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HomeMy WebLinkAbout6505 RESOLUTION NO. 6505 A RESOLUT10N OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, CONDITIONALLY AUTHORlZING THE ASSIGNMENT AND CHANGE OF CONTROL OF A CABLE TELEVISION FRANCHISE BY CENTURY- TCI CALIFORNIA, L.P. TO CAC EXCHANGE II, LLC RECITALS: A. The City of Arcadia, California ("Franchise Authority") has granted a cable television franchise for the construction, operation, and maintenance of a cable television system within the City (the "Franchise") to Century- TCI California, L.P. ("Franchisee"), which Franchisee is presently controlled by Adelphia Communications Corporation ("Adelphia"), which is currently in Chapter I I bankruptcy proceedings; and B. Pursuant to an asset purchase agreement dated April 20, 2005 between Adelphia and Comcast Corporation ("Comcast"), an indirect wholly-owned subsidiary of Comcast will acquire Adelphia's interest in the Franchise (the "Adelphia Transaction"); and C. Pursuant to an exchange agreement between Time Warner Cable Inc. ("Time Warner Cable") and Comcast, dated as of April 20, 2005 ("Exchange Agreement"), Comcast will conclude the asset purchase transaction, whereby Comcast will cause its indirect wholly-owned subsidiary, Comcast Cable Holdings, LLC, to assign the Franchise to CAC Exchange II, LLC (the "New Franchisee") and the New Franchisee will become an indirect subsidiary of, and will do business as, Time Warner Cable (which transaction shall hereinafter be referred to as the "Exchange"); and D. On June 16, 2005, the Franchise Authority received from Comcast Cable Holdings, LLC and Time Warner Cable Inc., an application for the assignment of the existing Franchise from Franchisee to the New Franchisee through the Ade1phia Transaction and the Exchange. This application included FCC Form 394 titled "Application for Franchise Authority Consent to Assignment or Transfer of Control of Cable Television Franchise." Supplemental information was provided to the Franchise Authority by Comcast Cable Holdings, LLC and Time Warner Cable Inc.; and E. In accordance with Section 8 of City of Arcadia Ordinance No. 2206 (the "Telecommunications Ordinance"), the Franchise Authority has the right to review and to approve the financial, technical, and legal qualifications of a proposed transferee in connection with a proposed assignment of the Franchise; and F. The Franchise Authority has reviewed the documentation that accompanied FCC Form 394 and, based upon the representations set forth in that 2 6505 documentation, has concluded that the proposed New Franchisee has the requisite financial, technical, and legal qualifications to adequately perform, or to ensure the performance of, all obligations required of Adelphia under the Franchise, and that the New Franchisee will be bound by all existing terms, conditions, and obligations of the Franchise as it currently exists or as it may be modified or superseded by the parties prior to the closing of the Adelphia Transaction and the Exchange. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, DOES HEREBY FIND, DETERMINE AND RESOL VE AS FOLLOWS: SECTION I. In accordance with Section 8 of the Telecommunications Ordinance, the Franchise Authority consents to and approves the proposed assignment and change of control of the Franchise by Century- TCI Cali fornia, L.P., through Comcast Cable Holdings, LLC, to CAC Exchange II, LLC, which, upon the closing of the asset purchase transaction, will be an indirect wholly-owned subsidiary of Time Warner Cable Inc., and will be qualified to conduct business as a limited liability company in the State of California. SECTION 2. The authorization, consent and approval of the Franchise Authority to the proposed assignment is hereby expressly conditioned upon, and 3 6505 made contingent upon, compliance with the following requirements within sixty (60) days following the closing of both the Adelphia Transaction and Exchange: (a) Adelphia and the New Franchisee will execute and file in the office of the City Clerk an "Assignment and Assumption Agreement" in the form attached to this Resolution as Exhibit "A", and incorporated by reference herein. The Mayor is authorized to execute that document and thereby evidence the written consent of the Franchise Authority to the assignment and assumption of all rights and obligations under the Franchise. (b) An original or conformed copy of the written instrument evidencing the closing of the Adelphia Transaction and the Exchange must be filed in the office of the City Clerk. (c) Provision of written report to the City Manager documenting the following: (i) Staffing and technical measures have been implemented to ensure adequate telephone call center perfom1ance, reporting capabilities, and transition programs to provide service as Time Warner Cable, including the capability to bring current call center performance into compliance with the Franchise tern1s; (ii) Staffing and technical measures have been implemented to ensure adequate public, educational, or governmental (PEG) Access channel allocation, staffing and service provision in accordance with the Franchise; 4 6505 (iii) All necessary insurance policies, endorsements or