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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 Ce de e® fe he 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. - 4 Re me 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. me 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: ~ - 6