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HomeMy WebLinkAbout11 Transfer of Agreements Agenda Item # WIN INOW Memorandum To: Board of Directors From: Peter Holzmeister Date: May 27, 2004 Subject: Transfer of agreements from USA Media to Cebridge Connections 1. WHY THIS MATTER IS BEFORE THE BOARD Only the board can authorize the transfer of agreements. 2. HISTORY Two letters from Jim Faircloth, President of USA Media were presented to the board on May 5, 2004. The board postponed action and agreed to refer the matter to District counsel Steve Gross. Cebridge Connections is in the process of purchasing the USA Media system in Truckee. There are two agreements to transfer from USA Media to Cebridge Connections: Pole Attachment License Agreement and Television Receive/Transmit Site Lease Agreement. 3. NEW INFORMATION Counsel Gross has completed a new letter agreement that combines both the Pole Attachment License Agreement and Television Receive/Transmit Site Lease Agreement. 4. RECOMMENDATION I recommend the board the Board approve the letter of agreement between Truckee Donner PUD and USA Media Group LLC and authorize the general manager to sign the agreement. •Page t Truckee Donner Public Utflityii �G2F9=vl�et Josey,o R.Aguert J_Rcnald Hering Business Office (530) 587-3896 FAX (530) 587-5056 iar;es A,Maass PatdcSa 3,Sutton Neksen Van Gundy Genera!Manager June , 2004 Peter L,Hoizrae,ster USA Media Group, LLC 6490 S. McCarran Blvd., Suite 22 Reno, NV 89509 Attn: Jim K. Faireloth, President and COO (775) 825-3111 Re: Pole Attachment License Agreement dated March 31, 2003, between Truckee Donner Public Utility District("TDPUD) and USA Media Group, LLC(the "Pole Agreement') and Television ReceivelTransmit Site Lease Agreement dated August 1, 1985, between TDPUD and USA Media group, LLC(the "Site Lease" and together with the Pole Agreement, collectively, the "Contracts Mr. Faircloth: This letter will respond to correspondence from USA Media Group, LLC ("USA Media") dated as of April 19, 2004, regarding requests for our consent to the assignment and transfer of all of USA Media's right, title and interest in the Contracts to Cequel III Communications I, LLC, a Delaware corporation ("Cebridge-) or a Cebridge Affiliate (as such term is defined below). Such assignments will be effective as of the date of the closing of the sale of certain USA Media cable television business assets to Cebridge pursuant to that certain Asset Purchase Agreement dated as of March 5, 2004, between USA Media and Cebridge (the "Effective Date"). Subject to the acknowledgement and certification by USA Media and Cebridge (or such Cebridge Affiliate to which the Contracts will be assigned) of certain statements and agreements made herein, which acknowledgment and certification shall be evidenced by USA Media's and Cebridge's signature below, TDPUD hereby (i) consents to the assignment and transfer of all of USA Media's right, title and interest in the Contracts, together with all rights and obligations thereunder arising from and after the Effective Date, to Cebridge or an entity controlling, controlled by or under common control with it (a "Cebridge Affiliate"), effective as of the Effective Date, and (ii) acknowledges that the Contracts represent the entire understandings of the parties with respect to the subject matter thereof and are in full force and effect, and that, to the knowledge of TDPUD, other than the nonpayment of certain amounts due under the Site Lease, USA Media is in material compliance with the provisions of the Contracts and that, to the knowledge of TDPUD, other than the nonpayment of certain amounts due under the Site Lease, there exists no fact or circumstance that constitutes or that, with the passage of time or the giving of notice or both, would constitute a default or event of default under the Contracts. For the Benefit of TDPUD, USA Media hereby certifies, acknowledges, agrees and warrants as follows: (i) all obligations and conditions under the Contracts to be performed by TDPUD as of the date hereof have been satisfied, and all such obligations and conditions of TDPUD have been completed to the satisfaction of USA Media, (ii) there are no existing defenses which USA Media has against the enforcement or validity of the Contracts or any of the terms thereof, (iii) Fos1 Office Box 309 115 70 Danner Pass Road ffi Truckee, GaVor nia 96160 all payments to be made under the Contracts shall be made strictly in accordance with the terms of the Contracts as written, and there are no charges, liens or claims of offset against future payments or other sums due to TDPUD under the Contracts, (iv) the term of the Site Lease will expire on July 31, 2005, and there is no obligation or expectation of renewal of the Site Lease beyond such date, and (v) the Contracts are presently in full force and effect, with no uncured defaults and with no acts or omissions having occurred which, but for the passing of time or giving of notice, would be a default under the Contracts. For the Benefit of TDPUD, Cebridge (or such Cebridge Affiliate to which the Contracts will be assigned) hereby certifies, acknowledges, agrees and warrants as follows: (i) as of the Effective Date, Cebridge (or such Cebridge Affiliate to which the Contracts will be assigned) will be bound by and will assume and discharge, in accordance with the terms of the Contracts, all obligations under the Contracts, including, but without limitation, all payments to be made under the Contracts, (ii) that there are no charges, liens or claims of offset against future payments or other sums due to TDPUD under the Contracts, and (iii) the term of the Site Lease will expire on July 31, 2005, and there is no obligation or expectation of renewal of the Site Lease beyond such date. Sincerely, Peter Holzmeister General Manager ACKNOWLEDGED, CONSENTED AND AGREED TO AS OF 2004: "USA Media" USA MEDIA GROUP, LLC, a Delaware limited liability company By: Name: Title: "Cebridge" and/or"Cebridge Affiliate" CEQUEL III COMMUNICATIONS I, LLC, a Delaware limited liability company a By: By: Name: Name: Title: Title: USA MEDIA GROUP,LLC 6490 S. McCARRAN