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HomeMy WebLinkAbout022872 ORD - 03/18/1997AN ORDINANCE APPROVING CONSENT TO COLLATERAL ASSIGNMENT FROM KMC SOUTHEAST CORPORATION (KMC TELECOM INC.) TO AT&T FINANCE CORPORATION; AND DECLARING AN EMERGENCY. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS, THAT: SECTION 1. The City Manager is hereby authorized to execute the Consent To Collateral Assignment from KMC Southeast Corporation (KMC Telecom Inc.) To AT&T Finance Corporation, a substantial copy of which is attached hereto and made part hereof. SECTION 2 That upon written request of the Mayor or five Council members, copy attached, to find and declare an emergency due to the need for immediate action necessary for the efficient and effective administration of City affairs, such finding of an emergency is made and declared requiring suspension of the Charter rule as to consideration and voting upon ordinances at two regular meetings so that t rdinance is assed and shall take effect upon first reading as an emergency measure this the day of z,h 1997. ATTEST: THE CITY OF CORPUS CHRISTI City Secretary MAYOR THE CITY OF CORPUS CHRISTI APPROVED THIS THE itt DAY OF % I,/ A.ve-4 , 1997. JAMES R. BRAY, JR., CITY ATTORNEY R. &I-7 4!22872 11::10FILMEU Corpus Christi, Texas I R11 day of TO THE MEMBERS OF THE CITY COUNCIL Corpus Christi, Texas 2 For the reasons set forth in the emergency clause of the foregoing ordinance an emergency exists requiring suspension of the Charter rule as to consideration and voting upon ordinances at two regular meetings: I/we, therefore, request that you suspend said Charter rule and pass this ordinance finally on the date it is introduced, or at the present meeting of the City Council. Respectfully, Respectfully, Council Members \ emir MAYOR THE CITY OF The above ordinance was passed by the following vote: Mary Rhodes Dr. Jack Best Betty Black Melody Cooper Tony Heldenfels Betty Jean Longoria John Longoria Edward A. Martin Dr. David McNichols (4(/) Obsuid US CHRISTI (Liu 010 I%) g-11(9 122872 1MAR 11'97 15:21 FR.KELLEY DRYE WARREN NY 12 808 7897 TO 01014915128803239 P.02/04 CONSENT TO COLLATERAL ASSIGNMENT THIS CONSENT TO COLLATERAL ASSIGNMENT ("Consent") dated as of _ , 1997 is executed by THE CITY OF CORPUS CHRISTI ("City"), in favor of AT&T COMMERCIAL FINANCE CORPORATION, a Delaware corporation ("Lender"), having an office at 44 Whippany Road, Morristown, New Jersey 07962-1983. WITNESSETH: WHEREAS, "An Ordinance Granting to KMC Southeast Corp. a Non - Exclusive Franchise to Construct, Maintain, and Operate in Designated Portions of Public Rights -of -Way Telecommunications facilities for the Purpose of Providing Services Within the City and Future Additions Thereto." (KMC Southeast Corporation now known as SMC Telecom Inc., a Delaware corporation ("KMC")) was adopted by City on April 23, 1996 and accepted by KMC (the "Agreement"); and WHEREAS, Lender and KMC have entered into a Loan and Security Agreement dated December 31, 1996 (the "Loan Agreement") pursuant to which Lender will make loans to SMC; and WHEREAS, as a condition precedent to making certain advances under the Loan Agreement, Lender has required that KMC grant Lender a collateral assignment and/or security interest in substantially all of its assets, including, without limitation, the rights of SMC under the Agreement; NOW, THEREFORE, in consideration of the premises and the mutual undertaldng herein contained, the parties hereto agree as follows: 1. Consent. City consents to the grant by KMC of a collateral assignment and security interest in all of KMC's rights under the Agreement. 