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HomeMy WebLinkAbout2006-002RESOLUTION NO. 2006-2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO CONDITIONALLY AUTHORIZING THE ASSIGNMENT OF A CABLE TELEVISION FRANCHISE BY ADELPHIA CABLEVISION OF INLAND EMPIRE, LLC TO TIME WARNER NY CABLE LLC, AN INDIRECT SUBSIDIARY OF TIME WARNER CABLE INC. RECITALS: 8 A. Adelphia Cablevision of Inland Empire, LLC ("Franchisee"), is the 9 authorized holder of a franchise ("Franchise") that authorizes the construction, operation, and maintenance of a cable television system within the City of San Bernardino ("Franchise 10 Authority"). 11 B. pn Apri120, 2005, Time Warner NY Cable LLC ("TWNY"), an indirect 12 subsidiary of Time Warner Cable Inc., and Comcast Corporation ("Comcast"), each entered into separate definitive agreements to acquire, collectively, substantially all of the assets of Adelphia 13 Communications Corporation ("Adelphia") for a total of $12.7 billion in cash (of which TWNY will pay $9.2 billion and Comcast will pay the remaining $3.5 billion) and 16% of the common 14 stock of Time Warner Cable Inc. At the same time that Comcast and TWNY entered into the 15 agreements to purchase Adelphia's assets, Time Warner Cable Inc., Comcast, and their respective subsidiaries also agreed to swap certain cable systems to enhance their respective 16 geographic clusters of subscribers ("Cable Swaps"). The asset purchase transaction by TWNY that includes the City's cable franchise is not, however, dependent upon the consummation of the 17 Cable Swaps transaction, nor upon certain redemption transactions whereby Time Warner Cable Inc., the parent company of TWNY, will redeem Comcast's 17.9 percent equity interest in Time 18 Warner Cable Inc. in exchange for $1.9 billion in cash plus 100 percent of the common stock of 19 a Time Warner Cable subsidiary that will own cable systems located in four states other than California. ..~ C. On June 14, 2005, the Franchise Authority received from the Franchisee 21 and from Time Warner NY Cable LLC ("Transferee"), an application for the assignment of the existing Franchise. This application included FCC Form 394 titled "Application for Franchise 22 Authority Consent to Assignment or Transfer of Control of Cable Television Franchise." 23 Supplemental information was provided to the Franchise Authority by the Transferee on July 22, 2005. 24 D. In accordance with Section 14.08.400 of the San Bernardino Municipal 25 Code, the Franchise Authority has the right to review and to approve the financial, technical, and legal qualifications of the Transferee in connection with the proposed assignment of the 26 Franchise. 27 E. The staff of the Franchise Authority has reviewed the documentation that 28 accompanied FCC Form 394 and, based upon the representations set forth in that documentation, DHC/js [Time Warner\Adelphia.Reso] i 01/04/06 2006-2 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL 2 OF THE CITY OF SAN BERNARDINO CONDITIONALLY AUTHORIZING THE ASSIGNMENT OF A CABLE 3 TELEVISION FRANCHISE BY ADELPHIA CABLEVISION OF INLAND EMPIRE, LLC TO TIME WARNER NY CABLE 4 LLC, AN INDIRECT SUBSIDIARY OF TIME WARNER 5 CABLE INC. 6 has concluded that the proposed Transferee has the requisite financial, technical, and legal 7 qualifications to adequately perform, or to ensure the performance of, all obligations required of the Franchisee under the Franchise, and that the Transferee will be bound by all existing terms, 8 conditions, and obligations of the Franchise as it currently exists or as it may be modified or 9 superseded by the parties prior to the closing of the asset purchase transaction described above in Recital (B). 10 NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON 11 COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 12 Section 1. In accordance with Section 14.08.400 of the San Bernardino Municipal Code, the Franchise Authority consents to and approves the proposed assignment of 13 the Franchise by Adelphia Cablevision of Inland Empire, LLC to Time Warner NY Cable LLC, 14 ~'~'hich, upon the closing of the asset purchase transaction, will be an indirect subsidiary of Time Warner Cable Inc., and will be qualified to conduct business as a limited liability company in the 15 State of California. 16 Section 2. The authorization, consent and approval of the Franchise Authority to the proposed assignment is conditioned upon compliance by the Franchisee or the Transferee 17 with the following requirements: 18 (a) Within 60 days after the adoption of this resolution, the Franchisee 19 and the Transferee will execute and file in the office of the City Clerk an "Assignment and Assumption Agreement" in substantially the form attached to this resolution as Exhibit A. The 20 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 21 Franchise. 22 (b) An original or conformed copy of the written instrument 23 evidencing the closing and consummation of the asset purchase transaction involving the proposed assignment of the Franchise must be filed in the office of the City Clerk within 60 days 24~ ~ after that closing and consummation. 25 Section 3. If the conditions set forth above in paragraph (a) of Section 2 are not satisfied within the period of time specified in that paragraph, then the authorization and consent 26 of the Franchise Authority to the proposed assignment as provided for in this resolution will be 27 revoked and rescinded without further action by the Franchise Authority, and the FCC Form 394 application will be denied in all respects. In such event, the City Administrator is authorized and 28 directed to give written notice to all affected parties of that revocation and rescission, which will DHCljs [Time Warner~P.delphia.Reso] 2 01!04!06 2006-2 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL 2 OF THE CITY OF SAN BERNARDINO CONDITIONALLY AUTHORIZING THE ASSIGNMENT OF A CABLE 3 TELEVISION FRANCHISE BY ADELPHIA CABLEVISION 4 OF INLAND EMPIRE, LLC TO TIME WARNER NY CABLE LLC, AN INDIRECT SUBSIDIARY OF TIME WARNER 5 CABLE INC. 6 be deemed to be without prejudice to the right of those parties to submit a new FCC Form 394 to 7 the Franchise Authority if required by the Franchise or local ordinance. 