No transfer shall occur without prior written notice to and written approval of the City Council, and only then upon such terms and conditions as the City deems necessary and proper. The franchisee’s obligations under the franchise involves personal services whose performance involves personal credit, trust, and confidence in the franchisee, and transfer without the prior written approval of the City shall be considered to impair the City’s assurance of due performance. The granting of approval for a transfer in one instance shall not render unnecessary approval of any subsequent transfer.
(A)
Prompt Notice. The franchisee shall promptly notify the City of any proposed transfer. If any transfer should take place without prior notice to the City, the franchisee will promptly notify the City that such a transfer has occurred.
(B)
Application for Approval. At least one hundred twenty (120) calendar days prior to the contemplated effective date of a transfer, the franchisee shall submit to the City an application for approval of the transfer. Such an application shall provide complete information on the proposed transaction, including details on the legal, financial, technical, and other qualifications of the transferee, and on the potential impact of the transfer on subscriber rates and service. At a minimum, the following information must be included in the application; provided that, a franchisee is not required to duplicate information that it submits to the City to comply with its obligations under federal or state law:
(1)
All information and forms required under federal law or the equivalent of such forms if not longer required by federal law;
(2)
All information required in SJBMC 5-20-415(F), (K), (M) and (O);
(3)
Proposed transferee, together with an explanation of how decisions regarding the cable system will be made if the proposed transaction is approved;
(4)
Any contracts, financing documents, or other documents that relate to the proposed transaction, and all documents, schedules, exhibits, or the like referred to therein;
(5)
Any documents related to the transaction (including any documents regarding rates the transferee expects to charge) that have been provided to any entity that has been asked to provide financing (debt, equity, or any other kind) for, or to underwrite any offering made in connection with, the proposed transaction;
(6)
Committees, or similar controlling bodies of the franchisee and any potential transferee, or their corporate parents, subsidiaries, or affiliates, regarding the proposed transaction;
(7)
Any shareholder reports or filings with the Securities and Exchange Commission (“SEC”) or the Federal Trade Commission (“FTC”) that discuss the transaction, and any filings required under the Clayton Act in connection with the proposed that discuss the transaction;
(8)
Potential transferees for the last three (3) years, including balance sheets, income statements, profit and loss statements, and documents detailing capital investments and operating costs;
(9)
A detailed description of the sources and amounts of the funds to be used in the proposed transaction, indicating how the debt-equity ratio of the cable system will change in the course of the transaction; what entities will be liable for repayment of any debt incurred; what interest, payment schedule, and other terms or conditions will apply to any debt financing; any debt coverages or financial ratios any potential transferees will be required to maintain over the franchise term if the proposed transaction is approved; what financial resources would be available to the cable system under the control of the proposed transferee; whether the proposed transferee can meet debt-equity or any other required ratios without increasing rates, with any assumptions underlying that conclusion, and if not, what increases would be required and why;
(10)
Any other information necessary to provide a complete and accurate understanding of the financial position of the cable system before and after the proposed transfer, including but not limited to two (2) sets of projected income statements and cash flow statements, including capital investments, for at least five (5) years after the proposed transfer, one (1) set assuming the transfer is approved, and one (1) set assuming the transfer is not approved, each set stating specifically what assumptions are being made with respect to any rebuild or upgrade of the cable system;
(11)
Complete information regarding any potential impact of the transfer on subscriber rates and service;
(12)
Any representations made to anyone, in connection with the transaction, about the franchisee’s compliance with its franchise; and
(13)
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.
(C)
City Inquiry. For the purposes of determining whether it shall consent to a transfer, the City or its agents may inquire into all qualifications of the prospective transferee and such other matters as the City may deem necessary to determine whether the transfer is in the public interest and should be approved, denied, or conditioned under SJBMC 5-20-1410. The franchisee and any prospective transferees shall assist the City in any such inquiry, and if they fail to do so, the request for transfer may be denied.
In making a determination as to whether to grant, deny, or grant subject to conditions an application for a transfer of a franchise, the City shall consider the legal, financial, and technical qualifications of the transferee to operate the cable system; any potential impact of the transfer on subscriber rates or services; whether the incumbent cable operator is in compliance with its franchise agreement and this Chapter and, if not, the proposed transferee’s commitment to cure such noncompliance; whether the transferee owns or controls any other cable system in the City, and whether operation by the transferee may eliminate or reduce competition in the delivery of cable service in the City; and whether operation by the transferee or approval of the transfer would adversely affect subscribers, the City’s interest under this Chapter, the franchise agreement, other applicable law, or the public interest, or make it less likely that the future cable-related needs and interests of the community would be satisfied at a reasonable cost.
(A)
Ineffective Transfer. Any transfer without the City’s prior written approval shall be ineffective, and shall make this franchise subject to revocation at the City’s sole discretion, and to any other remedies available under the franchise or other applicable law.
(B)
Subordination. Any mortgage, pledge or lease shall be subject and subordinate to the rights of the City under this Chapter or other applicable law.
No application for a transfer of a franchise shall be granted unless the transferee agrees in writing that it will abide by and accept all terms of this Chapter and the franchise agreement, and that it will assume the obligations, liabilities, and responsibility for all acts and omissions, known and un-known, of the previous franchisee under this Chapter and the franchise agreement for all purposes, including renewal, unless the City, in its sole discretion, expressly waives this requirement in whole or in part.
Approval by the City of a transfer of a franchise does not constitute a waiver or release of any of the rights of the City under this Chapter or a franchise agreement, whether arising before or after the date of the transfer.
Notwithstanding the foregoing, pledges in trust or mortgages of the assets of the system to secure the construction, operation or repair of the cable system may be made without the City’s prior consent; except that no such arrangement may be made which would in any respect under any condition prevent the franchisee or any successor from complying with the franchise and applicable law, nor may any such arrangement permit a third party to succeed to the interest of franchisee, or to own or control the cable system, without the prior consent of the City.