2 CITY OF MARYSVILLE
RIGHT-OF-WAY ACCESS AND USE AGREEMENT
THIS RIGHT-OF-WAY USE AGREEMENT (“Agreement”) is entered into by and between the City of Marysville, a California Municipal Corporation (“City”) and SiFi Networks Marysville LLC, a Delaware limited liability company (“Company”). For the purposes of this Agreement, City and Company may be referred to collectively as the “Parties” or individually as a “Party.”
RECITALS
A. Company wishes to install, use, operate, and maintain a fiber optic cable system in, on or over portions of the rights-of-way (“ROW”) of the City and/or City-owned land, subject to separate license, if required, including the fiber optic cable and its component parts and appurtenances, and the other cables, wires, components, facilities, Cabinets, ducts, conduits, connectors, Shelters, chambers, chamber covers, pedestals, appliances, splitters, attachments, and other property, equipment, components, materials, apparatus and appurtenances (collectively, the “Project” or the “System”).
B. The Project will require the occupation of the public ROW and will be completed pursuant to City granting the Company’s right of access to the public ROW for the installation of a fiber optic system for the purposes of wholesaling access to internet service providers C. The City and Company now wish to enter into the present Agreement to install and maintain the Project which shall include underground and aerial fiber optic, conduit, cable and any other communication lines (“communication lines”), which terms shall govern the initial Project as well as Company’ subsequent occupation and use of the ROW in the City.
NOW THEREFORE, in consideration of the mutual promises and agreements contained in this Agreement, the Parties agree as follows:
1. Scope of Project and Use.
A. City hereby grants and conveys all necessary and required rights, encroachments, and licenses to Company to encroach over, under and along the public ROW for the purpose of the construction, use, operation, and maintenance of the Project. Notwithstanding the forgoing, permits are required for all work to be performed in the right of way. All work will be constructed and maintained at the sole cost and expense of Company and subject to all governmental approvals including applicable permitting processes including excavation and/or permits. The portion ofthe ROW occupied by the Project shall be for the exclusive use of the Project, subject to the terms and conditions of this Agreement, all laws, rules, regulations, and policies including the Marysville Municipal Code. City hereby further grants and conveys the right and license to Company, and its licensees, successors, lessees, transferees, and assigns, to enter and occupy portions of the ROW and/or City-owned land, for the installation, maintenance and operation of Shelters, distributed Cabinets and other Project equipment, components, parts, and other appurtenances and related 3 facilities from which the fiber optic cables will be deployed, such locations to be mutually agreed upon in good faith between the City and Company (the “Improvements”). A “Shelter” is an above ground facility that requires an enclosed area of approximately one thousand (1,000) square feet in size, which houses Project equipment as further described in Exhibit A. A “Cabinet” is an above ground enclosure, placed within the ROW for the housing of active and passive equipment for the provision of service to premises as further described in Exhibit A. When on private property, Shelters and Cabinets may only be constructed in a mutually agreeable location and must conform to Exhibit A. More specifically, the Shelters locations within the City Boundary shall only be approved through a City approved permit.
B. Company shall prepare a detailed narrative description of the Project which shall include total linear feet will be installed aboveground and/or underground. Company shall also prepare a map depicting all communication lines installation, shall depict aboveground and/or underground installations in differing colors and shall depict any Shelters or Cabinets within the City. These maps shall be updated periodically to clearly demonstrate the location of all installations within the City.
