CCR2000122COMMON COUNCIL - CITY OF MUSKEGO
RESOLUTION #122-2000
RESOLUTION OF THE CITY OF MUSKEGO, WISCONSIN CONSENTING
TO THE CHANGE OF CONTROL OF ITS CABLE TELEVISION
FRANCHISEE FROM
TIME WARNER, INC. TO AOL TIME WARNER, INC.
WHEREAS, Time Warner Cable of southeastern Wisconsin, L.P. (the
"Franchisee") is the holder of a franchise (the "Franchise") to provide cable
television service in the City of Muskego (the "Municipality") pursuant to a
franchise agreement between the Municipality, dated November 22, 1999
(together with any amendments, the "Franchise Agreement") and the
Municipality's Ordinance No. 1004 (the "Cable Ordinance"). The Franchise
Agreement and the Cable Ordinance are collectively referred to as the "Franchise
Documents"; and
WHEREAS, Time Warner, Inc. ("Time Warner"), the ultimate parent of the
Franchisee, submitted to the Municipality its application on Federal
Communications Commission ("FCC") Form 394, dated February 4, 2000 (the
"Application"), requiring that the Municipality approve if it concludes that a
change of control of the Franchisee from Time Warner to AOL Time Warner, Inc.
(the "Change of Control") will result from the transactions associated with the
Agreement and Plan of Merger dated January 10, 2000 (the "Transaction"); and
WHEREAS, pursuant to the information requests of the Milwaukee
Regional Cable Commission on behalf of the Municipality, Time Warner
supplemented the Application with additional documents and information; and
WHEREAS, Time Warner has made various representations in the
Application and supplemental information thereto including that the Transaction is
not expected to change local management, reduce the quality of cable television
customer service or the quality of cable television service in the Municipality; and
WHEREAS, the Franchisee will remain the holder of the Franchise upon
consummation of the Change of Control; and
WHEREAS, the Municipality and the Franchisee have negotiated an
agreement regarding certain conditions of this consent (the "Change of
I
Control Agreement"), a copy of which is attached as Exhibit A and is incorporated
by reference.
NOW, THEREFORE, BE IT RESOLVED THAT THE COMMON
COUNCIL OF THE CITY OF MUSKEGO, hereby concludes that the Transaction
will result in a Change of Control that requires the prior consent of the
Municipality, and in reliance upon the representations and information submitted
in the Application and supplemental information thereto and subject to the
conditions set forth below, hereby consents to the Change of Control of the
Franchisee from Time Warner to AOL Time Warner, Inc. as described in the
Application and supplemental information thereto; and
BE IT FURTHER RESOLVED that the Municipality's consent is subject to
the Franchisee executing and delivering to the Municipality by no later than June
30,2000 a Change of Control Agreement in the form of the attached Exhibit A. If
the Franchisee fails to do so, the Municipality's consent to the Change of Control
shall be null and void and the Application shall be denied as of April 30, 2000;
and
BE IT FURTHER RESOLVED that, by this consent, the Municipality does
not agree to any renewal or extension of the Franchise. Any pending or future
renewal or extension of the Franchise shall be subject to applicable federal, state
and local laws, the Franchise Documents, and the Change of Control Agreement;
and
BE IT FURTHER RESOLVED that, by this consent, the Municipality does
not approve of or consent to: (1) any other change of control of the Franchisee,
(2) any pending or future transfer of the Franchise, or (3) any pending or future
assignment or delegation of any of the Franchisee's rights or duties under the
Franchise. Any other change of control of the Franchisee, any pending or future
transfer of the Franchise, or any pending or future assignment or delegation of any
of the Franchisee's rights or duties under the Franchise are subject to any then
applicable federal, state and local laws, the Franchise Documents, and the Change
of Control Agreement; and
BE IT FURTHER RESOLVED that, by this consent, the Municipality does
not make any representation that the Franchisee is in compliance with all of its
obligations under the Franchise Documents; and
2
BE IT FURTHER RESOLVED that, by this consent, the Municipality does
not waive any of the Franchisee's commitments, duties and obligations under the
Franchise Documents, including any accrued and unfulfilled obligation of the
Franchisee, whether known or unknown, relating to the Franchise; and
BE IT FURTHER RESOLVED that the Mayor is hereby authorized and
directed to execute and deliver the Change of Control Agreement in substantially
the form of the attached Exhibit A.
DATED THIS 23rd DAY OF MAY ,2000.
This is to certify that this is a true and accurate copy of Resolution #122-2000 i which was adopted by the Common Council of the City of Muskego.
5/00jmb
3
EXHIBIT A
CHANGE OF CONTROL AGREEMENT
Agreement between the CITY OF MUSKEGO, WISCONSIN (the
"Municipality") and Time Warner Cable of Southeastern Wisconsin, L.P. (the
"Franchisee").
Recitals
A. The Franchisee is the holder of a franchise (the "Franchise") to
provide cable television service in the Municipality, subject to the provisions of a
franchise agreement between the Municipality and the Franchisee dated November
22, 1999, (together with any amendments, the "Franchise Agreement") and subject
to Ordinance No. 1004 of the Municipality (the "Cable Ordinance"). The
Franchise Agreement and the Cable Ordinance are collectively referred to as the
"Franchise Documents."
B. Time Warner, Inc. has submitted to the Municipality an FCC
Form 394 Application for Franchise Authority Consent to Assignment or
Transfer of Control of Cable Television Franchise, (the "Application"), requesting
the Municipality to consent if it concludes that a change of control of the
Franchisee from Time Warner, Inc. to AOL Time Warner, Inc. (the "Change of
Control") will result from the transactions associated with the Agreement and Plan
of Merger dated January 10, 2000 (the "Transaction").
