(A) Transfer of franchise. Any franchise granted hereunder shall be a privilege to be held for the benefit of the public. The franchise cannot in any event be sold, transferred, leased, assigned or disposed of, including but not limited to, by forced or voluntary sale, merger, consolidation, receivership, or other means without the prior consent of the city, and then only under such conditions as the city may establish; however, consent shall not be unreasonably withheld.
(B) Ownership or control.
(1) The grantee shall promptly notify the city of any proposed change in, or transfer of, or acquisition by any other party of control of the grantee. The word
CONTROL as used herein is not limited to major stockholders but includes actual working control in whatever manner exercised. A rebuttable presumption that a transfer of control has occurred shall arise upon the acquisition or transfer by any person or group of persons of 10% of the voting shares of the grantee. Every change, transfer, or acquisition of control of the grantee shall make the franchise subject to cancellation unless and until the grantor shall have consented thereto, which consent shall not be unreasonably withheld. For the purpose of determining whether it shall consent to such change, transfer, or acquisition of control, the city may inquire into the qualifications of the prospective controlling party, and the grantee shall assist the city in any such inquiry.
(2) In seeking the city's consent to any change in ownership or control, the grantee shall have the following responsibility:
(a) To show to the satisfaction of the city whether the proposed purchaser, transferee, or assignee (hereafter referred to as the "proposed transferee"), which in the case of a corporation, shall include all officers, directors, employees and all persons having a legal or equitable interest in 5% or more of its voting stock, or any of the proposed transferee's principals:
1. Has ever been convicted of, or held liable for, acts involving moral turpitude including, but not limited to any violation of federal, state or local law, or is presently under an indictment or investigation complaint charging such acts; or
2. Has ever had a judgment in an action for fraud, deceit or misrepresentation entered against it, her, him, or them by any court of competent jurisdiction.
(b) To establish, to the satisfaction of the city, the financial solvency of the proposed transferee by submitting all current financial data for the proposed transferee which the grantee was required to submit in its franchise application; and such other data as the city may request. Financial statements shall be audited and certified by an independent certified public accountant.
(c) To establish to the satisfaction of the city that the financial and technical capability of the proposed transferee is such as to enable it to maintain and operate the system for the remaining term of the franchise under the existing franchise terms.
(C) The grantor agrees that any financial institution having a pledge of the franchise or its assets for the advancement of money for the construction and/or operation of the franchise shall have the right to notify the city that it or its designee satisfactory to the city will take control and operate the system, in the event of a grantee default in its financial obligations. Further, the financial institution shall also submit a plan for such operation that will insure continued service and compliance with all franchise requirements during the term the financial institution exercises control over the system. The financial institution shall not exercise control over the system for a period exceeding one year unless extended by the city in its discretion and during this period of time it shall have the right to petition the city to transfer franchise to another grantee. If the city finds that the transfer, after considering the legal, financial, character, technical and other public interest qualities of the applicant, is satisfactory, the city will transfer and assign the rights and obligations of the franchise as in the public interest. The consent of the city to the transfer shall not be unreasonably withheld.
(D) Waiver. The consent or approval of the city to any transfer of the grantee shall not constitute a waiver or release of the rights of the city in and to the use of streets, and any transfer shall by its terms, be expressly subordinate to the terms and conditions of the franchise.
(E) Prohibition on early transfer. In the absence of extraordinary circumstances, the city will not approve any transfer or assignment of the franchise prior to substantial completion of construction of the proposed system.
(F) Acceptance. In no event shall a transfer of ownership or control be approved without the successor in interest accepting, in writing, the franchise.
('83 Code, § 5.24.110) (Ord. 912, passed - -85) Penalty, see § 10.99