HomeMy WebLinkAbout1993-383RESOLUTION NO. 93-383
RESOLUTION OF THE CITY OF SAN BERNARDINO APPROVING THE
TRANSFER OF CABLE TELEVISION FRANCHISE FROM CHAMBERS CABLE OF
SOUTHERN CALIFORNIA, INC., TO THE MARKS PARTNERS, L.P.
WHEREAS, Chambers Cable of Southern California, Inc.,
["Seller"] is a duly authorized holder of a franchise authorizing
the operation and maintenance of a cable television system within
the City of San Bernardino, pursuant to City of San Bernardino
Ordinances No. MC-2395, as amended, and an assignment dated 8-30-
83 ["the Franchise"]; and,
WHEREAS, Seller and the Marks Group, Inc., ["Purchaser"] are
parties to that certain Asset Purchase and Sale Agreement dated
August 6, 1993 ["the Agreement"] wherein Seller and Purchaser
agree that Purchaser will acquire all of the assets used in the
ownership and operation of the cable television system; and,
WHEREAS, the Agreement provides that Purchaser has the right
to assign all of its right, title and interest in the Agreement to
to The Marks Partners, L.P. ["Partnership"J, a Delaware limited
partnership which is 79% owned by Purchaser; and,
WHEREAS, the Partnership desires to acquire from Seller all
the rights and privileges of the Franchise and assume all of the
obligations of Seller under the Franchise accruing from the date
of closing under the Agreement; and,
WHEREAS, the Franchise, as amended in 1968, authorizes the
transfer and assignment of the Franchise by Seller, provided that
the net worth of purchaser at the time of such transfer is not
less than $250,000.00 (adjusted to include increases in the Cost
of Living Index for Southern California over the then current Cost
of Living Index), as shown by a statement of net worth certified
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RESOLUTION OF THE CITY OF SAN BERNARDINO APPROVING THE TRANSFER OF
CABLE TELEVISION FRANCHISE FROM CHAMBERS CABLE OF SOUTHERN
CALIFORNIA, INC., TO THE MARKS PARTNERS, L.P.
to by a licensed certified publoic accountant; and,
WHEREAS, the City has received such evidence of financial
responsibility submitted by the Purchaser and its affiliates and
has found that Purchaser and its affiliates have the financial
managerial ability to operate the system in a proper manner; and,
WHEREAS, the Purchaser has agreed, by letter (a copy of
which is attached hereto as Exhibit "A" and incorporated herein)
in response to the City's request, to continue with a fiber optic
rebuild of half of the City which was originally commenced by
Seller two years ago, and thereby increase the number of channels
from 36 to approximately 54; and,
WHEREAS, the Purchaser has further agreed by letter (Exhibit
"A") to abide by any previous agreement between the City and
Seller, including, but not limited to, the franchise ordinances
and any attachments or amendments thereto, which includes the
Judgment and Settlement Agreement in the case of City of San
Bernardino v. Liberty T.V. CabLe, Inc., Case No. 82-6876 WMB(Gx),
U.S. District Court, Central District of California; and,
WHEREAS, Seller has requested the approval of the City for
the transfer and assignment of the Franchise by the Seller to the
Purchaser;
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AS FOLLOWS:
SECTION 1. The Mayor and Common Council of the City of San
Bernardino hereby approve the assignment of the Franchise and
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RESOLUTION OF THE CITY OF SAN BERNARDINO APPROVING THE TRANSFER OF
CABLE TELEVISION FRANCHISE FROM CHAMBERS CABLE OF SOUTHERN
CALIFORNIA, INC., TO THE MARKS PARTNERS, L.P.
related assets of the cable televsion system by Seller to the
Purchaser.
