1996-025-Approving A Proposed Transfer Of A Cable Television Franchise From Brenmor Cable PartnersRESOLUTION 1996 - 25
RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS
APPROVING A PROPOSED TRANSFER OF A CABLE TELEVISION FRANCHISE
FROM BRENMOR CABLE PARTNERS, L.P. DBA SOUTH BAY CABLEVISION TO
TCI OF CLEVELAND, INC. AND AUTHORIZING THE TOWN MANAGER TO EXECUTE
A FRANCHISE ASSUMPTION AGREEMENT AND GUARANTY AGREEMENT WITH
RESPECT TO SUCH TRANSFER
RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF LOS GATOS,
COUNTY OF SANTA CLARA, THAT:
WHEREAS, Brenmor Cable Partners, L.P. ( "Brenmor "), doing business as South Bay
CableVision, has applied to the Town of Los Gatos for consent to a proposed transfer of its non-
exclusive cable television franchise within the Town to TCI of Cleveland, Inc. ( "TCI "), a Tennessee
corporation, and has paid the applicable transfer application fee in accordance with Chapter 7 of the
Town Code of Los Gatos; and
WHEREAS, a system and services review, including a public session duly noticed and held
on December 5, 1995, has been carried out pursuant to sections 7.20.030 and 7.30.040 of the Town
Code of Los Gatos; and
WHEREAS, the public notice requirements contained in section 7.110.025 of the Town
Code of Los Gatos have been met; and
WHEREAS, the Town Council held a public hearing on March 4, 1996, and received and
considered all oral and written material presented by all interested persons; and
WHEREAS, consent to the proposed transfer should be granted subject to the terms and
conditions contained in the Franchise Assumption Agreement by and among the Town, Brenmor and
TCI attached hereto as Exhibit A and the Guaranty by TCI Development Corporation, a Colorado
corporation, attached as Exhibit 1 to the Assumption Agreement, should be accepted.
NOW, THEREFORE, IT IS ORDERED that the proposed transfer of the cable television
franchise from Brenmor to TCI is approved pursuant to the Franchise Assumption Agreement and
the Town Code and the Town Manager is authorized and directed to execute the Franchise
Assumption Agreement contained in Exhibit A hereto and to accept the Guaranty contained in
Exhibit 1 to the Franchise Assumption Agreement.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los
Gatos, California held on the 4th day of March, 1996 by the following vote:
COUNCIL MEMBERS:
AYES: Joanne Benjamin, Steven Blanton, Linda Lubeck, Patrick O'Laughlin,
Mayor Randy Attaway
NAYS: None
ATTEST:
CLERK OF THE TOWN OF S GATOS
LOS GATOS, CALIFORNIA
09
n
FRANCHISE ASSUMPTION AGREEMENT
ego,
THIS FRANCHISE ASSUMPTION AGREEMENT, ( "Agreement" herein) made and
entered into this day of 1996, at Los Gatos, California, by and between the
TOWN OF LOS GATOS, a municipal corporation of the State of California ( "Grantor "),
BRENMOR CABLE PARTNERS, L.P., a California limited partnership doing business as
South Bay CableVision ( "Brenmor ") and TCI OF CLEVELAND, INC., a Tennessee
Corporation ( "TCI ").
WHEREAS:
WITNESSETH
Chapter 7 of the Town Code of Los Gatos ( "Franchise Ordinance ")
authorizes the Town, as Grantor, to grant one or more non - exclusive franchises ( "Franchise ") to
construct, operate, install and maintain a cable communications system ( "System ") within the
Town of Los Gatos; and
2. In accordance with the Franchise Ordinance and a Franchise Agreement
dated January 16, 1990 ( "Franchise Agreement "), Grantor approved the transfer of the Franchise
from Hearst Cablevision of California, Inc. to Brenmor, extended the term of the Franchise,
made certain modifications to other terms and conditions of the Franchise, and required Brenmor
to upgrade and improve the System in accordance with specifications contained in said Franchise
Agreement ( "System Rebuild "),
Brenmor proposes to assign and transfer all of the assets of the System,
including all right, title, interest, and obligations of Brenmor under the Franchise to TCI, (the
"Transfer ") and has requested the consent of Grantor to the assignment and transfer pursuant to
the terms of the Franchise Ordinance and Franchise Agreement.
