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 written consent of the Grantor, and then only under such reasonable conditions as the Grantor may establish. Such consent as required by the Grantor shall be given or denied no later than ninety (90) days following any request, and shall not be unreasonably withheld.
B. Hypothecation.
1. Notwithstanding Subsection A. of this Section, the issue and outstanding shares of stock of the Grantee may be hypothecated and the system assets may be hypothecated, without the prior approval of the Grantor, where such shares and assets are hypothecated in connection with securing an indebtedness of the company which includes, but may not be limited to, indebtedness for this system.
2. In the instance of a hypothecation of the shares or assets of the Grantee, the sale or transfer of the stock or assets of the Grantee, the sale or transfer of the stock or assets by the lender shall be subject to the prior approval by the Grantor as established by a Resolution.
C. Ownership or control.
1. The Grantee shall promptly notify in writing the Grantor of any proposed change in, or transfer of, or acquisition by any other party of, control of the Grantee or its parent. 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 twenty-five percent (25%) or more of the beneficial ownership interest of the Grantee or its parent. 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 in writing thereto, which consent shall be given or denied no later than ninety (90) days following any request, and shall not be unreasonably withheld.
2. The provisions of this Subchapter shall not apply to any transfer, assignment or other disposition, direct or indirect, between or among commonly controlled corporations or partnerships, or their common parent. For the purposes of the foregoing, common control shall mean eighty percent (80%) direct or indirect ownership of the common equity entitled to vote generally or of the general partnership interest, as the case may be, of the subject entities by a common parent, and a common parent shall mean a person directly or indirectly owning eighty percent (80%) or more of the common equity entitled to vote generally or of the general partnership interest, as the case may be, in the subject entities. In those instances where City approval is not required, notice of any ownership change greater than five percent (5%) of the aggregate common equity in the company shall be provided to the Grantor upon reasonable request by the Grantor.
3. For the purpose of determining whether it shall consent to such change, transfer or acquisition of control, the Grantor may inquire into the qualifications of the prospective controlling party, and the Grantee shall assist the Grantor in any such inquiry.
4. In seeking the Grantor's consent to any change in ownership or control, the Grantee shall have the responsibility:
a. To show to the satisfaction of the Grantor whether the proposed purchaser, transferee, or assignee (the "proposed transferee"), which in the case of a corporation, shall include all directors and all persons having a legal or equitable interest in five percent (5%) or more of its voting stock:
(1) Has ever been convicted or held liable for acts involving moral turpitude including, but not limited to any violation of Federal, State or local law or regulations, or is presently under an indictment, investigation or complaint charging such acts;
(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;
(3) Has pending any legal claim, lawsuit or administrative proceeding arising out of or involving a cable system.
b. To establish, to the satisfaction of the Grantor, the financial solvency of the proposed transferee by submitting all current financial data for the proposed transferee which the Grantee has required to submit in its franchise application, and such other data as the Grantor may request. Financial statements shall be audited, certified and qualified by a Certified Public Accountant.
c. To establish to the satisfaction of the Grantor the financial technical capability of the proposed transferee is such as shall enable it to maintain and operate the cable system for the remaining term of the franchise under the existing franchise terms.
d. Any financial institution having a pledge of the franchise or its assets for the advancement of money for the construction or operation of the franchise shall have the right to notify the Grantor it, or its designee satisfactory to the Grantor, shall take control and operate the Cable Communications System, in the event the Grantee defaults 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 (1) year unless extended by the Grantor in its discretion and during this period of time it shall have the right to petition the Grantor to transfer the franchise to another Grantee. If the Grantor finds such transfer after considering the legal, financial, character, technical and other public interest qualities of the applicant are satisfactory, the Grantor shall transfer and assign the rights and obligations of such franchise as in the public interest. The consent of the Grantor to such transfer shall be given or denied no less than ninety (90) days after any request, and shall not be unreasonably withheld.
e. The consent or approval of the Grantor to any transfer by the Grantee shall not constitute a waiver or release of the rights of the Grantor in and to the streets, and any transfer shall by its terms, be expressly subject to the terms and conditions of any franchise.
f. In the absence of extraordinary circumstances, the Grantor shall not approve any transfer or assignment of the franchise prior to completion of initial construction of the cable system.
g. In no event shall a transfer of ownership or control be approved without the successor in interest becoming a signatory to the Franchise Agreement.
('65 Code, § 35B-3(j)) (Ord. No. 87-021 § 1; Ord. No. 2001-009 § 1)