HomeMy Public PortalAbout05-117 i
RESOLUTION NO. 05-117
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CARSON, CALIFORNIA, CONDITIONALLY
APPROVING A TRANSACTION INVOLVING COMCAST
CORPUR.ATION AND TIME WARNER CABLE INC., AND
THE TRANSFER OF THE CABLE TELEVISION
FRANCHISE TO C-NATIVE EXCHANGE I,LLC
WHEREAS, Comcast of Los Angeles, Inc. ("Franchisee") currently owns, operates and
maintains a cable system ("System") in the City of Carson("City"); and
WHEREAS, Franchisee provides cable service in the City pursuant to the terms of a
cable system franchise ("Franchise") originally granted for 20 years to Carson Cable Television,
Inc., in 1969 pursuant to Ordinance No. 69-106; and
WHEREAS, on or about June 18, 2002, after the Franchise had been extended for an
additional 15 years by Ordinance No. 86-743 and after a series of previous ownership transfers,
the City adopted Resolution No. 02-077 which transferred control over the Franchisee to
Comcast Corporation and included additional mutually agreed upon terms that are incorporated
in and considered an integral part of the Franchise; and
WHEREAS, the Franchise expired by its own terms on or about December 1, 2004, and
Franchisee has continued operating the System under the terms of the Franchise on a month-to-
month basis pending completion of renewal negotiations; and
WHEREAS, Comcast Corporation, Time Warner Cable Inc., and related entities are
parties to an asset purchase agreement and an exchange agreement (collectively, the
"Transaction"), pursuant to which the System and Franchise are to be transferred to C-Native
Exchange I, LLC ("Transferee"), which will become an indirect subsidiary of Time. Warner
Cable,, Inc.; and
WHEREAS, on June 14, 2005, the City received an F.C.C. Form 394 requesting the
City's approval of the Transaction and the transfer of the Franchise from Franchisee to
Transferee; and
WHEREAS, the City has one hundred twenty (120) days from the receipt of a complete
F.C.C. Form 394 to act upon the transfer request or the request automatically is deemed to have
been approved; and
WHEREAS, the one hundred twenty (120) day review period expired on October 12,
2005; and
WHEREAS, the City received letters dated September 29, 2005, October 27, 2005 and
November 15,, 2005,, from Franchisee and behalf of Franchisee and Transferee extending the
review period until December 14, 2005; and
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WHEREAS, to the extent required by the Carson Municipal Code, the Franchise cannot
be transferred or assigned without the City Council's consent; and
WHEREAS, in considering whether to approve or deny a transfer, 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 (the "1992 Cable Act") further indicates that Congress intended
that local franchising authorities consider such information as the effect of the transfer or sale on
rates and subscriber services and the Transferee's plans for expanding or eliminating services to
subscribers when assessing an application for transfer of a cable system 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 Transferee, which will be indirectly controlled by Time
Warner Cable Inc., is a separate new legal 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 Carson subscribers provided the transfer is conditioned in order to safeguard
the interests of Carson subscribers; and
WHEREAS, the City desires to proceed with the proposed transfer on the terms and
conditions set forth herein.
NOW, THEREFORE, the City Council of the City of Carson does hereby resolve,
determine and order as follows:
Section 1. The foregoing recitals are incorporated herein by reference as if set forth
in full.
Section 2. The City hereby approves the Transaction and consents to the transfer of
the System and Franchise to the T subject to the satisfaction of all of the following
conditions:
1. C-Native Exchange I, LLC, the Transferee, will be owned and controlled as indicated in
Exhibit "A" attached hereto. To the extent required by Carson Municipal Code Section
6606(d), any change of ownership or control of Transferee from the ownership and
control indicated in Exhibit"A" shall be subject to prior City review and consent.
2. Time Warner Cable Inc., the indirect parent company of the Transferee, shall
unconditionally and irrevocably guarantee the full and faithful performance of all of the
terms,, covenants, conditions and agreements to be performed and observed by the
Transferee under the Franchise, including but not limited to the punctual payment of all
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amounts due under or required to be made by the Transferee under the Franchise. Time
Warner Cable Inc. shall execute and deliver to City a guarantee in substantially the same
form as the guarantee attached to this Resolution as Exhibit "B." Time Warner Cable
Inc. shall be known as the"Guarantor."
3. The City expressly reserves any and all rights that it may possess under the Franchise and
applicable law with respect to the Franchisee's non-compliance with any term of the
Franchise, whether known or unknown, which existed prior to the effective date of this
transfer, and Franchisee and Transferee reserve any and all rights and defenses they may
have with respect to such non-compliance issues.
