1999-010-Consenting To The Merger Of TCI And AT&T Corporation Pursuant To Code Of The Town Section 7.20.030RESOLUTION 1999 - 10
RESOLUTION OF THE TOWN COUNCIL
OF THE TOWN OF LOS GATOS CONSENTING TO THE MERGER
OF TCI AND AT &T CORPORATION PURSUANT TO CODE OF THE
TOWN OF LOS GATOS SECTION 7.20.030
WHEREAS:
A. The Los Gatos Cable Television Franchise Ordinance (Chapter 7, Code of the Town
of Los Gatos, hereafter referred to as "Ordinance ") sets forth the terms and conditions under which
the Town may grant a non - exclusive franchise to provide cable television services within the Town.
B. Section 7.20.030 of the Ordinance governs transfers of franchises, stating the
requirement that the Town consent to transfers and changes of ownership or control, setting forth
the procedure for obtaining such consent, and defining "transfers" to include "mergers."
C. On January 20, 1990, the Town granted a non - exclusive franchise to Hearst
Cablevision of California (the "Franchise Agreement "), and thereafter consented to the transfer of the
franchise from Hearst Cablevision of California to Brenmor Cable Partners., L.P., dba South Bay
CableVision.
D. On March 4, 1996, the Town consented to the transfer of the franchise from Brenmor
to TCI of Cleveland, Inc. (the "Franchisee ") pursuant to section 7.20.030 of the Ordinance, said
consent having been made in conjunction with a guarantee provided to the Town by TCI
Development Corporation covering Franchisee's obligations to the Town.
E. On September 4, 1998, Franchisee notified the Town of its intention to merge with
AT &T, the specifics of that transaction being described in the FCC Form 394 regarding the
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Agreement and Plan of Restructuring and Merger among AT &T Corp. ( "AT &T "), a newly formed
wholly owned subsidiary of AT &T ( "Merger Sub "), and Telecommunications, Inc., the parent of
Franchisee ( "TCI "), dated as of June 23, 1998 (the "Merger Agreement "). According to the Merger
Agreement, Merger Sub wifl merge with and into TCI with TCI as the surviving corporation in the
merger, and as a result of the transactions contemplated by the Merger Agreement, TCI will become
a wholly owned subsidiary of AT &T. Franchisee will continue to exist as a separate wholly owned
corporate entity and would continue to hold the franchise after consummation of the merger.
F. On September 8, 1998, Franchisee paid to the Town TWENTY -FIVE THOUSAND
DOLLARS ($25,000), the application fee required pursuant to subsection (g) of section 7.20.030 of
the Ordinance.
G. On December 2, 1998, the Town Manager's Cable Television Advisory Committee
held a noticed public meeting and received comments from the community on the proposed merger.
H. On January 26, 1999, Franchisee submitted to the Town a Systems and Services
Review pursuant to subsection (a) of section 7.20.030 and section 7.30.040 of the Ordinance.
I. TCI has agreed to provide the Town with a guarantee of all of Franchisee's obligations
to the Town arising under the Franchise Agreement and the Ordinance (Exhibit "A ")
J. AT &T has accepted, acknowledged and agreed that, from and after the consummation
of the proposed merger, it will not take any action inconsistent with the promises contained in the
franchise agreement, or cause Franchisee to take-any action contrary to its lawful obligations under
the franchise agreement (Exhibit "B")
RESOLVED:
The Town Council of the Town of Los Gatos hereby consents to and approves the
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Merger pursuant to section 7.20.030 of the Ordinance.
2. This Resolution shall be deemed effective in accordance with applicable law.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town
of Los Gatos, California held on the 1 st day of February, 1999, by the following vote:
COUNCIL MEMBERS:
AYES: Randy Attaway, Steven Blanton, Linda Lubeck, Joe Pirzynski,
Mayor Jan Hutchins
NAYS: None
ABSENT: None
ABSTAIN: None
SIGNED:
TOS, CALIFORNIA
ATTEST:
CLERK OF THE TOWN OF L- S GATOS
LOS GATOS, CALIFORNIA
LOS GATOS
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CVMCE OF THE -i'CNtN Ct.ERV
CERTIFICATION OF TRANSFEREE
(re: Town of Los Gatos) :Iaa s�� >- �-
WHEREAS:
AT &T CORP., a New York Corporation, has agreed to acquire
TELE - COMMUNICATIONS, INC. ( "TCI ") pursuant to an
Agreement and Plan of Merger dated June 24, 1998 (the "Proposed
Transaction ").
2. TCI currently owns and controls TCI.of Cleveland, Inc., a
Tennessee Corporation, the Grantee of a non - exclusive Cable
television franchise ( "Franchise ") in the Town of Los Gatos
( "Town ").
3. TCI and AT &T have filed FCC Form 394 pursuant to the 1992
Cable Act and FCC Regulations, and have requested that the Town
approve the Application for Change of Control of the Franchisee
from TCI to AT &T.
