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HomeMy WebLinkAboutCC RES 05-116 RESOLUTION NO. 05-116 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, STATE OF CALIFORNIA, CONSENTING TO THE TRANSFER OF OWNERSHIP AND CONTROL OF THE CABLE TELEVISION FRANCHISE FROM COMCAST CORPORATION TO AN INDIRECT SUBSIDIARY OF TIME WARNER CABLE INC. AND APPROVING THE ASSIGNMENT OF THE PROGRAMMING AGREEMENT ASSOCIATED THERETO SUBJECT TO THE CONDITIONS HEREOF WHEREAS, COMCAST OF LOS ANGELES, INC., a California Corporation ("COM CAST-LA") currently holds a cable franchise (the "Franchise") from the CITY pursuant to Ordinance No. 1273, an ordinance of the City Council of the CITY renewing a franchise for a cable television system granted to COM CAST-LA dated as of May 19, 2003 (the "Franchise Agreement"), and subject to Tustin City Code §§ 7410 et seq., (the "Cable Ordinance"), all documents, of which as any of them may lawfully be or may have been amended from time to time, are collectively referred to as the "Franchise Documents"; and WHEREAS, COMCAST-LA entered into an Agreement for Program Production Services (the "Programming Agreement") with the CITY, regarding the provision of cable programming services by COM CAST-LA for the CITY; and WHEREAS, pursuant to an Exchange Agreement dated as of April 20, 2005, among COMCAST-LA's parent company, COMCAST CORPORATION, a Pennsylvania Corporation ("COMCAST"), TIME WARNER CABLE INC., a Delaware Corporation, ("TIME WARNER"), and their related entities (the "Master Transaction Agreement"), C- NATIVE EXCHANGE I, LLC, a Delaware LLC ("C-NATIVE"), an indirect subsidiary of TIME WARNER will acquire the Franchise currently held by COM CAST-LA and the cable television system serving the City of Tustin (the "Proposed Transaction"); and WHEREAS, Section 1(c) of the Franchise Agreement provides that the prior written consent of the City is required for the Proposed Transaction and Section 7418(d) of the Cable Ordinance provides that the Franchise Agreement or its control shall not be assigned, transferred, sold or disposed of without the prior consent of the CITY as authorized by resolution of the City Council of the CITY; and WHEREAS, on or about June 14, 2005, COMCAST and TIME WARNER filed an FCC Form 394 with the City and requested that the City consent to the Proposed Transaction (the "Transfer Application"); and Resolution No. 05-116 Page 1018 WHEREAS, in conjunction with the Proposed Transaction, COMCAST-LA desires to assign its rights and obligations under the Programming Agreement to C- NATIVE; and WHEREAS, C-NATIVE agrees to provide the CITY with a guaranty from TIME WARNER guaranteeing performance by C-NATIVE of all of C-NATIVE's obligations under the Franchise Documents; and WHEREAS, C-NATIVE has agreed to comply with the Franchise Documents and the Programming Agreement and applicable federal and state law from and after the consummation of the Proposed Transaction; and WHEREAS, relying on COMCAST-LA's and C-NATIVE's representations, the City is willing to grant its consent to the Proposed Transaction and the assignment of the Programming Agreement from COM CAST-LA to C-NATIVE, subject to the terms and conditions set forth herein. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUSTIN, STATE OF CALIFORNIA, finds, determines and consents to the transfer of the cable television system to C-NATIVE, the assignment of the Programming Agreement, and hereby approves the Transfer Application subject to the following conditions: 1. Within sixty (60) days of the close of the Proposed Transaction, C-NA TIVE shall provide the City with an executed copy of Exhibit A, "Acceptance of Franchise and Programming Agreement by the Franchisee" and an executed copy of a Guarantee from TIME WARNER in the form attached hereto as Exhibit B, "Guarantee." 2. Within sixty (60) days of the close of the Proposed Transaction, C-NATIVE shall remit the City the sum of $2,500.00 to defray the City's costs in reviewing the transfer application. 3. The City's consent to the Proposed Transaction and the transfer of the Franchise and Programming Agreement shall not in any respect relieve COM CAST-LA of responsibility for past acts or omissions, known or unknown. 4. The City waives none of its rights with respect to the compliance of COM CAST-LA and C-NATIVE with the requirements set forth in the Franchise Documents and the Programming Agreement. The CITY's consent to the Proposed Transaction shall in no way be deemed a representation by the City that either franchisee is in compliance with all of its obligations under the Franchise Documents and the Programming Agreement. 5. Neither this approval, nor any other action or omission by the City at or before the adoption of this resolution shall be construed to grant the City's consent to Resolution No. 05-116 Page 2018 any future transfer of the Franchise and/or the cable television system, and/or any future change in ownership and/or control of C-NATIVE, the Franchise and/or the cable television system. The CITY's consent to the Proposed Transaction is limited solely to the transfer of the Franchise and the Cable Television system from COM CAST-LA to C-NATIVE. 6. C-NATIVE shall have obtained and filed with the City an insurance certificate and performance bond described in and required by the Franchise Documents, within sixty (60) days after the closing of the Proposed Transaction. PASSED AND ADOPTED at a regular meeting of the City Council of the City of Tustin held on the 21st day of November 2005. --tit LOU BONE ~ Mayor ATTEST: c1J11?r/p{ ,Á' /~~~ zM:.