[Code 1991, § 9-96]
The term of a franchise shall be as specified in the franchise
agreement, but it shall not exceed 15 years.
[Code 1991, § 9-97]
A.
A franchisee, in consideration of the privilege granted under a franchise
for the use of public ways and the privilege to construct and operate
a cable television system, shall pay to the City 5% of its annual
gross revenues during the period of its operation under the franchise.
B.
Unless a franchise specifies a different period, a franchisee shall
file with the City, by the end of each month, a financial statement
showing the gross revenues received by the franchisee during the preceding
month. At the same time, a franchisee shall pay to the City the franchise
fee for that period of time. A franchisee shall also file, no later
than March 31 of each year, the franchisee's financial statements
for the preceding year. Any franchise fee payment in adjustment for
any shortfall of the total monthly payments for the year shall be
made at that time. Adjustments for any overpayment shall be by credit
to subsequent monthly payments.
C.
The City shall have the right to inspect a franchisee's income records,
to audit any and all relevant records, and to recompute any amounts
determined to be payable under the franchise and this article.
D.
If any franchise payment is not received by the City on or before
the applicable dates, interest shall be charged from such due date
at an annual interest rate then chargeable for unpaid federal income
taxes (26 U.S.C. § 6621). In addition, the franchisee shall
pay a late charge of 5% of the amount of such payment. Interest and
late charges will not be chargeable to the franchisee for additional
payment required under the yearly adjustment provided that such payment
does not exceed 10% of the total monthly payments made during the
year. If such payment exceeds 10%, the franchisee shall be liable
for interest and late charges for the entire amount due.
E.
If a franchise is revoked or otherwise terminated before its expiration
date, the franchisee shall file with the City, within 90 days of the
date of revocation or termination, an audited financial statement
showing the gross revenues received by the franchisee since the end
of the previous year and shall make adjustments at that time for the
franchise fees due up to the date of revocation or termination.
[Code 1991, § 9-98]
A.
Upon the granting of a franchise and following simultaneously with
the filing of the acceptance of the franchise and at all times during
the term of the franchise, including the time for removal of facilities
or management as a trustee as provided for in this division, the franchisee
shall obtain, as required by the franchise, a general comprehensive
public liability policy indemnifying the City and a performance bond
in favor of the City in the sum set forth in the franchise agreement.
B.
All bonds and insurance policies called for in this section shall
be in a form satisfactory to the City Attorney. Each bond or insurance
policy shall provide that such bond or policy may not be canceled
or modified during its term without at least 60 days' prior written
notice to the City.
C.
A franchisee shall, at its sole cost and expense, indemnify and hold
harmless the City and its officials, boards, commissions, agents and
employees against any and all claims, suits, causes of action, proceedings,
and judgments for damage arising out of the acts of the franchisee
or its operation of the cable television system under the franchise.
D.
No franchisee shall permit any policy or bond to expire during the
term of the franchise, and a franchisee, not less than 30 days prior
to its expiration, shall deliver to the City a substitute, renewal
or replacement policy or bond.
[Code 1991, § 9-99]
A.
The City may require in the franchise that a franchisee obtain a
letter of credit to ensure the faithful performance by the franchisee
of all provisions of the franchise and this article.
B.
At the City's option, it may draw against the letter of credit for
any unpaid liquidated damages, franchise fees or other amounts owing
to it under the franchise which are 30 days or more past due. The
City shall notify the franchisee in writing at least 10 days in advance
of drawing upon the letter of credit.
[Code 1991, § 9-100]
A.
Because a franchisee's failure to comply with the provisions of this
article and its franchise will result in damage to the City and because
it may be impractical to determine the actual amount of such damages,
the City and any franchisee shall agree upon and specify in the franchise
certain amounts which represent both parties' best estimate of the
damages.
B.
The liquidated damages provided in a franchise shall be the exclusive
monetary remedy for the named breaches. Neither the right to liquidated
damages nor the payment of liquidated damages shall bar or otherwise
limit the right of the City in a proper case to:
(1)
Obtain judicial enforcement of the franchisee's obligations by means
of specific performance, injunctive relief, mandate or other remedies
at law or in equity;
(2)
Consider any violation as grounds for forfeiting and terminating
the franchise pursuant to this article; and
(3)
Consider any violation as grounds for not renewing or extending the
franchise or issuing a new franchise. In any action, either for liquidated
damages or to enforce obligations under a franchise, the prevailing
party shall be entitled to reasonable attorney's fees and costs.
[Code 1991, § 9-101]
A.
In addition to all other rights and powers retained by the City under
this article and any franchise issued pursuant thereto, the City Council
reserves the right to terminate the franchise and all rights and privileges
of the franchisee in the event of a substantial breach of its terms
and conditions. A substantial breach by the franchisee shall include,
but shall not be limited to, the following:
(1)
An uncured violation of any material provision of this article or
a franchise issued thereunder, or any material rule, order, regulation,
or determination of the City made pursuant thereto;
(2)
The practice of any fraud or deceit upon the cable television system
customers and subscribers or upon the City;
(3)
Failure to begin or substantially complete any system construction
or system extension as set forth in the franchise;
(4)
Failure to provide the services promised in the application or specified
in the franchise or a reasonable substitute therefor;
(5)
Failure to restore service after five consecutive days of interrupted
service, except where such interruption resulted from the unavailability
of replacement parts or when approval of such interruption is obtained
from the City;
(6)
Material misrepresentation of fact in the application for or during
negotiation relating to the franchise; or
(7)
Failure to provide surety and indemnity as required by the franchise
or this article.
B.
