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The licensee shall provide continuous service for the entire term of the license agreement to all subscribers and users in return for payment of the established rates, fees and charges. If the licensee overbuilds, rebuilds, modifies, or seeks permission to transfer the system; or if the city revokes, fails to renew, or otherwise terminates the license agreement or declares it forfeited, or elects to purchase the system; or if for any reason the license becomes void, the licensee shall continue to operate the system in a normal and orderly manner until an orderly and lawful change of operation is effectuated. This period of operation shall not exceed thirty-six (36) months from the date of occurrence of any of the above events, or the date any appeals of the same are finally concluded, whichever is later. During such interim period, the licensee shall not make any material, administrative or operational change that would tend to (1) degrade the quality of service, (2) decrease revenues, or (3) materially increase expenses, without the express written permission of the city. In addition to providing grounds for termination, if the licensee fails to operate the system for ninety-six (96) consecutive hours without prior approval of the city or fails to continue operation on the occurrence of any of the events stated in this section, the city shall have the right to operate the system, either directly or through a designate, until such time as a new operator is selected. If the city is required to fulfill this obligation for the licensee, the licensee shall reimburse the city for any and all costs, fees or damages incurred by the city.
(Ord. No. 8937, § 2, 9-2-97)
(1) Rights To purchase. In the event the city terminates, or revokes the license agreement or declares the license forfeited pursuant to any provisions of this chapter, or at the normal expiration of the license agreement (referred to collectively and individually in this section by use of the term terminate or termination), the city shall have the first option, directly or as an intermediary, to purchase the system. The city shall have ninety (90) days prior to the effective date of termination and an additional ninety (90) days following the conclusion of any appeal of the termination, to notify the licensee of the city's intent to exercise the option to purchase stated herein.
(2) Valuation. In the event of a termination of the license agreement by the city for cause, the city may purchase the system for an equitable price. "Equitable price" means fair market value adjusted downward for the harm to the city or subscribers, if any, resulting from Licensee's breach of its license agreement, or violation of this chapter, and as further adjusted to account for other equitable factors that may be considered consistent with 47 U.S.C. § 547. Upon other termination of the license agreement the value of the system shall be solely based on the fair market value of the system.
(a) No value shall be assigned to the license itself whether termination is or is not for cause.
(b) "Valuation" as referred to above shall be determined by audit of system assets pursuant to generally accepted auditing principles. Procedures for valuation may be specified in a license agreement.
(3) Date of valuation. The date of valuation shall be ninety (90) days after city gives licensee notice of its intent to exercise the option to purchase.
(4) Transfer to city. Upon exercise of the city's option to purchase and written notice of such action by the city to the licensee, the licensee shall, immediately upon payment of the purchase price by the city, transfer to the city possession and legal title to all system facilities and property, both real and personal, free from any and all liens and encumbrances not agreed to be assumed by the city in lieu of a portion of the purchase price; and the licensee shall execute such warranty deeds or other instruments of conveyance to the city as shall be necessary to effectuate this transfer.
(Ord. No. 8937, § 2, 9-2-97)
(1) In the case of a foreclosure or other judicial sale or termination of lease of the plant, property or equipment of the licensee, or any substantial part thereof, or any rights under the license agreement, the licensee shall serve written notice upon the city of any such event; and the city may serve written notice of termination upon the licensee and the successful bidder at such sale, in which event the license and the license agreement and all rights and privileges of the licensee thereunder shall cease and terminate thirty (30) days after service of such notice, unless:
(a) The mayor and council have approved the transfer of ownership of the license, in accordance with all pertinent provisions of section 7A-28 ("Transfers and Assignments"); and
(b) Such successful bidder shall have covenanted and agreed with the city, in writing in a form approved by the city attorney, to assume and be bound by all the terms and conditions of this chapter and the license agreement.
(2) The license shall terminate one hundred twenty (120) days after the appointment of a receiver, or trustee, to take over and conduct the business of the licensee, whether in receivership, reorganization, bankruptcy or other related action or proceeding.
