Loading...
HomeMy WebLinkAboutResolution - 3018 - Authorize Assignment - CTF To MCTC - Cable Services - 01_26_1989Resolution #3018 January 26, 1989 DGV: js RESOLUTION WHEREAS, the City of Lubbock (the "City") granted to Cablevision of Texas Limited Partnership, (the "Seller") a franchise (the "Franchise") to conduct a cable television business in the City pursuant to that certain Ordinance No. 8834 dated October 24, 1985 (the "Ordinance"); and WHEREAS, Seller desires to assign all of its rights and delegate all of its obligations under the Franchise to Mission Cable Company, L.P., a Delaware limited partnership (the "Buyer"); and WHEREAS, the City is willing to: (a) grant its consent to the assign- ment of the Franchise from Seller to Buyer; (b) grant its consent to a collateral assignment of the'Franchise and a pledge of the assets of the cable communications system to any of Buyer's lenders; and (c) waive the right of first refusal granted to the City pursuant to Ordinance No. 8554 dated February 23, 1984. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: SECTION 1. THAT the City hereby grants its consent to: (a) the as- signment of the Franchise from Seller to Buyer; (b) any collateral assign- ment of the Franchise by the Buyer to any of its lenders; and (c) any pledge of the assets of the cable communications system by the Buyer to any of Buyer's lenders. SECTION 2. THAT the City hereby waives the right of first refusal re- served by the City in paragraph E of Section 12 of Ordinance No. 8554. SECTION 3. THAT the City hereby approves and adopts the Transfer of Franchise of Ordinance No. 8834, which Transfer of Franchise is attached hereto as Exhibit A, and the Mayor of the City of Lubbock is hereby autho- rized and directed to execute said Transfer of Franchise and all associated documents. SECTION 4. THAT the City hereby confirms that: (a) the Franchise was properly granted to Cablevision of Texas Limited partnership; (b) the Fran- chise is in accordance with all state and local laws; (c) the Franchise is validly existing and in full force and effect; and (d) there exists no fact or circumstance which constitutes or which, with the passage of time or the giving of notice or both, would constitute a default under the Franchise or permit the City to cancel or terminate the rights thereunder, except upon the expiration of the full term hereof. SECTION 5. That this Resolution is expressly conditioned upon the un- conditional closing of that certain Asset Purchase Agreement by and between Buyer and Seller pursuant to which Buyer is to acquire the Franchise from Seller and shall become effective upon written notice from Buyer that the closing has been consummated. In addition, the Transfer of Franchise to Mission Cable Company, L.P., shall not become effective until receipt by the City of Lubbock of an Acceptance of Franchise duly executed by an officer or principal of Mission Cable Company, L.P., with authority to make and sign such an agreement, in the following form: ACCEPTANCE OF FRANCHISE "The Honorable Mayor and City Council of the City of Lubbock: Mission Cable Company, L.P., for themselves, their successors and assigns, hereby accepts to be bound by the terms and conditions of City Ordinance No. 8834 granting a cable television franchise as finally passed by the City Council of the City of Lubbock on the 24th day of October, 1985. By this Acceptance of Franchise, Mission Cable Company, L.P., agrees to be bound by such franchise the same as if it were signatory to the original agreement." SECTION 6. THAT except as hereby modified, the Franchise is in all other respects ratified and confirmed and all of the terms and conditions thereof shall remain in full force and effect. SECTION 7. THAT this Resolution is hereby declared to be a measure in the interest of public peace, health, welfare and safety. SECTION 8. THAT in the event that the City Council should determine that the actual sale price is unreasonable, then such portion of the sale price as is determined to be unreasonable, shall not be considered in the rate base of any subsequent request for rate increases. Passed by the City Council this 26th day of January 1989. c 1��,vrr� C. McMI N, MAYOR ATTEST: Bea ice Cervantes, APPIt?ViED AS T Nabar Martinez, Ass Manager for Managem APPROVED AS TO FORM: Doh-61d G. Vandiver, Firs City Attorney puty City Secretary City rvices s - 2 - TRANSFER OF FRANCHISE Pursuant to Resolution No. 3018 of the City of Lubbock, Texas (the "City") enacted on January 26 , 1989, the City Council of the City of Lubbock hereby authorizes the assignment of the franchise, right and privilege granted in Ordinance No. 8834 to Mission Cable Company, L.P., a Delaware limited partnership, and each reference in said Ordinance to Cablevision of Texas Limited Partnership or the Company shall as of the date of this Transfer of Franchise be deemed a reference to Mission Cable Company, L.P., a Delaware limited partnership. Ordinance No. 8834 remains in full force and