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CITY OF CHARLOTTESVILLE, VIRGINIA • REGARDING FRANCHISE NONCOMPLIANCE FOR FAILURE TO REMIT OUTSTANDING FRANCHISE FEES AND AUDITOR'S FULL COSTS AND EXPENSES WHEREAS, on or about May 28, 1992, the City of Charlottesville, Virginia ("City") granted a Cable Television Franchise Ordinance ("Franchise") to Multi -Channel Cable TV Company ("MCCTV"); and WHEREAS, MCCTV's rights under the City's Franchise were transferred and assigned to Adelphia Communications ("Adelphia"), and City consented to and approved of said transfer and assignment; and WHEREAS, Section 10.01(A) of the Franchise provides that Adelphia shall pay to the City a Franchise Fee equal to five percent of its gross revenues; and WHEREAS, Section 10.01(E) of the Franchise provides that in the event any payment is not made on the due date, simple interest on the amount due shall accrue from such date at the annual rate of twelve percent; and WHEREAS, on July 7, 2003, at a regularly scheduled City Council meeting, the City Council was provided information from the City staff concerning Adelphia's failure to pay franchise fees over the period from January 1, 1999 to December 31, 2001 in an amount of • $41,037.00, including late fees and interest through June 4, 2003, as set forth in the June 4, 2003 report of Lewis and Associates (hereinafter the "Lewis Report"), a copy of which is attached as Exhibit 1 and incorporated herein by reference; and WHEREAS, the parties have exchanged substantial correspondence in an effort to resolve this dispute; and WHEREAS, Adelphia disputes certain findings of the Lewis Report but acknowledges that it owes $21,632.00 of the amount, which accounts for unpaid fees related to shopping channel launch revenue adjustments, non -subscriber revenue exclusions, customer coding and related interest on the unpaid fees and late payments; and WHEREAS, Adelphia agrees that in exchange for the City agreeing to not fully pursue the findings of the Lewis Report, Adelphia agrees to pay the City $21,632.00 and agrees not to pass through any of this payment to subscribers; and WHEREAS, the parties recognize that this settlement is subject to approval of the United States Bankruptcy Court for the Southern District of New York (hereinafter the "Bankruptcy Court") and, in the event approval is not granted, the City reserves its right to fully enforce the findings of the Lewis Report. NOW, THEREFORE, the City Council for the City of Charlottesville, Virginia resolves and makes the following FindingsI/ of Fact: •