4. The Town is unwilling to consent to the change of control of the
Franchisee unless AT &T certifies it will not take any action
inconsistent with the promises contained in the Franchise and will
cause Franchisee to perform the Franchise obligations.
NOW, THEREFORE, as a material inducement for the Town's consent,
AT &T hereby certifies as follows:
1. AT &T Corp., a New York Corporation, hereby accepts,
acknowledges and agrees that, from and after the consummation of
the Proposed Transaction, it will not take any action inconsistent
with the promises contained in the franchise agreement, or which
would cause the Franchisee to take any action contrary to its lawful
obligations under the franchise agreement.
AT &T CORP.
Name: David P. Condit
Title: L &GA Vice President
Date: 1/29/99
PAWD \72 \7233 \026 \Los Gatos\ Certification1.doc
EXHIBIT 1
GUARANTY
THIS GUARANTY ( "Guaranty ") is made this day of 1999 by
TELE - COMMUNICATIONS, INC. a Delaware Corporation ( "Guarantor "), to, ii favor of and
for the benefit of the TOWN OF LOS GATOS, CALIFORNIA, a municipal corporation
( "Town ").
WITNESSETH
WHEREAS:
1. AT &T CORP., a New York Corporation, has agreed to acquire
TELE - COMMUNICATIONS, INC. ( "TCI ") pursuant to an Agreement
and Plan of Merger dated June 24, 1998 (the "Proposed Transaction ").
2. TCI currently owns and controls TCI of Cleveland, Inc., a Tennessee
Corporation, the Grantee of a non - exclusive cable television franchise
( "Franchise ") in the Town.
3. TCI and AT &T have filed FCC Form 394 pursuant to the 1992 Cable Act
and FCC Regulations, and have requested that the Town approve the
Application for Change of Control of the Franchisee from TCI to AT &T.
4. The Town is unwilling to consent to the change of control of the
Franchisee unless the Town receives Guarantor's unconditional guarantee
of Grantee's performance of its obligations and Grantee's observance of
the terms and conditions of the Franchise.
NOW, THEREFORE, in consideration of the above recitals and the mutual covenants and
agreements contained herein, and as a material inducement for the Town's case, it is hereby
agreed as follows:
1. Guarantor hereby guarantees unconditionally and absolutely to the Town,
its successors and assigns, the full and faithful performance and
observance by Grantee of all the terms, obligations and conditions
contained in the Franchise to be performed and observed by Grantee.
2. This Guaranty shall not be affected by any deviation from or alteration of
t1 terms, covenants or conditions of the Franchise including but not
limited to any extension of the Franchise term. If the Franchise is
modified in any respect by agreement between Town and Grantee, the
obligations hereunder of Guarantor shall extend and apply with respect to
the full and faithful performance and observance of all of the covenants,
terms, and conditions of the Franchise and of any such modification
thereof.
3. It shall not be necessary for Town to institute suit or exhaust any of its
legal remedies against Grantee in order to enforce this Guaranty. This
Guaranty may be immediately enforced against Guarantor upon any
default by Grantee. Guarantor waives all rights that it may have under
Section 2845 of the California Civil Code, subject only to defenses
otherwise available to Franchisee.
4. Failure of Town to insist upon strict performance and observance of any of
the terms, provisions and covenants of the Franchise or to exercise any
right therein contained shall not be construed as a waiver or
relinquishment for the future of any term, provision or covenant thereof,
but, as to Guarantor, the same shall continue to remain in full force and
effect.
5. If any provision of this Guaranty shall be invalid, unenforceable or
ineffective for any reason whatsoever, all other provisions hereof shall be
and remain in full force and effect.
6. This Guaranty, and all of the terms hereof, shall inure to the benefit of
Town, its successors and assigns, and shall be binding upon Guarantor.
No assignment of this Guaranty shall be effective without the prior written
consent of Town.
7. This Guaranty shall be interpreted in accordance with, and governed by,
the substantive and procedural law of the State of California. Guarantor
hereby consents to jurisdiction of the courts of the State of California in
resolving any dispute arising under or concerning this Guaranty.
8. Guarantor irrevocably appoints Grantee as its agent for service of process
related to this Guaranty.
9. Guarantor represents and warrants that this Guaranty has been duly
authorized by all necessary corporate action on Guarantor's part, has been
duly executed and delivered by a duly authorized officer, and constitutes
Guarantor's valid and legally binding agreement in accordance with this
term.
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IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date and year
first written above.
TELE -COM UNICATIONS, INC.
By:
Name: Steph n M. Brett
Title: Executive Vice President
ACCEPTED BY THE TOWN OF LOS GATOS
on Z . 2 , 1999
By:
Its:
ATTEST:
P
MARIAN S VE, TOWN CLERK-
PAWD \72 \7233 \026\Los Gatos \Guarantyldoc 3