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HomeMy WebLinkAboutResolution 96-099 transfer of cable television license from jones cable holdings to jones communications MARANA RESOLUTION NO. 96-99 A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, APPROVING AND AUTHORIZING THE TRANSFER OF (i) THE CABLE TELEVISION LICENSES AND SYSTEMS OF JONES CABLE HOLDINGS, INC., TO JONES COMMUNICATIONS OF ARIZONA, INC., AND (ii) THE STOCK OF JONES COMMUNICATIONS OF ARIZONA, INC., FROM JONES CABLE HOLDINGS, INC., TO JONES CABLE HOLDINGS II, INC. WHEREAS, the Town of Marana, pursuant to a Cable Conununications License, dated September 19, 1988 ("the License"), previously granted to Jones Intercable, Inc. ("Jones"), a license to receive, distribute and supply radio, television and other cable communication services by operating a cable television system within the town limits of the Town of Maran a ("the System"); and WHEREAS, by Resolution No. 95-67 adopted on December 5, 1995, the Mayor and Town Council of the Town of Maran a consented to the transfer of the License and the System from Jones Intercable, Inc., to Jones Cable Holdings, Inc. ("JCIf'), and the License and the System were so transferred to JCH; and WHEREAS, JCH has agreed to sell the System and the License to its wholly owned subsidiary, Jones Conununications of Arizona, Inc., a Colorado corporation ("Jones of Arizona"), and Jones of Arizona has agreed to purchase the System and the License; and WHEREAS, JCH has agreed to sell I 00% of the stock ofJones of Arizona ("the Stock") to Jones Cable Holdings II, Inc., a Colorado corporation ("Holdings II") which is wholly owned by Jones Intercable, Inc., and Holdings II has agreed to purchase the Stock; and WHEREAS, the Marana Cable Communications Regulations, Ordinance No. 87.09, provide that a licensee may not, without prior written authorization of the Town, (i) sell, transfer or assign the System, or (Ii) grant a security interest in the System's assets if the indebtedness secured thereby exceeds 75% of the original cost.<;>r ~ fair market value ofthe System, whichever is higher; and WHEREAS, the Marana Cable Communications Regulations, Ordinance No. 87.09 Section IX provides that a licensee may not sell, transfer or assign more than 5% of the cumulative ownership of the system without prior written authorization from the Town; and WHEREAS, JCH has requested that the Town Council approve (i) the transfer of the System and the License from JCH to Jones of Arizona; (ii) the granting by Jones of Arizona, from time to time, of a security interest in the License and the System in an amount in excess of 75% of the original cost or fair market value of the System to an institutional lender or lenders as security for its obligations to such lender or lenders; (iii) the transfer of the Stock from JCH to Holdings II; and (iv) the pledge by Holdings II of the Stock to an institutional lender or lenders as security for its obligations to such lender or lenders; and WHEREAS, the Town of Maran a has determined that it is in the best interests of the public that JCH be permitted to transfer the System and the License to Jones of Arizona; and M....... Arizona Reoolution No. 96-99 Page 1 of3 ......... f' WHEREAS the Marana Town Council has determined that it is in the best interests of the , public that JCH be permitted to transfer the Stock to Holdings II. NOW, THEREFORE, BE IT RESOLVED by the Mayor and Council of the Town of Marana, Arizona, that the Town does hereby consent to (i) the transfer of the System and the License from JCH to Jones of Arizona; and (ii) the Stock from JCH to Holdings II. BE IT FURTHER RESOLVED that Jones of Arizona shall assume all rights and obligations of JCH under the License. BE IT FURTHER RESOLVED that Jones of Arizona is authorized to grant, from time to time, a security interest in the System and in all of its rights, powers and privileges under the License and all of its other assets for the sole purpose of securing indebtedness in an amount in excess of 75% of the original cost or fair market value of the System, to such a lending institution or institutions as may be designated from time to time by Jones of Arizona, which lending institution or institutions shall have all of the rights and remedies of a secured party under the applicable Uniform Commercial Code. J.ones of Arizona shall notify the Town of any arrangement in which a security interest of more than 75% of the original cost or fair market value of the cable television system is to be granted. r BE IT FURTHER