Sacramento Municipal Code Art. IX Assignments

Except as provided by either Section 5.28.1730 or 5.28.1740 of this chapter, no part or element of a cable television system or any other real or personal property which is mandatorily included by Section 5.28.560 of this chapter within a purchase which the cable television commission or its assignee is authorized to make shall be sold, transferred, assigned, mortgaged, pledged, leased, sublet or otherwise encumbered for any purpose whatsoever, nor shall title thereto, either legal or equitable, or any right or interest therein pass to or vest in any party.

Except as provided by either Sections 5.28.1730 or 5.28.1740 of this chapter, a franchise issued pursuant to the provisions of this title shall not, either in whole or in part, be sold, transferred, assigned, mortgaged, pledged, leased, sublet, or otherwise encumbered for any purpose whatsoever; nor shall title thereto, either legal or equitable, or any right or interest therein, pass to or vest in any party.

Any such sale, transfer, assignment, mortgage, pledge, lease sublease or other encumbrance of whatever kind or nature made in violation of the provisions of this section shall be void. (Prior code § 20.09.750)

Upon written application by a franchisee, the lender, and any and all signatures or guarantors upon the proposed loan, the board of directors of the cable television commission may, in its sole discretion, from time to time, consent by duly adopted resolution to the sale, transfer, assignment, mortgage, pledge, lease, sublease or other encumbrance upon real or personal property mandatorily included by Section 5.28.560 of this chapter within a purchase which the commission or its assignee is authorized to make or upon a franchise issued pursuant to the provisions of this chapter, for the purpose of securing a loan of capital or constituting a purchase money security interest. Such information concerning the identity and background of the lender, terms of the transaction, intended expenditure of the capital, and other matters relating to the transaction shall be provided as is required by the board or its authorized representative. If, in its sole discretion, the board of directors elects to approve such encumbrance or encumbrances, such approval may be granted upon such terms and conditions as the board determines to be appropriate including, but not limited to, the following:

A. The purpose for which the capital to which the encumbrance relates will be utilized, including guarantees relating to expenditure or disposition of such capital;

B. The terms and conditions of encumbrance instruments relating to such matters as default, and the rights of the lender and successors in interest in relation thereto;

C. The amount of the encumbrance and types of properties encumbered;

D. Subordination of the encumbrance to the rights of the county, cities and commission under the franchise, consistent with the terms and conditions of the encumbrancy approved by the board; and

E. An agreement by any party in whose name the loan secured by the encumbrance is made or any signator or guarantor thereon to be bound by the terms, conditions, provisions and requirements of the franchise documents, in addition to the party or parties whose names the franchise is issued by the resolution offering the franchise and certificate of acceptance.

The board of directors of the commission shall by resolution be authorized to delegate to its executive director power to consent in writing to such encumbrances for financing purposes of individual items of property described by Section 5.28.560(C) of this chapter subject to limitations prescribed. (Prior code § 20.09.752)

The board of directors of the cable television commission may, pursuant to the provisions of Section 5.28.1760 of this chapter, consent by duly adopted resolution to the sale, transfer, assignment, mortgage, pledge, lease, sublease or other transfer of right, title or interest in property mandatorily included by Section 5.28.560 of this chapter within that authorized to be purchased or in a franchise issued pursuant to the provisions of this chapter, when such transfer is for a purpose other than securing a loan of capital. Any such transfer shall be subject and subordinate to the rights of the county, cities and commission under the franchise documents for the franchise, and the transferee shall acknowledge in writing such subordination and agreement to comply with and be bound by the terms, conditions, provisions and requirements of the franchise documents. (Prior code § 20.09.754)

Every change, transfer or acquisition of control of the franchisee or of any owner of the franchisee who is named in the resolution offering the franchise shall render the franchise subject to cancellation by the board of directors of the cable television commission unless the board of directors consents thereto by duly adopted resolution pursuant to the provisions of Section 5.28.1760 of this chapter. As used in this section, the word "control" shall mean the acquisition of sufficient dominance to determine the operational and financial policies of the franchisee, including disposition of its assets. A rebuttable presumption that a transfer of control has occurred shall arise upon:

A. The acquisition or accumulation by any party or association of parties of ten (10) percent or more or the voting shares or stock of the franchisee or named owner of the franchisee;

B. A change in general partners of a franchisee or named owner of the franchisee; or

C. A merger or consolidation of the franchisee or named owner of the franchisee.

The presumption is subject to rebuttal only by determination by the board of directors of the commission. (Prior code § 20.09.756)

A franchisee shall file written notice with the clerk of the board of directors of the cable television commission as soon as it acquires knowledge of any impending transaction or other event consent to which by the board is required by Sections 5.28.1740 or 5.28.1750 of this chapter. The written notice shall be filed not less than ninety (90) calendar days in advance of the proposed effective date of the transaction or event for which consent is required.