(3) Failure to comply with the provisions of paragraph (1) of this section shall be deemed an unauthorized transfer pursuant to the provisions of section 7A-28 ("Transfers and Assignments").
(Ord. No. 8937, § 2, 9-2-97)
The procedures for transfers and assignments of the license agreement will conform to the requirements as set forth in federal law and applicable FCC regulations and will include the following requirements:
(1) The licensee shall not sell, transfer, assign, exchange or release, or permit the sale, transfer, assignment, exchange or release of more than five (5) percent of the ownership of the system or rights in the license agreement to a person (hereinafter "proposed transferee"), without the prior written authorization of the mayor and council. For purposes of this section, a merger or consolidation shall be deemed a transfer or assignment. Any transaction in which actual working control of a licensee or its system, in whatever manner exercised, is transferred, shall be deemed a transfer. The mayor and council specifically reserve the right to deny, restrict or condition authorization to transfer upon the criteria stated in this section and any other lawful criteria the mayor and council determine to be necessary in the public interest.
(2) The licensee shall provide the following information to the city:
(a) All information and forms required under federal law or the equivalent of such forms if no longer required by federal law;
(b) Any contracts or other documents that constitute the proposed transaction and all documents, schedules, exhibits, or the like referred to therein;
(c) Any shareholder reports or filings with the Securities and Exchange Commission that discuss the transaction;
(d) Complete information regarding any potential impact of the transfer on subscriber rates and service and system debt; and
(e) A brief summary of the proposed transferee's plans for at least the next five (5) years regarding line extension, plant and equipment upgrades, channel capacity, expansion or elimination of services, and any other changes affecting or enhancing the performance of the cable system.
(3) Once the required information has been provided, the transfer application shall be subject to review by the city and any approval shall be subject to the city's determination that:
(a) The proposed transferee has the qualifications to construct, operate and repair the system proposed in conformity with applicable law;
(b) The proposed transferee will accept the conditions established by the city on the transfer; and the proposed transferee will enter into a license and comply with any conditions precedent to its effectiveness. This section does not authorize the city to exercise authority it does not otherwise have under applicable law.
(4) Any approval will also be subject to a determination by the city that:
(a) There will be no adverse effect on subscribers, the public, or the city's interest in the license;
(b) Transferee will agree to be bound by all the conditions of the license and to assume all the obligations of its predecessor;
(c) Any outstanding compliance and compensation issues will be resolved or preserved to the satisfaction of the city; and
(d) The proposed transferee and the current licensee have provided all required information so that the city may act on the application.
(5) Any proposed transferee shall execute an agreement, in such form as acceptable to the city attorney, that it will assume and be bound by all of the provisions, terms and conditions of this chapter, the license agreement and any other conditions the mayor and council may have established in granting authorization as contemplated by subsections (1) through (4).
(6) No transfer under paragraph (1) of this section shall be permitted within fifteen (15) months prior to the expiration date of the license agreement.
(7) The occurrence of an unauthorized transfer or assignment may, at the option of the city, provide the mayor and council with cause to immediately terminate the license agreement and accelerate all of the obligations and rights as provided in section 7A-24.
(8) From and after any occurrence constituting an unauthorized transfer or assignment, the putative transferee shall not make, execute or enter into any deed, deed of trust, mortgage, contract, conditional sales contract or any loan, lease, pledge, security agreement, sale, pole agreement or any other agreement or hypothecation concerning any system facilities or property, whether real or personal, without the written approval of the mayor and council.
(9) Nothing in this section shall be deemed to prohibit the use of the licensee's property as collateral for security in regard to construction financing. However, any such financing arrangements shall be subject to all provisions of this chapter and the license agreement. In no case may any person, including the institution holding the system as collateral, succeed to the ownership or control of the system or the license without the prior approval of the city.
(10) Nothing in this section shall be read to prohibit licensee from providing information subject to the protections for proprietary information under this chapter or a license agreement.
(Ord. No. 8937, § 2, 9-2-97)
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