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HomeMy WebLinkAboutReso 01-2007 RESOLUTION NO. 01-2007 CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION ESTABLISHING CONDITIONS FOR THE APPROVAL OF A TRANSFER OF AN OPEN VIDEO SYSTEM AGREEMENT AND ENCROACHMENT AGREEMENT FROM RCN TELECOM SERVICES, INC. TO ASTOUND BROADBAND, LLC WHEREAS, RCN Telecom Services, Inc. ("Operator") owns, operates and Inaintains an Open Video System ("OVS" or "System") in the City of South San Francisco ("City"); and WHEREAS, Operator provides cable service in the City pursuant to the terms of Open Video System Agreement ("Agreelnent") granted to Operator effective March 1 0, 1999; and WHEREAS, Operator and Astound Broadband, LLC ("Astound" or "Transferee") are parties to an asset purchase agreement ("Purchase Agreelnent") pursuant to which the System and the Agreement are to be transferred to Astound; and WHEREAS, on Septelnber 21, 2006, the City received an F.C.C. Form 394 requesting a transfer of the Agreement from Operator to Transferee; and WHEREAS, the City has one hundred twenty (120) days from the receipt of a cOlnplete F.C.C. Form 394 to act upon the transfer request or the request autolnatically is deemed to have been approved; and WHEREAS, the one hundred twenty (120) day review period expires on January 19, 2007; and WHEREAS, to the extent required by the South San Francisco Municipal Code the Agreement cannot be transferred or assigned without the City Council's consent; and WHEREAS, federal regulations pennit the City to evaluate the legal, technical and financial qualifications of Operator to operate the Systeln; 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 City, as steward of the public good, believes that the transfer will be in the best interest of subscribers provided the transfer is conditioned in order to safeguard the interests of Systeln subscribers; and WHEREAS, on March 24, 1999, the City and RCN executed an Encroacmnent Agreelnent allowing RCN to construct, install and maintain the facilities and video services authorized by the OVS; and WHEREAS, pursuant to Section 45 of the Encroachment Agreement, the City Inust provide written approval of any proposed assignment of the Encroacmnent Agreelnent; and WHEREAS, the City desires to proceed with the proposed transfer of the OVS and assignment of the Encroachment Agreement on the terms and conditions set forth herein. NOW, THEREFORE, the City Council of the City of South San Francisco does hereby resolve, detennine and order as follows: Section 1. The City hereby consents to the transfer of the OVS and assignment of the March 24, 1999 Encroaclunent Agreelnent, subject to the following conditions: 1. Astound Broadband, LLC, the Transferee, is owned and controlled as indicated in Exhibit A attached hereto. To the extent required by South San Francisco Municipal Code 6.76 and Section 5 of the OVS, 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. The City expressly reserves any and all rights that it may possess under the OVS and applicable law with respect to any non-cOlnpliance issues on the part of Operator, whether known or unknown, which exist prior to the effective date of this transfer and Transferee reserves any and all rights and defenses with respect to any such non- compliance issues. In reserving such rights, the City confirms that the Operator is materially in compliance with the provisions of the OVS and there exists no fact or circulnstance known to the City which constitutes, or which, with the passage of time or the giving of notice or both, would constitute a material default or breach under the OVS or would allow the City to cancel or tenninate the rights hereunder, except upon the expiration of the full term of the OVS. 3. The transfer is expressly contingent upon Transferee reimbursing the City for the consultant's costs incurred in the processing of the request for transfer in accordance with Chapter 6.76 of the South San Francisco Municipal Code, not to exceed any Inaximuln amount indicated in the "Change of Ownership Consent Agreement" attached to this Resolution as Exhibit A. Said reimburselnent shall be provided within thirty (30) calendar days of Transferee's receipt of an iten1ized invoice detailing the Consultant's costs. 4. All terms of the OVS Agreement relnain in full force and effect, including all tenns contained in applicable Resolutions approving the OVS Agreement. The OVS agreelnent allows the City to require Operator to provide up to three (3) Public, Educational and Govermnental ("PEG") access channels. Two of the three (3) access channels are currently provided by the Operator. Transferee agrees to abide by all requirements of the OVS regarding provision of PEG service, and to activate and provide one additional PEG access channel at City's request. This channel may be located on Transferee's digital tier of service. Transferee shall not be required to carry the second and third PEG Channels on the Basic Service tier until Transferee converts its entire System to a digital fonnat. 5. Transferee shall evidence acceptance of these conditions by signing a copy of the "Change of Ownership Consent Agreelnent," in substantially the same fonn as attached to this Resolution as Exhibit A, containing the conditions provided to Transferee and submitting the same to the City Clerk within sixty (60) calendar days of this approval. If Transferee fails to submit a signed copy of the "Change of Ownership Consent Agreelnent" to the City Clerk within said sixty (60) day period, or otherwise refuses to accept the conditions placed on the proposed transfer set forth herein, 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 2. Other than with respect to the condition made in Section 1.2 above, if any sentence, clause, phrase or portion of any condition itnposed in Section 1 hereof if for any reason held by a court of cOlnpetent jurisdiction to be invalid or unenforceable, such decision shall not affect the validity of the relnaining conditions placed on this transfer. The City Council of the City of South San Francisco hereby declares that it would have adopted this