RESOLVED that Holdings II is authorized to pledge the Stock to such lending institution or institutions as may be designated from time to time by Holdings II, which lending institution or institutions shall have all of the rights and remedies of a secured party under the applicable Uniform Commercial Code. BE IT FURTHER RESOLVED that the foregoing consent shall be effective upon the closing of the sale of the cable television system by JCH to Jones of Arizona and written notice of the closing date shall be provided to the Town. The foregoing consent to the transfer of the Stock shall be effective upon the closing of the sale of the Stock from JCH to Holdings II, and upon written notice of the closing date to the Town. BE IT FURTHER RESOLVED that the Town hereby confirms that, to its knowledge, (a) the License is currently in full force and effect; (b) JCH is in compliance in all material respects with the License; and (c) no event has occurred or exists which would permit the Town to revoke or terminate the License. Subject to complia~ce with the terms of this Resolution, all action necessary to approve the transfer of (i) the License and the System by JCH to Jones of Arizona and (ii) the Stock from JCH to Holdings II has been duly and validly taken. f' Marana, Arizona Resolution No. 96-99 Page 2 of3 - I" PASSED AND ADOPTED by the Mayor and Council of the Town of Maran a, Arizona, this 19th day of November, 1996. Daniel 1. Hochuli Town Attorney r- r Marana, Arizona Resolution No. 96-99 Page 3 of3 ~#~, Mayor ED ONEA 9 Federal CaenOausIdOm COMW40i n / Approved 6 OMs 106 0057] w w% n. C 2 os34 FCC 394 E xpires 0&31,'% APPLICATION FOR FRANCHISE AUTHORITY CONSENT TO ASSIGNMENT OR TRANSFER OF CONTROL OF CABLE TELEVISION FRANCHISE FOR FRANCHISE AUTHORITY USE ONLY SECTION 1. GENERAL INFORMATION DATE September , 1996 1• Community Unit Identification Number. AZ0299 2. Application for ❑ Assignment of Franchise � Transfer of Control 3. Franchising authority. Town Council of the Town of Marana Arizon 4. Identify community where the system/franchise that is the subject of the assignment or transfer of control is located. Town of Marana, Arizona S. Date system was acqquu'r�ed or (for system's constructed by the transferodassignor) the date on which servmce was provided to the first subscriber in the ise areas March 1 1996 6. Proposed effective date of closing of the transaction assigning or transferring ownership of the November 15, 1996 system to transferee/assignew 7. Attach as an Exhibit a schedule of any and all additional information or material filed with this Exhibit =o, application that is identified in the franchise as required to be provided to the franchising n / a authority when requesting its approval of the type of transaction that is the subject of this application. PART I - TRANSFEROR/ASSIGNOR t. Indicate the name mailing address and telephone number of the transferor /ass' Legal name of Transferor /Assignor (if individual, list last name first} Assumed name used for doing business (if any) n/a Mailing street address or P.O. Bust 9697 E. Mineral Ave. N Gnclude area code) City Stan ZIP Code Telephone Englewood CO 80112 (303) 792 -3111 that provides for assignment the or Exhibit No. 2.(a) Attach as an ExhmTmit a copy of the contract or agre in osier to understand the I - 2 (a ) transfer of control (including any exhibits or schedules reduce the terms to writing and attach. terms thereof). if there is only an oral agreement, (Confidential trade, business, pricing or marketing information, or other information not otherwise publicly available, may be redacted). (b) Does the contract submitted in response to (a) above embody the full and complete agreement 0 Yes ❑ No between the transferor /assignor and the transferee/assigneel If No, explain in an Exhibit. En 4 No. * Transferor of 100% of the stock of Jones Communications of .Arizona, Inc. PART It - TRANSFEREE/ASSIGNEE t.