8 Section 4. The City Clerk is directed to transmit a certified copy of this resolution to the following persons: 9 10 Mr. Roger Keating, President 11 Los Angeles Division Time Warner Cable Inc. 12 959 South Coast Drive, Suite 300 Costa Mesa, CA 92626 13 Brad M. Sonnenberg, Esq. 14 Executive Vice President, 15 General Counsel and Secretary Adelphia Communications Corporation 16 5619 DTC Parkway Denver, CO 80111 17 1// 18 /// 19 !1/ 21 /// 22 //! 2311 /// /// 25 /// 26 /// 27 /// 28 DHCljs [Time Warner\Adelphia.Reso] 3 01!04106 2006-2 1 2 3 4 5 6i 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO CONDITIONALLY AUTHORIZING THE ASSIGNMENT OF A CABLE TELEVISION FRANCHISE BY ADELPHIA CABLEVISION OF INLAND EMPIRE, LLC TO TIME WARNER NY CABLE LLC, AN INDIRECT SUBSIDIARY OF TIME WARNER CABLE INC. I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and Common Council of the City of San Bernardino at a joint regular meeting thereof, held on the 9th day of January 2006, by the following vote, to wit: COUNCIL MEMBERS: AYES ESTRADA x LONGVILLE x MCGINNIS x DERRY x KELLEY x x JOHNSON MCCAMMACK NAYS ABSTAIN ABSENT x ~. C' CTT CLERK i The foregoing Resolution is hereby approved this day of ~nuary , 2006. 23 24 25 26 27 28 3 VALLES, Mayor San Bernardino Approved as to form and legal content: JAMES F. PENMAN, City Attorney i, By: ~ ~ D ~s [Time Wazner~P,delphia.Reso] 4 01/04/06 I 2006-2 ORIGINAL ASSIGNMENT AND ASSUMPTION AGREEMENT AND GUARANTEE OF ASSIGNEE'S OBLIGATIONS (CABLE TELEVISION FRANCHISE AGREEMENT) THIS AS IGNMENT AND ASSUMPTION AGREEMENT ("Agreement") is entered into this lei day of '~ , 2006, between Adelphia Cablevision of Inland Empire, LLC, Delaware limited liability company ("Assignor"), Time Warner NY Cable LLC, a Delaware limited liability company ("Assignee"), and the City of San Bernardino, 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 San Bernardino, California. B. Subject to the prior consent of the Franchise Authority, 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: 1. 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 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" that is attached as Schedule 1 to this Agreement. 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 representatives as of the date set forth below the authorized signature. DHC/js [Time Warner`Adelphia.Reso] O l /04/06 2'006-2 AP VED AS TO O Legal Counsel PROVED AS TO FORM: .~.~.~ Legal Counsel ASSIGNOR Adelphia Cablevision of Inland Empire, L.L.C a Delaware limited liability company, d/b/a Adelphia Cable Communications By: Clear Cablevision, Inc a Delaware corporation, its Sole Member Y _ Name: ~MA=i ~_ L_yiKl'uZ~ (PRIN'T' OR TYPE) nn Q Title: ~0&r~ -- ''1'Yc.'~iNC` ~~~~ Date: /~ "ASSIGNEE" TIME WARNER NY CABLE LLC, a Delaware limited liability company By, ~Q ~J~\ ~~. ~ \ (Authorized Officer) - , w ~ Title: S ~ ~ ~ Y~/1~tx~yy~k'/YVI.s Date: 2--" 4a - aS~ AUTHORITY" BERNARDINO APPROVED AS TO FORM AND L AL CONT~: City Attorne ATTEST: City Jerk DHC/js [Time Warner~4delphia.Reso~ By: r/cE O 1 /04/06 2006-2 SCHEDULE 1 to ASSIGNMENT AND ASSUMPTION AGREEMENT AND GUARANTEE OF ASSIGNEE'S OBLIGATIONS GUARANTEE GUARANTEE, dated as of ~G~iua.4~. ( , 2006, made by TIME WARNER CABLE INC., a Delaware corporation ("Guarantor"), in favor of the City of San Bernardino, California, ("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 Adelphia Cablevision of Inland Empire, LLC (the "Franchise") to Time Warner NY Cable LLC ("Transferee") in accordance with the Federal Communications Commission Form 394 filed by Transferee, Guarantor agrees as follows: L 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. II. Guarantee. A. Effective upon the close of the asset purchase 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. DHC/js [Time Warner~.Adelphia.Reso] 01/04/06 2006-2 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 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 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 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 maybe 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 maybe designated in writing hereafter, in the same manner, by such party: DHC/js [Time Warner~Adelphia.Reso] O 1 /04/06 2006-2 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 San Bernardino 300 No. "D" Street, San Bernardino, CA 92418 Telephone: (909) 384-5122 Telecopy: (909) 384-5138 Attention: Fred Wilson, City Administrator 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 interpretation 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 maybe 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. DHC/js [Time Warner'~Ade]phia.Reso] O 1 /04/06 2006-2 XIII. 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. IIV. Venue. The parties hereto agree that all actions or proceedings arising in connection with this Agreement shall be tried and litigated either in the State courts located in the County of San Bernardino, State of California or the U.S. District Court for the Central District of California. The aforementioned choice of venue is intended by the parties to be mandatory and not permissive m nature. 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. "BENEFICIARY" CITY OF SAN BERNARDINO Approved as to Form and Legal Content: JAMES F. PENMAN, City Attorney e, ~~ DHC/js [Time Warner`,Adelphia.Reso] O 1 /04/06