Phone
- FOR IMMEDIATE RELEASE -
Wave Broadband Contact:
Jody A. Veeder
425.530.9035
0veede rU_cvebroadband.com
RECEIVED
SEP 2 8 2012
EDMONDS CITY CLERK
Black Rock Contact:
Bob Warshawer
360.738.3116
BoiackRockCable.com
BLACK ROCK CABLE TO MERGE WITH WAVE BROADBAND
KIRKLAND, WA, September 20, 2012 —Wave Broadband announced today that they have entered into a
merger agreement with Black Rock Cable, Inc ("Black Rock"). The terms of the transaction were not
disclosed.
Wave is a leading provider of video, internet and phone services on the West Coast, currently serving over
390,000 residential and commercial customers in Washington, Oregon and California. Formed in 2003 by
CEO Steve Weed, the company has established a reputation for high quality service, growing both
organically and by expanding their footprint to new communities. Wave was recently recognized by
CableFAX Magazine with the prestigious Independent Cable Operator of the Year award.
Steve Weed, CEO of Wave Broadband, said, 'We're excited about the opportunity to further invest in the
Northwest fiber business through this merger. Black Rock is an outstanding provider of fiber services and
we look forward to working with the Black Rock team, continuing to build our enterprise business by
focusing on the delivery of exceptional products and service to our customers."
Blade Rock currently provides high-speed fiber optic connectivity services in Whatcom, Skagit, and
Snohomish counties to public and private sector commercial customers in government, medical,
aerospace, communications, manufacturing and other regionally -based industries.
`The merger with Wave will allow Black Rode employees to continue providing our customers with the
high -quality personalized service they rely on, for the long-term," said Black Rock's President, Bob
Warshawer.
Transition plans will not impact current Black Rock customers. Services will continue without interruption
as operations are merged with Wave over the coming months. Both Wave and Blade Rock have expressed
their commitment to ensuring the smoothest transition possible. Current Black Rode customers are
directed to continue calling 1-360-738-3116 with any questions regarding their service.
Page 1 of 2
About Wave Broadband
Wave Broadband is a leading provider of Video, Internet and Phone services, currently serving over
390,000 residential and business customers in the communities, and surrounding suburbs, of the Seattle,
Portland, San Francisco and Sacramento markets. Wave is headquartered in Kirkland, Washington and
operates under two retail brand names —Wave Broadband, www.wavebroadband.corn, and Astound
Broadband, www.astound.net.
Owned and operated by local industry leaders, Wave supports its customers with decades of cable know-
how. Its mission is to provide all customers with the latest technologies and upgrades including advanced
Video services, true High Speed Internet, Phone Service, and customized Enterprise Solutions. In addition,
Wave Business Solutions delivers a redundant 10G fiber ring that serves businesses of all sizes, from local
government to well-known Fortune 100 companies and brands, with major fiber hubs in San Francisco,
Sacramento, Portland, and Seattle.
The merger is conditioned on the closing of the previously announced acquisition of Wave by an investor
group led by Oak Hill Capital Partners, which is expected to occur in the fourth quarter of 2012.
For more information about Wave Broadband, visit www.wavebroadband.com.
About Black Rock Cable
Black Rock builds, owns and operates its own fiber optic network in Northwest Washington. With fiber
optic connections, businesses and organizations can access unprecedented levels of bandwidth and
networking services that significantly enhance their operations. Access to fiber is a strategic asset for any
business and a vital resource for communications in the communities we serve.
Black Rock offers fiber connections at huge costs savings against comparable technologies and enables
customers to access advanced networking solutions that would otherwise be out of reach.
Black Rock leases direct fiber connections to customers who have multiple locations, who want to connect
to the region's data centers and telecom carriers, and/or who simply want a direct, very high speed
Internet connection.
Black Rock's partners provide a range of competitive voice, data and video services for networking within
their market area as well as connections to national and global destinations.
Page 2 of 2
w,vE BLACK FLOCK CABLE
(0
BUSINESS
p FIBER -BASED COMMUNICATION
DIVISION HOLDINGS astound SERVICES AND SOLUTIONS
Via Overnight Delivery RECEIVE]
September 24, 2012
SEP 2 8 2012
City of Edmonds
121 Fifth Avenue North EDMONDS CITY CLERK
Edmonds, WA 98020
Re: Black Rock Cable, Inc. l WaveDivision Holdings, LLC
To Whom It May Concern:
We are writing with exciting news concerning Black Rock. As you know, Black Rock Cable, Inc.
is the holder of the OVS franchise issued by the City of Edmonds, which is in the process of being
renewed. On September 20, 2012, we entered into a definitive agreement to acquire Black Rock, with
Black Rock to become a subsidiary of WaveDivision Holdings, LLC ("Wave").
Wave provides cable television, broadband and telephone services under the trade name Wave
Broadband in Skagit County, Snohomish County, Whatcom County and many other areas in
Washington. As the winner of the 2012 Independent Cable Operator of the Year, Wave is nationally
recognized for providing its customers with the highest levels of product quality, speed and customer
care available.
Under the terms of the franchise held by Black Rock, we will be seeking your consent to the
change of ownership of Black Rock. In support of our request, within the next few days we will be
providing you with a Federal Communications Commission Form 394 "Application for Franchise
Authority Consent to Assignment or Transfer of Control of Cable Television Franchise," together with
the exhibits thereto. The Form 394 will detail the structure of the transaction and will provide you
with information about Wave's legal, technical and financial qualifications. We believe these materials
will furnish you with all the information necessary to make a prompt and conclusive determination on
our request for consent. In addition, Wave (through its CLEC subsidiary, Astound Broadband) intends
to apply for a telecom franchise to replace the OVS franchise. We expect that application will be
submitted within the next few days.
Because the transaction must close no later than November 30, 2012, we look forward to
working with you to obtain swift approval of our request for the City's consent. Please do not hesitate
to contact us if you have any questions.
Very Truly Yours,
Black Rock Cable, Inc.
By: Robert Warshawer
Title: President
WaveDivision Holdings, LLC
By: 4as A. Penney
Title: Executive Vice President