(a) Indicate the name mailing address and telephone number of the transfereelassi Legal name of Transferee/Assignee (if individual, list last name first) Jones Cable Holdings_II, Inc. ** Assumed name used for doing business (if any) n a Mailing street address or P.O. Box 9697 E. Mineral Ave. City State ZIP Code Telephone No. (include area code) - Englewood 80112 (303) 792 -3111 Indicate the name mailing address and telephone number of person to contact if other than transfereelassi nee. Name of contact person (list last name first) LeVoy, Katherine A. Firm or company name (if any) Same as above Mailing street address or P.O. Box Same as above city Same ZIP Code Telephone No. (include area code) (c) Attach as an Exhibit the name, mailing address, and telephone number of each additional person who 6chibit No. should be contacted, if any. (d) Indicate the address where the systems records will be maintained. Suva address 8251 R. Cortaro Rd. Z1 /Code Cdy Stan AZ 85743 -9599 Tucson to a the f ice and Exhibit No. 2. Indicate on an attached exhibit any plans change current terms and conditions o service n / a operations of the system as a consequence of the transaction for which approval is sought There are no current plans to change the current terms and conditions of service and operation of the system as a result of the transaction for which approval is sought. ** Transferee of 100% of the stock of Jones Communications of Arizona,Inc. KC 394 (h* 0 octow 1"3 SECTION 1. TRANSFEREE'S/ASSIGNEE'S LEGAL QUALIFICATIOI'A t. Transferee/Assignee is: ® Corporation a. jurisdiction of incorporation: d. Name and address of registered agent in - Colorado jurisdiction: b. Date of incorporation: Elizabeth M. Steele September 6, 1996 9697 E. Mineral Ave. c. For profit or not- for - profit: Englewood, CO 80112 For Profit M Limited Partnership a. jurisdiction in which formed: c. Name and address of registered agent in jurisdiction: b. Date of formation: General Partnership a: jurisdiction whose laws govern formation: b. Date of formation Individual Other. Describe in an Exhibit: Exhibit No. 2. List the transfereelassignee, and, if the transferee/assignee is not a natural person, each of its officers, directors, stockholders beneficially holding more than S% of the outstanding votm; shares, general partners, and limited partners holding an equity interest of more than S %. Use only one column for each individual or entity. Attach additional pages if necessary. (Read carefully - the lettered items below refer to corresponding lines in the following table.) (a) Name, residence, occupation or principal busitwss, and principal place of business. (if other than an individual, also show nano, address and citizenship of natural person authorized to vote the votithnngg securities of the applicant that it holds.) List the applicant first, officers, next, then directors and, thereafter, remaining stocit holders and/or partners. (b) Citizenship. (c) Relationship to the transfereelassignee (e.g., officer, director, etc.). (d) Number of shares or nature of partnershhp mteresL (e) Number of votes. (f) Percentage of votes. W See Exhibit II -2 (b) (c) (d) (e) (f) KG 794 Ihfe 71 October 1991 • _ - 3. If the applicant is a corporation or a limited partnership, is the transferee/assigrm formed under the ® Yes ❑ No laws of, or duly qualified to transact business in, the State or other jurisdiction M which the system operates# Exhibit No. If the answer is No, explain in an Exhibit. n/a 4. Has the transfereelassignee had any interest in or in connection with an app lication which has been F7 Yes Q No dismissed or denied by any franchise authority) Exhibit No. If the answer is Yes, describe circumstances in an Exhibit. n i s S. Has an adverse finding been made or an adverse final action been taken by any court or F7 Yes ❑X No administrative body with respect to the transferee/assignee in a civil, criminal or administrative proceeding, brought under the provisions of any law or lation related to the following: any felony; revocation, suspension or involuntary• transfer of any authorization (including cable franchises) to provide video programming services; mass media related antitrust or unfair competition; fradulent statements to another governmental unit; or employment discrimination# and matter(s) involved, E �ff l If the answer is Yes, attach as an Exhibit a full description of the personsing (by dates and file including an identification of any court or administrative body and any p roceed numbers, if applicable), and the disposition of such proceeding. 