SECTION 2. The Mayor and Common Council hereby affirm that:
(a) the Franchise was properly granted; (b) the Franchise is in
full force and effect; (c) the Franchise is scheduled to expire on
December 31, 2003; and (d) to the City's knowledge there exists no
fact or circumstance which constitutes or which, with the passage
of time or giving of notice or both, would constitute a default
under the Franchise or will entitle the City to cancel or
terminate the rights thereunder, except upon the expiration of the
full term thereof.
SECTION 3. The authorization of the transfer and assignment
of the franchise from Seller to the Purchaser is expressly
conditioned upon, and shall be deemed effective upon, the
consummation of the sale to the Purchaser of the Franchise and
related assets and the closing of the transactions under the
Agreement.
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93-383
1 RESOLUTION OF THE CITY OF SAN BERNARDINO APPROVING THE TRANSFER OF
CABLE TELEVISION FRANCHISE FROM CHAMBERS CABLE OF SOUTHERN
2 CALIFORNIA, INC., TO THE MARKS PARTNERS, L.P.
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I HEREBY CERTIFY that the foregoing resolution was duly
5 adopted by the Mayor and Common Council of the City of
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San Bernardino at a regular
meeting thereof, held on the
October, 1993, by the following vote, to wit:
Q~~
Ci.'t~~lerk
The foregoing resolution is hereby approved this ~ day
October , 1993.
day of
4th
Council Members:
AYES
NAYS
ABSTAIN
NEGRETE
x
CURLIN
--'L-
HERNANDEZ
--'L-
OBERHELMAN
---1L-
DEVLIN
---1L-
POPE-LUDLAM
--..X-...
MILLER
--..X-...
of
_____------ .) 7/, '
/ c/;;vl/\ L / "(..A~{
Tom Minor" Mayor
City of San Bernardino
Approved as to
form and legal content:
JAMES F. PENMAN,
City Attorney
c;~)
4
ABSENT
Mr. Frank Keller
CATV Manager
City of San Bernardino
300 North D Street
San Bernardino, CA 92418
HE
ARKS
ROUP
1836 Union Street
San Francisco, CA 94133
(415) 563-2288
FAX: 563-2351
93_38.2337 30th Avenue NE, Suite 1
-;eattle, Washington 98125
206) 440-9030
FAX: 440-9032
Dear Mr. Keller,
It was a pleasure to meet with you last week and to hear about some of the future plans and
desires regarding telecommunications in the City of San Bernardino. Our company is
extremely excited about providing cable television service to such a progressive city.
Because of The Marks Group's commitment to civic involvement and visions of advanced
cable telecommunications for the City of San Bernardino, we strongly believe that together
we will make a good match.
I am writing this letter to confirm to you our company's desire to start on day one of our
ownership of the cable system, to progress toward the next century of communications. We
intend to continue with a fiber optic rebuild of half of the city, that was originally started by
Chambers two years ago, so that soon, we will be able to increase the number of channels on
the system. We expect that upon completion of the rebuild, we will be able to increase the
number of channels being offered from 36 to about 54.
Also, please understand that our company will abide by any previous agreement between the
City and Chambers Communications, including, but not limited to, the franchise ordinance
and any attachments thereto. We recognize that in order to grow a business we must look at
the franchising authority as a partner, as opposed to an adversary. We both know that in
order to achieve all of the great things that are possible for both of us, we must be able to at
least agree on what has already been established.
I trust by now you have had the opportunity to check references of our firm and hope that
they have been positive. The City of San Bernardino, through our joint efforts, should be
the telecommunication paradigm that many other cities strive for. We were thoroughly
impressed by your ambitions and hope that soon we can work together to make them a
reality.
Sincerely,
f2M~:~
President
WDM/clb
b)(!I/,d/ T It/J' h
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1 93-383
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SETTLEMENT AGREEMENT
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PARTIES: CITY OF SAN BERNARDINO, a Municipal Corporation ("City"), and
CHAMBERS CABLE OF SOUTHERN CAL., INC., an Oregon
Corporation ("Chambers").
