HomeMy WebLinkAboutResolution 92-24 STATE OF MINNESOTA
COUNTY OF ANOKA
CITY OF COLUMBIA HEIGHTS
RESOLUTION N0.92-24 APPROVING THE
TRANSFER OF OWNERSHIP OF NORTH CENTRAL
CABLE COMMUNICATIONS CORPORATION
WHEREAS, Hauser Cable of Minnesota, Inc., a Delaware corpora-
tion, Hauser Cable Communications, Inc., a Delaware corporation,
and Continental Cablevision of Minnesota, Inc., a Minnesota
corporation (hereinafter "Transferors"), originally owned One
Hundred percent (100%) of the outstanding stock of North Central
Cable Communications Corporation (hereinafter "North Central"); and
WHEREAS, North Central, by and through Group W Cable of
Columbia Heights/Hilltop, Inc., a wholly owned subsidiary, owns,
operates and maintains a cable television system in the City
pursuant to the terms and conditions of the Cable Communications
Franchise Ordinance of the City of Columbia Heights, as amended,
(hereinafter "Franchise"); and
WHEREAS, through an interim transaction completed on or before
December 31, 1991, Transferors' interest in the outstanding stock
of North Central was modified so that the stock of Continental
Cablevision of Minnesota, Inc. (hereinafter "Continental"),
previously 50%, was transferred to result in Continental'~
ownership of 19 1/2% of the stock with 30 1/2% of the stock owned
by NCC Holding Co., Inc., a Massachusetts Corporation (hereinafter
"Holdco"), an entity in which Continental retained all voting stock
and transferred non-voting stock in the holding company to
Meredith/New Heritage Strategic Partners, L.P. (hereinafter
"Transferee"); and
WHEREAS, Transferors desire to sell and otherwise transfer all
of their shares of the capital stock of North Central, together
with all of the voting stock of Holdco, to Transferee, in whom
Meredith/New Heritage Partnership will initially hold, as general
partner, a 72.73% interest and Continental, a Limited Partner, will
initially acquire a 27.27% interest; and
WHEREAS, the City has been informed that the ownership
interests in Transferee, after taking into account all notes
delivered as capital contributions to Transferee, will be 62.1% for
Meredith/New Heritage Partnership, general partner and 37.9% for
Continental Cablevision of Minnesota, Inc., Limited Partner; and
WHEREAS, the Transfer Application discloses that Meredith/New
Heritage Partnership, which is the general partner of Transferee
and holds a 62.1% ownership interest in Transferee, may in certain
circumstances be required or have the right to purchase the limited
partnership interest of Continental Cablevision of Minnesota, Inc.
subject to the requirements of local, state and federal law; and
WHEREAS, Meredith Cable, Inc. ("Meredith Cable"), a wholly-
owned subsidiary of Meredith Corporation ("Meredith"), currently
holds a 54.6% ownership interest in Transferee through its 88%
ownership of the General Partner of Transferee and has the right to
acquire total ownership and management control of both the General
Partner and Transferee, subject to the requirements of local, state
and federal law; and
WHEREAS, the interim transaction has taken place; and
WHEREAS, the Transferors have requested the consent from the
City to a change in ownership and control of North Central to
Transferee; and
WHEREAS, City has waived any right of first refusal to
purchase the stock acquired by Transferee as such right of first
refusal applies to the pending sale and transfer; and
WHEREAS, the Columbia Heights/Hilltop Cable Communications
Commission (hereinafter "Commission") has been delegated the
authority and responsibility advise the city in such matters as
this transfer of ownership; and
WHEREAS, the City has held public hearings and with the advice
of Commission has reviewed the legal, technical, character and
financial qualifications of Transferee and its general partner
Meredith/New Heritage Partnership and finds no reasonable basis to
deny the request for transfer as a result of said review, except
for those conditions listed below; and
WHEREAS, the Commission has recommended to City approval of
the transfer of control of North Central to Transferee subject to
the actual closing of the stock sale and subject to the conditions
listed below; and
WHEREAS, the Commission has also recommended approval of a
request by Transferee to permit the pledge as security to its
lenders of the stock and assets of North Central and its
subsidiaries, which would include Group W Cable of Columbia
Heights/Hilltop, Inc.; and
WHEREAS, the City does not object to such security interest in
the stock and assets.
NOW THEREFORE, BE IT RESOLVED, by the City Council of the City
of Columbia Heights that:
The City hereby approves the sale and transfer by
Transferors of all of their shares of the capital stock
of North Central, together with all of the voting stock
of Holdco, subject to an actual closing of the stock sale
transaction on or before December 31, 1992, pursuant to
the terms and conditions as evidenced by the Notice of
Transfer to City and all written representations from
Transferors, Transferee, Meredith/New Heritage
Partnership, its subsidiaries, employees, agents,
partners, parent corporations -and North Central, and
further subject to the terms and conditions of this
Resolution.