effect and this transfer is expressly made subordinate to the terms and conditions of said Franchise Ordinance and a copy of this Transfer of Franchise shall,be filed with said Ordinance in the official records of the City of Lubbock. C AI T. C. MCMINN, MAYOR ATTEST: &-e Z Z_Zz- R a rTftxM xBWMxNOMY zw6Mf Bea'tri-ce'Cervantes, Deputy City Secretary CERTIFICATE I, B. C. McMINN, do hereby certify to Mission Cable Company, a Delaware limited partnership ("MCC"), and its counsel, Shapiro, Edens & Cook, a Professional Corporation, that I am the duly elected Mayor of the City of Lubbock, Texas (the "Municipality"), that I am authorized pursuant to the laws of the State of Texas and any applicable Ordinance, Resolution, Order or Motion (collective- ly, "Municipal Laws") of the Municipality to execute and deliver this Certificate under the seal, if any, of the Municipality, and that: 1. (a) The Municipality, pursuant to Ordinance No. 8834 dated October 24, 1985, granted to Cablevision of Texas Limited Partnership the right, privilege and franchise (the "Franchise") to conduct a cable television business in the Municipality; (b) The Municipality, pursuant to Resolution, dated January 26 1989, granted its consent to the assignment of the Franchise to MCC and the collateral assignment of the Franchise and the pledge of the assets of the cable system to MCC's lenders; 2. Each of the acts described in paragraph 1 above has been taken by the governing body of the Municipality: (a) at a meeting for which notice of such action was posted at least 72 hours prior to the time of such meet- ing in a place readily accessible to the general public; (b) at a meeting that was open to members of the public; (c) at a meeting at which a quorum of the governing body was present; and (d) by a vote in favor of the action by a majority of such quorum. 3. The undersigned, after consultation with the members of the governing body of the Municipality, knows of no vio- lation or default under the Franchise or any pending or threatened challenge by any interested party to any of the acts described in Section 1 above. In witness whereof, the undersigned, as Mayor of the Munici- pality,'and:by, virtue of the authority vested in the Mayor by law, has hereunto set -my hand and the seal of the Municipality. [Municipality C - 000 cz�1�1041 . C. McMINN, MAYOR Seal, if any] THE STATE OF TEXAS § COUNTY OF LUBBOCK § This instrument was acknoFledged before me on 499YAe4 1989 by DliUiu.. �, soS Notary Public, Lubbock County, Texas (SEAL) Notary Public Printed or Typed Name My Commission Expires: MY COMMISSION! EXPIRES NOVEMBER 30, 1989 OLIVIA R. SOLIS - 2 - CERTIFICATE I, B. C. McMINN, do hereby certify that I am the duly elected Mayor of the City of Lubbock, Texas (the "City"), that I am autho- rized .pursuant to the Charter and Ordinances of the City and the laws of the State of Texas to execute and deliver this Certificate under the seal of the City, and that: 1. The City granted to Cablevision of Texas Limited Partner- ship, a franchise (the "Franchise") to conduct a cable television business in the City pursuant to that certain Ordinance No. 8834, dated October 24, 1985; and 2. The City, pursuant to Resolution, dated January 26 , 1989, which Resolution has been duly adopted in confor- mity with the Charter of the City of Lubbock and the laws of the State of Texas, has granted its consent to the assignment of the Franchise to Mission Cable Company, L.P., a Delaware limited partnership ("Buyer"), and the collateral assignment of the Franchise and the pledge of the assets of the cable system to Buyer's lenders, and has waived the right of first refusal issued to the City pursuant to that certain Ordinance No. 8554, dated February 23, 1984. A true and correct copy of such Reso- lution is attached hereto. In witness whereof, the undersigned, as Secretary of the City, and by virtue of the authority vested in the Secretary by law, has hereunto set her hand and the seal of the City. 4B.C. CMcMINN, MAYOR ATTEST; Beatrice -Cervantes, Deputy City Secretary $ 8066523328 CPBLEVISID,+TEX 01/19/89 09:14 P.02 CABLEVISION OF TEXAS January 19, 1989 City of Lubbock c/o Mr. Cunningham P 0 Box 2000 Lubbock, TX 79457 Dear Mr. Cunningham: P. O. BAR 810.806-6 52-8328 110 SOUTH MAIN STREET . LOCKNEY, TEXAS 79241 Cablevision of Texas paid for cost of publication of our franchise within the city of Lubbock for the area serving some of our subscribers in the Woodrow area. We paid $1,175.34 of which the attached letter gives us a prepayment of franchise of 75% of the $1,175.34 for an amount. of $881.51. Below is our calculation of the franchise fees we owe to the city of Lubbock for the period 10/24/85 to 1/26/89. (1/26/89-tenative date of sale to Mission Cable) Estimated # of subscribers is Average month receipts per subscriber Gross Revenue per month X 3% franchise fee franchise fee due monthly # of months (10/24/85-1/26/89) owed Franchise fee due less prepaid franchise Franchise fee due now Sincerely, Mary