RECITALS:
Chambers provides cable television service to subscribers within the City
of San Bernardino under the terms of a franchise from the City of San Bernardino
granted pursuant to Municipal Ordinance No. 2395, as amended, and an assignment
dated 8-30-83.
In 1983, when Chambers acquired the San Bernardino cable television
system and the franchise, the City was involved in litigation with the previous
franchisee, Liberty T.V. Cable, Inc. As part of the obligations assumed by Chambers
in the acquisition of the cable television system, Chambers agreed to become a party
to and to be bound by the terms of a final judgment in the case of City of San
Bernardino v. Liberty T.V. Cable, Inc., Case No. 82-6876 WMB(Gx), U.S. District
Court, Central District of California, a copy of which is attached hereto as Exhibit A
hereto (hereinafter referred to as the "Final Judgment"). In addition to providing all
parties with certain benefits, the Final Judgment imposed upon Chambers specific
obligations which are set forth in paragraph 4 of that Final Judgment. Among those
obligations was the duty set forth in paragraph 4.(c) which required Chambers to
provide to the City "notice, facilities and training necessary for use of said community
service channels." The City and Chambers have disagreed over the meaning of that
provision and the extent of the unfulfilled obligation, if any, that Chambers has under
that provision.
During 1991, the City conducted an audit of the payment of franchise
fees by Chambers during the years 1988 to 1990 (hereinafter referred to as the
"Audit"), and concluded based upon its interpretation of certain provisions of the
franchise agreement, that Chambers had failed to pay franchise fees on certain types
of revenue, and that Chambers had failed to pay franchise fees at an increased rate of
5 % of its gross revenues. When Chambers acquired the franchise, the franchise fee
was fixed at 4 % . Chambers disputed the City's interpretations of the franchise
agreement, and disputed the right of the City to unilaterally increase the franchise fee
rate.
Settlement Agreement - 1
RMS\Chambers.SA
93-383
The parties have now concluded that it is in the best interest of all
concerned to resolve their differences and enter into a comprehensive settlement
agreement of all issues relating to the Final Judgment and the audit of franchise fees.
AGREEMENT:
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and
sufficiency of which is acknowledged, the parties agree as follows:
1.
Final Judgment:
Final Judgment. The parties agree as follows with respect to the
a. The obligation of Chambers under paragraph 4.(a) of the
Final Judgment to pay to the City a sum of money equal to the number of current
subscribers multiplied by 50 cents for each calendar year is satisfied. No further
obligation exists with respect to this portion of the Final Judgment.
b. The obligation of Chambers to provide "notice, facilities
and training necessary for use of said community service channels," as set forth in
paragraph 4.(c) of the Final Judgment is satisfied. No further obligation exists with
respect to this portion of the Final Judgment.
c. The City shall assume responsibility for administering the
PEG access channels, including notice, facilities and training necessary for their use
by the public.
d. Chambers shall provide channel space for PEG access, as
provided in paragraph 4.(b) of the Final Judgment, and shall maintain the system, at
no cost to the City, including any necessary hard or soft inner-connects, as well as
maintain those channels on its system.
e. All provisions of the Final Judgment not specifically
modified by this Settlement Agreement shall remain the same.
2. Settlement Regarding Audit Issues. The parties agree to modify
the franchise ordinance to which Chambers is subject as follows:
a. The franchise fee is 5%, effective August 1989. City
agrees not to increase the fee in the future without the consent of Chambers. City
acknowledges that Chambers has paid all franchise fees owing for all periods prior to
January 1, 1992.
Settlement Agreement - 2
RMS\Chambers.SA
93-383
b. The parties agree that the definition of "gross revenues"
under Chambers' franchise agreement does not and shall not include revenue from the
following sources:
(1) installation charges and converter box and other
equipment charges;
(2) trip charges;
(3) advertising revenues;
(4) leased access/home shopping revenues.
c. All of the above modifications to the franchise ordinance
shall apply throughout the balance of the current term of Chambers' franchise, and
during the entirety of the renewal term of the franchise, which the parties
acknowledge has been extended through and including December 31, 2003.