6 Are there any documents, instruments, contracts or understandings relating to ownership or future ❑ Yes T No ownership rights with respect to any attributable interest as described in Question 2 (including, but not limited to, non - voting stock interests, beneficial stock ownership interests, options, warrants* debentures)# If Yes, provide particulars in an Exhibit. or understandings for the pledge of stock of the ❑ Yes ❑ No 7. Do documents, instruments. agreement o p rovide that: (a) votes rights transferee/assignee, as security for loans or contractual Performance, p in will remain with the applicatn, evert in the event of default on the obligation exer a _ arty default, there will be either a private or public sale of the stock (cam of the e e f the ownership rights by a purchaser at a sale described in (b), any p C and/or the teens e franchising authority, if required pursuant to federal, state or local law or pursuant the franchise agreement will be obtained? The stock of the transferee /assignee (Jones Cable Holdings II Inc.) Exhibit No. �,,� P �. If No a b ltacit ainnxi lb� n / a SECTION 111- TRANSFEREE'S/ASSIGNEE'S FINANCIAL QUALIFICATIONS _ El No 1. The transfereelassignee certifies that it has sufficient net liquid facilities reevmilable from 0 Y es committed resources to consumnnate the transaction and oper M accordance wrath generally Exhibit No. 2. Attach as an Exhibit the most recent fi nancial income statement for at least one full III accepted accounting principles, including a e in the ordinary course of year, for the tranfsereelassignee or parent entity that has been prepared business, if any such financial statements are routinely prepared. Such statements, if not otherwise publicly available, may be marked CONFIDENTIAL ss bk i local main tained es Confidential by the franchise authority and its agents to the extent permissible SECTION IV - TRANSFEREE'S/ASSIGNEE'S TECHNICAL QUALIFICATIONS Exhibit No. Set forth in an Exhibit a narrative account of the transferee's/assignee's technical qualification IV and expertise regarding cable television systems, including, but not limited to, summary appropriate management personnel that will be involved in the system's management and operations. The transferee/assignee may, but need not, list a representative sample of cable systems currently or formerly owned or operated. SECTION V - CERTIFICATIONS Part 1- Transferor /Assignor All the statements made in the application and attached exhibits are considered material representations , and all the Exhibits are a material part hereof and are incorporated herein as if set out in full in the application. Signature 1 CERTIFY that the statements in this application are true complete and correct to the best of MY knowledge and belief ZA Jones Cable Holdings, Inc. are made in good faith. B Hate Le a PUNISHABLE BY FINE AND /OR IMPRISONMENT F ORM ARE CODE, TITLE 18, SECTION 1001. Print full name Elizabeth M. Steele Check ropriate classification: Co Officer In�vidual General Partner ® (Indicate Title) Other. Explain: Vice Presid Part 11- TransferwJAssignm All the statements made in the application and attached Exhibits are considered material representations, and all the Exhibits are a material part hereof and are incorporated herein as if set out in full in the application. The transferee/assignee certifies that he/she: (a) Has a current copy of the FCC's Rules yoverni ft cabk television systems (b) Has a current copy of the franchise that is the subject of this application, and of any applicable state laws or local ordinances and related regulations.. W use its best efforts to comply with the tenro of the franchise and applicable state laws a local ordinances and related (c) regulations, and to effect changes. as as practicable, in the operation of the system, if my changes are necessary to cure any violations thereof or defaults p in effect: or o^go Signature 1 CERTIFY that the in Utit: appti.catlon an Jones Cable Holdings II, Inc. complete and correct to =the of my btovYfed� and belief and are made in good faith. B Dace WILLFUL FALSE STATEMENTS MADE ON THIS FORM ARE PUNISHABLE BY FINE ANO/OR IMPRISONMENT. U.S. COOS, Prirt full! nmw TITLE 18, SECTION 1001. Elizabetb M. Steele Check to classificatia Officer rj Other. Explaim individual re Gowal Partner u andicate rdW Vi ce FCC 374 (?31* S) octo1w 1117 0 Exhibit I -2(a) Jones Cable Holdings, Inc., the transferor, will convey 100% of the stock of Jones Communications of Arizona, Inc. ( "JCA ") to Jones Cable Holdings II, Inc., for a purchase price of $62,269,000. The transfer will be effected by a stock power in substantially' the form attached to this Exhibit I -2 (al as well as by any other instruments of conveyance as may be necessary or desirable. Exhibit H -2 The following tables sets forth certain current information regarding beneficial ownership of the Common Stock of the transferee of the stock of JCA, Jones Cable Holdings H, Inc., by executive officers and directors of Jones Cable Holdings II, Inc. and stockholders (including any group) beneficially holding more than 5 %'o of such stock. Common Stock of Jones Cable Holdings , Inc. Occupation, Title Name and