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99-69RESOLUTION NO. 99-69 APPROVING THE TRANSFER AND ASSIGNMENT OF THE CABLE TELEVISION FRANCHISE TO MEDIACOM LLC WHEREAS, on or about June 7, 1998, the City of Chanhassen ("City") passed and adopted Ordinance No. 280 granting a Cable Television Franchise ("Franchise") currently held by Triax Midwest Associates, L.P. ("Triax"); and WHEREAS, on April 29, 1999, a certain Asset Purchase Agreement ("Agreement") was made and entered into by and among Triax and Mediacom LLC; and WHEREAS, Triax and Mediacom have requested consent by the City to transfer the Franchise and the assets comprising the Cable System to Mediacom Minnesota LLC ("Mediacom"); and WHEREAS, in compliance with the terms of the Asset Purchase Agreement, the name of grantee/franchisee under the Franchise will be changed to Mediacom; and WHEREAS, under the Franchise and applicable law, the proposed Transfer require consent from the City; and WHEREAS, the City has reviewed the proposed Transfer and the legal, technical, and financial qualifications of Mediacom and Mediacom LLC; and WHEREAS, based on information obtained and on the reports and information received by the City, including the report prepared by the City's cable television consultants, Moss & Barnett, a Professional Association, which is hereby incorporated by reference, the City has found no reason to disapprove of the proposed Transfer to Mediacom. 274154/1 NOW, THEREFORE, the City Council for the City of Chanhassen, Minnesota resolves as follows: 1. 2. Triax is the lawful holder of the Franchise. The City hereby consents and approves of the proposed Transfer subject to: a. Closing of the transaction contemplated within the Asset Purchase Agreement pursuant to the terms and conditions described in information provided to the City by Triax and Mediacom LLC. b. Mediacom LLC notifying the City in writing of the completion of the Transfer within thirty (30) days of the date of closing of the Transfer. c. Mediacom, within thirty (30) days of the closing of the Transfer, providing the City with a signed Acceptance of the Franchise in the form attached hereto and incorporated by reference and a Certificate of Good Standing or Existence for Mediacom for the State of Minnesota, and Mediacom LLC providing the City with a Corporate Guaranty in the form attached hereto. d. Within in ten (10) days from the date of adoption of this Resolution, Triax will provide the City with a thorough and detailed accounting of the PEG access support fees assessed to Chanhassen subscribers under the Franchise beginning July 7, 1998 to present. Triax will clarify whether the full $.84 PEG access 274154/1 2 fee required under the Franchise has been passed through to subscribers and what amount of that $84 fee was offset based upon fees which were previously built into the subscriber rate base under the prior Franchise between Triax and the City. Triax will also provide City with copies of any and all FCC rate regulation forms (i.e. FCC Form 1200, 1210, 1240 or other) verifying that the rate increase imposed in 1999 along with the PEG access pass- through fee was correctly implemented under all applicable laws and regulations. Triax will identify any applicable credit which must be provided to Chanhassen subscribers for any overcharges which may have occurred as a result of any improper allocation of the PEG access fee on subscribers bills. e. Pursuant to Section 4.1 of the Franchise, the grantee is obligated to complete the system upgrade to 750 MHz within eighteen (18) months from the date Triax executed the Franchise. Section 2.3 of the Franchise required acceptance by Triax within thirty (30) days of the date of approval by the City council. The City council approved the Franchise on or about June 7, 1998 thus Triax had until July 7, 1998 to accept the Franchise. Eighteen (18) months from July 7, 1998 is January 7, 2000. Therefore Triax and Mediacom hereby agree that the system upgrade to 750 MHz shall be completed on or before January 7, 2000 or it will constitute a 274154/1 3 material violation of the Franchise which may be enforced by the City in accordance with all applicable Franchise provisions. f. On or before January 7, 2000, Triax and/or Mediacom hereby agree to provide free of charge to the City two-way capability from City Hall to the headend facility so that live programming may be cablecast by City from City Hall on to one or more PEG channels. Any and all fees associated with the provision of this two-way return line will be the sole responsibility of Triax and/or Mediacom. Triax will also provide free of charge to the City all required equipment to facilitate playback for the City's PEG access channel(s). Included in the equipment to be provided by Triax and/or Mediacom to facilitate playback will be a computer based character generator which will allow the City to cablecast messages on the PEG access channel when live or taped programming is not being cablecast. Any and all fees and costs associated with the provision of the playback equipment and the computer based character generator shall be the sole responsibility of Triax and/or Mediacom. g. Mediacom shall submit a financial analysis indicating that it can perform the upgrade identified in Paragraph 2(e) above and finance the purchase of Triax. The City hereby waives any right of first refusal which the City may have to purchase the Franchise, or the cable television system 274154/1 4 serving the City, but only as such right of first refusal applies to the request for approval of the Transfer now before the City. 4. In the event the Transfer from Triax to Mediacom contemplated by the foregoing resolutions is not completed, for any reasons, the City's consent shall not be effective. 5. Mediacom may, at any time and from time to time, assign, grant, or pledge or otherwise convey one or more liens or security interests in its assets, including its rights, obligations and benefits in and to the Franchise to any lender providing financing to Mediacom. 6. To the maximum extent permitted by all applicable local, state and federal laws, this Resolution shall not be construed to in any way relieve Triax nor limit Mediacom from any liability under the Franchise. This Resolution shall take effect and continue and remain in effect from and after the date of its passage, approval, and adoption. A motion to approve the foregoing Resolution No. 99-69 was made by Council Member Engel and duly seconded by Council Member Jansen. The following Council Members voted in the affirmative: Mayor Mancino, Council Members Engel, Labatt, Jansen, and Senn. The following Council Members voted in the negative: None 274154/1 5 Passed and adopted by the City Council for the City of Chanhassen this 9th day of August, 1999. ATTEST: CITY OF CHANHASSEN By: By: Its: 274154/1 6 Additional Issues The City has raised four (4) additional issues as part of this Transfer process that must be addressed in any Resolution to be considered by the City. These issues are as follows: The $.84 PEG access pass through fee issue must be clarified so that subscribers receive credit for $.54 which was already built into the rate base and only receive a thirty cent ($.30) increase in the subscriber bill. Triax must also provide any appropriate credit/refund to subscribers for any overcharges that may have occurred. Pursuant to Section 4.1 of the Franchise, Triax is obligated to complete the system upgrade within eighteen (18) months from the date Triax executed the Franchise. Section 2.3 of the Franchise required acceptance by Triax within thirty (30) days of the date of approval by the City council. The City council approved the Franchise on or about June 7, 1998, which means Triax, had until July 7, 1998 to accept the Franchise. Eighteen (18) months from July 7, 1998 is January 7, 2000. Therefore the system upgrade must be completed on or before January 7, 2000 or it will constitute a material violation of the Franchise. The City needs a return line to be provided to City Hall so that it may provide its own playback of PEG access programming from City Hall. In addition, Triax is to pay all costs associated with the provision of that service including any computer and/or related equipment necessary to facilitate playback and character generated programming. Mediacom shall submit a financial analysis indicating that it can perform the upgrade identified as additional issue No. 2 above and finance the purchase of Triax. Each of these issues has been addressed in the Resolution attached hereto as Exhibit D. 274154/1