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Home My WebLink About1997-10-15 97-421 ORDERCOUNCIL ACTION Item No. 97-421 Date October ls. 1999 Item/Subject: Authorizing the Transfer of Cable Television Franchise and the Assignment Of Assets and the Franchise as Collateral Responsible Department: Legal This item would approve a transfer of the existing CATV Franchise Agreement held by A -R Cable Services -ME, Inc. (Cablevision( to ProntierVision Operating Partners, L.P. The item as drafted includesapproval for collateral assignments of the existing franchise agreement. A separate item, also on tonight's agenda, would approve a 90 -day extension of the current franchise agreement, which otherwise will expire on October 26, 1997. If the extension is approved, the attached item should be amended by inserting the date "January 26, - 1998" on page 3. Otherwise, the date "October 28, 1997" should be Inserted. Dep2x Vneni HeaO Finance Director CiC�O11C1LOY xntroduced For NEW BUSINESS Passage First Reading Referral Page 1 of 4 / City M �. Manager Associated Information: Finance Director CiC�O11C1LOY xntroduced For NEW BUSINESS Passage First Reading Referral Page 1 of 4 9]-421 Assigned to Councilor Farnham October 15, 1997 CITY OF BANGOR Authorizing the Transfer of Cable Television a(TUj 3liesvluz ...... _....... _..... _... _.... _..._....._.._....... _.................................... _.............. _.. Franchise and the Assignment of the Assets and the Franchise as Collateral By W BON Council a dw GYM of Sauget: MWLVM. WHEREAS, A -R Cable Services -1E, Inc. ("A -R") currently owns and operates a cable television system (the "System") operating in the City of Bangor, Maine (the "City") pursuant to that certain Cable Television Franchise Agreement dated April 27, 1981 and all renewals or extensions thereof (the "Franchise"); and WHEREAS, A -R and FYOntlerV151On Operating Partnere, L.P. ' ("FrontierVision") have entered into an Asset Purchase Agreement, dated as of May 8, 1997 (the "Purchase Agreement"), providing for, among other things, the sale, assignment and transfer of the Franchise and the assets of the System to FrontierVision (the "Transfer") and requiring A -R to obtain any required consents of governmental franchising authorities for the Transfer pursuant to applicable law and the Franchise; and WHEREAS, A -R, as Transferor, and FrontierVision, as Transferee, have jointly submitted to the City Council of the City (the "Council") an application on Federal Communications Commission ("FCC") Form 394 requesting consent for the Transfer and have submitted such other information concerning the Transfer and FrontierVision asrequired by law and the Franchise and as requested by the Council (collectively, the "Transfer Application"); and WHEREAS, the Council has reviewed the Transfer Application, examined the legal, financial and technical qualifications of FrontierVision, followed all required procedures to consider and act upon the Transfer Application, and considered the comments of all interested parties; and IN CITY COUNCIL October 15, 1997 Passed �'. A TRue Copy, Attest: E. �m /� k T LER 0 9]-421 -2- WHEREAS, the Franchise is in full force and effect without default thereunder by A -R as of the date hereof in accordance with its terms and conditions as set forth therein, and FrontierVision has agreed to comply with the Franchise and applicable law from and after the completion of the Transfer; and WHEREAS, A -R, FrontierVision and the City have negotiated an extension and/or renewal of the Franchise conditioned upon the consummation of the Transfer and the closing of the transaction described in the Purchase Agreement and Transfer Application; and WHEREAS, FrontierVision and its partners will need to grant one or more security interests and/or liens i upon the Franchiseand the System from time to time on or after the closing date of the Transfer (as defined in the Purchase Agreement) in order to secure the present and future indebtedness of FrontierVision; and WHEREAS, the Council believes it is in the interest of the City to approve the Transfer Application and the Transfer of the Franchise and the System to FrontierVision, to allow FrontierVision to secure its present and future indebtedness with security interests and/or liens in or upon the Franchise and the System and to allow the parties owning or controlling FrontierVision to pledge their equity interests to secure FrontierVision's current and future indebtedness, all as described in the Transfer Application; NOW, THEREFORE, By the City Council of the City of Bangor, be it RESOLVED, THAT (1) The Council hereby approves the Transfer Application and grants its consent for the Transfer to FrontierVision, or to any affiliated company under common control with or controlled by FrontierVision, as described in the Transfer Application. (2) FrontierVision is authorized to pledge, mortgage, transfer in trust and otherwise -hypothecate the property and assets used or held for use in connection with the ownership and operation of the System, including the Franchise, and the parties owning or controlling FrontierVision are authorized to pledge, mortgage, transfer in trust and otherwise hypothecate their equity interests in FrontierVision as collateral security for such loans and financing (or for guarantees of such loans and financing) as may be incurred or assumed by FrontierVision from time to time in connection with 9]-421 -3- the ownership and operation of the System. Provided that any such pledge, mortgage, transfer in trust, or other hypothecation of such property and assets shall not impair any obligation of FrontierVision to the City of Bangor under the existing or negotiated franchise agreements; and provided that the assignee, upon exercise of any collateral rights so assigned, shall be responsible for performance of all obligations of the Grantee to the City of Bangor under such franchise agreements. (3) In order to facilitate FrontierVision's financing arrangements with its lenders, the Council hereby acknowledges that (1) the Franchise is valid and outstanding and in full force and effect without default thereunder by A -R to the date hereof; (ii) the Franchise authorizes service throughout the incorporated areas of the City; and (iii) the current term of the Franchise, including the extension and/or renewal period, will expire on (4) The Council's grant of the Transfer Application and its consent to the Transfer to FrontierVision herein Provided shall be effective immediately upon adoption of this Resolve, and shall continue and remain in effect upon the consummation of the Transfer and the closing of the transactions described in the Purchase Agreement, and FrontierVision shall notify the Council promptly upon the closing of such transactions. IN CITY COUNCIL October 15. 1997 Passed An Amended Amended by Inserting the Date "January, 26, 1998" in the space provided in paragraph (3) 97-421 0 E50LYE Aathoeizlna the Transfer of Cable Television Franchise and the Assignment of the Assets and the Franchise as collateral erK,/] C NL4� F.t sal