Allenson Financial Advisor MA:vw Enclosure 43 22.00 946.00 x .03 28.38 40 1,135.20 881.51 253.69 0s MISSION CABLE Jock A. Morgan Jr. (3del'Opernrina Offirer January 19, 1989 Mr. Larry Cunningham City Manager City of Lubbock Lubbock, Texas ATTN: Greg Solomon Dear Mr. Cunningham: Mission Cable Coampany, L.P. has entered into a contract to acquire certain assets from Cablevision of Texas, L.P. which assets include the cable TV franchise serving the Woodrow community of Lubbock. I am writing to respectfully request that Mission be placed on the agenda of the January 26, 1989 meeting of the Lubbock City Council regarding the transfer of the Woodrow franchise. The staff of the City of Lubbock has requested certain information in connection with our proposal to obtain your consent of the acquisition of the Woodrow franchise. We hereby submit for your review the following: the total purchase price of the transaction with Cablevision of Texas is in excess of $26 million covering some 45 communities, Inasmuch as the Woodrow franchise is only a portion of the total assets being conveyed, it would be impossible to accurately reflect a purchase price applicable only to the Woodrow franchise. The city staff has also requested certain information which is required in connection with Section 5.D, Ordinance No. 8554, which ordinance is the master cable television franchise ordinance pursuant to which each individual cable television franchise is granted. In accordance with Section 01 1 enclose some background information on the principals of Mission Cable. As you can see, the three partners of Mission have had considerable experience in operating CATv systems throughout the United States. since its formation in 1988, Mission has assembled or is in the process of assembling approximately 40,000 subscribers in the west Texas, west Oklahoma region. A regional office has been established and staffed in Muleshoe to oversee the systems in the immediate vicinity of Lubbock. Other "cluster" offices will be established in the Lubbock area to provide direct management supervision. 114 %Vrst 7t1, Strcct, Suitc 717 Atiatin. Texas 78701 (512) 478-8184 FA?(; (512) 474-7569 As it relates to financial responsibility, I enclose a letter from Mr. Hill Johnston, Senior Vice President of Dillon Read, as evidence of the fact that Mission has minimum resources of at least $100 million. To the extent that you are desirous of a conversation with Mr. Johnston or our lead banker, Mr. Steve McDonald at Toronto -Dominion, I would be happy to arrange such. We do not envision significant changes in the Woodrow franchise until such time as we have an opportunity to determine the specific desires and requests of the Woodrow citizens. we would anticipate bringing in additional programming so as to provide greater viewing alternatives and would do so only after clearly identifying the specific desires of the Woodrow citizens. in summary, we believe that Mission Cable should be viewed by the City of Lubbock as capable of operating the Woodrow system. significant experience at the Senior Management level as well as the regional office level and field operating officers, provide Mission with considerable depth in its management ranks. our financial viability is open for further review and I would be happy to visit with you in this regard should you have any questions. After you have had a chance to review this information, if you have any questions or comment, please do not hesitate to contact me. We greatly appreciate your consideration of this transfer request. sincerely, 9�eA t04 J ck A. kio n J . M. .......�.�_..�.....p r�•.w,a.:.;i:.�rlil'@i'tt_— i n•'•"�i •�Ai rs. MISSION CABLE COE PAxIX Mission Cable Company ("Mission") is a Newly formed cable, TV operating company, based in Austin, Texas. The principal partners of Mission are sack R. Crosby, Jack A. Morgan, 0 r. , and Jay O f Neal . Together, these three individuals comprise approximately 70 years of aggregate experience in the cable industry. Mr. Crosby is truly one of the "founding fathers" of the CATV industry as a result of his 35 years experience. Mr. Crosby built his first system in Del Rio, Texas, in 1953. Since that time, he has been involved in the formation and development of nine major CATV operating companies, both in the U.S. and Europe. Most recently, Mr. Crosby was Chairman of Communications properties, a publicly traded company that was sold to the Times Mirror Corporation in 1978. Since that time, Mr. Crosby has been actively involved as a Director of Prime Cable, a major multiple -system operator based in Austin. In addition, Mr. Crosby was a founder and active partner in Telesystems Ynternational, the second largest CATV operator in Switzerland. Most recently, Mr. Crosby has decided to form, along with Mx. Morgan and Mr. O'Neal, Mission Cable in an effort to build a major company that focuses on the smaller, more "Classic" systems throughout the United States. Mr. O'Neal has been actively involved both in the