certificates, as required by the Franchise, including, without limitation, applicable "additional insured" language shall been provided to the City Manager or his designee; (iv) All necessary security (cash deposit, surety fund, construction bond, and/or any other security as approved by the City Manager or designee) provisions of the Franchise shall have been provided to the City Manager or his designee; (v) That the New Franchisee shall have established the location of franchise financial records and other cable system records pertaining to Franchise fee reviews as Time Warner Controller's Office, 959 South Coast Drive, Suite 300, Costa Mesa CA 92626, or that the New Franchisee shall make available all such records available for inspection and photocopying at Arcadia City Hall; and (vi) The New Franchisee's program for providing notice to subscribers of, and implementing, account transition, including, without limitation, e-mail account transitioning and domain name changes. (d) The New Franchisee shall have caused to be paid to the Franchise Authority all processing charges required by law for the review and consideration of the proposed transfer. SECTION 3. If the closing of the AdeIphia Transaction and the Exchange shall not have occurred within one hundred eighty (180) days following the date of this Resolution (or such other date as may be agreed upon by the City Manager), or if anyone or more of the conditions set forth above Section 2 of this Resolution is or are not satisfied within the period of time specified in that Section, then the authorization and consent of the Franchise Authority to the proposed 5 6505 assignment as provided for in this Resolution shall be deemed of no force or effect, shall be treated as null and void without further action by the Franchise Authority, and the FCC Form 394 application will be deemed denied in all respects, as of the date of adoption of this Resolution, In such event, the City Manager is authorized and directed to give written notice to all affected parties of such effect, which will be deemed to be without prejudice to the right of any parties to submit a new FCC Form 394 to the Franchise Authority if required by the Franchise or local ordinance. SECTION 4. The City Clerk is directed to transmit a certified copy of this Resolution to the following persons: If to New Franchisee: Mr. Roger Keating, President Los Angeles Division Time Warner Cable Inc. 959 South Coast Drive, Suite 300 Costa Mesa, CA 92626 If to Adelphia: Brad M. Sonnenberg, Esq. Executive Vice President, General Counsel and Secretary AdeIphia Conmmnications Corporation 5619 DTC Parkway Denver, CO 80111 6 6505 If to Comcast: Comcast Cable Holdings, LLC 1500 Market Street Philadelphia, PA 19102 SECTION 5. The City Clerk shall certify to the adoption of this Resolution. Passed, approved and adopted this 6th day of December ATTEST: o fJ-A ~ City Clerk APPROVED AS TO FORM: ~\["'- p, I~ Stephen P. Deitsch City Attorney ,2005. May of the City of Arcadia 7 6505 STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES) SS: CITY OF ARCADIA ) I, JAMES H. BARROWS, City Clerk of the City of Arcadia, hereby certifies that the foregoing Resolution No. 6505 was passed and adopted by the City Council of the City of Arcadia, signed by the Mayor and attested to by the City Clerk at a regular meeting of said Council held on the 6th day of December, 2005 and that said Resolution was adopted by the following vote, to wit: A YES: Council Member Chandler, Kovacic, Marshall, Segal and Wuo NOES: None ABSENT: None !~~ City Clerk of the City of Arcadia 8 6505 EXHIBIT A ASSIGNMENT AND ASSUMPTION AGREEMENT AND GUARANTEE OF ASSIGNEE'S OBLIGATIONS (CABLE TELEVISION FRANCHISE AGREEMENT) THIS ASSIGNMENT AND ASSUMPTION AGREEMENT ("Agreement") is entered into this day of , 200 between Century- TCI California, L.P., a California limited partnership ("Assignor"), CAC Exchange II, LLC, a Delaware limited liability company ("Assignee"), and the City of Arcadia, a California municipal corporation ("Franchise Authority"). RECITALS: A. Assignor is the authorized holder of a franchise that authorizes the construction, operation, and maintenance of a cable television system within the City of Arcadia, California. B. Subject to the prior consent of the Franchise Authority as set forth more fully in Resolution No. , adopted December 6, 2005 (the "Consent Resolution"), Assignor desires to assign to Assignee, and Assignee desires to assume, effective as of the closing of the asset purchase transaction described in the FCC Form 394 as filed with the Franchise Authority on June 14, 2005 (the "Closing"), all rights, duties, and obligations under the cable television franchise agreement between the Franchise Authority and the Assignor ("Franchise Agreement") as it currently exists, or as it may be modified or superseded by the parties prior to the Closing. THE PARTIES AGREE AS FOLLOWS: I. Effective as of the Closing, Assignor assigns and transfers to Assignee all of Assignor's rights, duties, and obligations under the Franchise Agreement. 