3. Payment to City. Upon execution of this Agreement, Chambers
shall pay to City the sum of $130,000.00.
4. Miscellaneous Provisions.
a. Except for the obligations set forth in this Settlement
Agreement, City and Chambers and each of them hereby fully and completely release
and discharge one another and each and all of one another's past and present officers,
employees, agents, and attorneys from any and all claims, demands, causes of action
or liabilities now are asserted, which have been asserted or which could have been
asserted against anyone or more of them, which arise out of the controversy
concerning the interpretation of the Final Judgment and the Audit.
b. This Settlement Agreement shall govern the course and
conduct of the parties in the future with respect to the subject matter specifically
described herein. Any inconsistency between this Settlement Agreement and the Final
Judgment or the franchise ordinance shall be governed by this Settlement Agreement.
c. No rights are created in any person or entity by this
Settlement Agreement, aside from the parties hereto. Nothing contained in this
Settlement Agreement or the negotiations leading up to this Settlement Agreement
constitutes an admission of fault or wrongdoing by any party hereto.
Settlement Agreement - 3
RMS\Chambers.SA
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93-383
d. City agrees to adopt appropriate modifications to the
franchise ordinance that are consistent with the provisions of this Settlement
Agreement, subject to approval by Chambers. The parties hereto shall execute any
and all other and further documents necessary to implement this Settlement
Agreement.
e. This Settlement Agreement shall inure to and be binding
upon the assigns and successors in interest in each of the parties hereto.
f. Each party acknowledges that it has been advised by legal
counsel and is familiar with the provisions of California Civil Code Section 1542,
which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN
HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR. "
Each party, being aware of this section, hereby expressly waives and
relinquishes all rights and benefits it may have thereunder, as well as any other
statutes or common law principles of similar effects as to any claims arising out of
facts existing prior to January 1, 1992.
DATED "'" O?!" d" of ~_~. .. 'J..-.t993
CITY OF SAN BERNARDINO CHAMBERS CABLE OF SOUTHERN
CAL., INC.
By: (Li~_~A~LJ ./
Carolyn S. Cha ers
Its President
Approved as to form
and legal content.
JAMES F. PENMAN, CITY ATTORNEY
f'
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ettIement Agreement - 4
RMS\Charnbers.SA
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"""
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RALPHH. PRINCE, City Atto6QPGED
JOANNE FENTON, Deputy City Attorne~
and FEB 2. - bC4
BURKE, WILLIAMS & SORENSEN .
RICHARD R. TERZIAN ~'[RI~ U.S. DISTRICT CO'
SCOTT F. FIELD -"c;' DIS1R!Cl OF CA"r"
707 Wilshire Blvd., Suite 3300
Los Angeles, California 90017
s - 3(q
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F..ILED
FEB 29 1984
ClERK, U. S. DIS1RICl COURl
CENTRAL DIS1RICl OF CALIFORNIA
BY DEPUTY
Telephone: (213) 485-0101
.~...~..
~. .,........
EN1'EREP
Attorneys for Plaintiff
and Counterdefendant
HI1 ~ 9 i.9?li
UNITED STATES DISTRICT COURT 1l','i,W,ICI C()Il"~. .
t' <..~ U.S. O' c'\.\fO"',\I,
.~t:-,\nl Vt'1 r r. ......
