Loading...
06-D Cox Cable Franchise Assignment AGENDA INFORMATION SHEET PROJECT: Consider adopting a Resolution approving and consenting to a Transfer of the Cox Southwest Holdings, L.P. ("Grantee") Cable Franchise to Cebridge Acquisition, L.P. d/b/a Cebridge Connections ("Cebridge"), subject to Cebridge's compliance with the provisions contained therein; requiring a written Acceptance by the Cox the Grantee, and Cebridge; and establishing an effective date. BACKGROUND: The City of Paris Charter states that no holder of a franchise shall have the right to transfer or assign such franchise to any other person, firm, or corporation without the consent of a majority of the entire Council. Additionally, the City Code requires that a franchise shall not be assigned or transferred without the prior written consent of the City of Paris. Cox Southwest Holdings, L.P. ("Grantee") is a wholly owned subsidiary of Cox Communications, Inc. and is currently a Grantee for cable services in the City of Paris, Texas pursuant to Resolution No. 2003-177. Cox the "Grantee", and Cebridge LLC have requested the City's consent to transfer of the Cable Franchise to "Cebridge", and have filed a FCC Form 394 with the City requesting such consent. "Cebridge" will become an indirect subsidiary (but subject to the direction and control) of Cebridge Connections Holdings, LLC. In 2005, the Texas Legislature passed a law that resulted in a fundamental change in franchise relations with cable and telephone companies. The law now requires a state permit for all cable or video service providers, except those that currently have or had previously received a franchise to provide service with respect to a municipality until the expiration date of the existing franchise agreement. In its request for consent to transfer, Cebridge has expressed its agreement that, upon the closing of the transfer transaction, it shall be the successor entity to the incumbent cable service provider, pursuant to Texas law, including Chapter 66, Texas Utilities Code, [Sec. 66.004 (a) and (c)] as adopted by S.B. 5, 79th Texas Legislature, 2nd Called Session. As such, it is Cebridge's intent and agreement that it will be operating under the Franchise being transferred from the current incumbent cable provider (Cox) in the City and to be the incumbent cable provider in the City under applicable law as if it were, and had at all times been, the incumbent cable provider in the City under the Franchise as of December 8, 2003 thereunder since that date regardless of the actual date of the Franchise transfer. Cebridge additionally agrees to abide by all the terms, conditions, standards, duties, responsibilities, and obligations of the Grantee under the Franchise upon the closing of the transfer transaction. RECOMMENDED ACTION: It is recommended that the City Council consider adopting a Resolution approving and consenting to a Transfer of the Cox, L.P. Cable Franchise to Cebridge, subject to Cebridge's compliance with the provisions contained therein; and requiring a Written Acceptance by the Grantee and Cebridge. STAFF CONTACT: Tony Williams, City Manager COUNCIL DATE: City Council Regular Meeting on Monday, February 27, 2006. ,-, ..,.._, -T' DRAFT F:A lTORNEY\ORDWORK\CURRENT\ Cox Cable Francbise Assignment RES 2006 February 15,2006 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS, APPROVING AND CONSENTING TO THE TRANSFER AND CONTROL OF THE COX SOUTHWEST HOLDINGS, L.P. ("GRANTEE") CABLE FRANCHISE TO CEBRIDGE ACQUISITION, L.P. D/B/A CEBRIDGE CONNECTIONS, SUBJECT TO CEBRIDGE'S COMPLIANCE WITH PROVISIONS CONTAINED HEREIN; REQUIRING A WRITTEN ACCEPTANCE BY COX AND CEBRIDGE; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Charter of the City of Paris provides that no holder of a franchise heretofore or hereafter granted shall have the right to transfer or assign such franchise to any other person, firm, or corporation without the consent of the Council; and WHEREAS, Article V, Section 16 "Transactions affecting ownership of grantee." of Appendix A - Franchises ofthe Code of ordinances of the City of Paris requires that a franchise shall not be assigned or transferred without the prior written consent of the City; and WHEREAS, Cox Southwest Holdings, L.P. (hereinafter referred to as "Grantee") is currently a Grantee for cable services in the City of Paris, Texas (the "City") pursuant to Resolution No. 2003-177 adopted on the 8th day of December, 2003; and WHEREAS, Grantee is a wholly owned subsidiary of Cox Communications, Inc.; and WHEREAS, Grantee and Cebridge have requested the City's consent to transfer of the Franchise and have filed a FCC FornI 394 with the City requesting such consent; and WHEREAS, pursuant to an Asset Purchase Agreement dated October 31, 2005 between Cebridge Acquisition Co. LLC ("Cebridge LLC") and Cox and certain related entities (the "Agreement"), Cox will cause the Grantee to sell and transfer the cable system owned and operated by Grantee within the City ("Transfer") to Cebridge Acquisition, L.P. d/b/a! Cebridge Connections ("Grantee"), which will become an indirect subsidiary (but subject to the direction and control) of Cebridge Connections Holdings, LLC (the "Transaction"); and WHEREAS, current state law provides that a cable or video service provider that currently has or had previously received a franchise to provide cable or video service with respect to a municipality is not eligible to seek