Principal State of and Relationship Number of P19ce of Business $esidenre Ckbew ip to Asdoee Votes Percent of Votes Jones Intercable, Inc. Colorado USA Shareholder 1,000 100% 9697 East Mineral Ave. (State of Englewood, CO 80112 Incorporation) Gletm R. Jones Colorado USA Chairman of the 0 0 9697 East Mineral 'Board and Chief Avenue Executive Officer Englewood, CO 80112 James B. O'Brien Colorado USA President and 0 0 9697 East Mineral Am Direct Englewood, CO 80112 Ruth E. Warren Colorado USA: Group Vice. 0 0 9697 East Mineral Ave. President/Operations Englewood, CO 80112 Kevin P. Coyle Colorado USA Vice 0 0 9697 East Mineral Am President/Finance Englewood, CO 80112 Elizabeth M. Steele~ -- Coloradan USA Vice President and 0 0 9697 East Minerat Avg:. Secretary Englewood; CG 80112 J. Roy Potter Coloradan USA Treasurer 0 0 9697 East Mineral: Ave: Englewood,, CO 80112 Exhibit III -2 EXHIBIT III(2) Attached as Exhibit III -2 is the pro forma balance sheet of Jones Cable Holdings II, Inc. ( "Holdings II "), which shows financial information for Holdings II if the transfer of the stock of JCA and the stock of Jones Communications of Georgia, Inc. (which Holdings II will also be purchasing) had occurred as of June 30, 1996. Finally, the Annual Report to Shareholders for Jones Intercable, Inc. ( "Intercable "), the ultimate parent company of JCA, for the fiscal year ended December 31, 1995 is attached to the Form 394 submitted to your community in connection with the transfer of your community's franchise to JCA. In the Annual Report you will see information concerning Intercable and its activities during the fiscal year, as well as the audited financial statements for the company. JONES CABLE HOLDINGS II, INC. UNAUDITED PRO FORMA BALANCE_ . SHEET As of June 30, 1996 (Stated in Thousands) ASSET CASH AND CASH EQUIVALENTS $ 913 RECEIVABLES: Trade receivables, net of allowance for doubtful accounts of $96,000 2,264 INVESTMENT IN CABLE TELEVISION PROPERTIES: Property, plant and equipment, at cost 184,691 Less - Accumulated depreciation (59.6 125,080 Franchise costs and other intangibles, net of accumulated amortization of $39,678,000 146.855- TOTAL INVESTMENT IN CABLE TELEVISION PROPERTIES 271.9 DEPOSITS, PREPAID EXPENSES AND OTHER ASSETS X22 TOTAL ASSETS $ — 2Zft.1Q4 i IARILITIES ANDS AREHOLDER'S INVESTMENT LIABILITIES: Accounts payable and accrued liabilities $ 5,654 Subscriber prepayments and deposits 560 Credit facility, subordinated notes and other debt 304.605 TOTAL LIABILITIES 310,819 SHAREHOLDER'S INVESTMENT: Common Stock, $.01 par value, 1,000 shares authorized and issued at December 31, 1995 - Accumulated deficit X34.715) TOTAL SHAREHOLDER'S INVESTMENT (34.715 TOTAL LIABILITIES AND SHAREHOLDER'S INVESTMENT $ 276. I04 The accompanying note to Unaudited Pro Forma Balance Sheet is an integral part of this balance sheet. I JONES CABLE HOLDINGS II, INC. NOTES TO UNAUDITED PRO FORMA BALANCE SHEET As of June 30, 1996 (1) This Unaudited Pro Forma Balance Sheet as of June 30, 1996 assumes that Jones Cable Holdings II, Inc. had been formed and had acquired the stock of Jones Communications of Georgia, Inc. and Jones Communications of Arizona, Inc. with proceeds from a revolving credit facility to be established prior to acquisition. 2 Exhibit IV As indicated elsewhere in this Application, Jones Cable Holdings II, Inc. ( "Holdings II ") is a wholly -owned subsidiary of Jones Intercable, Inc. ( "Intercable "). In the transaction for which consent is sought, Holdings II will become the owner of 100% of the issued and outstanding stock of Jones Communications of Georgia, Inc. ( "JCG "). It will also become the owner of 100% of the issued and outstanding stock of Jones Communications of Arizona, Inc. ( "JCA "). JCA will own the cable systems serving communities in and around Pima County, Arizona. JCG will own the cable systems serving communities in and around North Augusta and Savannah, Georgia. Intercable, the parent of Holdings II, is a publicly held Colorado corporation organized in 1970, which has been engaged in the cable television business since that time. It acquires, develops and operates cable television systems for itself, for affiliated managed public limited partnerships and for other affiliated entities. Intercable is controlled by Glenn R. Jones, Intercable controls Holdings IL At December 31,1995 (the end of the fiscal year for which Intercable has most recently filed a Form 10 -K with the Securities and Exchange Commission), Intercable managed 54 cable television systems, 41 of which, operating in 19 