The City approves the pledge by Transferee, Meredith/New
Heritage Partnership, and North Central as security to
their lenders the stock and assets of North Central and
its subsidiaries subject to the terms and conditions of
this Resolution.
This Resolution constitutes all action and approvals of
the City necessary under the City's Franchise for the
sale and transfer of control to Transferee.
The City's approval of the above named transfer of
ownership of North Central is further conditioned upon
the following:
North Central shall have corrected all technical
discrepancies in the cable system of City as
delineated in the report of Communications Support
Corporation (hereinafter "CSC") No. 92010.001, and
its addendum No. 92010.A01, and as represented as
corrected pursuant to the letter from Mr. Kevin
Griffin to Ms. Linda Magee dated June 17, 1992,
unless otherwise qualified, below.
North Central and the City shall have agreed to
waive any and all alleged or existing claims for
overpayment of franchise fees attributable to sales
tax and/or underpayment of franchise fees as delin-
eated in the City's audit of the gross receipts of
North Central. North Central shall have agreed and
City hereby agrees to negotiate mutually acceptable
language to amend the Franchise definition of
"Gross Receipts" to more adequately reflect the
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current practices of North Central in the
calculation and payment of Franchise Fees.
The City hereby waives the Franchise requirement
that the emergency override system also override
audio on the FM service provided to subscribers.
The City hereby waives any Franchise requirement
that short wave signals be carried on the FM band.
The City hereby agrees to hold in abeyance the
issue of the provision of status monitoring
equipment by North Central, and agrees not to
enforce the Franchise requirement for the remaining
term of the Franchise, with the understanding that
such equipment/capability will be a subject for
negotiation upon any request for renewal of the
Franchise.
North Central shall have agreed to amend the
existing Franchise to conform to this resolution
and the terms of this sale and transfer of control.
To the extent required as a result of the sale of
stock and transfer of control, the replacement of
any and all letters of credit, bonds, insurance
certificates, or other forms of security provided
to the City pursuant to the terms of the Franchise.
North Central shall have agreed to conduct "proof
of performance tests" as required by the FCC, with
50% of the test sites selected by City on the
scheduled day of the tests, and any sweeping and
balancing of the system required as a result of the
end-of-line performance tests. In addition, North
Central shall have agreed to conduct an annual
sweep and balance of the trunk cable system, and a
bi-annual (every other year) sweep and balance of
the distribution system.
North Central shall have agreed that any area
served by the Columbia Heights/Hilltop cable system
that fails to have cable service provided to its
customers for over one hour in any twelve (12)
month period, due to a failure of power which would
have been prevented by the provision of standby
power in the effected power supply, then North
Central must install standby power capability, with
batteries, to the effected power supply within
thirty (30) days of the above mentioned one hour
failure.
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North Central shall have agreed to maintain and
continue to provide access facilities and equipment
required in the Franchise.
North Central shall have agreed to reimburse City
for all expenses incurred in relation to the
interim transaction and final Transfer of Owner-
ship, including an agreement to reimburse City for
any expenses associated with subsequent ordinance
amendments required by the Transfer of Ownership
but not incurred until after closing.
North Central shall have agreed to provide in the
access facility located in the City a portable
switcher with at least a two camera capacity, one
camcorder equal to or greater than the quality and
specifications of the existing camcorders currently
located at the facility, and up to One Thousand
Dollars ($1,000.00) for the purchase of
miscellaneous equipment such as headsets and
microphones.
North Central shall have agreed to pay to City
Twenty Thousand Six Hundred Dollars ($20,600.00) in
lieu of providing automatic audio control on all
over-the-air broadcast channels and access
channels. The City hereby agrees to waive the
Franchise requirement that automatic volume control
shall be provided on all over-the-air broadcast
channels and access channels, provided however,
should a volume level variation problem arise on
the access channels in the sole opinion of the
City, North Central shall install automatic gain
control systems ("AGC") on any such problem access
channels.
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Failure to comply with above conditions "b., f.,
g., h., i., j., k., 1., and m.," shall render
City's Resolution of Approval null and void.
Failure to comply with condition "a.," above, or
any agreements required by this Resolution shall
result in penalties and/or sanctions provided for
in the Franchise.
The above resolution was moved by Council Member Ruettimann
duly seconded by Council Member Peterson .
The following Council Members voted in the affirmative:
Clerkin, Ruettimann~ Peterson~ Murzyn
and
The following Council Members voted in the negative:
Nawrock i
Passed this 24th day of Auousl;
, 1992.
ATTEST:
o-Anne student -
Council Secretary
Mayor
The undersigned, the Deputy City Clerk of the
City of Columbia Heiqhts , Minnesota does hereby certify
that attached hereto is a true and correct copy of Resolution No.
92-24 , which Resolution was duly adopted by the City Council on
, 1992 and is in full force and
the 24th day of August
effect on the date hereof.
e Jo~Anne Student
Title: ~
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