RES 1995-36 - 0000287650
RESOLUTION NO. 36 - 1995
' A RESOLUTION APPROVING OF THE TRANSFER OF CONTROL OF
KBLCOM INCORPORATED FROM HOUSTON INDUSTRIES
INCORPORATED TO TIME WARNER INC.
WHEREAS, on or about May 2, 1988, the City of Fridley, Minnesota ( "City ")
granted a Cable Television Franchise to Nortel Cable Associates, L.P., a
Delaware limited partnership ( "Nortel "), by adoption of Ordinance No. 904 (the
"Fridley Franchise "); and
WHEREAS, on May 16, 1988, Nortel accepted the Fridley Franchise; and
WHEREAS, Nortel, doing business as "Paragon Cable," is the current and lawful
Grantee of the Fridley Franchise; and
WHEREAS, Countryside Investments, Inc., a Delaware corporation
( "Countryside "), and Nortel Cable Corporation, a Minnesota corporation
( "NCC "), own 17.18 and 89.98 limited partnership interests respectively in
Nortel; and
WHEREAS, Countryside and NCC are each wholly owned by KBLCOM Incorporated, a
Delaware corporation ( "KBLCOM "); and
I WHEREAS, KBLCOM is wholly owned by Houston Industries Incorporated, a Texas
corporation ( "HI "); and
WHEREAS, on January 26, 1995, HI entered into an Agreement and Plan of Merger
with Time Warner Inc. ( "Time Warner "), KBLCOM and TW KBLCOM Acquisition Corp.
and
WHEREAS, pursuant to the Agreement and Plan of Merger HI will transfer control
of KBLCOM to Time Warner; and
WHEREAS, in compliance with the terms of the Agreement and Plan of Merger, the
name of Nortel shall remain unchanged; and
WHEREAS, under the Fridley Franchise and Minnesota Statutes Section 238.083,
the transfer of control of KBLCOM from HI to Time Warner constitutes a
transfer by means of a fundamental corporate change with respect to KBLCOM and
Nortel; and
WHEREAS, under the Fridley Franchise and Minnesota Statutes Section 238.083,
any such transfer requires the approval of the City; and
WHEREAS, the City, with the assistance of Moss & Barnett, A Professional
Association, has reviewed the proposed transfer of control of KBLCOM and the
legal, technical, and financial qualifications of Time Warner; and
WHEREAS, based on information obtained at a public hearing conducted by the
City on April 24, 1995 and May 15, 1995 and on the reports and information
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Page 2 -- Resolution No. 36 - 1995
received by the City, the City has found no reason to disapprove of the
transfer of control of KBLCOM from HI to Time Warner.
NOW, THEREFORE, the City Council for the City of Fridley, Minnesota resolves
as follows:
1. The Fridley Franchise is in full force and effect and Nortel is the
lawful Grantee of the Fridley Franchise.
2. The City hereby consents and approves of the transfer of control of
KBLCOM from HI to Time Warner subject to:
a. Closing of the transaction contemplated within the Agreement and
Plan of Merger pursuant to the terms and conditions described in
information provided by Nortel, KBLCOM, HI and Time Warner to the City,
including the Agreement and Plan of Merger.
i. Time Warner providing the City with an opinion of legal
counsel substantially in the form of Exhibit D to the Agreement
and Plan of Merger to the effect that the merger will constitute a
"reorganization" for Federal Income Tax purposes.
ii. Time Warner providing the City with an opinion of legal
counsel in a form and substance acceptable to the City to the
effect that the transfer of control of KBLCOM from HI to Time
Warner does not violate 47 U.S.C. § 533.
3. The City hereby waives any right of first refusal which the City may
have pursuant to Section 405.12 of the Fridley Franchise, as amended,
or, otherwise, to purchase the Fridley Franchise, or the cable
television system serving the City, but only as such right of first
refusal applies to the request for approval of the transfer of control
of KBLCOM now before the City.
4. In the event the transfer of control of KBLCOM contemplated by the
foregoing resolutions is not completed, for any reasons, the City's
' consent to the transfer of control shall not be effective.
b. HI reimbursing the City for all reasonable costs,
expenses, and
professional fees incurred as a result of the City's
approval
of the
transfer of control of KBLCOM as specified in Section
6.05(b)
of the
Agreement and Plan of Merger.
c. Time Warner promptly notifying the City in writing
of the
completion
of the transfer of control of KBLCOM.
'
d. KBLCOM, within thirty (30) days of the closing of
the transaction
contemplated within the Agreement and Plan of Merger,
abiding
by the
requirements as listed below:
i. Time Warner providing the City with an opinion of legal
counsel substantially in the form of Exhibit D to the Agreement
and Plan of Merger to the effect that the merger will constitute a
"reorganization" for Federal Income Tax purposes.
ii. Time Warner providing the City with an opinion of legal
counsel in a form and substance acceptable to the City to the
effect that the transfer of control of KBLCOM from HI to Time
Warner does not violate 47 U.S.C. § 533.
3. The City hereby waives any right of first refusal which the City may
have pursuant to Section 405.12 of the Fridley Franchise, as amended,
or, otherwise, to purchase the Fridley Franchise, or the cable
television system serving the City, but only as such right of first
refusal applies to the request for approval of the transfer of control
of KBLCOM now before the City.
4. In the event the transfer of control of KBLCOM contemplated by the
foregoing resolutions is not completed, for any reasons, the City's
' consent to the transfer of control shall not be effective.
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Page 3 -- Resolution No. 36 - 1995
' 5. This Resolution shall take effect and continue and remain in effect from
and after the date of its passage, approval and adoption.
A motion to approve the foregoing Resolution No. 36 - 1995 was made by Council
Member Dennis Schneider and duly seconded by Council Member Nancy Jorgenson.
The following Council Members voted in the affirmative:
Billings
Bolkcom
Jorgenson
Nee
Schneider
The following Council Members voted in the negative:
None
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS 12TH DAY OF
JUNE, 1995.
1
ATTEST:
WILLIAM A. CHAMPA - CITY CLERK
WILLIAM J. N - MAYOR