C. Company will use commercially reasonable efforts to commence Construction (“Construction” means breaking ground for the installation of the Project ) on or before a date that is twenty-four (24) months after the Commencement Date (as defined in Section 2) of this Agreement (the “Construction Commencement Deadline”); provided however, in the event of a Force Majeure Event or if all Shelter locations have not been agreed upon within twenty-four (24) months from the Commencement Date of this Agreement, the Construction Commencement Deadline shall be extended by the time impact resulting from the (i) Force Majeure Event or (ii) delay in agreeing on all Shelter locations. In addition, Company will use commercially reasonable efforts to complete construction of the System on or before a date that is thirty-six (36) months after the Construction Commencement Deadline; provided however, in the event of a Force Majeure Event or if all Shelter locations have not been agreed upon within twenty-four (24) months from the Commencement Date of this Agreement, the Construction Completion Deadline shall be extended by the time impact resulting from the (i) Force Majeure Event or (ii) delay in agreeing on all Shelter locations. The timeline shall also be extended due to and for the length of any delay by the City in performing its obligations hereunder or issuing the permits, licenses and approvals toCompany orits contractorsto the extent the City exceeds the processing times set forth in Section 3B under the timeline described therein. Company will keep the City informed of the progress of its schedule at reasonable intervals.
D. If applicable, Company agrees that any antenna or verticality installations subject to the City’s Wireless Telecommunications Ordinance or any other provisions of the City’s Municipal Code will be separately processed through the City’s regulations for such installations in the public right-of-way. Further, Company agrees and warrants that any installation of communications lines in the City shall not be installed for the purposes of servicing a wireless telecommunications facility or small wireless facility unless and until Company has a City approved permit for the installation of said facilities.
E. Until after the first anniversary of the Effective Date, the City shall not solicit or accept offers from, or enter into an agreement with, any third party regarding a fiber to the premise 4 system within the City’s boundary, except to the extent the City is so obligated or required under federal or state law or regulation.
F. By entering into this Agreement, neither the City nor Company waives any rights reserved under the Telecommunications Act of 1996 including, but not limited to, those rights set forth in Section 253 of the Act.
2. Term.
A. The term of this Agreement (the “Initial Term”) is thirty (30) years, commencing on the date both Company and City have executed this Agreement (“Commencement Date”). This Agreement may be renewed for an additional term (a “Renewal Term” of fifteen (15) years upon approval of a written amendment to this Agreement. If Company is occupying the ROW in full compliance with lawfully adopted ordinances of the City, this Agreement, and in compliance with all applicable laws, the City will not unreasonably deny an extension request and Company shall provide the City with a written request to renew six (6) months prior to expiration of the Initial Term. Failure to effectively send such written notice, shall allow the City to terminate this Agreement at any time.
3. Permit Fees; Efficient Permitting Process.
A. Except as otherwise provided herein, Company will pay, as further described in Section 19, any and all permit, inspection, and related cost-recovery fees of the City consistent with Cal. Gov’t Code § 50030 to the extent applicable and all City codes, policies, and practices.
Company shall also be required to obtain a City issued business license.
B. The City agrees to act with reasonable diligence in connection with permitting, licensing and approval of the Project. To the extent possible, City agrees to provide efficient and diligent good faith review of all applications for permits required for the Project, in accordance with the process and timeframes outlined below, provided however, Company shall not submit more than one (1) permit application per month covering a construction distance of approximately two hundred thousand (200,000) linear ft and components of the System over such distance.
Moreover, Company agrees to pay the City’s Monthly Reimbursable Amounts (as defined in Section 21) including the costs to hire a contractor to assist with the review and processing of Company’s permit applications up to maximum cost of sixty thousand dollars ($60,000) per year until the last permit is submitted by Company and Company has notified City in writing to that effect.
Applications may be submitted by email to [email protected] and [email protected] . For the first and second permit applications, the City’s response times for paragraphs ii, iii and iv below will each be extended by five (5) days. The City may change or add emails to which applications may be sent from time to time. Furthermore, should the Company submit more than 1 permit application per month, the agreed timeline below shall not apply:
i. The City shall within three (3) business days of submittal by Company and/or its contractors of an application or other request for a permit in connection with this 5 Agreement provides written acknowledgment to Company and/or its contractor confirming receipt of such submittal; and
ii. The City shall within five (5) business days of submittal by Company and/or its contractors of an application or other request for a permit in connection with this Agreement acknowledge in writing that such application is properly submittedand complete, or in the event such application is not properly submitted and complete, provide Company and/or its contractors with a with a checklist of any deficiencies.