states, were owned by Intercable- managed partnerships and 13 of which, operating in 10 states, were owned by Intercable directly or through its subsidiaries. Intercable's existing managed partnerships own cable television systems located in California, Colorado, Florida, Illinois, Indiana, Maryland, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, Ohio, Oregon, South Carolina, Texas and Wisconsin. Intercable- owned cable television systems are located in Arizona, California, Colorado, Florida, Georgia, Maryland, South Carolina, and Virginia. At December 31, 1995, Intercable -owned and managed systems served more than 1,400,000 basic subscribers, making Intercable among the top 10 multiple system cable television operators in the United States. Intercable's headquarters are located in Englewood, Colorado, a suburb adjacent to Denver. At its headquarters, it employs approximately 350 associates who devote their time to managing the affairs of the cable television systems owned by Intercable and those owned by the Intercable- managed partnerships. These employees provide engineering, marketing, legal, accounting and other operations support and guidance to all cable television • 0 systems owned or managed by Intercable. The system manager for each of the cable television systems reports to an Operations Vice President located in Englewood, and the services and expertise of the Operations Department, Engineering Department, Legal Department, Marketing Department and Finance Department are made available to the systems and coordinated through the Operations Vice' President. All material policy, operations and financial decisions are and will be made in a cooperative effort by Intercable's system management with Intercable's corporate executives and operations groups. Intercable was formed by Glenn R. Jones, a former attorney who has been in the cable television business since 1961. Mr. Jones has been recognized in the industry for focusing his companies on the cable television industry's responsibilities and capabilities as a unique delivery medium for information and entertainment. Among its distinguishing characteristics, Intercable's commitment to embracing new technology for customer service is especially noteworthy. Cable system and operations are centralized and automated to a high degree, ensuring efficiency and consistently high quality of service. The Intercable companies are also pioneers in customer service training, having introduced a series of interactive video programs for cable systems' employees. These programs are now in use in numerous other companies in the cable television industry. The Intercable philosophy is to provide high quality customer service, to deliver valuable and satisfying programming and entertainment, and to be a good and respected corporate citizen in the communities served by its systems. (25919/jz) 0 • 11,1q To; Sandy Groseclose Marana k q& - qq From: Kenna Smith, Jones lntercable Date: October 2, 1996 Phase 1 Jones Cable Holdings, Inc holds Will be transferred to Jones of and owns Marana, Oro Valley and Arizona in exchange for Jones Pima County franchises. These assets » »> of Arizona stock. Jones of AZ stock is issued to Jones Cable Holdings, Inc. Jones of Arizona will be operating entity. Phase 2 Jones Cable Holdings, Inc will sell to » » » » » » » » » » » »» »Jones Cable Holdings II, Inc In summary, the end players will be: Jones of Arizona — will be the owner and operator of the cable system and the holder of the franchise. Jones Intercable, Inc — will continue to manage the cable system as always. Local contacts and local management will not change. Why is Jones doing this? We are arranging our assets so that Holdings 11 will have access to $600 million in credit, providing Holdings 11 will increased borrowing capacity. What do you — the franchise authority — need to do? Any transfer of the franchise requires your written consent as does a change in ownership more than 5% of the stock of the franchisee. We need your consent to: • transfer to Jones of Arizona by JCH of the your franchise. • transfer to Holdings 11 the stock of Jones of Arizona. We have drafted a resolution to grant such consent for your perusal and review. In addition to the resolution, you'll find FCC paperwork that needs to be completed whenever there is this type of transfer — Form 394. This form and the F CC rules require that you act upon the Ap plication within 120 days after recei Thus, we need you to approve any transfer of system assets or control via a resolution and the Form 394.