4. The transfer is expressly contingent upon Franchisee reimbursing the City for the City's
costs incurred in the processing of the request for transfer, not to exceed any maximum
amount indicated in the "Change of Ownership Consent Agreement" attached to this
Resolution as Exhibit "A." Said reimbursement shall be provided within thirty (30)
calendar days of Franchisee's receipt of an itemized invoice detailing the City's costs.
5. Transferee acknowledges that the Franchise is continuing on a month-to-month basis and
that City and Franchisee have commenced negotiations for the renewal of the Franchise,
and Transferee agrees to cooperate in good- faith to complete the negotiations in an
expeditious manner.
6. All terms of the Franchise shall remain in full force and effect on a month-to-month
basis'. including all terms contained in Ordinance No. 86-743 and Resolution 02-077.
7. Transferee shall evidence acceptance of these conditions by executing the "Change of
Ownership Consent Agreement" in substantially the same form as attached to this
Resolution as Exhibit "A" and containing the conditions described herein, and submitting
the same to the City Clerk within sixty (60) days of this Resolution. If Transferee fail to
submit a signed copy of the "Change of Ownership Consent Agreement" to the City
Clerk within said sixty (60) day period, or otherwise refuse to accept the conditions
placed on the proposed transfer, the City's approval of the Transaction and consent to the
transfer shall be automatically withdrawn, effective the date of adoption of this
Resolution, and the request to transfer shall be deemed denied.
Section 3. Other than with respect to the condition made in Section 2.2 above, if any
sentence, clause,phrase or portion of any condition imposed in Section 2 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 Carson hereby declares that it would have adopted this Resolution 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.
Section 4. This Resolution shall be deemed effective for the purposes of the transfer
upon adoption by the City Council.
Section 5. Subject to the reservation of rights contained in Section 2.3 above,
effective upon the date of the closing of the Transaction(the "Closing Date"), Franchisee shall be
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released from any obligations and liabilities under the Franchise that accrue on or after the
Closing Date. Franchisee shall remain responsible for all obligations and liabilities under the
Franchise that accrued prior to the Closing Date. Transferee shall be responsible for any
obligations and liabilities under the Franchise that accrue on or after the Closing Date.
Section 6. This Resolution and Exhibits "A" and "B" hereto shall have the force of a
continuing agreement with the Franchisee and Transferee,, and the City shall not amend or
otherwise alter this Resolution without the prior written consent of the Franchisee and/or
Transferee.
Section 7. The City Clerk shall certify to the adoption of this Resolution and shall
cause the same to be processed in the manner required by law, and shall transmit a certified copy
of this Resolution and Exhibits"A"and"B"hereto to Franchisee, Transferee and Guarantor.
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PASSED AND APPROVED AND ADOPTED this 13th day of Decembe2005.
CITY F CAR9�
Mayor J nq SEAR
A -'T ST:
/v I I
v�
Helen S. Kawagoe, CfCyC61erk
APPROVED AS TO FORM:
ALESHIRE & WYNDER, LLP
A- 00�
City Attorney
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF CARSON )
I, Helen S. Kawagoe, City Clerk of the City of Carson, California, do hereby certify that the whole
number of members of the City Council is five; that the foregoing resolution, being Resolution No. OS-117
as duly and regularly adopted by said Council at an adjourned regular meeting duly and regularly held on
the 13th day of December, 2005, and that the same was passed and adopted by the following vote:
AYES: COUNCIL MEMBERS: Mayor Dear, Ruiz-Raber, Williams and Gipson
NOES: COUNCIL MEMBERS: None
ABSTAIN: COUNCIL MEMBERS: None
ABSENT: COL7NCIL MEMBERS: Santarina
City Clerk, City of Carson, qalifornia
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EXHIBIT "A"
CHANGE OF OWNERSHIP CONSENT AGREEMENT
This CHANGE OF OWNERSHIP CONSENT AGREEMENT ("Agreement") is entered
into as of December 1 2005, between and among the CITY OF CARSON("City"), C-NATIVE
EXCHANGE I, LLC ("Transferee"), and COMCAST OF LOS ANGELES,INC. ("Franchisee").
SECTION 1.
All terms used in this Agreement shall be as defined in Resolution No. OS-117, except as
otherwise provided herein. Resolution No. OS-117 is incorporated by reference as if set forth in
full.
SECTION 2.
The City hereby approves the Transaction and consents to the transfer of the System and the
Franchise to Transferee,, subject to the satisfaction of all of the following conditions:
I. Following the Closing Date, C-Native Exchange I, LLC, the Transferee, will be owned
and controlled as indicated in Figure 1 attached hereto. To the extent required by Carson
Municipal Code Section 6606(d), any change of ownership or control of Transferee from
the ownership and control indicated in Figure 1 shall be subject to prior City review and
consent.