2. Effective as of, and contingent upon, the occurrence of the Closing, Assignee covenants and agrees with Assignor and with the Franchise Authority to assume all rights and to assume and perform all duties and obligations of the Assignor under the Franchise Agreement. The Franchise Authority reserves any and all rights with respect to any non-compliance issues that may exist prior to A-I the Closing, and Assignee reserves any and all rights and defenses with respect to any such non-compliance issues. 3. Franchise Authority consents to the assignment and transfer by Assignor to Assignee of all rights, duties, and obligations specified in the Franchise Agreement, contingent upon the execution by Time Warner Cable Inc., as guarantor, of the "Guarantee of Assignee's Obligations", attached as Schedule I to this Agreement and incorporated by reference herein. 4. This Agreement will become operative and enforceable upon the closing of the asset purchase transaction described in the FCC Form 394 as filed with the Franchise Authority on June 14,2005. TO EFFECTUATE THIS AGREEMENT, the parties have caused this Assignment and Assumption Agreement to be executed by their duly authorized representati ves as of the date set forth below the authorized signature. "ASSIGNOR" CENTURY-TCI CALIFORNIA, L.P., A Delaware limited partnership By: (authorized officer) Title: APPROVED AS TO FORM: Date: Legal Counsel [SIGNATURES CONTINUE ON NEXT PAGE] A.2 APPROVED AS TO FORM: Legal Counsel APPROVED AS TO FORM: City Attorney ATTEST: City Clerk "ASSIGNEE" CAC EXCHANGE II, LLC, a Delaware limited liability company By: (Authorized Officer) Title: Date: "FRANCHISE AUTHORITY" CITY OF ARCADIA By: Mayor Date: A-3 SCHEDULE 1 to ASSIGNMENT AND ASSUMPTION AGREEMENT AND GUARANTEE OF ASSIGNEE'S OBLIGATIONS GUARANTEE GUARANTEE, dated as of CABLE INC., a Delaware corporation Arcadia, California, ("Beneficiary"). , 2005, made by TIME WARNER ("Guarantor"), in favor of the City of For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and to induce Beneficiary to timely consent to the transfer of the cable television franchise issued by Beneficiary and currently held by Century- TCI California, L.P. (the "Franchise") to CAC Exchange 11, LLC ("Transferee") in accordance with the Federal Communications Commission Forlll 394 filed by Transferee, Guarantor agrees as follows: I. Interpretive Provisions. A. The words "hereof," "herein" and "hereunder" and words of similar import, when used in this Guarantee, shall refer to this Guarantee as a whole and not to any particular provision of this Guarantee, and section and paragraph references are to this Guarantee unless otherwise speci fied. B. The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. II. Guarantee. A. Effective upon the close of the Exchange Agreement, Guarantor unconditionally and irrevocably guarantees to Beneficiary the timely and complete perforn1ance of all Transferee obligations under the Franchise (the "Guaranteed Obligations"). The Guarantee is an irrevocable, absolute, continuing guarantee of payment and performance, and not a guarantee of collection. If Transferee fails to A-4 pay any of its monetary Guaranteed Obligations in full when due in accordance with the terms of the Franchise, Guarantor will promptly pay the same to Beneficiary or procure payment of same to Beneficiary. Anything herein to the contrary notwithstanding, Guarantor shall be entitled to assert as a defense hereunder any defense that is or would be available to Transferee under the Franchise or otherwise. B. This Guarantee shall remain in full force and effect until the earliest to occur of: (i) performance in full of all Guaranteed Obligations at a time when no additional Guaranteed Obligations remain outstanding or will accrue to Transferee under the Franchise; and (ii) subject to any required consent of the Beneficiary, any direct or indirect transfer of the Franchise from Transferee to (or direct or indirect acquisition of Transferee or any successor thereto by (whether pursuant to a sale of assets or stock or other equity interests, merger or otherwise)) any other person or entity a majority of whose equity and voting interests are not beneficially owned and controlled, directly or indirectly, by Guarantor. Upon termination of this Guarantee in accordance with this Section Il(B), all contingent liability of Guarantor in respect hereof shall cease, and Guarantor shall remain liable solely for Guaranteed Obligations accrued prior to the date of such termination. III. Waiver. Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by Beneficiary upon this Guarantee or acceptance of this Guarantee. Guarantor waives diligence, presentment, protest and demand for payment to Transferee or Guarantor with respect to the Guaranteed Obligations; provided, however, that Guarantor shall be furnished with a copy of any notice of or relating to default under the Franchise to which Transferee is entitled or which is served upon Transferee at the same time such notice is sent to or served upon Transferee. IV. Representations and Warranties. Each of Guarantor and Beneficiary represents and warrants that: (i) the execution, delivery and perfomlance by it of this Guarantee are within its corporate, limited liability company or other powers, have been duly authorized by all necessary corporate, limited liability company or other