4. Grantor is willing to consent to the proposed assignment and transfer, subject
to the terms and conditions set forth herein.
NOW, THEREFORE, Grantor, Brenmor and TCI do hereby agree as follows:
Section 1. FRANCHISE TRANSFER
1.1 Conditional Approval. Pursuant to the provisions of the Franchise Ordinance
and subject to applicable state and federal law, Grantor, Brenmor and TCI do hereby agree that
TCI shall be substituted in the place instead of Brenmor as the "Grantee" for the purposes of
constructing, operating, installing, maintaining, and reconstructing the System, subject to the
terms and conditions contained herein.
1.2 Assumption by TCI. TCI does hereby expressly and unreservedly agree to assume
and fully perform all of the duties and obligations required of "Grantee" under said Franchise.
1.3 Effective Date. No rights under the Franchise shall accrue to TCI pursuant to this
Agreement until and unless consent to said transfer and assignment is obtained by approval of all
the applications therefor now pending in the cities of Milpitas, Monte Sereno, Mountain View,
Newark, Santa Clara, and Saratoga, nor shall the consent of Grantor be effective until and unless
Brenmor and TCI, as applicable, shall have fully performed their respective obligations
contained herein to be performed prior to the effective date of the Transfer and the Transfer shall
have occurred (affective Date "). TCI and Brenmor shall jointly notify Grantor in writing of the
Transfer date.
Section 2. SYSTEM REBUILD
2.1 Certification. Prior to the Effective Date, Brenmor shall provide written
certification of completion of the System Rebuild in accordance with the specifications contained
in the Franchise Agreement, and shall deposit with the Finance Director of Grantor the sum of
ten thousand dollars ($10,000) which may be applied against the cost of any audit or other
review of the certification of completion of the System Rebuild.
2.2 Deficiencies. In the event that an audit or other examination of the System Rebuild
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conducted following the Effective Date of the Transfer shows that Bremnor's certification is not
correct, Grantor shall notify TCI in writing of the deficiencies. TCI shall promptly correct the
deficiencies at no cost to Grantor. If TCI does not correct the deficiencies within sixty (60) days
of Grantor's written notice, Grantor may pursue the remedies set forth in Section 7.60.010 of the
Franchise Ordinance, or any other remedy available to Grantor.
Section 3. FRANCHISE FEES. Within thirty (30) days following the Effective Date or
by April 1, 1996, whichever occurs first, Brenmor shall file with the Grantor a statement
prepared by an independent, duly licensed, California certified public accountant, setting forth
and certifying the accuracy of the total gross revenues received by Brenmor for calendar year
1995. TCI hereby agrees to assume all liability for the payment of franchise fees to Grantor from
the period of January 1, 1996, through the Effective Date, and thereafter shall be subject to the
requirements of the Franchise Ordinance relating to the payment of franchise fees. In the event
that, following the Effective Date, it is determined that Bremner has failed to pay to Grantor the
full amount of franchise fees pursuant to the Franchise Ordinance, TCI hereby expressly agrees
to assume all liability therefore, and to pay such an amount, and any additional compensation
required by the terms of said Franchise Ordinance to Grantor within ten (10) days of written
notification from Grantor.
Section 4. PUBLIC ACCESS SUPPORT. In recognition of the importance that local
public and governmental access programming has to the Town of Los Gatos, TCI hereby agrees
that the community access channel commonly known as KCAT will remain on cable channel 6
throughout the term of the Franchise, unless otherwise requested in writing by Grantor or unless
relocation is required in order to comply with "must carry" or "retransmission consent"
requirements.