None of the items listed in Subsection A of this section shall constitute a major breach if the franchisee is able to demonstrate that a violation occurred as a result of circumstances beyond its control. The franchisee shall not be excused by mere economic hardship or by nonfeasance or malfeasance of its Directors, officers, agents or employees.
C.
The City may make a written demand by certified mail that the franchisee
comply with any such provision, rule, order, or determination under
or pursuant to the franchise. If the violation by the franchisee continues
for a period of 30 days following such written demand without written
proof that the corrective action has been taken or is being actively
and expeditiously pursued, the City Council may consider terminating
the franchise; provided, however, a written notice thereof shall be
given to the franchisee at least 15 days in advance and the franchisee
must be given an opportunity to appear before the City Council to
present its arguments.
D.
Should the City Council determine, following a hearing, that the
violation by the franchisee was the fault of the franchisee and within
the franchisee's control, the City Council may by resolution declare
that the franchise be forfeited and terminated; provided, however,
the City Council may in its discretion provide an opportunity for
the franchisee to remedy the violation and come into compliance with
the franchise and this article so as to avoid the termination.
E.
If the City Council determines that a violation has occurred, it
may impose fines or other sanctions consistent with state and federal
law as it deems appropriate in lieu of revocation or forfeiture.
[Code 1991, § 9-102]
A.
Upon the foreclosure or other judicial sale of all or a substantial
part of the cable communications system facilities, or upon the termination
of any lease covering all or a substantial part of the cable communications
system facilities, or upon the occasion of additional events which
effectively cause termination of the system's operation by the franchisee,
the franchisee shall promptly notify the City of such fact, and such
notification or the occurrence of such terminating events shall be
treated, among other things, as a notification that a change in control
of the franchisee has taken place, and the provisions of this article
governing the consent of the City to such change in control of the
franchisee shall apply.
B.
The City Council shall have the right to cancel a franchise 120 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
that period, or unless within that period:
(1)
The receiver or trustee shall have fully complied with all of the
provisions of this article and remedied any defaults thereunder to
the satisfaction of the City; and
(2)
The receiver or trustee shall have executed an agreement, duly approved
by any court having jurisdiction, whereby such receiver or trustee
assumes and agrees to be bound by each and every provision of this
article and the franchise granted to the franchisee.
[Code 1991, § 9-103]
A.
If the City Council decides not to grant a renewed franchise to a
franchisee, the City Council shall have the right to purchase the
system at its fair market value, which shall take into account the
going-concern value of the system. The fair market value shall be
reduced by the amount of any lien, encumbrance or financial obligation
which the City will assume.
B.
If the City Council revokes, forfeits or terminates the franchise
for cause, it shall have the right to purchase the cable system for
an equitable price. An equitable price takes into account the nature
of the franchisee's breach or malfeasance and the resulting harm to
the community; it is not necessarily based on fair market value or
going-concern value.
C.
If the City and the franchisee cannot agree upon the value of the cable system where the City Council exercises its option to purchase pursuant to Subsection A or B of this section, the City and the franchisee may jointly agree to resolution by arbitration. The arbitration shall be conducted pursuant to procedures agreed upon by the parties as consistent with the procedures of the American Arbitration Association.
D.
Upon exercise of the City's option to purchase and the consummation
thereof, the franchisee shall immediately transfer to the City possession
and title to all facilities and property, real and personal, of the
cable television system, free from any and all liens and encumbrances
which the City has not agreed to assume, and the franchisee shall
execute all necessary warranty deeds or other instruments of conveyance
to the City.
[Code 1991, § 9-104]
When a franchise issued pursuant to this article expires without
renewal or is terminated, the franchisee shall upon notice by the
City promptly remove at its own expense all portions of the cable
communications system from all streets and public ways within the
City, and shall restore such streets and public ways to their former
condition; provided, however, that the franchisee shall have the right
to sell its physical plant to a subsequent franchisee, subject to
City approval, in which case such plant need not be removed. If the
franchisee fails to remove its facilities upon request, the City may
perform the work at the franchisee's expense.
[Code 1991, § 9-105]
A.
A franchise issued pursuant to this article shall not be sold, assigned,
transferred, leased, or disposed of, either in whole or in part, in
any manner; nor shall title thereto, either legal or equitable, or
any right, interest, or property therein pass to or vest in any person;
nor shall the controlling interest in any corporation holding a franchise
under this article be changed without the prior consent of the City
Council, and then only under such conditions as may be required by
the City Council. Such a transfer of control is not limited to major
interest holders but includes actual working or de facto control by
minor interest holders in whatever manner exercised. Every change,
transfer, or acquisition of control of the franchisee shall make the
franchise subject to cancellation unless and until the City shall
have consented.
B.
The franchisee shall promptly notify the City of any proposed change
in control of the franchisee. A formal application for approval of
a proposed assignment or transfer of control shall include, among
other things, a copy of any and all documents relating to the sale
or transfer and any filings by any party to the transaction at any
state or federal agency. An original and three copies of the text
of the application shall be filed and additional copies as the City
may request.
C.
The proposed purchaser, transferee, or assignee must show financial
responsibility as determined by the City and must agree to comply
with all provisions of the franchise.
D.
For the purpose of determining whether it shall consent to such change,
transfer, or acquisition of control, the City may inquire into all
qualifications of the prospective controlling party, and the franchisee
shall assist the City in any such inquiry. In considering an application
for transfer, the City shall consider the qualifications of the proposed
transferee and relevant factors affecting the public interest. The
City Council may require any conditions which it deems necessary at
the time of review to ensure that the cable communications system
will satisfy the public interest of the City and its citizens for
the balance of the term of the franchise. The City Council shall determine
whether to grant the transfer application and what conditions, if
any, are to apply following a public hearing at which all persons
will be provided an opportunity to comment.
