CC RESOLUTION 4177RESOLUTION NO. 4177
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
EL SEGUNDO PROVIDING FOR THE CHANGE IN
CONTROL OF A CABLE TELEVISION FRANCHISEE
WHEREAS, the City of El Segundo ( "Franchising Authority ") has granted a
franchise to Paragon Communications, d.b.a. Time Warner Communications, (the
"Franchisee ") a subsidiary of Time Warner Inc. ('TWI ") to provide cable television
service;
WHEREAS, TWI and America Online, Inc. ( "AOL ") have entered into an
Agreement and Plan of Merger (the "Merger Agreement ") dated as of January 10, 2000;
WHEREAS, the Merger Agreement will result in a stock - for -stock merger (the
"Transaction ") in which TWI and AOL will merge with subsidiaries of a newly formed
holding company; and
WHEREAS, as a result of the Transaction both TWI and AOL will become wholly
owned subsidiaries of the new company, AOL Time Warner Inc.; and
WHEREAS, the Franchising Authority has concluded the Transaction will result
in a change of control of the Franchisee; and
WHEREAS, a Form 394 regarding the Transaction has been filed with the
Franchising Authority; and
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of El
Segundo does hereby determine and find as follows:
1. To the extent required under the terms of the Franchise, the Franchising
Authority hereby authorizes and consents to the change in control of the
Franchisee resulting from the Transaction.
2. The Franchisee shall remain responsible for all obligations under the
Franchise.
3. Nothing in this Resolution shall be deemed or interpreted to be a waiver
by the Franchising Authority of any past non - compliance, known or
unknown, with the terms of the Franchise by the Franchisee. The
Franchising Authority does not waive any past non- compliance with the
terms of the Franchise, and it reserves the right to pursue any and all
remedies permitted by law for any non - compliance with the terms of the
Franchise.
RESOLUTION NO.4177
PROVIDING FOR THE CHANGE OF CONTROL OF CABLE FRANCHISEE
PAGE NO. 1
4. This authorization and consent shall be effective upon the closing of the
Transaction. Notwithstanding the foregoing, if the Transaction should not
close by 5:00 p.m. Pacific Standard Time on March 1, 2001, then the
Franchising Authority's authorization and consent shall lapse and expire.
5. Within thirty (30) days of receipt of an itemized invoice of costs from the
Franchising Authority, the Franchisee shall reimburse the City for its actual
costs incurred in reviewing and evaluating the Transaction and the Form
394, not to exceed $15,000. Franchisee's present intention is to not add
the cost amount to the Basic Service Tier in future years; however, this
Resolution does not restrict its right to do so under FCC rules, or does it
restrict the ability of the City of El Segundo to challenge said position.
6. The Franchising Authority acknowledges the Memorandum of
Understanding entered into by Time Warner and America Online on
February 29, 2000, and the decision of the U. S. Ninth Circuit Court of
Appeals filed June 22, 2000 in AT &T v. Portland. Nevertheless, the
Franchising Authority reserves any rights it may have to later require the
Franchisee to allow third parties access to the Franchisee's data network
for the purpose of providing internet service to customers in the Franchise
service area (commonly known as "open access "). This reservation
includes any similar right of the Franchising Authority that may be
acknowledged or granted in the future by any court of competent
jurisdiction, legislative action, or administrative action. Prior to the
enactment or enforcement of any such requirement, Franchisee shall be
provided with reasonable notice, an opportunity to be heard, and an
opportunity to present evidence on any findings made with respect to such
a requirement.
7. This authorization and consent is conditioned that the parties to the
Transaction and any other reviewers of the Transaction (for example, the
Federal Communications Commission) approve the Transaction in a form
not materially different from the form reviewed, authorized and consented
to by the Franchising Authority.
8. The Franchising Authority hereby gives Franchisee notice that the change
of control may create a taxable possessory interest upon which
Franchisee may be liable for certain property taxes. Franchisee shall
acknowledge that it has received actual notice as provided by California
Revenue and Taxation Code section 107.6.
9. Within thirty (30) days of consummation of the Transaction, Franchisee
shall execute and return to the Franchising Authority an acceptance of this
Resolution in a form substantially similar to the form attached to this
Resolution.
RESOLUTION NO.4177
PROVIDING FOR THE CHANGE OF CONTROL OF CABLE FRANCHISEE
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10. Failure of the Franchisee to comply with any condition of this Resolution
shall automatically render this Resolution null and void, and the
Franchisee's request for a change of control shall be considered denied.
11. Nothing in this Resolution shall be considered or construed to grant the
Franchising Authority's consent to any future change of control, transfer,
or any other transaction, including any transfer of the Franchise to any
subsidiary or affiliate of the Franchisee or its corporate parent(s). The
Franchising Authority expressly reserves all of its rights regarding any
future transactions.
PASSED, APPROVED AND ADOPTED this 1St day of August , 2000.
Mike Gordon, Mayor
Of the City of El Segundo,
California
ATTEST:
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS
CITY OF EL SEGUNDO
I, Cathy Domann, Deputy City Clerk of the City of El Segundo, California, do hereby
certify that the whole number of members of the City Council of said City is five; that the
foregoing Resolution No.4177 was duly passed and adopted by said City Council,
approved and signed by the Mayor of said City, and attested to by the City Clerk of said
City, all at a regular meeting of said Council held on the 1st day of August, 2000, and
the same was so passed and adopted by the following vote:
AYES:
Gordon, Jacobs, Gaines, McDowell, Wernick
NOES:
None
ABSENT:
None
ABSTAIN:
None
Cathy Domann, Deputy City Clerk
APPROVED AS TO FORM:
s
Mark 'Hensley, City Attor° ey
RESOLUTION NO.4177
PROVIDING FOR THE CHANGE OF CONTROL OF CABLE FRANCHISEE
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