BLVD., SUITE 22 RENO,NEVADA 89509 (775) 825-3111 April 19, 2004 REC'D A r R 2 0 2004 Mr. Peter Holtzmeister Truckee Donner Public Utility District 11570 Donner Pass Road Truckee, California 96161 Re: Television Receive/Transmit Site Lease Agreement dated August 1, 1985, between the Truckee Donner Public Utility District("TDPUC") and USA Media Group, LLC (the"Contract") Dear Mr. Holtzmeister: This letter serves to inform the TDPUC that USA Media Group, LLC, Delaware limited liability company("USA Media") and Cequel III Communications I, LLC, a Delaware limited liability company [doing business as Cebridge Connections ("Cebridge")],have entered into an Asset Purchase Agreement dated as of March 5, 2004,providing for the sale of certain of USA Media's cable television business serving California,Nevada, Idaho, Oregon and Washington and surrounding areas(the"System"). In connection with the sale, USA Media will be assigning all of its right, title and interest in the above-referenced Contract to Cebridge or its assignee. Such assignment will be effective as of the date of the closing of the sale of the System to Cebridge(the"Effective Date"). On behalf of USA Media, we respectfully request that you consent to (i)the assignment and transfer of all of USA Media's right, title and interest in the Contract, together with all rights and obligations thereunder arising from and after the Effective Date, to Cebridge or an entity controlling, controlled by or under common control with it ("Cebridge Affiliate"), effective as of the Effective Date, and the assignment and/or pledge of its rights under the Contract by Cebridge or such Cebridge Affiliate, for collateral purposes, to such financial institutions as Cebridge or such Cebridge Affiliate may select from time to time. In addition, we request that you acknowledge that the Contract represents the entire understanding of the parties with respect to the subject matter thereof and is in full force and effect, that USA Media is in material compliance-with the provisions of the Contract and that there exists no fact or circumstance that constitutes or that, with the passage of time or the giving of notice or both, would constitute a default or event of default under the Contract. As of the Effective Date, Cebridge or such Cebridge Affiliate, as the case may be, will be bound by and will assume and discharge, in accordance with its terms, all obligations under the Contract with respect to periods from and after the Effective Date. Please evidence your consent to, agreement with and acknowledgement of the matters set forth in this letter by signing, dating and returning the enclosed copy of this letter. If you have any questions or require further information, please contact the undersigned or Dawn McWithey at (530) 587-6100. Your prompt attention and cooperation in this matter are greatly appreciated. Very truly yours, Jim K. Faircloth President and Chief Operating Officer ACKNOWLEDGED, CONSENTED AND AGREED TO THIS day of 2004: Truckee Donner Public Utility District By: Name: Title: f USA MEDIA GROUP,LLC 6490 S. McCARRAN BLVD., SUITE 22 RENO, NEVADA 89509 (775) 825-3111 April 19, 2004 RECD APR 2 2004 Mr. Peter Holzmeister Truckee Donner Public Utility District PO Box 309 Truckee, California 96160 Re: Pole Attachment License Agreement dated March 31, 2003,between Truckee Donner Public Utility District("TDPUD") and USA Media Group, LLC (the"Contract") Ladies and Gentlemen: This letter serves to inform the Truckee Donner Public Utlity District that USA Media Group, LLC, a Delaware limited liability company("USA Media") and Cequel III Communications I, LLC, a Delaware limited liability company [doing business as Cebridge Connections ("Cebridge")], have entered into an Asset Purchase Agreement dated as of March 5, 2004,providing for the sale of certain of USA Media's cable television business serving California,Nevada, Idaho, Oregon and Washington and surrounding areas (the"System"). In connection with the sale,USA Media will be assigning all of its right, title and interest in the above-referenced Contract to Cebridge or its assignee. Such assignment will be effective as of the date of the closing of the sale of the System to Cebridge (the`Effective Date"). On behalf of USA Media, we respectfully request that you consent to (i) the assignment and transfer of all of USA Media's right, title and interest in the Contract, together with all rights and obligations thereunder arising from and after the Effective Date, to Cebridge or an entity controlling, controlled by or under common control with it ("Cebridge Affiliate"), effective as of the Effective Date, and the assignment and/or pledge of its rights under the Contract by Cebridge or such Cebridge Affiliate, for collateral purposes, to such financial institutions as Cebridge or such Cebridge Affiliate may select from time to time. In addition, we request that you acknowledge that the Contract represents the entire understanding of the parties with respect to the subject matter thereof and is in full force and effect, that USA Media is in material compliance with the provisions of the Contract and that there exists no fact or circumstance that constitutes or that, with the passage of time or the giving of notice or both, would constitute a default or event of default under the Contract. f i As of the Effective Date, Cebridge or such Cebridge Affiliate, as the case may be,will be bound by and will assume and discharge, in accordance with its terms, all obligations under the Contract with respect to periods from and after the Effective Date. Please evidence your consent to, agreement with and acknowledgement of the matters set forth in this letter by signing, dating and returning the enclosed copy of this letter. If you have any questions or require further information, please contact the undersigned or Dawn McWithey at (530) 587-6100. Your prompt attention and cooperation in this matter are greatly appreciated. Very truly yours, Jim K. Faircloth President and Chief Operating Officer ACKNOWLEDGED, CONSENTED AND AGREED TO THIS day of , 2004: Truckee Donner Public Utility District By: Name: Title: