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HomeMy WebLinkAboutRES CC 2005 2410 2005 1102RESOLUTION NO. 2005 -2410 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MOORPARK, CALIFORNIA, ESTABLISHING CONDITIONS FOR THE APPROVAL OF A TRANSFER OF A CABLE TELEVISION FRANCHISE FROM CENTURY - TCI CALIFORNIA, L.P. TO CAC EXCHANGE I, LLC. WHEREAS, Century -TCI California, L.P. ( "Franchisee ") owns, operates and maintains a cable system ( "System ") in the City of Moorpark ( "City "); and WHEREAS, Franchisee provides cable service in the City pursuant to the terms of a cable system franchise ( "Franchise ") granted to Franchisee effective October 1, 2004 for the City; and WHEREAS, the Franchise has an expiration date of September 30, 2019; and WHEREAS, Franchisee is seventy five percent (750) owned by entities affiliated with Adelphia Communications Corporation ( "Adelphia ") and twenty five percent (250) owned by entities affiliated with Comcast Corporation ( "Comcast "); and WHEREAS, Adelphia, Comcast Corporation and Time Warner Cable Inc. ( "Time Warner ") are parties to an asset purchase agreement and an exchange agreement (collectively the "Sale Agreements ") pursuant to which the System and the Franchise are to be transferred from Franchisee to Comcast Cable Holdings, LLC ( "Transferee Number 1 ") and then from Transferee Number 1 to CAC Exchange I, LLC ( "Transferee Number 2 "), which will become a Time Warner entity, through a series of transactions; and WHEREAS, on June 14, 2005, the City received two F.C.C. Forms 394 requesting a transfer of the Franchise from Franchisee to Transferee Number 1 and from Transferee Number 1 to Transferee Number 2; and WHEREAS, the City has one hundred twenty (120) days from the receipt of a complete F.C.C. Form 394 to act upon a transfer request or the request automatically is deemed to have been approved; and WHEREAS, as provided for in applicable law, the City, within thirty (30) days of receipt of the transfer requests, Resolution No. 2005 -2410 Page 2 noticed the Franchisee, Transferee Number 1 and Transferee Number 2 that the F.C.C. Forms 394 were inaccurate and incomplete; and WHEREAS, Transferee Number 1 and Transferee Number 2 allege that the F.C.C. Forms 394 were complete and accurate and that the one hundred twenty (120) day review period started on June 14, 2005; and WHEREAS, the one hundred twenty (120) day review period expires on October 12, 2005, if a June 14, 2005 receipt date is to be considered correct; and WHEREAS, Time Warner has granted an extension of the approval deadline to November 7, 2005; and WHEREAS, to the extent required by Moorpark Municipal Code the Franchise cannot be transferred or assigned without the City Council's consent; and WHEREAS, federal regulations permit the City to evaluate the legal, technical and financial qualifications of Transferee to operate the Franchise; and WHEREAS, the legislative history of the Federal Cable Television Consumer Protection and Competition Act of 1992 further indicates that Congress intended that local franchising authorities consider the ability of the transferee to fulfill the obligations of any applicable franchise; and WHEREAS, the United States Court of Appeals for the Ninth Circuit, in a case involving the County of Santa Cruz, California and Charter Communications, found that local cable franchising authorities should be afforded broad deference in legislative acts in their role as stewards of the public good; and WHEREAS, the proposed final franchise holder, Transferee Number 2, is a new entity with no historical performance record and no identified assets; and WHEREAS, the City, as steward of the public good, believes that the transfer will be in the best interest of Moorpark subscribers provided the transfer is conditioned in order to safeguard the interests of Moorpark System subscribers; and WHEREAS, the City desires to proceed with the proposed transfers on the terms and conditions set forth herein. Resolution No. 2005 -2410 Page 3 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The City hereby consents to the transfers, subject to the following conditions: 1. All proposed transactions, from Franchisee to Transferee Number 1 and from Transferee Number 1 to Transferee Number 2, must be completed as follows: (a) In connection with the transfer to Transferee Number 1, the City authorizes and consents to the acquisition by Transferee Number 1 from Adelphia, as the ultimate parent company of Franchisee, of Adelphia's seventy five percent (750) direct and indirect ownership interest in Franchisee (the "Adelphia Transaction "). As a consequence of the Adelphia Transaction, Transferee Number 1 will become the direct parent company and sole owner of the Franchisee. (b) Contingent upon the closing of the Adelphia Transaction referenced in Section 1.1(a) above, the City authorizes and approves the transfer of the Franchise from Transferee Number 1 to Transferee Number 2. Upon the close of the transactions contemplated in the Sale Agreements, Transferee Number 2 will be a wholly owned subsidiary of Time Warner NY Cable LLC, which will be controlled solely by Time Warner and will do business in the City under the trade name Time Warner Cable. (c) Time Warner has represented to the City that the transactions authorized in Section 1.1(b) above are based upon the 'expectation of sequential closing" and that the transactions are expected "to close contemporaneously and in direct succession." 2. Transferee Number 2, will be owned and controlled as indicated in Exhibit A attached hereto. To the extent required by the Moorpark Municipal Code, any change of ownership or control of Transferee Number 2 from the ownership and control indicated in Exhibit A shall be subject to prior City review and consent. 3. Time Warner, the indirect parent company of Transferee Number 2, shall unconditionally guarantee the performance of Transferee Number 2 under the terms of the Franchise, and shall be a signatory to the "Guarantee," attached hereto as Exhibit B. Resolution No. 2005 -2410 Page 4 Time Warner shall submit the same to the City Clerk within sixty (60) days of this approval. If Time Warner fails to do so, or otherwise refuses to accept the conditions on the proposed transfers, consent to the transfers shall be automatically withdrawn, effective the date of adoption of this resolution, and the requests to transfer shall be deemed denied unless expressly waived by the City in writing. 4. The City shall retain applicable law with respect part of Franchisee, whether to the effective date of Transferees reserve any and to any such non - compliance i all rights under the Franchise and to any non - compliance issues on the known or unknown, which exist prior these transfers. Franchisee and all rights and defenses with respect ssues. 5. The City shall be reimbursed for the City's costs incurred in the processing of the requests for transfers from the $6,000 payment submitted with the Form 394 filings as required by Section 5.06.660(i) of the Moorpark Municipal Code. 6. All terms of the Franchise agreement shall remain in full force and effect, including all terms contained in Sections 2.6 (Security Fund) and 5 (Services and Programming) of the Agreement and Exhibits C (Grantee Commitment to PEG Access Facilities and Equipment) and D (Institutional Network) and all other Exhibits to the Franchise Agreement. 7. Transferee Number 1 and Transferee Number 2 (the "Transferees ") shall evidence acceptance of these conditions by signing a copy of the "Change of Ownership Consent Agreement," in substantially the same form as attached to this Resolution as Exhibit A. Each Transferee shall cause the same to be submitted to the City Clerk within sixty (60) days of this approval. If either Transferee fails to do so, or otherwise refuses to accept the conditions placed on the proposed transfers, consent to the transfers shall be automatically withdrawn, effective the date of adoption of this Resolution, and the requests to transfer shall be deemed denied, unless expressly waived by the City in writing. SECTION 2. Other than with respect to the conditions made in Sections 1.1 and 1.3 above, if any sentence, clause, phrase or portion of any condition imposed in Section 1 hereof is for any reason held by a court of competent jurisdiction to be invalid or unenforceable, such decision shall not affect the validity of the remaining conditions placed on this transfer. The City Council of the City of Moorpark hereby declares that it Resolution No. 2005 -2410 Page 5 would have adopted this Resolution and each and every condition set forth in Section 1 hereof separately, irrespective of the fact that one or more of these conditions may be declared invalid or unenforceable. SECTION 3. This Resolution shall be deemed effective immediately, taking into account the conditions listed in Section 2. SECTION 4. Subject to the reservation of rights of Section 1.4 above, the City hereby releases Franchisee and Transferee Number 1, as applicable, effective upon the consummation of the transaction contemplated in the Sale Agreements (the "Closing Date ") from all obligations and liabilities under the Franchise that accrue on or after the Closing Date. Franchisee and Transferee Number 1, as applicable, shall remain responsible for all obligations and liabilities under the Franchise that accrue up to the Closing Date. Transferee Number 2 shall be responsible for any obligations and liabilities under the Franchise that accrue on or after the Closing Date. SECTION 5. Once Exhibit A and B to this Resolution have been accepted by the parties, the City shall not revise this Resolution without the prior written consent of the Franchisee and /or Transferee. Resolution No. 2005 -2410 Page 6 SECTION 6. The City Clerk shall certify to the adoption of this resolution and shall cause erti 'ed reso ution o be filed in the book of original reso tions. PASSED AND ADOPTED this 2n day of Nove er, 2 05. J � Hunte, Mayor ATTEST: Deborah S. Traffensted City Clerk Attachments: Exhibit A - Change of Ownership Consent Agreement Exhibit B - Guarantee Resolution No. 2005 -2410 Page 7 EXHIBIT A CHANGE OF OWNERSHIP CONSENT AGREEMENT Cortinn 1 Terms used in this Change of Ownership Consent Agreement shall be as defined in Resolution 2005 -2410 (the "Resolution "). gArtinn i Each signatory to this agreement recognizes the Resolution which approved the involved the various conditions listed therein, and the terms in the Resolution is fair, rea permissible, and that each Transferee will and comply with each of the conditions. that the City passed transfers subject to agrees that each of sonable, and legally diligently prosecute The Transferees each further agree to accept transfers described in the Resolution, subject to the following conditions: 1. All proposed transactions, from Franchisee to Transferee Number 1 and from Transferee Number 1 to Transferee Number 2, must be completed as follows: (a) In connection with the transfer to Transferee Number 1, the City authorizes and consents to the acquisition by Transferee Number 1 from Adelphia, as the ultimate parent company of Franchisee, of Adelphia's seventy five percent (750) direct and indirect ownership interest in Franchisee (the "Adelphia Transaction "). As a consequence of the Adelphia Transaction, Transferee Number 1 will become the direct parent company and sole owner of the Franchisee. (b) Contingent upon the closing of the Adelphia Transaction referenced in Section 2.1(a) above, the City authorizes and approves the transfer of the Franchise from Transferee Number 1 to Transferee Number 2. Upon the close of the transactions contemplated in the Sale Agreements, Transferee Number 2 will be a wholly owned subsidiary of Time Warner NY Cable LLC, which will be controlled solely by Time Warner and will do business in the City under the trade name Time Warner Cable. (c) Time Warner has represented to the City that the transactions authorized in Section 2.1(b) above are based upon the "expectation of sequential closing" and that the Resolution No. 2005 -2410 Page 8 transactions are expected "to close contemporaneously and in direct succession." 2. Transferee Number 2 will be owned and controlled as indicated in Figure 1 attached hereto. To the extent required by Moorpark Municipal Code, any change of ownership or control of Transferee Number 2 from the ownership and control indicated in Figure 1 shall be subject to prior City review and consent. 3. Time Warner, the indirect parent company of Transferee Number 2, shall unconditionally guarantee the performance of Transferee Number 2 under the terms of the Franchise, and shall be a signatory to the "Guarantee" attached to the Resolution as Exhibit B. For purposes of that agreement, Time Warner shall be known as the "Guarantor." 4. The City expressly reserves any and all rights that it may possess under the Franchise and applicable law with respect to any non - compliance issues on the part of Franchisee, whether known or unknown, which exist prior to the effective date of this transfer, and Franchisee and Transferee reserve any and all rights and defenses with respect to any such non - compliance issues. 5. All terms of the Franchise agreement shall remain in full force and effect. It is expressly affirmed that the Franchise Agreement includes Section 2.6 (Security Fund), Section 5 (Services and Programming), and all exhibits to the Franchise Agreement including Exhibit C (Grantee Commitment to PEG Access Facilities and Equipment) and Exhibit D (Institutional Network). 6. Transferee Number 1 and Transferee Number 2 shall evidence acceptance of these conditions by signing a copy of this "Change of Ownership Consent Agreement," and submitting the same to the City Clerk within sixty (60) days of this approval. If either Transferee Number 1 or Transferee Number 2 fails to submit a signed copy of this "Change of Ownership Consent Agreement" to the City Clerk within said sixty (60) day period, or otherwise refuses to accept the conditions placed on the proposed transfers, consent to the transfers shall be automatically withdrawn, effective the date of adoption of City of Moorpark Resolution No. 2005- 2410, and the requests to transfer shall be deemed denied unless expressly waived by the City in writing. Resolution No. 2005 -2410 Page 9 gartinn '� Other than with respect to the promises made in Sections 2.1 and 2.3 above, if any sentence, clause, phrase or portion of any condition imposed in Section 2 hereof if for any reason held by a court of competent jurisdiction to be invalid or unenforceable, such decision shall not affect the validity of the remaining conditions placed on this transfer. The City Council of the City of Moorpark hereby declares that it would have entered into this "Change of Ownership Consent Agreement" and each and every condition set forth in Section 2 hereof separately, irrespective of the fact that one or more of these conditions may be declared invalid or unenforceable. CAr +inn A Subject to the reservation of rights of Section 2.4 above, the City hereby releases Franchisee and Transferee Number 1, as applicable, effective upon the consummation of the transactions contemplated in the Agreements (the "Closing Date ") from all obligations and liabilities under the Franchise that accrue on or after the Closing Date. Franchisee and Transferee Number 1, as applicable, shall remain responsible for all obligations and liabilities under the Franchise that accrue up to the Closing Date. Transferee Number 2 shall be responsible for any obligations and