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HomeMy WebLinkAboutORDINANCE - 2682 - 4/13/1999 - CABLE TELEVISIONORDINANCE NO. 2682 AN ORDINANCE CONSENTING TO THE CHANGE OF CONTROL OF THE CABLE TELEVISION FRANCHISEE FROM TELECOMMUNICATIONS, INC.,TO AT&T CORP. WHEREAS, TCI of Northern New Jersey, Inc.(the "Franchisee") is the holder of a franchise (the "Franchise") to provide cable television service in the Village of Elk Grove Village (the "Municipality") pursuant to a franchise agreement between the Municipality, dated February 18, 1997 (together with any amendments, the "Franchise Agreement") and the Municipality's Ordinance No. 2541 (the "Cable Ordinance"). The Franchise Agreement and the Cable Ordinance are collectively referred to as the "Franchise Documents"; and WHEREAS, Tele-Communications, Inc. ("TCI"), the parent of the Franchisee, and AT&T Corp. ("AT&T") jointly submitted to the Municipality their application on Federal Communications Commission ("FCC") Form 394, dated November 18, 1998 (the "Application"), requesting that the Municipality approve the change of control of the Franchisee from TCI to AT&T (the "Change of Control") which results from the transactions associated with the Agreement and Plan of Restructuring and Merger dated June 23, 1998 (the "Transaction"); and WHEREAS, pursuant to the information requests of the Municipality, TCI and AT&T supplemented the Application with additional documents and information; and WHEREAS, AT&T and TCI have made various representations in the Application and supplemental information thereto including that the Transaction is not expected to increase cable television service rates or reduce the quality of cable television customer service or the quality of cable television service in the Municipality; and WHEREAS, the Franchisee will remain the holder of the Franchise upon consummation of the Change of Control; and WHEREAS, the Municipality and the Franchisee have negotiated an agreement regarding certain conditions of this consent (the "Change of Control Agreement"), a copy of which is attached as Exhibit A and is incorporated by reference. NOW THEREFORE BE IT ORDAINED by the President and Board of Trustees of the Village of Elk Grove Village, Counties of Cook and DuPage, Illinois as follows: Section 1: In reliance upon the representations and information submitted in the Application and supplemental information thereto and subject to the conditions set forth below, hereby consents to the Change of Control of the Franchisee from TCI to AT&T as described in the Application and supplemental information thereto. Section 2: That the Municipality's consent is subject to the Franchisee executing and delivering to the Municipality by no later than sixty (60) days following execution of this Ordinance a Change of Control Agreement in the form of the attached Exhibit A. If the Franchisee fails to do so, the Municipality's consent to the Change of Control shall be null and void and the Application shall be denied. Section 3: That, by this consent, the Municipality does not agree to any renewal or extension of the Franchise. Any pending or future renewal or extension of the Franchise shall be subject to applicable federal, state and local laws, the Franchise Documents, and the Change of Control Agreement. Section 4: That, by this consent, the Municipality does not approve of or consent to: (1) any other change of control of the Franchisee, (2) any pending or future transfer of the Franchise, or (3) any pending or future assignment or delegation of any of the Franchisee's rights or duties under the Franchise. Any other change of control of the Franchisee, any pending or future transfer of the Franchise, or any pending or future assignment or delegation of any of the Franchisee's rights or duties under the Franchise are subject to any then applicable federal, state and local laws, the Franchise Documents, and the Change of Control Agreement. Section 5: That, by this consent, the Municipality does not make any representation that the Franchisee is in compliance with all of its obligations under the Franchise Documents. Section 6: That, by this consent, the Municipality does not waive any of the Franchisee's commitments, duties and obligations under the Franchise Documents, including any accrued and unfulfilled obligation of the Franchisee, whether known or unknown, relating to the Franchise. Section 7: That the Village President is hereby authorized and directed to execute and deliver the Change of Control Agreement in substantially the form of the attached Exhibit A. Section 8: That the Clerk is hereby authorized to publish this Ordinance in pamphlet form. Section 9: That this Ordinance shall be in full force and effect from and after its passage, approval and publication according to law. VOTE: AYES: 6 NAYS: 0 ABSENT: 0 PASSED this 13th , day of April 1999 APPROVED this 13th , day of April , 1999. Craig B. Johnson Village President ATTEST: Patricia S. Smith Village Clerk Ord/AT&T_Final_Ord_&_Agree2.doc EXHIBIT A CHANGE OF CONTROL AGREEMENT Agreement between the Village of Elk Grove Village, Illinois (the "Municipality") and TCI Cablevision of Northern New Jersey, Inc. d/b/a TCI (the "Franchisee"). Recitals A. The Franchisee is the holder of a franchise (the "Franchise") to provide cable television service in the Municipality, subject to the provisions of a franchise agreement between the Municipality and the Franchisee dated February 18, 1997 (together with any amendments, the "Franchise Agreement") and subject to Ordinance No. 2541 of the Municipality (the "Cable Ordinance"). The Franchise Agreement and the Cable Ordinance are collectively referred to as the "Franchise Documents." B. AT&T Corp. ("AT&T") and Tele-Communications, Inc. ("TCI") have submitted to the Municipality an FCC Form 394 Application for Franchise Authority Consent to Assignment or Transfer of Control of Cable Television Franchise, dated November 18, 1998 (the "Application"), requesting the Municipality to consent to a change of control of the Franchisee from TCI to AT&T (the "Change of Control") which results from the transactions associated with the Agreement and Plan of Restructuring and Merger dated June 23, 1998 (the "Transaction"). The Franchisee desires that the Municipality grant that approval. C. Pursuant