§ 5.36.240. Transfer of ownership.

(1)

A franchise is a privilege to be held in personal trust by the original Cable Operator. A Cable Operator shall not sell, transfer, lease, dispose of or assign this franchise or any rights there under, including any beneficial interest or right to operate there under, by voluntary sale, merger, consolidation, or otherwise, or by operation of law, without the prior approval of the City Council.

(2)

If a Cable Operator is a partnership or a corporation, prior approval of the City Council is also required when there is an actual change in control of the Cable Operator. A change in control shall be deemed to include, but not be limited to, the following: (a) in the case of a partnership, the general partner changes, (b) ownership of 20 percent or more of its voting stock or the voting stock of any parent or affiliate which directly or indirectly through other affiliates owns 20 percent or more of the Cable Operator's voting stock is to be acquired by a person or group of persons acting in concert. The word "control" as used in this Section is not limited to major stockholders but includes de facto control or significant influence with respect to the operation of the Cable Operator's cable system. For purposes of this Section, "significant influence" occurs where a person other than the Cable Operator or a person controlling controlled by or under common control with the Cable Operator or exercises working or effective control of decisions affecting the operation of the cable system.

(3)

The consent of the City Council is not required for transfer of the franchise to a wholly-owned subsidiary of the Cable Operator or to any person controlling, controlled by or under common control with the Cable Operator providing any such person agrees in writing to be bound by the existing franchise and provides bonds and insurance acceptable to the City. The City shall continue to regard the Cable Operator and its transferee as a single entity for all purposes.

(4)

A Cable Operator's execution of a deed of trust, mortgage or other instrument given merely to secure the payment of any indebtedness of a Cable Operator shall not constitute a transfer under this division and shall not require the consent of the City Council.

(5)

Upon foreclosure or other judicial sale of all or a substantial part of the system or upon the termination of a lease covering all or a substantial part of the system, the Cable Operator shall notify the City of the fact. The notification shall be considered as notice that a change in control of the Cable Operator has occurred. In this case the City Councils approval of the new owner of the system must be obtained as herein required.

(6)

Prior to any transfer or change in control, a Cable Operator shall submit to the City any form required by federal law together with the matters described in Section 5.36.220 above. The City Council shall approve, conditionally approve or deny the transfer or change in control within 120 days following receipt of all required material, unless an extension is agreed to by the City and the Cable Operator. Conditions of approval may include, but are not limited to, the following: (a) Resolution of any outstanding franchise violations or performance deficiencies; (b) Payment of any outstanding franchise fees; (c) Payment of City costs incurred in reviewing the transfer; (c) Filing of any appropriate bonds, insurance endorsements, letters of credit or guarantees; and (d) Written assumption of all obligations of the transferor by the transferee.

(7)

Within 30 days after the date of the resolution approving transfer of the franchise, or within such extended period of time as the City Council in its discretion may authorize, the transferee shall file with the clerk of the City Council its written acceptance of the franchise, in a form satisfactory to the City, together with all required bonds and insurance certificates, and its agreement to be bound by and to comply with and to do all thing required of it by the provisions of this division and the franchise award resolution. Such acceptance and agreement shall be acknowledged by the transferee before a notary public and shall be in a form and content satisfactory to and approved by the City Attorney.

(8)

The City may cancel a franchise 60 days or later after the appointment of a receiver or trustee to take over and conduct the business of the Cable Operator, whether in receivership, or other action or proceeding, unless the receivership or trusteeship is vacated prior to the expiration of the 60 days, or unless:

(a)

within 60 days after his election or appointment, the receiver or trustee complies with this division and remedies all defaults; and

(b)

such receiver or trustee, within 60 days, executes an agreement, approved by the court, whereby the receiver or trustee assumes and agrees to be bound by this division and the franchise granted to Cable Operator.

(9)

Failure to comply with the requirements of this section is a material breach of this Title, subject to the remedies provided for herein.

(Ord. No. 820, § 1, 3-19-02)