(a) Grantee shall offer city prior opportunity to purchase system. In the event of a bonafide offer to purchase a grantee that is a publicly traded or publicly held corporation, as a part of an overall sale of the parent grantee or a separate sale of the grantee itself, whether by sale of stock, assets, consolidation, merger, or other vehicle of transfer, the city shall have a right of first refusal whereby the city shall have 60 days from the date of receipt by the city of written notice of the pending sale (including a copy of the offer itself and all relevant details thereto) in which to match said bonafide offer of purchase (including that portion explicitly identified of any offer to purchase the parent grantee as allocable only to the purchase of the grantee), on the same terms and conditions as contained in the original offer. In the event of a bonafide offer which proposes the transfer of the majority voting interest in a grantee that is other than a publicly held corporation, the city shall have 60 days from the date of receipt by the city of written notice of the pending offer (including a copy of the offer itself and all relevant details thereto) in which to match said bonafide offer on the same terms and for the same price as the then tendered offer. Any offer of purchase must be in writing and acceptable to the grantee to be considered bonafide.
(b) Prior written consent of city required before any sale, assignment, or transfer of a franchise. A franchise and any rights or obligations of the grantee under the franchise shall not be sold, assigned, or transferred, either in whole or in part, or leased or sublet in any manner, nor shall title thereto, either legal or equitable, or any right, interest or tangible or intangible property therein (tangible property being defined as more than 25 percent of the tangible property of the grantee located in the city either cumulatively or at any one time), pass to or vest in any person without prior written consent of the city as required in this chapter and Section 12.02 of the City Charter, which consent shall not be unreasonably withheld.
(c) Prior written consent of the city required before any transfer of ownership or control of grantee. Ownership or control of grantee shall not be transferred without the prior written consent of the city.
(d) Grantee to submit application documenting information required by the city. A grantee shall promptly notify the city of any action or proposed action requiring consent of the city pursuant to Sections 95-4(b) through 95-4(n) of this article.
A grantee shall submit to the city an original application and four copies, unless otherwise directed, which application shall fully describe the terms and conditions of the action or proposed action subject to this section and clearly state the basis on which the application should be approved. The application shall also contain all documentation to support the showings required under Sections 95-4(e) and 95-4(f).
At any time during the review process, the city reserves the right to require additional supporting documentation from a grantee or any other person involved in the action or proposed action to support the showing required of grantee under Sections 95-4(e) and 95-4(f). A grantee shall provide all requested assistance to the city in connection with any such inquiry and, as appropriate, shall secure the cooperation and assistance of all other persons involved in such action.
The city shall respond to any application requiring the city's consent under Sections 95-4(b) through 95-4(n) within 120 days after such application, and all information required by the city under this article, the grantee's franchise agreement, and applicable law in connection with the application, has been received by the city. The city may deny such an application on, among other grounds, a grantee's failure to submit the information required by this article, grantee's franchise agreement and applicable law.
(e) Showings required of proposed assignee; assignee must agree to conditions prescribed by city. A proposed assignee or transferee must demonstrate that it possesses the legal, financial and technical qualifications necessary to perform all the terms, conditions and obligations under the grantee's franchise agreement for the remaining term thereof, and such reasonable additional obligations required of the assignee or transferee by the city for the specific and limited purpose of assuring the performance by the assignee or transferee of all the terms, conditions and obligations of the franchise agreement, and, in connection with this purpose, a proposed assignee or transferee must provide the following information:
(1) Legal qualifications. The application shall identify the proposed assignee or transferee and, if the proposed assignee or transferee is not a natural person, each of its officers, directors or shareholders owning or beneficially holding percent or more of its outstanding voting shares, general partners and limited partners holding an equity interest in the proposed assignee or transferee of five percent or more, and the respective percentage share of each such identified officer, director, shareholder or general or limited partner. The proposed assignee or transferee shall disclose any pending administrative, legal, equitable or dispute resolution proceeding before, or adverse final action taken during the past three years by any court, administrative body or arbitrator with respect to the proposed assignee, transferee or its officers, directors, or other persons having an equitable interest in five percent or more of the voting stock of such transferee or assignee in a civil, criminal, administrative or equitable proceeding brought under the provisions of any law or regulation related to the following: any felony; revocation, suspension or involuntary transfer of any authorization (including cable franchises) to provide video programming or other communication services; antitrust or unfair competition; fraudulent statements to a governmental unit; material breach of a cable franchise agreement, including but not limited to a material failure to provide PEG access channels, facilities or equipment; or final rate regulation proceeding in which the proposed rate was not sustained.
