HomeMy WebLinkAboutRes 02-86 01/21/1986
RESOLUTION NO.
2-86
A RESOLUTION APPROVING EFFORTS OF CABLENET ASSOCIATES
TO INCREASE ITS WORKING CAPITAL TO PROVIDE BETTER
SERVICE TO CABLE FRANCHISE COMMUNITIES
WHEREAS, the Village of Mount Prospect has previously approved
the formation of a general partnership to be known as Cablenet
Associates, the general partners of which are Cablenet, Inc. and
Telenois, Inc., a subsidiary company of TCI Development
Corporation (which is a subsidiary of Tele-Communications, Inc.),
and the transfer to Cablenet Associates of the franchise
agreement between the Village of Mount Prospect and Cablenet,
Inc. relating to cable television service ("Franchise"); and
WHEREAS, the formation of Cablenet Associates occurred on
January 31, 1985; and
WHEREAS~ Cablenet, Inc., when it started construction of its
cable television system, borrowed funds (llold loan") from the
Canadian Imperial Bank of Commerce ("CIBC") for purposes of
constructing the system, and the old loan was secured by the
assets of Cablenet, Inc. in accordance with the Franchise; and
WHEREAS, in furtherance of the formation of Cablenet Associates,
CIBC loaned Cablenet Associates and made available to it through
a line of credit additional sums of money (linew loanU) and
consolidated Cablenet, Inc.ls old loan with the new loan to
Cablenet Associates; and
WHEREAS, as a result of the new loan from CIBC, Cablenet
Associates! debt to GIBC is approximately $78,000,000, whereas
Gablenet, Inc.ls debt to GIBC prior to the formation of Cablenet
Associates was approximately $60,000,000; and
WHEREAS, the new loan will be secured by the assets of Cablenet
Associates; and
WHEREAS, when Cablenet Associates repays any portion of the
$15~OOO,OOO it has drawn on its line of credit with CIBC, and so
long as Cablenet Associates is not in default under its new loan
agreement with CIBC, Telenois and CIBC will advance the monies
for such repayments by way of their own subordinated loan to
Cablenet Associates, which will be secured by the assets of
Cablenet Associates; and
WHEREAS, in furtherance of the formation of Cablenet Associates,
U.S. Cablenet, Inc., Cablenet, Inc.ls parent corporation, loaned
Cablenet Associates approximately $800,000, which will be secured
by the assets of Cablenet Associates; and
WHEREAS, the Village of Mount Prospect was advised, while it was
considering its resolution approving the transfer of the
Franchise to Cablenet Associates, that one of the purposes of the
formation of the partnership was to increase the working capital
available to Cablenet Associates for construction and operation
of its cable television system; and
WHEREAS, the foregoing loans and credit lines to Cablenet
Associates are in furtherance thereof; and§
WHEREAS, the financial arrangements between Cablenet Associates,
CIBC, Telenois, lne, TCI Development Corporation~ and U.S.
Cablenet, Inc. do not alter or change any of the rights, duties,
or obligations of Cablenet Associates or the Village of Mount
Prospect under the Franchise and applicable Ordinances; and
WHEREAS, the financial arrangements between Cablenet Associates,
CIBC, Telenois, Inc., TCI Development Corporation, and U.S.
Cablenet, Inc. contemplate that Cablenet Associates will advise
its franchisor municipalities of the foregoing matters and obtain
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Page 2 of 2
the municipalities. approval of such financial arrangements in
furtherance of its franchise responsibilities.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND BOARD OF TRUSTEES
OF THE VILLAGE OF MOUNT PROSPECT9 COOK COUNTY, ILLINOIS:
SECTION ONE: The Village of Mount Prospect does hereby
acknowledge that it has been informed of the foregoing financial
arrangements between Cablenet Associates, CIBC, Telenois, Inc.,
TCI Development Corporation, and U.S. Cablenet, Inc.
SECTION TWO: The Village of Mount Prospect approves any such
efforts on the part of Cablenet Associates to increase its
working capital for the purpose of allowing it to provide better
service to the Village of Mount Prospect in performance of its
obligations under the cable television franchise agreement
between Cablenet Associates and the Village of Mount Prospect.
SECTION THREE: This Resolution shall be in full force and
effect from and after its passage and approval in the manner
provided by law.
AYES:
NAYS:
Arthur, Farley, Floras, Murauskis, Wattenberg
None
ABSENT:
Van Geem (Abstain)
PASSED and APPROVED this
21st day of
January
, 1986.
ATTEST:
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