CENTRAL DISTRICT OF CALIFORNldt\1W.\. \1',0,1 ,'. ' rF
,,~
CITY OF SAN BERNARDINO ) No. 82-6876 WMB (Gx)
a municipal corporation, )
)
Plaintiff, )
)
v. ) FINAL JUDGMENT
)
LIBERTY T.V. CABLE, INC., )
a Delaware corporation; and )
DOES I through X, Inclusive, )
)
Defendants. )
)
I )
LIBERTY T.V. CABLE, INC., a )
Delaware corporation, )
)
Countercomplainant, )
)
v. )
)
CITY OF SAN BERNARDINO, a )
municipal corporation, )
)
Counterdefendant. )
)
~
Plaintiff and counterdefendant City of San
Bernardino ("City"), having commenced this action in the
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superior Court of San Bernardino County (No. 193743), and said
action having been duly removed thereafter to the above-
entitled Court and denominated as set forth above and defendant
and countercomplainant Liberty T.V. Cable, Inc., a Delaware
corporation ("Liberty"), having appeared and filed its answer
and counterclaim and, subsequent to the filing of this action
but prior to date of this Final Judgment, Liberty having
transferred and assigned certain rights with respect to
providing of cable television services within City, as more
particularly described below, to Chambers Cable of Southern
Cal., Inc., an Oregon corporation ("Chambers") which is to
become a party hereto and be bound by the terms of this Final
Judgment and said parties by their attorneys having severally
consented to the entry of this Final Judgment without trial or
adjudication of any issue of ~act or law herein, without taking
of evidence, and without this Final Judgment constituting any
evidence or admission by any party in respect to any issue of
fact or law herein, it is hereby
ORDERED, ADJUDGED and DECREED as follows:
1. This Court has the jurisdiction of the subject
matter of this action and of the parties hereto.
2. For the purpose of this Final Judgment:
(a) "Franchise
Ordinance"
shall
mean
Ordinance No. 2395 of City, as amended to date;
(b) "Franchise" shall mean the non-exclusive
~
right to provide cable television
services within City pursuant to the
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Franchise Ordinance now held by Chambers
as successor in interest to Liberty;
(c) "Cable Television Services" shall mean
signals provided by Liberty or Chambers,
for its subscribers within City, whether
over cable, wire or otherwise for the
purpose of transmitting television or
other information;
(d) "Subscribers" shall mean persons within
City heretofore, now or hereafter having
agreed with Liberty or Chambers to receive
cable television services;
(e) "Rates" shall mean fees or charges of any
kind imposed by Liberty or Chambers upon
its subscribers for cable television
services.
(f) "Companion Case" means that certain
action entitled Liberty T.V. Cable y..:. City
of San Bernardino (No. CV 82-5432 WMB) now
pending in the above-entitled Court;
(g) "Preliminary Injunction" shall mean the
preliminary injunction heretofore filed
in the Companion Case, on December I,
1982.
(h) "Escrow Fund" shall mean that certain
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escrow No. 196-16202 held by Bank of
America
National
Trust &
Savings
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Association as escrow agent at its main
branch in City, (No. 196) into which
certa,in sums collected by Liberty and
Chambers from its subscribers have been
deposited
December 1,
1982,
since
pursuant to the preliminary Injunction,
and which now contains a sum in excess of
One Hundred and Fifty Thousand Dollars
($150,000) .
3. City will not hereafter regulate or control
rates for cable television services provided by Chambers under
the franchise and the consent of City to any increase or
decrease of rates by Chambers need not be obtained. This
paragraph 3 shall supersede the provisions of Section
Seventeen of the Franchise Ordinance and similar provisions of
any other City ordinance regulating rates for cable television
services with respect to the parties hereto.
4. Chambers shall provide to City hereafter:
(a) A sum of money equal to the number of
current subscribers multiplied by fifty
cents (50~) for each calendar year
commencing January 1, 1984 and determined
by the number of subscribers appearing on
the books and records of Chambers as of
the first day of each year. Said amount
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shall be paid by Chambers on or before
January 31 of each calendar year,
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accompanied by its certification under
penalty of perjury as to the number of
subscribers.