(2) Financial qualifications. The proposed assignee or transferee must demonstrate that it has sufficient net liquid assets on hand or available from committed resources to consummate the transaction and operate the grantee's cable system for six months. The application for transfer shall include recent financial statements, including audited financial statements if available, of the proposed assignee or transferee prepared in accordance with generally accepted accounting principles, including balance sheets, income and expense statements, capital expenditure statements and accompanying notes for the past three years. Such statements, if not otherwise publicly available, may be designated as confidential and shall be maintained as such by the city to the extent permissible under state and local law.
(3) Technical qualifications. The application shall set forth a narrative account of the proposed assignee's or transferee's technical qualifications, experience and expertise regarding cable cystems. The narrative account shall include, but not be limited to, a list of the cable systems currently and formerly owned or operated by assignee or transferee within the past three years; summary information concerning appropriate management personnel that will be involved in the management and operation of the assignee's or transferee's cable system; a list of any material violations of the technical rules of the FCC or of federal, state or local governments, including but not limited to violations of rules and regulations regarding signal quality, safety and construction cited during the past three years by a franchising authority or by local, state or federal governments involving currently or formally owned or operated cable systems.
(4) Customer service. The assignee or transferee must submit to the city (i) a reasonably detailed narrative describing, or a representative manual (if such a manual exists) containing, assignee's or transferee's customer service procedures; (ii) copies of at least two representative annual customer notices provided by other systems owned or operated by assignee or transferee; (iii) a summary of assignee's or transferee's proposed billing procedures; (iv) a sample customer service bill which assignee or transferee proposes to use in grantee's system, and (v) a copy of a sample customer service complaint log or form, printed out from an electronic or computerized complaint recording system, which assignee or transferee proposes to use in grantee's system.
(5) Compliance with franchise agreement and cable ordinance. The proposed assignee or transferee must agree to comply with all provisions of the grantee's franchise agreement and the cable ordinance, as well as such reasonable additional terms and conditions as the city may require for the specific and limited purpose of assuring the proposed assignee's or transferee's compliance with such provisions, including without limitation such additional terms and conditions as the city may require to remedy or avoid the recurrence of any past violations of the terms of a franchise or of federal, state or local laws in the operation of grantee's, assignee's or transferee's cable system or service.
(f) Grantee and assignee or transferee to assist city in its inquiry of prospective controlling party; grantee promptly to notify city of any actual or prospective change in control of franchise.
(1) Grantee's responsibility. A grantee shall assist the city in its inquiry into an assignee's or transferee's capabilities under Section 95-4(e).
(2) Assignee's or transferee's responsibility. In seeking the city's consent to any change in ownership or control of a franchise, a grantee, assignee or transferee shall have the responsibility to establish, to the satisfaction of city, that assignee or transferee has all of the legal, financial, and technical qualifications necessary to perform all of the terms, conditions and obligations of the grantee under its franchise agreement for the remaining term thereof. The city may request, and assignee or transferee shall provide, all reasonable financial data relative to the transfer, including but not limited to the materials specified in Section 95-4(e) of this article. In addition, assignee or transferee shall provide to the city the terms and conditions of the sale, credit agreements, partnership agreements and any other information reasonably related to the assignee's or transferee's acquisition of the grantee's franchise which is needed to clarify the change in ownership.