a state-issued certificate of franchise authority as to that municipality until the expiration date of the existing franchise agreement; and r WHEREAS, Cebridge agrees that, upon the closing of the Transaction, it shall be the successor entity to the incumbent cable service provider, the Grantee, pursuant to Texas law, including, without limitation, Chapter 66, Texas Utilities Code, [Sec. 66.004 (a) and (c)] as adopted by S.B. 5, 79th Texas Legislature, 2nd Called Session, and as such will be operating under the Franchise being transferred from the current incumbent cable provider in the City and will be the incumbent cable provider in the City under applicable law as if it were the incumbent cable provider in the City under the Franchise as of September 1, 2005 and had at all times been the incumbent cable provider in the City thereunder since that date regardless of the actual date of the Franchise transfer; and WHEREAS, Cebridge agrees to abide by all the terms, conditions, standards, duties, responsibilities, and obligations of the Grantee under the Franchise upon the closing of the Transaction; and WHEREAS, Cebridge has indicated its agreement with the following resolution and their intention to accept; and WHEREAS, the City is willing to consent to the proposed Transfer as detailed in the FCC Form 394, pursuant and subject to the conditions set forth herein; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS: Section 1. That the findings set out in the preamble to this resolution are hereby in all things approved. Section 2. That the City, at the request of Grantee and Cebridge, has consented to the Transfer, effective immediately upon the Closing on the Agreement, and subject to: 1. Cebridge's agreement that, upon the closing of the Transaction, it shall be the successor entity to the incumbent cable service provider, the Grantee, pursuant to Texas law, including, without limitation, Chapter 66, Texas Utilities Code, [Sec. 66.004 (a) and (c)] as adopted by S.B. 5, 79th Texas Legislature, 2nd Called Session, and as such will be operating under the Franchise being transferred from the current incumbent cable provider in the City and will be the incumbent cable provider in the City under applicable law as if it were the incumbent cable provider in the City under the Franchise as of September 1, 2005 and had at all times been the incumbent cable provider in the City thereunder since that date regardless of the actual date of the Franchise transfer. 2. Cebridge's agreement to abide by all the terms, conditions, standards, duties, responsibilities, and obligations of the Grantee under the Franchise, the Paris City Charter, the Paris Code of Ordinances and the Franchise Ordinance, upon the closing of the Transaction. .r 3. Strict compliance with the conditions set out in the acceptance form attached to this resolution as Exhibit "A". 4. Written Acceptance of the Resolution by Grantee, and Cebridge, as follows: (a) Within either thirty (30) days after passage of this Resolution by the City Councilor thirty (30) days after the Closing, whichever is later, Cebridge LLC, Cebridge and Grantee shall file their written acceptance of this Resolution with the City Manager. The acceptance shall be in the form attached hereto as Exhibit "A"; (b) Cebridge and Grantee's acceptances shall be contingent only upon the final Closing of the Agreement. Such acceptance shall be otherwise unqualified and shall be construed to be an acceptance of all the terms, conditions and restrictions contained in this Resolution; (c) Cebridge or Grantee's failure, refusal or neglect to file such written acceptance within such time shall constitute an abandonment and rejection of the rights and privileges conferred hereby. 5. Subject to the closing of the Transaction and Cebridge's compliance with the provisions contained herein, the City of Paris accepts the transfer of the Franchise to Cebridge. Such acceptance does not preclude further investigation and action by the City of any potential Franchise violations or non-compliance issues, including those occurring prior to the closing of the Transaction. With respect to any violation or non-compliance issues that are not extinguished prior to closing of the Transaction, the City will have all rights following the closing of the Transaction to continue investigation of such matters and to pursue action as determined by the City in connection therewith under the terms set forth in the Franchise. 6. The City releases Grantee, effective upon the Closing Date, from all obligations and liabilities under the Franchise that accrue on and after the Closing Date; and Cebridge shall be responsible for any obligations and liabilities under the Franchise that accrue on and after the Closing Date. Notwithstanding any other provision of this Resolution, Grantee shall continue to be responsible for any obligations and liabilities under the Franchise relating to time periods occurring prior to the closing date of the Transaction. 