2. Transfer. City acknowledges and agrees that in the event Lender exercises its remedies under the Loan Agreement, Lender may foreclose on its security interest in the Agreement and/or arrange for a third party (which third party must be consented to by City pursuant to Section 9 of the Agreement), to acquire KMC's assets through public or private sale or through agreement with KMC, provided, however, that as a condition under either option, Lender or such third party shall assume the obligations of KMC under the Agreement. Notwithstanding any provision of the Agreement to the contrary, such foreclosure by Lender or acquisition of assets by such third party shall net constitute a breach of the Agreement and upon such foreclosure or acquisition, Lender or such third party shall succeed to all obligations, rights and remedies of HMC under the Agreement. MAR 11'97 15:21 FR_KELLEY DRYE WARREN NY 12 808 7897 TO 01014915128803239 P.03/04 3. Notice and Opportunity to CureDefaults an&Terminatjop Events- City agrees to provide Lender with notice contemporaneously with the provision of any such notice to KMC of (i) any default by KMC in the performance of any liability, obligation, representation or covenant in the Agreement and (ii) any other event which would permit City to cancel or terminate the Agreement, and shall permit Lender to cure any such default or cancellation or termination event if KMC fails to do so within the cure periods, if any, prescribed by the Agreement in respect of such default or cancellation or termination event or within ten business days after receipt by Lender of notice thereof, whichever period is longer. All notices to Lender shall be sent to AT&T Capital Corporation/Capital Markets Division, 44 Whippany Road, Morristown, New Jersey 07962-1983; Attention: Vice President/Operations Manager, facsimile no. 201-397-4368, confirmation no. 201-397-3482. All notices to City shall be sent to City of Corpus Christi, 1201 Leopard Street, P.O. Box 9277, Corpus Christi, TX 78469, Attention: City Manager. 4. Further Agreements. City hereby certifies and agrees that, to the best of its knowledge: (a) the Agreement is in full force and effect, all conditions to the comment of the term thereof has been satisfied, and there are no amendments, modifications, or supplements, whether oral or written, thereto; (b) KMC is not in default under the Agreement, nor are there any events or conditions which, by the passage of time or giving of notice or both, would constitute a default thereunder by KMC; (c) City is not aware of any dispute, action, suit, condemnation proceeding, claim, or right of setoff piling or threatened with respect to the Agreement or the property subject thereto; and (d) in the event that KMC shall become a debtor under the Federal Bankruptcy Code and, in connection therewith, KMC shall reject the Agreement as an executory contract, then upon the written request by Lender made within thirty (30) days following such rejection, and provided that Lender cures or causes the cure of KMC's defaults to City under the Agreement within thirty (30) days following City's notice to Lender of such defaults, City shall, to the extent consistent with the Federal Bankruptcy Code and the City's Charter, enter into a new Agreement with Lender or its designee for the benefit of Lender or such designee, for the rights covered by the Agreement, which new Agreement (1) shall be effective as of the date of the termination of the Agreement, (2) shall be for a term expiring as of the last day of the term of the Agreement and (3) shall be on the same terms and conditions as the Agreement (including any provisions for renewal or extension of the term of the Agreement). 5. Required Consents. City hereby represents and warrants that it has obtained all necessary consents to the execution, delivery, performance and recordation of this Consent iSf NY2S/DUTm,7742021 -2- MAR 11.97 15:22 FR KELLEY DRYE WARREN NY 12 808 7897 TO 01014915128803239 P.04/04 6. Agreements to Continue: Succgssors and Assigns. The agreements contained herein shall continue in force and effect until the earlier of (i) the expiration date of the Agreement or (ii) the date on which all of KIlfC's obligations and liabilities to the Lender are paid and satisfied in full and all financing arrangements between the Lender and KMC have been terminated, and shall be binding upon and inure to the benefit of the successors and assigns of Lender and City. IN WITNESS WHEREOF, the undersigned has caused this Consent to be duly executed as of the date first above written. NP NY24/Plft1WT7420.21 THE CITY OF CORPUS CUBISTM, TEXAS By: Name: Title: -3- ** TOTAL PAGE.004 ** if