Upon curing any such deficiencies, the City shall review the application per the timelines specified herein.
iii. The City shall, within fifteen (15) business days of receipt of a reasonably sufficient submittal by Company and/or its contractors of an application or other request for a permit in connection with this Agreement provide written notification of initial review and provide the Company and/or its contractors with a detailed written explanation of any additional information needed for the City to complete its review process. In the event no additional information is needed, the City shall so notify Company and/or its contractors in writing.
iv. The City shall, within twenty-one (21) business days of an application being deemed complete or other request for a permit in connection with this Agreement provide a final decision on an application and, for an approved application, issue any necessary approval or permits to Company and/or its contractors. v. The Company shall notify all owners and occupants of real property, and any resident manager for any multi-family dwelling unit, within a hundred (100) feet of the proposed installation. The notice must contain: (1) a general project description including dates and times of construction (2) the applicant's identification and contact information as provided on the application submitted to the City; and (3) the City’s contact information if requested by City. This notification shall include door hangers and temporary signage subject to prior review and approval by the City.
C. Nothing herein shall be construed as a promise, warranty, or guarantee ofapproval of any permit, license, or other land use approval which may be required; provided that no permit, license, or other land use approval or any other approval requested by or required of Company shall be unreasonably withheld, conditioned or delayed. If the necessary permits, licenses or approvals are not issued or are issued but not on a timely basis by the City. Should City fail to process company’s applications within the above stated timeframes, Company’s sole and exclusive remedy shall be, in SiFi’s sole reasonable discretion, either (i) an extension of time pursuant to Section 1C, or (ii) SiFi shall have the right to cease further construction of the System and shall retain all rights hereunder to operate the then existing portion of the System and shall have no liability for and shall not be deemed to be in breach of any of its obligations hereunder to pursue further construction.
4. Construction.
6 Prior to City’s issuance of any permits under this Agreement or Company’s commencement of construction, Company will provide an investment commitment letter to the City’s City Manager demonstrating that Company has an investor commitment to fund the completion of the Project.
A. Subject to City approval and/or any applicable permit requirements, the City acknowledges that Company and its contractors intend to use varying construction techniques for the System Construction and deployment, which may include, any of the following:
i. Company shall investigate joint trenching prior to any permit issuance; ii. traditional open trench and/or directional boring;
iii. slot cut microtrenching (“Microtrenching”) and as set forth in the specifications within Exhibit A to this Agreement.
iv. aerial cables; and/or
B. City hereby approves each of the above referenced construction methods and the specifications in Exhibit A and agrees to work cooperatively with Company in reviewing all other potential construction methods. All permits shall provide for and allow standard work hours from 7:00am to 7:00pm daily except on Sundays and State or Federal Holidays in which case work shall not begin until 8:00am per the applicable sections of the City Municipal Code.
C. Upon completion of construction for each Application, Company shall provide City with current maps accurately depicting all Company installations, including all communication lines within the City. Company shall update these maps thereafter to the extent of any changes within sixty (60) days written notice from the City to do so.
5. Company Obligations related to above referenced construction.
Company shall prior to any construction use ground penetration radar system as the primary method for identifying underground utilities prior to any trenching and shall report to Underground Service Alert (USA) as appropriate; notwithstanding the foregoing, Company shall be liableforits actions and any damages caused by underground excavation regardless ofthe use of ground penetration radar or any other construction method. Company shall be responsible for the performance of the work under this agreement by its contractors, their agents, representatives, employees or sub-contractors.