Said sum shall be used
exclusively
for the
purpose of
maintaining a fund benefiting all persons
receiving cable television services in
City;
(b) Up to three community service channels for
use by City and its residents subject to
the condition that a second channel will
not be provided unless the first channel
is used not less than 80% of the weekdays
for 80% of the time during any consecutive
l3-hourperiod for ten consecutive weeks,
and the' third channel will not be provided
unless the second channel is used to the
same extent. The first such channel shall
be available on or before September I,
1984.
(c) Notice, facilities and training necessary
for use of said community service
channels.
5. Upon entry of this Final Judgment, the
Companion Case shall be dismissed with prejudice and the
Preliminary Injunction dissolved forthwith.
6. Upon dissolution of the Preliminary Injunction
the Escrow Fund shall immediately be distributed as follows:
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(a) The first One Hundred and Fifty Thousand
Dollars ($150,000.00) to City to be used for the purpose of (i)
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reimbursing itself for attorneys' fees and costs incurred
herein and in the Companion Case and (ii) to provide cultural
or communication services to City residents or other benefits
to subscribers in such manner and at such times as may be solely
and exclusively determined in the discretion of the City
Council.
(b) Any funds in excess of One Hundred and
10 Fifty Thousand Dollars ($150,000.00) in the Escrow Fund shall
11 be distributed to Chambers free of any restrictions or
12 obligations thereon except for fees and expenses of the Escrow
13 Fund as provided in the escrow instructions.
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Except for the obligations set forth in this
7 .
15 Final Judgment, Liberty and Chambers and each of them hereby
16 fully and completely release and discharge City and each and
17 all of City's past and present officers, employees, agents and
18 l}ttorneys from any and all claims, demands, causes of action or
19 liabilities now asserted, have been asserted, or could have
20 been asserted against anyone or more of them, whether pl;;aded
21 in the above-entitled action, in the Companion Case or
22 otherwise.
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Except for the obligations set forth in this
8.
24 Final Judgment, City does hereby fully and completely release
25 and discharge Liberty and Chambers and~each of them and each
26 and every past and present director, officer, employee, agent
27 and attorney of Liberty and Chambers from any and all claims
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demands, causes of action, or liabilities now asserted, have
been asserted, or could have been asserted against anyone or
more of them whether pleaded in the above-entitled action, in
the Companion Case or otherwise.
9. This Final Judgment shall govern the course of
conduct of the parties in the future with respect to the
subject matter specifically described herein. Any
inconsistency between this Final Judgment and the Franchise
Ordinance shall be governed by this Final Judgment.
10. No rights are created in any person or entity by
this Final Judgment, aside from the parties hereto.
11. The parties hereto Shall execute any and all
other and further documents necessary to implement this Final
Judgment.
12. This Final Judgment shall inure to and be
binding upon the assigns and successors in interest of each of
the parties hereto.
13. Each party hereto shall bear its own respective
attorney's fees and costs.
14. Jurisdiction is retained for the purpose of
enabling any of the parites to this Final Judgment to apply to
this Court at any time for such further orders and direction as
may be necessary or appropriate to construe, carry out, modify,
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1. terminate. or enforce anyone or more of the provisions hereof
2. and for the punishment of violations thereof.
8 Dated:
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By
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. 1984
CHAMBERS CABLE OF
SOUTHERN CAL., INC.
By ~}~~~LJ
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(
APPROVED AND ORDERED
Dated:
~~l
\
. 1984
"'1. l':1l.T'J'AE'i) IriL.':Z. J;.
United States District Judge
Presented by:
BURKE, \o1lLL1Al~EN
By <:fJ I ~
Richard R. Terzia
CAS~OODS & SMITH
By }
~ Phf.~ass, Jr.
(;., "'--st Broadway Suite 200
~, ,
Eugene, Oregon 97404
(503) 687-1515
Of Attorneys for Chambers Cable of
Southern Cal., Inc.. .
Successor to Liberty TV Cable, Inc.
LAWLER, FELIX & HALL
By Ri~~ti. ~1u~ ~ -
Attorneys for
Liberty T.V. Cable, Inc.
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