-AMELA STOKER City Clerk STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF TUSTIN ) )SS ) I, Pamela Stoker, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, do hereby certify that the whole number of the members of the City Council of the City of Tustin is five; that the above and foregoing Resolution No. 05-115 was duly passed and adopted at a regular meeting of the Tustin City Council, held on the 21st day of November, 2005, by the following vote: COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER ABSENT: DAVERT, AMANTE, HAGEN, KAWASHIMA (4) HONE (1) NONE (0) NONE (0) --- ¿?71tr(~ If Ii-~ "'1- þv PAMELA STOKER City Clerk Resolution No. 05-116 Page30f8 EXHIBIT A ACCEPTANCE OF FRANCHISE AND PROGRAMMING AGREEMENT BY THE FRANCHISEE C-NATIVE EXCHANGE I, LLC (the "Franchisee") hereby accepts the assignment of, and accepts to be bound by, the Agreement for Program Production Services between the City of Tustin and Comcast of Los Angeles, Inc., (the .Programming Agreement") and the franchise to erect, construct, operate and maintain a cable television system in the City of Tustin (the "Franchise") pursuant to Ordinance No. 1273 dated as of May 19, 2003 (the "Franchise Agreement"). By this acceptance, the Franchisee agrees that it shall be bound by the terms and conditions of the Programming Agreement and the Franchise Agreement, and subject to Tustin City Code §§ 7410 et seq. (collectively, the "Franchise Documents"). By accepting to be bound by the Franchise Documents, the Franchisee further: (1) acknowledges and accepts the City's legal right to issue and enforce the Franchise Documents; (2) agrees that it will not oppose the City's intervention in any proceeding affecting the Franchise Documents or obligations thereunder; (3) accepts and agrees to comply with each and every provision of the Franchise Documents subject to applicable law; and (4) agrees that the City's consent to the transfer thereof, was granted pursuant to processes and procedures consistent with applicable law, and that it will not raise any claim to the contrary. Delivery of an executed copy of this "Acceptance of Franchise and Programming Agreement by the Franchisee" shall be accompanied by an executed Guarantee from Time Wamer Cable Inc. in the form attached hereto as Exhibit B. The Franchisee declares that it has carefully read all of the terms and conditions of the Franchise Documents, and accepts and agrees to abide by same. The Franchisee is bound to maintain and operate a cable television system under the terms, conditions and limitations set forth in the Franchise Documents and other applicable federal and state law, as of the time and date it files this written acceptance with the City. AGREED TO THIS - DAY OF C-NATIVE EXCHANGE I, LLC ,2006. By: By: Its: 20799lv5 Resolution No. 05-116 Page 4 of 8 EXHIBIT B GUARANTEE GUARANTEE, dated as of .2006, made by TIME WARNER CABLE INC., a Delaware corporation ("Guarantor"), in favor of the City of Tustin, Califomia, ("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 issued by Beneficiary and currently held by Comcast of Los Angeles, Inc. (the "Franchise") to C-Native Exchange I, LLC ("Transferee") in accordance with the Federal Communications Commission Form 394 filed by Transferee, Guarantor agrees as follows: I. II. 20799lv5 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. The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. Guarantee. B. A. Effective upon the close of the Proposed Transaction, 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. 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. 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 Resolution No. 05-116 Page 5 of 8 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 II(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 performance 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 govemmental 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 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: 20799lv5 Resolution No. 05-116 Page 6 of 8 To Guarantor and Transferee: Time Wamer Cable Inc. 290 Harbor Drive Stamford, CT 06902-6732 Telephone: (203) 328-0631 Telecopy: (203) 328-4094 Attention: General Counsel To Beneficiary: City of Tustin 300 Centennial WayTustin, CA 92780 Telephone: (714) 573-3000 Telecopy: (714) 832-0825 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. VIII. 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 waived by Beneficiary in a letter or agreement executed by Beneficiary. IX. 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 interpretati.on hereof. X. No Assignment or Benefit to Third Parties. 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. 20799lv5 Resolution No. 05-116 Page70f8 XIII. Governing Law. This guarantee shall be govemed by and construed and interpreted in accordance with the laws of the state of Califomia without regard to principles of conflicts of law. 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. XIV. Waiver of Jury Trial. To the extent permitted by then applicable law, each party hereto irrevocably and unconditionally waives trial by jury in any legal action or proceeding relating to this guarantee and for any counterclaim therein. "GUARANTOR" TIME WARNER CABLE INC. By: Name: Title: Date: "BENEFICIARY. CITY OF TUSTIN By: Name: Title: Date: 20799lv5 Resolution No. 05-116 Page 8 of 8 X111. 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. 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. XIV. Waiver of Jury Trial. To the extent permitted by then applicable law, each party hereto irrevocably and unconditionally waives trial by jury in any legal action or proceeding relating to this guarantee and for any counterclaim therein. "GUARANTOR" TIME WARNER CABLE INC. "BENEFICIARY* CITY OF TUSTIN By: Name: Title: Date: 20799tv5 Resolution No. 05-116 Page 8 of 8