6. City Obligations.
A. In addition to all other duties and obligations contained elsewhere in this Agreement, City has the following duties and obligations:
i. Provide a single point of contact (“SPOC”) for Company, which SPOC will be responsible to address all issues related to the System, providing coordination with and act as a liaison to City departments, and serving as a communication and troubleshooting resource for Company.
ii. Offer the full cooperation of all City departments with respect to relevant issues 7 with respect to the System. Such cooperation will be supervised by the SPOC.
Subject to Section 3, provide Company and its representatives with access to all City property and all City assets and infrastructure for which a permit has been issued to Company for the installation, inspection, and maintenance of the System and for any other reasonable business purpose with respect to the System. .
Company and/or any contractors it hires will be required to obtain encroachment permits and pay any related permit and inspection fees and comply with all other standard encroachment permit conditions of approval for future maintenance and/or repairs and/or alterations to its System located within the ROW. iii. Participate in regular status meetings for the coordination of all matters related to the System.
iv. Provide efficient and diligent, as specified in Section 3.B, good faith review of all applications for permits submitted by Company or its representatives or contractors, including permits or other necessary items for construction work on the System within the ROW.
v. In the event emergency repairs to the ROW are necessary, and will adversely impact the System, City will coordinate the repairs with Company, any utilities, or other users of the ROW, in order to facilitate prompt repairs, such coordination to be supervised by the SPOC and the SPOC shall keep Company continually apprised of the status of such repairs.
vi. When reasonably able, City will provide Company with a least one hundred twenty (120) days advance notice of any work in the ROW that requires the relocation of the System. In addition, where necessary, the City will provide Company with an opportunity to access the System at the time of the excavation in the ROW by others. City shall, both by itself and through its contractors, indemnify Company for any damage to the System caused by any negligent work by or on behalf of the City in the ROW.
7. Assignment/Subletting.
This Agreement may not be assigned by Company without the express written consent of City, which consent shall not be unreasonably withheld, conditioned or delayed. Notwithstanding any assignment of this Agreement the Company shall remain responsible to the City for performance of this Agreement inall respects.
8. Notices.
All notices must be in writing and are effective only when deposited in the U.S. Mail, certified and postage prepaid, or when sent via electronic mail or overnight delivery as follows:
8 If to Company: If to City:
SiFi Networks Marysville
LLC 103 Foulk Road, Suite
500
Wilmington, DE 19803
Email:
[email protected]
City of Marysville
Attn: Jim Schaad, City Manager
526 C Street
Marysville, CA 95901
Email: [email protected]
With a copy to:
Rich, Fuidge, Bordsen &
Galyean
1129 D
Marysville, CA 95901
Attention: Brant Bordsen, City Attorney
Email:[email protected]
9. Right-of-Way Repairs.
A. All work and entry upon, over, under or along the public ROW relating to the Project must be done under the supervision of Company and its contractors in a good and skillful manner and must comply with all standards imposed by the City from time to time.
B. Any and all damage to other facilities or the ROW resulting from the activities of Company must be promptly repaired by Company, at its sole cost and expense, to return such facilities or ROW to a safe and satisfactory condition as directed by, and to the reasonable satisfaction of the City’s Director of Public Works. If Company does not make such repairs, City has the option, upon thirty (30) days’ prior written notice to Company, to perform or cause to be performed all reasonable and necessary work on behalf of Company. City may charge Company for the costs incurred by City. Upon receipt of a demand for payment by City, Company must promptly reimburse City for those costs. The City is not required to undertake repairs or other work pursuant to this Section and may pursue, as provided for in this Agreement, any other right or remedy in law or equity occasioned byCompany's breach..
C. Any excavation on the public ROW by Company must be monitored by Company for any lateral movement or other forms of trench failure.
D. In addition, Company must notify all owners of real property located within thirty (30) feet of any installation and maintenance work performed by Company at least seven (7) business days prior to the commencement of such work. In order to accomplish this, the City and Company will agree to use an appropriate “door hangar” for notification, which shall include contact information for a Company representative for any questions that may arise, consistent with utility installation and construction practices.