action, and do not contravene any law, order, decree or other governmental restriction binding on or affecting it; and (ii) no authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and perfornlance by it of this Guarantee, except as may have been obtained or made, other than, in the case of clauses (i) and (ii), contraventions or lack of authorization, approval, notice, filing A-5 or other action that would not, individually or in the aggregate, impair or delay in any material respect such party's ability to perform its obligations hereunder. V. Binding Effect. This Guarantee, when executed and delivered by Beneficiary, will constitute a valid and legally binding obligation of Guarantor, enforceable against it in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency or other similar laws applicable to creditors' rights generally and by equitable principles (whether enforcement is sought in equity or at law). VI. Notices. All notices, requests, demands, approvals, consents and other communications hereunder shall be in writing and shall be deemed to have been duly given and made if served by personal delivery upon the party for whom it is intended or delivered by registered or certified mail, return receipt requested, or if sent by Telecopier, provided that the telecopy is promptly confirmed by telephone confirmation thereof, to the party at the address set forth below, or such other address as may be designated in writing hereafter, in the same manner, by such party: To Guarantor and Transferee: Time Warner Cable Inc. 290 Harbor Drive Stamford, CT 06902-6732 Telephone: (203) 328-0631 Telecopy: (203) 328-4094 Attention: General Counsel To Beneficiary: City of Arcadia 240 West Huntington Drive Arcadia, California 91006 Telephone: Telecopy: Attention: City Manager VII. Integration. This Guarantee represents the agreement of Guarantor with respect to the subject matter hereof and there are no promises or representations by Guarantor or Beneficiary relative to the subject matter hereof other than those expressly set forth herein. VIlI. Amendments in Writing. None of the terms or provisions of this Guarantee may be waived, amended, supplemented or otherwise modified except by a written instrument executed by Guarantor and Beneficiary, provided that any A-6 right, power or privilege of Beneficiary ansmg under this Guarantee may be waived by Beneficiary in a letter or agreement executed by Beneficiary. IX. Section Headings. The section headings used in this Guaraniee are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. X. No Assignment or Benefit to Third Parties. This Agreement shall not be assigned by Guarantor, in whole or in part, whether voluntarily or otherwise, without the prior written consent of the Beneficiary. This Agreement shall not be assigned by Beneficiary, in whole or in part, whether voluntarily or otherwise, without the prior written consent of the Guarantor. This Agreement shall be binding upon and inure to the benefit of the parties hereto. Nothing in this Agreement, express or implied, is intended to confer upon anyone other than Guarantor and Beneficiary and their respective permitted assigns, any rights or remedies under or by reason of this Guarantee. XI. Expenses. All costs and expenses incurred in connection with this Guarantee and the transactions contemplated hereby shall be borne by the party incurring such costs and expenses. XII. Counterparts. This Guarantee may be executed by Guarantor and Beneficiary on separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. XIlI. Governing Law. This Guarantee shall be governed by and construed and interpreted in accordance with the laws of the state of California without regard to principles of conflicts of law. Any legal action or proceeding concerning this Guarantee shall be filed and prosecuted in the appropriate California court in the County of Los Angeles, California. XIV. Waiver of Jury Trial. Each party hereto hereby irrevocably and unconditionally waives trial by jury in any legal action or proceeding relating to this guarantee and for any counterclaim therein. XV. Attorneys Fees. In the event that any action or proceeding is commenced to regarding any term of this Guarantee, the prevailing party in such action or proceeding, in addition to all other relief to which it may be entitled, shall be entitled to recover from the other party the prevailing party's costs of suit and reasonable attorneys' fees. The prevailing party shall be as determined by the court in accordance with California Code of Civil Procedure Section 1032. The attorney's costs and expert fees recoverable pursuant to this section include, without limitation, attorney's costs and expert fees incurred on appeal and those incurred in enforcing any judgment rendered. Attorney's costs and fees may be A-7 recovered as an element of costs in the underlying action or proceeding or in a separate recovery action. TO EFFECTUATE THIS GUARANTEE, each of the undersigned has caused this Guarantee to be duly executed and delivered by its duly authorized officer on the date set forth below the authorized signature. "GUARANTOR" TIME WARNER CABLE INC. By: Name: Title: Date: "BENEFICIARY" CITY OF ARCADIA By: Name: Title: Date: A-S