Section 5, GUARANTY. Prior to the Effective Date, TCI shall provide Grantor with a
written, unconditional guaranty, in the form of guaranty set forth in the attached Exhibit 1 hereto,
from TCI Development Corporation, a Colorado corporation, to guaranty the performance of all
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of the obligations of TCI, as Grantee, under the Franchise Ordinance, the Franchise Agreement,
and this Agreement.
Section 6. MANAGING AGENT. TCI has informed Grantor that TCI CableVision of
California, Inc., a California corporation ( "Managing Agent "), will assume management and
operation of the System on behalf of TCI. Notwithstanding any such delegation of authority by
TCI, TCI shall remain directly responsible to the Grantor for the performance of all obligations
of the Franchise in accordance with the Franchise Ordinance, the Franchise Agreement, and this
Agreement, and TCI hereby unconditionally guarantees the performance of all obligations of the
Franchise to be performed by the Managing Agent or any other employee, agent, affiliate, or
contractor of TCI. At no time does Grantor have any obligation to seek correction or
compensation for any deviation or violation of the Franchise Ordinance, the Franchise
Agreement, or this Agreement from the Managing Agent beyond providing notice as authorized
by TCI.
Section 7. SECURITY FUND AND INSURANCE. Within ten (10) days following
the Effective Date, TCI shall remit to Grantor the full amount of the Security Fund and deliver to
Grantor proof of its compliance with the insurance and bonding requirements of the Franchise
Ordinance and the Franchise Agreement as of the Effective Date.
Section 8. PENDING LITIGATION. Except as set forth below, Brenmor hereby
represents and warrants to Grantor, as of the Effective Date, that there is no claim, action, suit,
proceeding, or investigation with respect to its operation of the Franchise and its performance
under the Franchise Agreement. Prior to the Effective Date, Brenmor shall enter into an
enforceable settlement, in the form of a stipulated judgement or otherwise, of claims, including
claims for excessive late charges, currently under investigation by the Office of the District
Attorney of Santa Clara County. Said settlement shall include an acknowledgement of its terms
by TCI and an agreement by TCI to be bound by its terms as a successor in interest to Brenmor.
Prior to the Effective Date, Brenmor shall provide a copy of the executed settlement agreement
with the District Attorney.
Section 9. TCI REPRESENTATIONS AND WARRANTIES. TCI represents and
warrants to Grantor, that it possesses superior experience, character, and background including,
but not limited to, financial, legal and technical abilities and resources required to construct,
operate, install, and maintain the System in the Town of Los Gatos. TCI further warrants that is
a corporation duly organized, validly existing and in good standing under the laws of the state of
Tennessee and will be, as of the Effective Date, duly qualified to do business as a foreign
corporation in California, and has all requisite corporate power and authority to execute, deliver
and perform this Agreement.
Section 10. MISCELLANEOUS.
10.1 Severability. If any term, covenant, condition, or provision of this Agreement or
the application thereof to any person or circumstances is, to any extent, invalid or unenforceable,
the remaining terms, covenants, conditions, and provisions of this Agreement, or the application
of such term, covenant, condition, or provision to persons or circumstances other than those to
which it is held invalid or unenforceable, shall not be affected thereby, and each term, covenant,
condition, and provision of this Agreement shall be valid and enforced to the fullest extent
permitted by law.
10.2 Waiver. The consent to the transfer does not constitute a waiver of rights
belonging to Grantor under the Franchise. Brenmor does hereby waive and relinquish any and
all claims, demands, actions or causes of action it may have against Grantor arising out of or in
any way connected with the Franchise Agreement or any other matter.
10.3 Franchise Agreement References. The parties hereby agree that all references
contained in the Franchise Agreement to Chapter 9 of the Town Code of Los Gatos are hereby
amended to refer to Chapter 7 of the Town Code of Los Gatos, and all references to specific
sections of Chapter 9 shall be amended to refer to the corresponding, but renumbered sections of
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Chapter 7 of the Town Code of Los Gatos.