operations and construction of cable systems for approximately 25 years. Most recently, Mr. O'Neal was involved as President of Universal Cable Communications, a company formed to acquire classic CATV systems in the Kansas and Oklahoma areas. As a result. of Mr. O'Neal's desire to join with Mr. Crosby and Mr. Morgan in Mission Cable, Universal Cable was sold. Currently, Mr. O'Neal is directing all of his efforts to the acquisitions of CATV systems in the states of Texas, Arizona, Oklahoma, and New Mexico, for Mission. Mr. Morgan has represented several financial institutions as major investors in cable companies since 1977, including American Cablesystems, Prime Cable, and Kings Bay Cable in Georgia. In addition, Mr. Morgan has been active in the operations of Universal Cable, where he serves as a Director. He was instrumental in the formation and capitalization of Mission Cable. In addition to the three principals described above, Mission Cable Company has as its fourth partner, an affiliate of a major New York investment banking firm. As a result of this affiliation, Mission Cable is very well capitalized with an -initial equity infusion in excess of $35 million. Further, Mission Cable has secured a firm banking commitment in excess of $60 million with three of the largest lenders to the CATV industry. Mission is currently having discussions regarding the prospect of increasing its equity base �y by a substantial margin in order to provide additional capital for growth. 't December 2, 1988 To Whom It May Concern: This letter will serve as your notification that an affiliate of Dillon Read & Co. hams unequivocally committed to fund Mission Cable Company, L.P. with a minimum of $40 million of partnership equity capital during 1989. In addition, such an equity base will be supplemented by bank. financing in excess of $60 million. Wherefore, Mission will have substantial capital resources in which to carry out all of its acquisition and development programs. To the extend that additional information as to the financial capacity of Mission is required, please do not hesitate to contact ,me directly at (212) 906-7271. Sincerely, William C. Johnston Senior Vice President 6 0 - d ' 10 :770 7=3 � x=F " -71 " f1 T c c T 1.1 :-- JACK A. MORGAN. ZFR-. Mr. Morgan will serve as Chief Operating officer of Mission Cable and thus will be responsible for the day to day adminstration, financial affairs, and reporting. In addition, he will be integrally involved in all acquisitions and operations. For nine years preceding his involvement with Mission Cable, Mr. Morgan has served as Managing Partner of Rust Properties, an Austin real estate development company. Rust was formed in 1979 by Mr. Morgan and Mr. Crosby to participate in joint venture development opportunities with Wimpey Property Holdings (a major U.K. land developer). During the period 1979 -1984, Rust and Wimpey developed approximately 1.3 million square feet of class A office space. Mr. Morgan was directly responsible for all of the development activities as well as the property management for the completed projects. For the last two years, in addition to his activities with Rust Properties, Mr. Morgan has been active as a Director of Universal cable, a recently formed operation with approximately 22,000 subscribers in Kansas and Oklahoma. Mr. Morgan has also served as a director of Tescorp, Inc., a Houston -based oil field services concern, since its formation in 1981. Prior to forming Rust Properties with Mr. Crosby in 1979, Mr. Morgan was General Manager of First Dallas capital, a wholly owned subsidiary investment company of First National Bank in Dallas. Mr. Morgan was in charge of the company ' s portfolio and as such was involved with companies in the transportation, communication, computer technolody, and real estate development industries. During his tenure at First Dallas Capital, Mr. Morgan was instrumental in forming strong investment relationships with American Cablesystems and Prime Cable, Mr. Morgan received his B.A. degree with honors in Economics from Austin College in 1973. He received a Masters of Business Administration with honors from Indiana University in December, 1974. a - d " 0:D 31:a":D Nn T S:<=: T W 4�o - 0=0 J,�CK R. CROSBY Jack R. Crosby will serve as Chairman of the Board of Mission Cable Partners, the managing partner of Mission Cable Company, L.P. Having been actively involved in the CATV industry for over 35 years, Mr. Crosby will play a sizeable role in the development of Mission Cable. As a longstanding investor in the industry, Mr. Crosby has played an integral role in the development of numerous multiple -system operations, pioneered the use of new technologies, and helped introduce CATV to foreign mafkets. A brief history of his industry involvement follows below. Mr. Crosby began his career in CATV by developing a system to serve his hometown of Del Rio, Texas in 1951. As a result of his efforts to upgrade signal quality, Mr. Crosby's company, Southwest