C. Pursuant to the request of the Municipality, Time Warner,
Inc. has provided supplemental information to the Milwaukee Regional Cable
Commission on behalf of the Municipality in support of the Application, including
representations that the Transaction is not expected to reduce the quality of cable
television customer service or the quality of cable television service.
D. The Franchisee will remain the holder of the Franchise upon
consummation of the Change of Control.
E. The Municipality has concluded that the transaction will result in a
Change of Control that requires the prior consent of the Municipality
4
F. The Municipality has enacted or will enact a Resolution granting its
approval of the Change of Control subject to the condition that the Franchisee
enter into this Change of Control Agreement.
G. The Municipality has determined that, in light of the facts available to
it and the limited time within which to review the Application, it would not be
appropriate to approve the Change of Control absent certain agreements by the
Franchisee, including certain promises to ensure compliance with the provisions of
the Franchise Documents. The Franchisee agrees that it is appropriate to make
such agreements, subject to the Municipality's approval of the Change of Control
Agreement.
NOW THEREFORE, the Municipality and the Franchisee agree as follows:
ARTICLE I. INCORPORATION OF RECITALS.
1.1 Recitals. The above Recitals are incorporated into and constitute a
part of this Agreement.
ARTICLE 11. AFFIRMATION OF FRANCHISE OBLIGATIONS.
2.1 Affirmation. The Franchisee acknowledges and agrees that:
(a) after the Change of Control, the Franchisee will continue to be bound by all of
its commitments, duties and obligations under the Franchise Documents; and (b)
neither the Change of Control nor the Municipality's approval of the Change of
Control shall in any respect relieve the Franchisee of any responsibility it may
have for past acts or omissions, whether known or unknown, relating to the
Franchise. The Franchisee hereby reaffirms that it will be liable for, and accept
the consequences of, any responsibility it may have for such acts and omissions,
including liability for any accrued but unfulfilled obligation to the Municipality
under the Franchise Documents and applicable law, to the same extent as if the
Change of Control had not taken place.
ARTICLE 111. ADDITIONAL AGREEMENTS OF THE PARTIES.
3.1 Compliance With Franchise. The Franchisee agrees that it will
continue to be bound by the lawful obligations of this Agreement and the
Franchise Documents.
5
a
a
e
3.2 No Waiver. The Franchisee agrees that, by the Municipality
consenting to the Change of Control and the execution of this Agreement, the
Municipality is not waiving any of its rights or prospective rights with respect to
enforcement of the Franchisee's compliance with the terms and conditions set forth
in the Franchise Documents, including without limitation:
(a) Renewal of Franchise. The Franchisee agrees that the
Municipality has made no agreement that the Franchise will be renewed or
extended; any renewal or extension of the Franchise shall be subject to applicable
federal, state and local laws, the Franchise Documents, and this
Agreement;
(b) Future Change of Controls/Transfers. The Franchisee agrees
that (1) any other change of control of the Franchisee, (2) any pending or future
transfer of the Franchise, or (3) any pending or future assignment or delegation of
any of the Franchisee's rights or duties under the Franchise will be subject to the
review and approval of the Municipality in accordance with any then applicable
federal, state and local laws, the Franchise Documents, and this Agreement;
(c) Past Defaults. The Franchisee shall not contend that the
Municipality is barred, by reason of the Change of Control, from considering or
raising any lawful claim it may have based on the Franchisee's past or present
failure to comply with any term or condition of the Franchise Documents or
applicable law, including, without limitation: any unpaid franchise fees due the
Municipality from the Franchisee; any unpaid support for public, educational, or
governmental access channels; any known and unresolved consumer complaints;
and any construction, security or facility requirements of the Franchise Documents
that are unsatisfied; and
(d) Franchisee's Compliance. The Municipality's approval of the
Change of Control shall in no way be deemed a representation by the Municipality
that the Franchisee is in compliance or not in compliance with its obligations
under the Franchise Documents.
ARTICLE IV. MISCELLANEOUS.
4.1 Binding Agreement. This Agreement shall be binding upon and inure
to the benefit of the parties and their permitted successors and assigns.
6
4.2 Survival of Warranties and Representations. The warranties and
representations of the Franchisee shall survive the closing of the Transaction.
4.3 Assignment. The rights and obligations of any party under this
Agreement may not be assigned or delegated without the prior written approval of
the other party.
4.4 Waiver. No waiver of any provision of this Agreement shall be
deemed to be a waiver of any other provision of this Agreement nor shall any
waiver be deemed to be a continuing waiver except as otherwise expressly stated
in writing by the waiving party.
4.5 Severability. If any provision of this Agreement shall be held to be
unenforceable, this Agreement shall be construed with the unenforceable
provision deleted, and the rights and obligations of the parties shall be construed
and enforced accordingly.
4.6 Governing Law. This Agreement shall be governed by the internal
laws (without reference to conflict of laws) of the State of Wisconsin.
4.7 Drafting. This Agreement is a product of negotiation between the
parties and shall not be construed against any party on grounds relating to drafting,
revision, review or recommendation by any agent or representative of such party.
4.8 Time of the Essence. Time is of the essence to this Agreement.
4.9 Authority. Each signatory to this Agreement represents that he or she
has the authority to enter into this Agreement.
4.10 Effective Date. This Agreement may be executed in multiple
counterparts no later than June 30,2000 and shall be deemed effective as of the
closing date of the Transaction.
CITY OF MUSKEG0
By:
7
Time Warner Cable of Southeastern Wisconsin, L.P.
By:
, Its
Date:
8