(g) Transfer of control occurs with change of ten percent of voting interest or of person exercising management authority over grantee. For purposes of this Section 95-4, "control" means the ability to exert working control, in whatever manner exercised, over the affairs of a grantee, either directly or indirectly.
A rebuttable presumption that transfer of control has occurred, including of control in fact (i.e. transfer of de facto control), shall arise upon the acquisition or accumulation by any person, or group of persons, of 10 percent of the voting interest of a publicly held grantee, or of 25 percent of the voting interest of a privately held grantee or of the person exercising management authority over such a privately held grantee (unless 51 percent of the voting interest of a privately held corporation continues to be owned by the same ownership).
(h) Transfer or assignment without prior consent deemed to be material breach, and may be subject to liquidated damages. Any transfer or assignment of a franchise or of ownership or control of grantee without the prior consent of the city shall be null and void unless later ratified by the city and shall: (i) be deemed a material breach of a franchise agreement and (ii) among and/or in addition to other remedies available to the city, be subject to a liquidated damages assessment, on a daily basis, until the transfer or assignment is approved, or if not approved, until the prior ownership, control or other status quo is restored to a condition satisfactory to the city.
(i) City may revoke franchise if unauthorized transfer or assignment occurs. If the city fails to approve or denies its consent to any such transfer or assignment of a franchise or of the ownership or control of a grantee and such action has nevertheless been effected, the city may revoke a franchise and terminate a franchise agreement unless control of the grantee or the system is promptly restored to its status prior to such unauthorized action or to a status acceptable to the city.
(j) Consent of city to transfer or assignment shall not constitute waiver of city rights. The consent or approval of the City Council to any transfer or assignment of a franchise or of ownership or control of a franchise shall not constitute a waiver or release of any of the rights of the city unless the city specifically releases or waives such rights.
(k) No transfer or assignment to be approved within three years or prior to completion of grant, construction or acquisition.In the absence of compelling circumstances, the City Council will not approve any transfer of control of a grantee or assignment of a franchise or cable system within three years of its initial grant or construction or acquisition, respectively. The following transactions, assignments or transfers are exempt from this section: (i) a tax-free reorganization under the Internal Revenue Code; (ii) an assignment or transfer of control of a cable system which is required by law or by any act, order or decree of any federal agency or any state or political subdivision and which does not also require the prior consent of the city; (iii) an assignment or transfer of control to one or more purchasers, assignees or transferees controlled by, controlling or under control with, the seller, assignor or transferor; or (iv) an assignment of a franchise or transfer of control of a grantee, which assignment or transfer has otherwise been approved by the city, in which the franchise was renewed less than three years prior to the proposed date of such assignment or transfer, provided that the grantee has continuously operated such a cable system under the franchise and any prior franchises for a period of at least three years prior to such an assignment or transfer.
(l) Grantee must notify city of any agreement to transfer or assign cable system and terms of sale. A grantee must notify the city whenever it reaches a definitive written agreement to sell, transfer or assign its cable system, or any portion thereof. A grantee must also notify the city of the terms and conditions of any proposed sale as required by Section 95-4(f).
(m) Successor-in-interest must become signatory to an agreement. In no event shall an assignment of a franchise or a transfer of ownership or control be approved without the successor-in-interest becoming a signatory to the existing franchise agreement.
(n) Grantee not to enter into any management contract if it results in a change of control. A grantee shall not enter into any management contract or other arrangement for the management of the system, to the extent that such contract or other arrangement would result in a significant change of operational control of a grantee or the system (as defined in Section 95-4(g)), without the prior consent of the city.
(o) Processing fee may be imposed by city. The city may impose a processing fee upon the grantee and/or the assignee or transferee to cover its costs of considering and evaluating an application for assignment or transfer of a franchise.
(Ord. No. 2801, § 3, 2-25-99)