Texas Transmission Co., become one of the first private entities to receive an FCC license to transmit television signals via microwave. since his start in 1951, Crosby has built and sold six major Msols (all of which have been financially successful). These included GencoE, Inc. (which formed the nucleus of United Cable TV, Inc.), Telesystems International, Inc., which was the first financially successful, privately owned MSO in Europe and Communications Properties, Inc., which was sold to Times Mirror, Inc. in 1978. Two of the domestic MSO's Crosby has developed had over 300,000 subscribers each at the time of sale while Tel,esystems had over 72,000 subscribers at sale and constituted the second largest CATV system in Switzerland. As a former Director and Chairman of the National. Cable Television Association, Mr. Crosby was in the first group designated by his peers as a Pioneer of the Cable Television Industry. In addition to his continuing involvement the CATV industry, Mr. Crosby is a founder and Chairman of the Rust Group. This venture capital partnership, including Rust Ventures, L.P. and Rust Capital Limited, have diversified international holdings in real estate, entertainment and a variety of both high tech and manufacturing situations. In 1982, Mr. Crosby and a group of co --investors joined B.M. Warburg Pincus & Co. and Home Box Office in funding the Orion Pictures purchase of Filmways. From 1982 through early 1985, Mr. Crosby served as a Director of Orion and today, continues to serve on the Board of Directors of numerous public and privately held companies. Mr. Crosby received his B.B.A. degree from the University of Texas in 1949. LE3 - d - n--I -_-I-,2=N--� ..,.-. r .--- r .. JAY 0' NE11kL Mr. O'Neal, President of Mission Cable Partners, has over 20 years of experience in evaluating, negotiating, franchising, constructing, and operating cable systems in the southwestern United States. Since 1975, he has lived in Crested Butte, Colorado, as he focused his activity on the construction and operation of his own cable systems in New Mexico, Oklahoma and Colorado. The Oklahoma systems were sold to Jones Tntercable in 1983 and the Colorado properties were purchased by Rock Associates in January, 1986. The New Mexico systems are still owned by Mr. O'Neal. Prior to operating his own systems, Mr. O'Neal was Chief Executive Officer and Chief Operating Officer of COMMCO, Inc., an Austin, Texas -based, multiple -system operator which he helped form in 1966. From 1966 until its sale in 1975, COMMCO acquired and constructed 23 cable systems in Texas, Oklahoma, Kentucky and New Mexico, serving over 25,000 subscribers. In addition, COMMCO's construction division became one of the nation's largest cable contractors, building thousands of miles of cable plant throughout the United states and Mexico. Mr. O'Neal has served as President of the Texas Cable Association and as a member of the Board of Directors of the National Cable Television Association. He also served as a member of the governing Board for the Austin, Texas cable system (50,000 subscribers) and organized the cable technician school at Texas A&M University. Mr. O'Neal is well recognized in the cable television industry as a successful operator of smaller cable systems. Mr. O'Neal received his Petroleum Engineering degree from Oklahoma University in 1957. During his senior year, Mr. O'Neal was recognized as an academic All -American. Such a strong capital base will provide Mission with sufficient resources for growth and the nedessary capital expenditures the systems require. Mission will have in excess of 45,000 subscribers by year-end 1988, and approximately 85,000 subscribers by the end of the first quarter of 1969. Many of the systems purchased by Mission have significant growth opportunities within the franchise area and Mission believes that it will be able to grow its subscriber base to a level of 1.00,000 subscribers by 1990. Mission Cables strategic purpose is to acquire classic cable systems in smaller communities within a geographic area so as to cluster these systems for more operating efficiency and economic viability. By pursuing such a strategy, Mission will then be able to employ experienced individuals as regional managers for each geographic cluster. In addition, Mission will utilize its purchasing strength to purchase more programming alternatives and provide new channels to the existing systems. A strong operating team has been assembled to operate the regional clusters and individual. systems. These individuals, with proven CATV track records, will provide Mission with the strong foundation -on which it can grow, and improve the systems for the benefit of the subscriber. As their histories have demonstrated, the founders of Mission are dedicated to improving the quality of the programming service in each community in which they operate and also are committed to providing stable, long-term ownership of the cable franchise. 2 S0 - d - 100 i1:TH-1 air-. T c- T ..