10.4 Notices. All notices required under this Agreement shall be in writing and shall
deemed to have been duly given when delivered personally or mailed by first class mail, postage
pre -paid to the following address, as applicable:
Grantor: Town of Los Gatos
Civic Center
110 East Main Street
P. O. Box 949
Los Gatos, CA 95031
ATTN: Town Manager
Brenmor: InterMedia Partners
235 Montgomery Street
Suite 420
San Francisco, CA 94104
TCI: TCI of Cleveland, Inc.
c/o TCI Cablevision of California, Inc.
1850 Mt. Diablo Blvd., Suite 225
Walnut Creek, CA 94596
ATTN: Legal Department
or to such other address as any party will have furnished to the other by notice given in
accordance with this section.
10.5 Governing Law. This Agreement shall be interpreted in accordance with, and
governed by, the substantive and procedural law of the State of California. The parties hereby
consent to the jurisdiction of the courts of the State of California in resolving any dispute arising
under or concerning this Agreement. Venue for any such action shall be in either San Mateo or
Santa Clara County in the State of California.
10.6 No Further Amendment Intended Nothing contained herein is intended to
M
amend or modify anything contained in the Franchise Ordinance or the Franchise Agreement,
except as expressly provided in this Agreement. The term of the Franchise under the Franchise
Agreement shall expire on March 31, 2003, as provided in the Franchise Agreement.
IN WITNESS WHEREOF, Grantor, Brenmor, and TCI have executed this Agreement
on the day and first above written.
GRANTOR:
Approved as to form: TOWN OF LOS GATOS,
A California Municipal Corporation
By:
Larry Anderson, Town Attorney Town Manager
Attest: BRENMOR:
BRENMOR CABLE PARTNERS, L.P.,
A California Limited Partnership
Marian V. Cosgrove
Clerk of the Town of Los Gatos
By:
General Partner
TCI:
TCI OF CLEVELAND, INC.
A Tennessee Corporation
C
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EXHIBIT i
GUARANTY
THIS GUARANTY ( "Guaranty ") is made this day of , 1996 by TCI
DEVELOPMENT CORPORATION, a Colorado Corporation ( "Guarantor "), to, in favor of and for
the benefit of the TOWN OF LOS GATOS, CALIFORNIA, a municipal corporation ( "Town ").
WITNESSETH
WHEREAS:
TCI OF CLEVELAND, INC., a Tennessee Corporation ( "Grantee ") desires to
assume the obligations of Brenmor Cable Partners, L.P. as the Grantee of the non-
exclusive cable television franchise ( "Franchise ") in the Town pursuant to the terms
of that certain Franchise Assumption Agreement executed concurrently herewith.
2. The Town is unwilling to consent to the assignment and transfer of the Franchise to
Grantee, unless Town receives Guarantor's unconditional guaranty of Grantee's
performance of its obligations and Grantee's observance of the terms and conditions
of the Franchise Assumption Agreement.
NOW, THEREFORE, in consideration of the above recitals and the mutual covenants and
agreements contained herein, and as a material inducement to the Town to enter into the
Franchise Assumption Agreement, it is hereby agreed as follows:
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 Assumption
Agreement to be performed and observed by Grantee.
2. This Guaranty shall not be affected by any deviation from or alteration of the 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.
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.
This Guaranty, and all of the terms hereof, shall enure 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.
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 counts of the State of California in resolving any dispute arising
under or concerning this Guaranty.
Guarantor irrevocably appoints Grantee as its agent for service of process related to
this Guaranty.
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.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date and year
first written above.
TCI DEVELOPMENT CORPORATION
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Title:
Attest:
Marian V. Cosgrove, Town Clerk
ACCEPTED BY THE TOWN OF LOS GATOS
11711
1996
David W. Knapp, Town Manager
N:ATTrGUARANT2.EXH L February 28, 1996