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HomeMy WebLinkAbout2005-092 - Cable Television Franchise by Adelphia CableVision of Santa Ana (JWF 9/15/05) RESOLUTION NO. 2005-092 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA CONDITIONALLY AUTHORIZING THE ASSIGNMENT OF A CABLE TELEVISION FRANCHISE BY ADELPHIA CABLEVISION OF SANTA ANA, LLC TO TIME WARNER NY CABLE LLC, AN INDIRECT SUBSIDIARY OF TIME WARNER CABLE INC. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. Adelphia Cablevision of Santa Ana, LLC ("Franchisee"), is the authorized holder of a franchise ("Franchise") that authorizes the construction, operation, and maintenance of a cable television system within the City of Santa Ana ("Franchise Authority"). B. On April 20, 2005, Time Warner NY Cable LLC ("TWNY"), an indirect subsidiary of Time Warner Cable Inc., and Comcast Corporation ("Comcas!"), each entered into separate definitive agreements to acquire, collectively, substantially all of the assets of Adelphia 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 stock of Time Warner Cable Inc. At the same time that Comcast and TWNY entered into the 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 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 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 Warner Cable Inc. in exchange for $1.9 billion in cash plus 100 percent of the common stock of 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 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 Authority Consent to Assignment or Transfer of Control of Cable Television Franchise." Supplemental information was provided to the Franchise Authority by the Transferee on July 25, 2005. Resolution No. 2005-092 Page 1 of 10 AYES: Councilmembers: Alvarez. Bist. Bustamante. Garcia. Pulido. Solorio (6) NOES: Councilmembers: None (0) ABSTAIN: Councilmembers: Christv (1) NOT PRESENT: Councilmembers: None (0) CERTIFICATE OF ATTESTATION AND ORIGINALITY I. PATRICIA E. HEALY. Clerk of the Council. do hereby attest to and certify the attached Resolution No. 2005-092 to be the original resolution adopted by the City Council of the City of Santa Ana on October 3. 2005. Date: /~~~\ (;j?A Clerk of the Council City of Santa Ana Resolution No. 2005-092 Page 4 of 10 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 , 2005, between Adelphia Cablevision of Santa Ana, LLC, a Delaware limited liability company ("Assignor"), Time Warner NY Cable LLC, a Delaware limited liability company ("Assignee"), and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California ("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 Santa Ana, 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. As used in this Agreement, the term "Franchise Agreement" specifically includes the Settlement Agreement dated June 14, 2005, and all executory obligations of Assignor thereunder that exist as of the Closing of the asset purchase transaction. THE PARTIES AGREE AS FOLLOWS: 1. Assignee all of Agreement. Effective as of the Closing, Assignor assigns and transfers to Assignor's rights, duties, and obligations under the Franchise 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, including all duties and obligations arising prior to the Closing. 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. Resolution No. 2005-092 Page 5 of 10 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. "ASSIGNOR" ADELPHIA CABLEVISION OF ORANGE COUNTY, LLC, a Delaware limited liability company "ASSIGNEE" TIME WARNER NY CABLE LLC, a Delaware limited liability company By: By: (Authorized officer) (Authorized Officer) Title: Title: Date: Date: APPROVED AS TO FORM: APPROVED AS TO FORM: Legal Counsel Legal Counsel "FRANCHISE AUTHORITY" CITY OF SANTA ANA ATTEST: Patricia E. Healy Clerk of the Council David N. Ream City Manager Date: APPROVED AS TO FORM: Joseph W. Fletcher City Attorney Resolution No. 2005-092 Page 6 of 10 SCHEDULE 1 To ASSIGNMENT AND ASSUMPTION AGREEMENT AND GUARANTEE OF ASSIGNEE'S OBLIGATIONS GUARANTEE GUARANTEE, dated as of , 2005, made by TIME WARNER CABLE INC., a Delaware corporation ("Guarantor"), in favor of the City of Santa Ana, 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 Santa Ana, 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: 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 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. 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 Resolution No. 2005-092 Page 7 of 10 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 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 Resolution No. 2005-092 Page 8 of 10 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 Santa Ana Clerk of the Council Telephone: (714) 647-6520 Telecopy: (714) 647-6956 and City of Santa Ana Office of the City Attorney Telephone: (714) 647-5201 Telecopy: (714) 647-6515 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. Resolution No. 2005-092 Page 9 of 10 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. 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. 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. 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 SANTA ANA By: Name: Title: By: David N. Ream City Manager Date: Date: ATTEST: By: Patricia E. Healy Clerk of the Council APPROVED AS TO FORM By: Joseph W. Fletcher City Attorney Resolution No 2005-092 Page 10 of 10