7. Denial of Consent to Transaction. If for any reason Cebridge or Grantee fails, refuses or neglects to file the written acceptance as provided in Subsections 3 and 4, the City denies Grantee's request for the Transfer and/or consent to the Transaction. T Section 3. Automatic Nullification in Event of Failure to Close the Agreement or Closure on Materially Different Terms. In the event the Transfer which is the subject of this Resolution is not consummated or does not reach final closure for any reason, or in the event such closure is reached on terms substantially and materially different to the terms described in the FCC Form 394 and subsequent information provided by or Cebridge and relied upon by the City, then this Resolution, together with the written acceptance provided hereunder, shall be null and void. If the closure is upon terms which are substantially and materially different, Grantee shall resubmit its request for a change of control and/or transfer of the Franchise." Section 4. That this Resolution shall be effective from and after its date of passage. PASSED AND ADOPTED this 27th day of February, 2006. Curtis Fendley, Mayor ATTEST: Janice Ellis, City Clerk APPROVED AS TO FORM: John D. Lestock, Assistant City Attorney r EXHIBIT" A" Written Acceptance of Consent to Change of Control of Franchise, Resolution No. 2006- TO: City of Paris, Texas Tony N. Williams, City Manager P. O. Box 9037 Paris, TX 775461-9037 This is to advise the City of Paris, Texas that Cebridge Acquisition, L.P. d/b/a Cebridge Connections, (the "Cebridge" or "Grantee") and Cox Southwest Holdings, L.P. (the "Franchisee"), hereby unqualifiedly accept Resolution No. 2006-_ passed by the City Council on February 27, 2006, ("Resolution") regarding the change in control and/or transfer of the Franchise (Cable Franchise Ord. No. 84-082) to the Franchisee under the following terms and conditions: 1. Compliance with Franchise. Subject to Texas state law and federal law and in all respects and without exception, the Grantee shall comply with the requirements of the Franchise, including all applicable ordinances, orders, contracts, agreements, commitments, side letters, and regulatory actions taken pursuant thereto. The parties acknowledges that the transfer will not affect, diminish, impair or supersede the binding nature on Grantee of the documents set forth in this paragraph. In all instances, the Grantee will except as otherwise provided herein continue with all current obligations of the existing Franchise and continue to provide the level of service provided for therein. The Franchisee acknowledges that the City has certain Franchise fee audit rights pursuant to the Franchise and assure that they do not have any contractual or other restrictions that will limit the ability of Cebridge to remit Franchise fees as provided in the Franchise or limit Cebridge's ability to provide all relevant information concerning the payment of Franchise fees as required by the Franchise except as otherwise provided herein. Notwithstanding any other provision of this acceptance or the accompanying Resolution, Franchisee shall continue to be responsible for any obligations and liabilities under the Franchise relating to time periods occurring prior to the closing date of the transaction. The first payment of Franchise fees after Cebridge assumes control of the Franchise will be accompanied by a statement itemizing the revenue categories by account on which Franchise fees are being paid with a statement as to any differences between the calculations by Cebridge and the Franchisee. r' Further, neither the services currently provided nor the service area currently served by the Franchisee in the City of Paris will be changed or altered in any significant manner by this transaction. Cebridge agrees except as otherwise provided herein, that upon the closing of the Transaction, it shall be the successor entity to the incumbent cable service provider, the Franchisee, pursuant to Texas law, including, without limitation, Chapter 66, Texas Utilities Code, [Sec. 66.004 (a) and (c)] as adopted by S.B. 5, 79th Texas Legislature, 2nd Called Session, and as such will be operating under the Franchise being transferred from the current incumbent cable provider in the City and will be the incumbent cable provider in the City under applicable law as if it were the incumbent cable provider in the City under the Franchise as of September 1, 2005 and had at all times been the incumbent cable provider in the City thereunder since that date regardless of the actual date of the Franchise transfer. 2. No City Waiver or Release for any Non-Compliance. Grantee and Franchisee agree that the City does not waive and expressly reserves all legal rights and authority in regard to any and all non-compliance under the Franchise that may now exist or may later be discovered to have existed during the term of the Franchise, even if prior to or after the closing ofthe Agreement and Transfer that is the subject of this acceptance, as those terms are defined in the Resolution. Grantee and Franchisee acknowledge the City's reservation of rights as set forth above. 3. In the event the Agreement and Transfer, which is the subject of this Acceptance, is not consummated or does not reach final closure for any reason, or in the event such closure is reached on terms substantially and materially different to the terms described in the FCC Form 394, then Franchisee acknowledges that the City's Resolution, together with the written acceptance provided hereunder, shall be automatically null and void without further action by either party. If the closure is upon terms which are substantially and materially different, Franchisee shall resubmit its request for a transfer or assignment in order to be in compliance with the Franchise. Cox Southwest Holdings, L.P. By: Name: Title: Date: T