liabilities under the Franchise that accrue on or after the Closing Date. CAe-+inn r, This Agreement and Exhibits shall have the force of a continuing agreement with the Franchisee, Transferee Number 1 or Transferee Number 2, as applicable, and the City shall not amend or otherwise alter this Agreement without the prior written consent of the Franchisee and /or Transferee. Resolution No. 2005 -2410 Page 10 This Agreement shall be effective upon the Closing Date at which time Franchise and System ownership shall have transferred from Franchisee to Transferee Number 1 and from Transferee Number 1 to Transferee Number 2. NNCity" City of Moorpark Patrick Hunter, Mayor Attest: Deborah S. Traffenstedt, City Clerk Approved as to Form: Joseph M. Montes, City Attorney "Transferee Number 1" Comcast Cable Holdings I, LLC Its: Date: "Transferee Number 2" CAC Exchange I, LLC By: Its: Date: Resolution No. 2005 -2410 Page 11 i ime wamer n r came "owing mc. l00% Ti amer NY Cabi C Resolution No. 2005 -2410 Page 12 EXHIBIT B GUARANTEE This is a GUARANTEE, dated as of , made by TIME WARNER CABLE INC., a Delaware corporation ( "Guarantor "), in favor of the City of Moorpark, CA ( "Beneficiary "). 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 for the City of Moorpark (the "Franchise ") to CAC Exchange I, L.L.C. ( "Transferee ") in accordance with the Federal Communications Commission Form 394 filed by Transferee, Guarantor agrees as follows: 1. 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 specified. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. 2. Guarantee. (a) From and after the Closing Date referenced in Section 4 of the "Change of Ownership Consent Agreement," Guarantor unconditionally and irrevocably guarantees to Beneficiary the timely and complete performance 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, of the franchise, including all Exhibits to the Franchise, which includes Exhibit D (Institutional Network). If Transferee fails to 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. Resolution No. 2005 -2410 Page 13 (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) 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 2(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. 3. 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. 4. Representations and Warranties. Each of Guarantor and Beneficiary represents and warrants that: (i) the execution, delivery and performance by it of this Guarantee is 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 performance 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 or other action that would not, individually or in the aggregate, impair or delay in Resolution No. 2005 -2410 Page 14 any material respect such obligations hereunder. 5. Bindina Effect. party's ability to perform its 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). 6. 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 Moorpark 799 Moorpark Avenue Moorpark, CA 93021 Telephone: (805) 517 -6200 Telecopy: (805) 529 -8270 Attention: City Manager 7. Inteqration. This Guarantee represents the agreement of respect to the subject matter hereof and there or representations by Guarantor or Beneficiary Guarantor with are no promises relative to the Resolution No. 2005 -2410 Page 15 subject matter hereof other than those expressly set forth herein. 8. 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 right, power, or privilege of Beneficiary arising under this Guarantee may be expressly waived by Beneficiary in a letter executed by Beneficiary. 9. Section Headings. The section headings used in this Guarantee are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 10. No Assiqnment or Benefit to Third Parties. This Agreement shall be bir benefit of the parties hereto. express or implied, is intended to Guarantor and Beneficiary and assigns, any rights or remedies Guarantee. iding upon and inure to the Nothing in this Agreement, confer upon anyone other than their respective permitted under or by reason of this 11. 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. 12. 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. 13. 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. Resolution No. 2005 -2410 Page 16 14. 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. IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be duly executed and delivered by its duly authorized officer as of the day and year first above written. GUARANTOR TIME WARNER CABLE INC. By: _ Name: Title: BENEFICIARY CITY OF MOORPARK By: Name: Patrick Hunter Title: Mayor Resolution No. 2005 -2410 Page 17 STATE OF CALIFORNIA ) COUNTY OF VENTURA ) ss. CITY OF MOORPARK ) I, Deborah S. Traffenstedt, City Clerk of the City of Moorpark, California, do hereby certify under penalty of perjury that the foregoing Resolution No. 2005 -2410 was adopted by the City Council of the City of Moorpark at a regular meeting held on the 2nd day of November, 2005, and that the same was adopted by the following vote: AYES: Councilmembers Harper, Mikos, Millhouse, Parvin and Mayor Hunter NOES: None ABSENT: None ABSTAIN: None WITNESS my hand and the official seal of said City this 16th day of December, 2005. Deborah S. Traffenst City Clerk (seal)