2. Time Warner Cable Inc., the Guarantor and indirect parent company of the Transferee,
shall execute and submit to the City the "Guarantee" in substantially the same form
attached to Resolution OS-117 as Exhibit `B." By execution of the Guarantee, the
Guarantor shall unconditionally and irrevocably guarantee the full and faithful
performance of all of the terms, covenants, conditions and agreements to be performed
and observed by Transferee under the Franchise, including but not limited to the punctual
payment of all amounts due under or required to be made by Transferee under the
Franchise.
3. The City expressly reserves any and all rights that it may possess under the Franchise and
applicable law with respect to the Franchisee's non-compliance with any term of the
Franchise, whether known or unknown, which existed prior to the effective date of this
transfer, and Franchisee and Transferee reserve any and all rights and defenses they may
have with respect to such non-compliance issues.
fi 4. Franchisee shall reimburse the City for the City's costs incurred in the processing of the
request for transfer,not to exceed Two Thousand Five Hundred Dollars ($2,500.00). Said
reimbursement shall be provided within thirty (30) calendar days of Franchisee's receipt
of an itemized invoice detailing the City's costs.
5. Transferee acknowledges that the Franchise is continuing on a month-to-month basis and
that City and Franchisee have commenced negotiations for the renewal of the Franchise,,
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and Transferee agrees to cooperate in good faith to complete the negotiations in an
expeditious manner.
6. All terms of the Franchise shall remain in full force and effect, including all tern s
contained in Ordinance 86-743 and Resolution No. 02-077.
SECTION 3.
Other than with respect to the condition made in Section 2.2 above, if any sentence, clause,
phrase or portion of any condition imposed in Section 2 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
Carson hereby declares that it would have entered into this 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.
SECTION 4.
Subject to the reservation of rights contained in Section 2.3 above, effective upon the date of the
closing of the Transaction (the "Closing Date"), Franchisee shall be released from any
obligations and liabilities under the Franchise that accrue on or after the Closing Date.
Franchisee shall remain responsible for all obligations and liabilities under the Franchise that
accrued prior to the Closing Date. Transferee shall be responsible for any obligations and
liabilities under the Franchise that accrue on or after the Closing Date.
SECTION 5.
This Agreement hereto shall have the force of a continuing agreement with the Transferee, and
the City shall not amend or otherwise alter this Agreement without the prior written consent of
the Transferee.
SECTION 6.
This Agreement shall be effective upon the Closing Date of the Transaction, at which time
Franchise and System ownership shall have transferred from Franchisee to Transferee.
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"City" "Transferee"
City of Carson C-Native Exchange I, LLC
By:
Jim Dear,, Mayor Its:
Date:
Attest:
get,
Helen S. Kawagoe, CityvCw'—Ie—rk
Approved as to Form:
Aleshire& Wynder., LLP
"Franchisee"
vv
City Attorney Comcast of Los Angeles, Inc.
By:
ors: S (cj//�
Date:
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Exhibit A—Figure 1
.............
U Ic areholders Time Warner Inc.
b -qqqql
16% 84%
• indirect 900%
. Time Warner Cable Inc.
100%
American Television and
Communications
Corporation
TWE Holding
LLC
100%voting Common Stock [12]%
[88%equity] Non-Voting
Common Stock
Time Warner NY Cable Holding Inc.
400%
Ti arner NY Cable C
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EXHIBIT "B"
GUARANTEE
This GUARANTEE, dated as of December 13, 2405, is made by TIME
WARNER CABLE INC., a Delaware corporation("Guarantor"), in favor of the City of Carson,
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 Carson (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. 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 close of the Transaction described in Carson
Resolution 05-117,, Guarantor unconditionally and irrevocably guarantees to Beneficiary the
timely and complete performance of all Transferee obligations under the Franchise (the
"Guaranteed Obligations"). This 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 tern s 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) 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
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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 any material respect such party's ability
to perform its obligations hereunder.
-5-. 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).
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
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At
To Beneficiary:
City of Carson
701 E. Carson St.
Carson, CA 90745
Telephone: (310) 952-1729
Telecopy,, (310) 835-7261
Attention: City Manager
7. 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.
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 waived by Beneficiary in a letter or agreement
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 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.
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.
f
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.
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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., a Delaware
corporation
By: U /s
TitleEvp, I q V
"BENEFICIARY"
CITY OF CARSON,, a municipal corporation
t � -
By: % =�
Name:
Title:
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