The notice shall state the name or names and address or addresses of the party or parties who are interested in the transaction or event and describe the details of the transaction or event. In the event of a voluntary assignment, transfer, lease, sublease, mortgage or other encumbrance, a copy of the executed or proposed agreement shall be filed with the notice. Any written acknowledgement of subordination to the rights of the county, cities and commission under the franchise documents and agreement to comply with and be bound thereby required by the provisions of Section 5.28.1740 of this chapter, shall be filed with the notice.

The franchisee shall immediately submit such additional information concerning such a transaction as the board of directors or other authorized representative of the commission may request.

The board of directors of the commission shall schedule a public hearing to determine whether consent required by the provisions of Sections 5.28.1740 or 5.28.1750 of this chapter, will be given. Notice of the hearing shall be given in the manner prescribed by Section 5.28.080 of this chapter. The hearing shall be commenced not later than sixty (60) calendar days following filing of the notice of the franchisee pursuant to this section. At the conclusion of the hearing the board shall determine whether consent will be given.

In the hearing to determine whether consent will be given the franchisee (proposed transferor) shall have the burden of proving by clear and convincing evidence each of the following factors:

A. That the reputation, responsibility, integrity and reliability of the party or parties to whom the transfer is contemplated, and of the directors, officers, employees, and agents thereof is equal to that of the parties obligated under the franchise documents;

B. That the financial capability and capacity of the party or parties to whom the transfer is contemplated is equal to that of the parties obligated under the franchise documents;

C. That the terms, conditions or other circumstances of the transfer are not likely to result in an increase in the rates or charges for services;

D. That at the time of the transfer the franchisee is in compliance with the terms, conditions and requirements of the franchise documents and any rules, regulations or determinations promulgated thereunder;

E. That installation of the cable television system has been completed in the manner and within the times prescribed by Section 5.28.950 of this chapter. (In the absence of extraordinary circumstances, a transfer shall not be approved in advance of such completion); and

F. That the transactions would not detrimentally affect the public interest.

The determination by the board of directors as to whether to give such consent shall be vested within the sole discretion of the board, but shall be based exclusively upon the factors prescribed above. Such consent may be given upon maintenance or operation of the cable television system, services to be provided, rates and charges for services, management of the franchise business and other requirements relating to the franchise, as the board of directors, in its sole discretion, may order.

In the event the board does not consent and the franchisee seeks judicial review of the board's decision, the franchisee agrees, by filing of the certificate of acceptance, that the decision of the board shall be upheld by a trial or appellate court if there is any substantial evidence supporting the decision of the board as to any of the prescribed factors above. (Prior code § 20.09.758)

The board of directors of the cable television commission shall have the right to cancel a franchise one hundred twenty (120) calendar days after the appointment of a receiver, or trustee, to take over and conduct the business of the franchisee, whether in receivership, reorganization, bankruptcy, or other action or proceeding, unless such receivership or trusteeship shall have been vacated prior to the expiration of said one hundred twenty (120) calendar days, or unless within such one hundred twenty (120) calendar days the receiver or trustee shall both:

A. Have fully complied with all of the provisions of the franchise documents and any rules, regulations or determinations promulgated thereunder; and

B. Have executed an agreement, duly approved by the court having jurisdiction in the premises, whereby such receiver or trustee acknowledges that its rights are subject and subordinate to those of the county, cities and cable television commission under the franchise documents for the franchise, and promising to comply with and be bound by the terms, conditions and requirements of the franchise documents and any orders, directives, rules or regulations issued thereunder. (Prior code § 20.09.762)

Each franchisee shall execute a document in a form determined by the cable television commission evidencing the franchise documents appropriate for recording in the office of the Sacramento county recorder, and a financing statement in a form determined by the commission for filing pursuant to the provisions of Sections 9401 through 9403, inclusive, of the California Commercial Code. (Prior code § 20.09.764)