10. Compliance with Laws.
A. Company agrees that all of its installations shall at all times remain in compliance with all local, state, and federal laws regarding public safety as well as all applicable City requirements.
9 B. City may manage the public ROW and impose neutral and non- discriminatory requirements to the degree permitted under state and federal law; and as necessary to preserve and protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers, and may, to the extent permitted by applicable state law, (including California Public Utilities Code § 7901), require fair and reasonable, neutral and nondiscriminatory compensation from Company for use of equipment affixed to the public ROW, if any, on a non-discriminatory basis. Nothing in this Agreement shall constitute a waiver by Company or City of any state or federal regulation governing the provisioning of telecommunications services.
11. Interference.
A. Company will endeavor to resolve technical interference problems with other equipment located at or near the Project on the Commencement Date, as well as any interference problems arising from any equipment that becomes attached to the Project at any future date if the City approves the addition of equipment to the Project.
B. In the performance and exercise of its rights and obligations under this Agreement, Company will not interfere in any manner with the existence and operation of any public or private ROW, sanitary sewers, water mains, storm drains, gas mains, poles, aerial and underground electrical and telephone wires, electroliers, cable television and telecommunications facilities, utilities, or municipal property, without the express written approval of the owner or owners of the affected property or properties, except as authorized by applicable laws or this Agreement.
12. Ground-Mounted Equipment.
Once City approves the installation of Cabinets and underground chambers, within the Public Utility Easement and/or on City-owned land (in the case of use of City-owned land, such use will be subject to a separate written agreement at comparable to market rate) with the Cabinet dimensions outlined in Exhibit A, though Company understands that any installation of groundmounted facilities shall be subject to all City permitting approval processes and any and all applicable planning and design review imposed by the City on other similarly-situated users of the public ROW. Company will provide City with thirty (30) spray cans. Upon notice from City, Company will remove any graffiti on its cabinets or other property within 14 days of notification; provided that, City shall make reasonable efforts to minimize vandalism as part of City’s crime prevention efforts. Should Company breach its obligation the City shall have the right but not the obligation to cause the graffiti to be removed. Company shall pay the City's costs of removal within thirty (30) days of demand for payment.
10 13. Utilities and Maintenance.
A. Utilities. If applicable, Company shall pay for all utilities used (and connections to utilities) in connection with the installation, operation, and maintenance of the Project. Company agrees to take utility access from the nearest possible connection, to minimize damage to the public ROW. Throughout the life of this Agreement, Company agrees to maintain the facilities that it installs in good operational condition.
B. Maintenance. In the performance and exercise of its rights and obligations under this Agreement, Company, at its sole cost and expense, shall maintain any real property utilized by Company to access the Project’s facilities in a safe and satisfactory condition as directed by, and to the satisfaction of, the City, including but not limited to removal of any debris generated by Company and replacement of any plants damaged or destroyed by Company. In the event that any of Company’s facilities cause damage to the City's ROW or interfere with the performance of any of the City's public duties or other uses of the ROW, Company agrees, upon written notice from the City, to promptly commence and complete all necessary repairs to cure any such damage caused by such facilities, at Company's sole cost and expense. If Company fails to begin to repair the damage after receiving written notice from the City or if a public emergency necessitates immediate repair of the damage, City may, in its sole reasonable discretion, perform the repair work itself, in which case Company shall reimburse City for the actual and direct costs of the repair work performed by the City within forty-five (45) days after receiving an invoice detailing such costs. In the alternative, the City may pursue any rights available to it under law or equity pursuant to this Agreement, including the termination ofthis Agreement.
