(a) Grantee Shall Offer County Opportunity to Purchase System. In the event that a Grantee makes a determination to sell or transfer its system, in whole or in part, the grantee shall offer the County an opportunity to purchase the system at fair market value.
(b) Prior Written Consent of County Required Before Any Sale, Assignment or Transfer of a Franchise and/or Change of Control or Ownership of the Grantee.
(1) A franchise granted under this chapter is a privilege to be held in personal trust by the grantee. Sale or transfer of a franchise is prohibited without the consent of the Board of Supervisors, which consent shall not be unreasonably withheld. A franchise shall not be assigned, transferred, sold or disposed of, in whole or in part, by voluntary sale, merger, consolidation or otherwise, or by forced or involuntary sale, without the prior consent of the Board of Supervisors expressed by resolution, and then only on such conditions as may therein be prescribed. The County is hereby authorized to take legal or equitable action to set aside, annul, revoke or cancel the franchise, or the transfer of the franchise, if such transfer is not made according to the procedures set forth in this chapter.
(2) Prior approval of the Board is required where (i) ownership of ten percent of the voting interest of a publicly-held grantee or twenty-five percent of the voting interest of a privately-held grantee is acquired in any transaction or series of transactions, by a person or group of persons acting in concert, none of whom already owns five percent or more of the grantee, singularly or collectively, or (ii) control of more than ten percent of the right of control of a publicly- held grantee or twenty-five percent of the right of control of a privately-held grantee is acquired in any transaction or series of transactions, by a person or a group of persons acting in concert, none of whom already controls five percent or more of such right of control, singularly or collectively, or (iii) there is any other change which accomplishes a change in actual working or defacto ownership or control of the grantee by minor interest holders in whatever manner exercised. By its acceptance of a franchise, a grantee specifically grants and agrees that any such acquisition or change of control occurring without prior approval of the Board shall constitute a violation of the franchise by the grantee.
(c) No Consent Required for Securing an Indebtedness if the Indebtedness Does Not Exceed Seventy-Five Percent of the Fair Market Value of the Cable System. No such consent as set forth in subsection (b) hereof shall be required for a transfer in trust, mortgage, or other instrument of hypothecation, in whole or in part, to secure an indebtedness, except when such hypothecation exceeds seventy-five percent of the fair market value of the property used by the grantee in the operation of its cable television system. Prior consent of the Board, expressed by resolution, shall be required for such transfer where hypothecation exceeds seventy-five percent of fair market value, and such consent shall not be withheld unreasonably.
(d) Grantee to Submit Application Documenting Information Required by the County.
(1) A grantee shall promptly notify the County of any action or proposed action requiring consent of the County pursuant to subsections (b) through (m) hereof.
(2) A grantee shall submit to the County 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 subsections (e) and (f) hereof.
(3) At any time during the review process, the County 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 the grantee under subsections (e) and (f) hereof. A grantee shall provide all requested assistance to the County in connection with any such inquiry and, as appropriate, shall secure the cooperation and assistance of all other persons involved in such action.
(4) The County shall respond to any application requiring the County's consent under subsections (b) through (n) hereof within 120 days after such application, and all information required by the County under this chapter, the grantee's franchise agreement and applicable law, in connection with the application, has been received by the County. Such an application shall be deemed approved if the County should fail to render a final decision within 120 days following the grantee's filing of the application and the County's receipt of all information reasonably required to accompany such an application under this chapter, the grantee's franchise agreement and applicable law, unless the grantee and the County agree to an extension of time, provided, however, that the County may deny such an application, among other grounds, for a grantee's failure to submit the information required by this chapter, the grantee's franchise agreement and applicable law.
(e) Showings Required of Proposed Assignee; Assignee Must Agree to Conditions Prescribed by County. 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 County 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 five 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, 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 County 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 systems. The narrative account shall include, but not be limited to, a list of the cable systems currently and formerly owned or operated by the 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 County: (i) a reasonably detailed narrative describing, or a representative manual (if such a manual exists) containing, the 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 the assignee or transferee; (iii) a summary of the assignee's or transferee's proposed billing procedures; (iv) a sample customer service bill which the assignee or transferee proposes to use in the grantee's system; (v) a copy of a sample customer service complaint log or form, printed out from an electronic or computerized complaint recording system, which the assignee or transferee proposes to use in the grantee's system.
(5) Compliance with franchise agreement and cable chapter. The proposed assignee or transferee must agree to comply with all provisions of the grantee's franchise agreement and this chapter, as well as such reasonable additional terms and conditions as the County 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 County 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 the grantee's, assignee's or transferee's cable system or service.
(f) Grantee and Assignee or Transferee to Assist County in its Inquiry of Prospective Controlling Party; Grantee Promptly to Notify County of any Actual or Prospective Change in Control of Franchise.
(1) Grantee's responsibility. A grantee shall assist the County in its inquiry into an assignee's or transferee's capabilities under subsection (e) hereof.
(2) Assignee's or transferee's responsibility. In seeking the County's consent to any change in ownership or control of a franchise or of a grantee, the assignee or transferee shall have the responsibility to establish, to the satisfaction of the County, that the 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 County may request, and the assignee or transferee shall provide, all reasonable financial data relative to the transfer, including, but not limited to, the materials specified in subsection (e) hereof. In addition, the assignee or transferee shall provide to the County 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.
(1) For purposes of this section, “control” means the ability to exert working control, in whatever manner exercised, over the affairs of a grantee, either directly or indirectly.
(2) A rebuttable presumption that transfer of control has occurred, including 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 ten percent of the voting interest of a publicly-held grantee, or of twenty-five percent of the voting interest of a privately-held grantee or of the person exercising management authority over such a privately-held grantee.
(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 a grantee without the prior consent of the County shall be null and void unless later ratified by the County 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 County, 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 County.
(i) County May Revoke Franchise if Unauthorized Transfer or Assignment Occurs. If the County 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 County 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 County.
(j) Consent of County to Transfer or Assignment Shall Not Constitute Waiver of County Rights. The consent or approval of the County Board of Supervisors 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 County unless the County 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 County Board of Supervisors will not approve any transfer of control of a grantee or assignment of a franchise or cable system within three years of its grant or initial 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 court or any State agency or court; (iii) an assignment or transfer of control to one or more purchasers, assignees or transferees controlled by, 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 County, 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) 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.
(m) 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 without the prior consent of the County.
(n) Processing Fee May be Imposed by County. The County may impose a processing fee upon the grantee and/or the assignee or transferee to cover its reasonable costs of considering and evaluating an application for assignment or transfer of a franchise. (Ord. 98-05. Passed 4-15-98.)