HomeMy WebLinkAboutCCRes_92-30No. R-92-30
• CITY OF FALCON HEIGHTS
C O II N C I L R E S O L U T I O N
Date: Au ust 12 1992
RESOLUTION APPROVING THE TRANSFER OF OWNERSHIP OF
NORTH CENTRAL CABLE COMMUNICATIONS CORPORATION
WHEREAS, Hauser Cable of Minnesota, Inc., a Delaware corporation,
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 out-
standing stock of North Central Cable Communications Corporation (herein-
after "North Central"); and
WHEREAS, North Central, by and through Group W Cable of The
North Suburbs, Inc., a wholly owned subsidiary, owns, operates and maintains
a cable television system in the city pursuant to the terms and conditions of
city ordinance No. 193, amended by No. 0-85-11, (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's 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 circum-
• stances be required to 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 North Suburban Cable Communications Commission
(hereinafter "Commission") has been delegated the authority and
responsibility to coordinate, administer and enforce the Cable Communica-
tions Franchise Ordinance on behalf of the city pursuant to the terms of
a Joint and Cooperative Agreement for the Administration of a Cable Tele-
vision Franchise; and
WHEREAS, the Commission has held public hearings on behalf of
city and 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 The North Suburbs, 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 Falcon Heights that:
1. 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 said Commission and 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.
2. 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.
3. 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.
4. The city's approval of the above named transfer of
ownership of North Central is further conditioned upon
the following:
a. 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.AO1, and as represented as
corrected pursuant to the letter from Mr. Kevin
Griffin to Ms. Coralie Wilson dated June 17, 1992,
unless otherwise qualified, below.
b. North Central and the Commission 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 Commission's audit of the gross reve-
nues of North Central. North Central shall have
agreed and city hereby agrees to negotiate mutually
acceptable language to amend the franchise definition
of "Gross Revenues" to more adequately reflect the
current practices of North Central in the calculation
and payment of franchise fees.
c. The city hereby waives the franchise requirement
that the emergency override system also override audio
on the FM service provided to subscribers.
d. The city hereby waives any franchise requirement that
short wave signals be carried on the FM band.
e. 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.
f. 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.
g. To the extent required as a result of the sale of
stock and transfer of control, North Central and
City agree to 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.
h. North Central shall have agreed to conduct "proof
of performance tests" as required by the FCC, with
50~ of the test sites selected by Commission on the
scheduled day of the tests, and any sweeping and
balancing of the system required as a result of the
random 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.
i. North Central shall have agreed to contribute to
the Commission two (2) Di-tech frames each with a
capacity of forty (40) inputs by fifteen (15)
outputs for the purpose of enhancing the North
Suburban Access Corporation's responsibility for
institutional and subscriber network switching.
North Central shall purchase for the Shoreview
headend a new Di-tech switcher with thirty-two (32)
inputs and sixteen (16) outputs for institutional
and subscriber network switching. In the event the
Shoreview headend should no longer be utilized by
North Central, this switcher shall at the expense
of North Central be moved to and utilized for the
same purpose at the Commission's master control
operated by the access corporation. The access
corporation agrees to assume responsibility for
switching on the institutional network.
j. North Central shall have agreed to contribute to
the Commission a new Di-tech Pace 3000 controller
including two additional controllers for sites
currently identified as sites two and three.
C J
•
k. North Central shall have agreed to remove the hard-
wiring which was done to the switching capacity of
the system for the purpose of accommodating the
then existing needs of the school districts.
1. North Central shall have agreed to purchase ten
(10) RF demodulators and three (3) frequency agile
demodulators for utilization on the institutional
network in the North Suburban system.
m. North Central shall have agreed to reimburse
Commission and its member cities for all expenses
incurred in relation to the interim transaction
and final Transfer of Ownership, including an
agreement to reimburse cities and commission for any
expenses associated with subsequent ordinance
amendments required by the Transfer of Ownership but
not incurred until after closing.
•
n. North Central shall pay to Commission $650,000.00
pursuant to the Resolution Transferring Community
Programming.
o. Failure to comply with above conditions "b., f.,
g., h., i., j., k., l., m., and n.," shall render
City's Resolution of Approval null and void.
p. 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.
Moved by Gehrz
BALDWIN
CIERNIA 5 In Favor
GEHRZ
JACOBS 0 Against
GIBBON TALBOT
Approved by ~~~ ~ _ ,-
Mayor
August 12, 1992
Date
Attested by ~!L ~~~~°-°-+~~
Cit Clerk
August 12, 1992