to the request of the Municipality, AT&T and TCI have provided supplemental information in support of the Application, including representations that the Transaction is not expected to have any effect on cable television subscriber rates in the Municipality or reduce the quality of cable television customer service or the quality of cable television service. D. The Franchisee will remain the holder of the Franchise upon consummation of the Change of Control. E. The Municipality has enacted or will enact a Resolution granting its approval of the Change of Control subject to the condition that the Franchisee enter into this Change of Control Agreement. F. The Municipality has determined that, in light of the facts available to it and the limited time within which to review the Application, it would not be appropriate to approve the Change of Control absent certain agreements by the Franchisee, including certain promises to ensure compliance with the provisions of the Franchise Documents. The Franchisee agrees that it is appropriate to make such agreements, subject to the Municipality's approval of the Change of Control. Agreement NOW THEREFORE, the Municipality and the Franchisee agree as follows: ARTICLE I. INCORPORATION OF RECITALS. 1.1 Recitals. The above Recitals are incorporated into and constitute a part of this Agreement. ARTICLE II. AFFIRMATION OF FRANCHISE OBLIGATIONS. 2.1 Affirmation. The Franchisee acknowledges and agrees that: (a) after the Change of Control, the Franchisee will continue to be bound by all of its commitments, duties and obligations under the Franchise Documents; and (b) neither the Change of Control nor the Municipality's approval of the Change of Control shall in any respect relieve the Franchisee of any responsibility it may have for past acts or omissions, whether known or unknown, relating to the Franchise. The Franchisee hereby reaffirms that it will be liable for, and accept the consequences of, any responsibility it may have for such acts and omissions, including liability for any accrued but unfulfilled obligation to the Municipality under the Franchise Documents and applicable law, to the same extent as if the Change of Control had not taken place. ARTICLE III. ADDITIONAL AGREEMENTS OF THE PARTIES. 3.1 Compliance With Franchise. The Franchisee agrees that it will continue to be bound by the lawful obligations of this Agreement and the Franchise Documents. 3.2 No Waiver. The Franchisee agrees that, by the Municipality consenting to the Change of Control and the execution of this Agreement, the Municipality is not waiving any of its rights or prospective rights with respect to enforcement of the Franchisee's compliance with the terms and conditions set forth in the Franchise Documents, including without limitation: (a) Renewal of Franchise. The Franchisee agrees that the Municipality has made no agreement that the Franchise will be renewed or extended; any renewal or extension of the Franchise shall be subject to applicable federal, state and local laws, the Franchise Documents, and this Agreement; (b) Future Change of Controls/Transfers. The Franchisee agrees that (1) any other change of control of the Franchisee, (2) any pending or future transfer of the Franchise, or (3) any pending or future assignment or delegation of any of the Franchisee's rights or duties under the Franchise will be subject to the review and approval of the Municipality in accordance with any then applicable federal, state and local laws, the Franchise Documents, and this Agreement; (c) Past Defaults. The Franchisee shall not contend that the Municipality is barred, by reason of the Change of Control, from considering or raising any lawful claim it may have based on the Franchisee's past or present failure to comply with any term or condition of the Franchise Documents or applicable law, including, without limitation: any unpaid franchise fees due the Municipality from the Franchisee; any unpaid support for public, educational, or governmental access channels; any known and unresolved consumer complaints; and any construction, security or facility requirements of the Franchise Documents that are unsatisfied; and (d) Franchisee's Compliance. The Municipality's approval of the Change of Control shall in no way be deemed a representation by the Municipality that the Franchisee is in compliance or not in compliance with its obligations under the Franchise Documents. ARTICLE IV. 4.1 Binding Agreement. This Agreement shall be binding upon and inure to the benefit of the parties and their permitted successors and assigns. 4.2 Survival of Warranties and Representations. The warranties and representations of the Franchisee shall survive the closing of the Transaction. 4.3 Assignment. The rights and obligations of any party under this Agreement may not be assigned or delegated without the prior written approval of the other party. 4.4 Waiver. No waiver of any provision of this Agreement shall be deemed to be a waiver of any other provision of this Agreement nor shall any waiver be deemed to be a continuing waiver except as otherwise expressly stated in writing by the waiving party. 4.5 Severability. If any provision of this Agreement shall be held to be unenforceable, this Agreement shall be construed with the unenforceable provision deleted, and the rights and obligations of the parties shall be construed and enforced accordingly. 4.6 Governing Law. This Agreement shall be governed by the internal laws (without reference to conflict of laws) of the State of Illinois. 4.7 Drafting. This Agreement is a,product of negotiation between the parties and shall not be construed against any party on grounds relating to drafting, revision, review or recommendation by any agent or representative of such party. 4.8 Time of the Essence. Time is of the essence to this Agreement. 4.9 Authority. Each signatory to this Agreement represents that he or she has the authority to enter into this Agreement. 4.10 Effective Date. This Agreement may be executed in multiple counterparts no later than sixty (60) days following execution of this ordinance and shall be deemed effective as of the closing date of the Transaction. Village of Elk Grove Village By: Craig B. Johnson Its Village President TCI OF NORTHERN NEW JERSEY, INC By: Its Date: April 13, 1999