Resolution and each and every condition set forth in Section 1 hereof separately, irrespective of the fact that one or more of these conditions may be declared invalid or unenforceable. Section 3. This Resolution shall be deemed effective for the purposes of the transfer upon adoption by the City Council. Section 4. Subject to the reservation of rights of Section 1.3 above, the City hereby releases Operator, effective upon the consulnmation of the transaction contemplated in the Purchase Agreement (the "Closing Date") from all obligations and liabilities under the OVS that accrue on or after the Closing Date. Operator shall relnain responsible for all obligations and liabilities under the Franchise that accrue up 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. The City Clerk shall certifY to the adoption of this resolution and shall cause the SaIne to be processed in the lnanner required by law, and shall translnit a certified copy of this Resolution and Exhibit A hereto to Operator, Transferee and Guarantor. * * * * * I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a regular lneeting held on the 10th day of January 2007 by the following vote: AYES: Councilmembers Mark N. Addiego, Joseph A. Fernekes and Karyl Matsumoto, Vice Mayor Pedro Gonzalez and Mayor Richard A. Garbarino NOES: ABSTAIN: None ABSENT: ATTEST: EXHIBIT A to Resolution No. 01-2007 CHANGE OF OWNERSHIP CONSENT AGREEMENT Section 1 Terms used in this Change of Ownership Consent Agreement shall be as defined in Resolution No. Section 2 The City hereby consents to the transfer described in City Resolution No. subject to the following conditions: 1. Astound Broadband, LLC, the Transferee, is owned and controlled as indicated in Exhibit A attached hereto. To the extent required by South San Francisco Municipal Code 6.76 and Section 5 of the OVS, 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. The City expressly reserves any and all rights that it may possess under the OVS and applicable law with respect to any non-cOlnpliance issues on the part of Operator, whether known or unknown, which exist prior to the effective date of this transfer, and Transferee reserves any and all rights and defenses with respect to any such non-compliance issues. In reserving such rights, the City confirms that the Operator is materially in cOlnpliance with the provisions of the OVS and there exists no fact or circumstance known to the City which constitutes, or which, with the passage of tilne or the giving of notice or both, would constitute a lnaterial default or breach under the OVS or would allow the City to cancel or terminate the rights hereunder, except upon the expiration of the full tenn of the OVS. 3. The transfer is expressly contingent upon Transferee reimbursing the City for the Consultant's costs incurred in the processing of the request for transfer in accordance with Chapter 6.76 of the South San Francisco Municipal Code, not to exceed Ten Thousand Dollars ($10,000.00). Said reimburselnent shall be provided within thirty (30) calendar days of Transferee's receipt of an itemized invoice detailing the Consultant's costs. 4. All terms of the OVS agreement remain in full force and effect, including all terms contained in City Resolutions approving execution of the OVS. 5. The OVS agreement allows the City to require Operator to provide up to three (3) Public, Educational and Governmental ("PEG") access channels. Two of the three (3) access channels are currently provided by the Operator. Transferee agrees to abide by all requirelnents of the OVS regarding provision of PEG service, and to activate and provide one additional PEG access channel at City's request. This channel may be located on Transferee's digital tier of service. Transferee shall not be required to carry the second and third PEG Channels on the Basic Service tier until Transferee converts its entire Systeln to a digital fonnat. 6. Transferee shall evidence acceptance of these conditions by signing a copy of this "Change of Ownership Consent Agreelnent," and submitting the same to the City Clerk within sixty (60) calendar days of this approval. If Transferee fails to submit a signed copy of this "Change of Ownership Consent Agreelnent" to the City Clerk within said sixty (60) day period, or otherwise refuses to accept the conditions placed on the proposed transfer set forth herein, consent to the transfer shall be autolnatically withdrawn, effective the date of adoption of City of Resolution No. , and the request to transfer shall be deelned denied. Section 3 Other than with respect to the promise lnade in Section 2.2 above, if any sentence, clause, phrase or portion of any condition imposed in Section 2 hereof if for any reason held by a court of competent jurisdiction to be invalid or unenforceable, such decision shall not affect the validity of the relnaining conditions placed on this transfer. The City Council of the City of South San Francisco hereby declares that it would have entered into this "Change of Ownership Consent Agreement" and each and every condition set forth in Section 2 hereof separately, irrespective of the fact that one or more of these conditions lnay be declared invalid or unenforceable. Section 4 Subject to the reservation of rights of Section 2.3 above, the City hereby releases Operator, effective upon the consumlnation of the transaction contemplated in the Purchase Agreement (the "Closing Date") from all obligations and liabilities under the OVS that accrue on or after the Closing Date. Operator shall remain responsible for all obligations and liabilities under the OVS that accrue up to the Closing Date. Transferee shall be responsible for any obligations and liabilities under the OVS that accrue on or after the Closing Date. Section 5 This Agreelnent shall be effective upon the Closing Date at which time Franchise and System ownership shall have transferred frOln Franchisee to Transferee. "Ci ty" City of South San Francisco "Transferee" Astound Broadband, LLC By: Rich Garbarino, Mayor Its: Date: Attest: , City Clerk Approved as to Fonn: , City Attorney Exhibit A Figure 1 WU1<'L,rij,.-biiul7i II (' U(