(A) The grantee shall not sell, transfer, lease, assign, sublet or dispose of, in whole or in part, either by forced or involuntary sale, or by ordinary sale, consolidation or otherwise, the franchise and/or cable system or any of the rights or privileges granted by the franchise, without the prior consent of the Council which consent shall not be unreasonably denied or delayed and shall be denied only upon a good faith finding by the city that the proposed transferee lacks the legal, technical or financial qualifications to perform its obligations under the franchise agreement. Any attempt to sell, transfer, lease, assign or otherwise dispose of the franchise and/or cable system without the consent of the Council shall be null and void. This provision shall not apply to sales of property or equipment in the normal course of business. No consent from the city shall be required for a transfer in trust, mortgage or other instrument of hypothecation, in whole or in part, to secure an indebtedness, or for a pro forma transfer to a corporation, partnership or other entity controlling, controlled by or under common control with the grantee.
(B) (1) The following events shall be deemed to be a sale, assignment or other transfer of the franchise and/or cable system requiring compliance with this section:
(a) The sale, assignment or other transfer of all or a majority of the grantee's assets;
(b) The sale, assignment or other transfer of capital stock or partnership, membership or other equity interests in the grantee by one or more of its existing shareholders, partners, members or other equity owners so as to create a new controlling interest in the grantee;
(c) The issuance of additional capital stock or partnership, membership or other equity interest by the grantee so as to create a new controlling interest in the grantee; and
(d) The entry by the grantee into an agreement with respect to the management or operation of the grantee and/or the system.
(2) The term “Controlling Interest” as used herein means majority equity ownership of the grantee.
(C) Except as provided below, no grantee may sell or otherwise transfer ownership in a franchise and/or cable system within a 36-month period following either the acquisition or initial construction of said system by the grantee. In the case of a sale of multiple systems, if the terms of the sale require the buyer to subsequently transfer ownership of one or more such systems to one or more third parties, such transfer shall be considered a part of the initial transaction. The above-described 36-month holding period shall not apply to:
(1) Any transfer of ownership interest in any franchise and/or cable system which is not subject to federal income tax liability;
(2) Any sale required by operation of any law or any act of any agency, any state or political subdivision or the city; or
(3) Any sale, assignment or transfer, to one or more purchasers, assignees or transferees controlled by, controlling or under common control with, the seller, assignor or transferor.
(D) In the case of any sale or transfer of ownership of any franchise and/or cable system after the 36-month period following acquisition of such system, the city shall have 111 days to act upon any request for approval of such sale or transfer that contains or is accompanied by such information as is required in accordance with Federal Communications Commission Regulations, the requirements of this chapter and such other reasonable information as the city, in its sole discretion, may request. If the city fails to render a final decision on the request within 111 days from receipt by the city of all required information, such request shall be deemed granted unless the requesting party and the city agree to an extension of time.
(E) The grantee shall notify grantor in writing of any foreclosure or any other judicial sale of all or a substantial part of the franchise property of the grantee or upon the termination of any lease or interest covering all or a substantial part of said franchise property. Such notification shall be considered by the grantor as notice that a change in control of ownership of the franchise has taken place and the provisions under this section governing the consent of the grantor to such change in control of ownership shall apply. 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 transferee or controlling party, and the grantee shall assist the grantor in any such inquiry. In seeking the grantor's consent to any change of ownership or control, the grantee shall have the responsibility of insuring that the transferee completes an application in form and substance reasonably satisfactory to the grantor, which application shall include the information required under state and federal law as well as under § 111.13(A) through (H) of this chapter. An application, acceptable to the city, shall be submitted to the grantor not less than 90 days prior to the date of transfer. The transferee shall be required to establish that it possesses the legal, technical and financial qualifications to operate and maintain the system and comply with all franchise requirements for the remainder of the term of the franchise. If, after considering the legal, financial, character and technical qualities of the applicant and determining that they are satisfactory, the grantor finds that such transfer is acceptable, the grantor shall transfer and assign the rights and obligations of such franchise. The consent of the grantor to such transfer shall not be unreasonably denied.
(G) Any financial institution having a pledge of the grantee or its assets for the advancement of money for the construction and/or operation of the franchise shall have the right to notify the grantor that it or its designee satisfactory to the grantor shall take control of and operate the cable television system, in the event of a grantee default in its financial obligations. Further, said financial institution shall also submit a plan for such operation within 30 days of assuming such control 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 grantor in its discretion and during said period of time it shall have the right to petition the grantor to transfer the franchise to another grantee.
(Ord. G-15-95, passed 6-13-95)