RG CERti'CICAT. JF LIABILITY INSURAP ;EPA(— "OF 2 DATE(V-1997) PRODUCER 41315 Willis Corroon Corporation of New York 7 Hanover Square New York NY 10004-2594 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. (212) 344-8888 COMPANIES AFFORDING COVERAGE Andrea Z. Nowicki COMPANY Federal Insurance Company A INSURED COMPANY B KMC Telecom Inc. 1545 Route 206 Suite 300 COMPANY C Bedminster NJ 07921-2567 COMPANY D OV AG THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS BY THE POLICIES DESCRIBED HEREIN 15 SUBJECT TO ALL THE TERMS, BEEN REDUCED BY PAID CLAIMS. CO LTR TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE DATE (MM/DD/YY) POLICY EXPIRATION DATE (MM/DD/YY) LIMITS A GENERAL LIABILITY 37108161 01-NOV-1997 01-NOV-1998 GENERAL AGGREGATE $ 2.000.000 X COMMERCIAL GENERAL LIABILITY PRODUCTS COMP/OP AGG $ 1,000.000 CLAIMS MADE X I OCCUR PERSONAL& ADV INJURY $ 1,000,000 OWNER'S & CONTRACTOR'S PROT EACH OCCURRENCE $ 1.000,000 FIRE DAMAGE (Any ane fire) $ 100.000 1-1 MED EXP (Any one parson) $ 10,000 A AUTOMOBILE X LIABILITY ANY AUTO 73238178 01-NOV-1997 01-NOV-1998 COMBINED SINGLE LIMIT $ 1.000.000 ALL OWNED AUTOS SCHEDULED AUTOS BODILY INJURY (Per person) X X HIRED AUTOS NONOWNEDAUTOS BODILY INJURY (Per accident) PROPERTY DAMAGE $ GARAGE LIABILITY AUTO ONLY- EA ACCIDENT $ ANY AUTO OTHER THAN AUTO ONLY: EACH ACCIDENT $ _ AGGREGATE $ EXCESS LIABILITY EACH OCCURRENCE $ UMBRELLA FORM AGGREGATE $ OTHER THAN UMBRELLA FORM $ A WORKERS COMPENSATION AND 71637269 01-NOV-1997 01-NOV-1998 X WaRVTDMlrs EORH EMPLOYERS' LIABILITY EL EACH ACCIDENT $ 500,000 THE PROPRIETOR/ PARTNERS/EXECUTIVE X INCL ELDISEASE-POLIOY LIMIT $ 500,000 OFFICERS ARE: —, EXCL EL DISEASE -EA EMPLOYEE $ 500,000 OTHER DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS SEE ATTACHED OERTIFICATE HOLDER City of Corpus Christi 1201 Leopard Street CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, P.O. Box 9277 Attn.: City Manager BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THECOMPANY, . ITS AGENTS OR REPRESENTATIVES. Corpus Christi TX 78469 ACOiD 25-S (1195) 0 LAIALWC301: AUTHORIZED REP ENTATIVI%! ® ACORD CORPORATION 1958 0 0 CErIFICA E OF IN.S.URANCE -', SSD3-NO MM,DD/YY) coRooN ' , .AGS Q.0 ,.,_ 3-NOV-1997 THIS CERTIFICATE IS ISSuED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. INSURED 41315 KMC Telecom Inc. 1545 Route 206 Suite 300 Bedminster NJ 07921-2567 I PRODUCER Willis Corroon Corporation of New York 7 Hanover Square New York NY 10004-2594 (212) 344-8888 Andrea Z. Nowicki COVERAGES THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS MAY HAVE BEEN REDUCED BY PAID CLAIMS. TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE DATE (MM/DD/YY) POLICY EXPIRATION DATE (MM/DD/VV) i LIMITS DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS It is agreed that the following entities are included as Additional Insured(s) on the General Liability policy, but only with respect to their liabilities arising out of the Named Insured's operations: Additional Insured(s): The City of Corpus Christi, Texas, its officers, employees, board members and elected representatives Re: Ordinance granting non-exclusive franchise to construct, maintain and operate telecommunication facilities Waiver of Subrogation: Insurer agrees to waive the rights of subrogation against the City of Corpus Christi, Texas, its officers, employees, board members and elected representatives Amendment of Other Insurance Clause: This insurance shall be primary without rights of contribution of any other insurance carried by the City of Corpus Christi Obligation of the First Named Insured: Any obligation imposed upon the Insured (including the liability to pay premiums or assessments) shall be the sole obligation of the Named not that of the City of Corpus Christi CEA TfFfCATE HOLDER H City of Corpus Christi 1201 Leopard Street P.O. Box 9277 Attn.: City Manager Corpus Christi TX 78469 ILLI `Li1RROON 25WC1 (9/9S) GLAIALWC301 CANCELLATKIN SHOULD ANY EXPIRATION 30 OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY KIND UPON THE ITS AGENTS OR REPRESENTATIVES. BUT FAILURE OF ANY ,COOMMPANY,Y, AUTHORIZED gEPRE.$ENTATIVEy!i © WILktS CORROON 1995