14. Default.
If either Party believes that the other Party has not complied with or is otherwise in default of a material term of this Agreement, such Party shall promptly notify the defaulting Party with specific details regarding the exact nature of the alleged noncompliance or default. If the noncompliance or default is not remedied within thirty (30) days (“Cure Period”) following receipt of notice from the non-defaulting party then, the non-defaulting party may terminate this Agreement, and may pursue any remedies available to it against the defaulting Party under applicable law. If a non-monetary default may not reasonably be cured within the Cure Period, this Agreement may not be terminated if the defaulting party commences action to cure the default within such 30-day cure period and proceeds diligently and in good faith to fully cure the default.
In the case of Company, it shall cure an actual default or noncompliance; provided, however, in the event that the default is curable but due to the nature of the default or noncompliance, such default or noncompliance cannot be cured within the Cure Period, so long as Company initiates reasonable steps to remedy and continuously and diligently uses all reasonable efforts to cure such default or noncompliance promptly and notifies the City of the steps being taken and the projected date that they will be completed, the Cure Period shall be extended for a reasonable amount of time to permit such cure but not to exceed thirty (30) days from Company’s receipt of a notice of breach from the City.
11 15. Taxes.
Company shall be solely responsible for payment of all applicable real property taxes, personal property taxes, usetaxes, and possessory interest taxes assessed upon and arising from its use and operation of the Project.
16. Treatment of Confidential Information.
The Parties acknowledge that the California Public Record Act govern the disclosure of information under or related to this Agreement.
17. Insurance.
A. Insurance Coverages. The Company shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to City, during the entire term of this Agreement including any extension thereof, the following policies of insurance which shall cover all elected and appointed officers, officials, employees, agents and volunteers of City:
Coverage shall be at least as broad as:
1. Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL, or its equivalent, on an “occurrence” basis, including products and completed operations, property damage, bodily injury, and personal & advertising injury with limits not less than $1,000,000 per occurrence and $2,000,000 in the aggregate.
2. Automobile Liability: ISO Form Number CA 00 01, or its equivalent, covering any auto (Code 1), or if Company has no owned autos, hired, (Code 8) and non-owned autos (Code 9), with limit no less than $1,000,000 per occurrence for bodily injury and property damage.
3. Workers’ Compensation: as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease.
4. Professional Liability (Errors and Omissions): Insurance with limit no less than $1,000,000 per occurrence or claim, $2,000,000 aggregate.
5. Umbrella/Excess Policy: Insurance will have a $5,000,000 per occurrence limit and will be over all applicable required insurance coverages listed above.
If the Company maintains higher limits than the minimums shown above, the City requires and shall be entitled to coverage for the higher limits maintained by the Company.
Other Insurance Provisions
The insurance policies are to contain, or be endorsed to contain, the following provisions:
Additional Insured Status
The City, its officers, officials, employees, and volunteers are to be covered as 12 additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of the Company including materials, parts or equipment furnished in connection with such work or operations. General liability coverage can be provided in the form of an endorsement to the Company’s insurance (at least as broad as ISO Form CG 20 10 11 85 or both CG 20 10 and CG 20 37 forms if later revisions used).
Primary Coverage
For any claims related to this contract, the Company’s insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers shall be excess of the Company’s insurance and shall not contribute with it.
Notice of Cancellation
Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to the City.
Waiver of Subrogation
Company hereby grants to City a waiver of any right to subrogation which any insurer of said Company may acquire against the City by virtue of the payment of any loss under such insurance. Company agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the City has received a waiver of subrogation endorsement from the insurer.
Deductibles and Self-Insured Retentions
Any deductibles or self-insured retentions must be declared to and approved by the City. The City may require the Company to purchase coverage with a lower deductible or retention or provide proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention.
Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the City.
Claims Made Policies
If any of the required policies provide claims-made coverage, the Retroactive Date must be shown, and must be before the date of the contract or the beginning of contract work.
Verification of Coverage
Company shall furnish the City with original certificates and amendatory endorsements, or copies of the applicable policy language effecting coverage required by this clause. All certificates and endorsements are to be received and approved by the City before work commences. However, failure to obtain the required documents prior to the work beginning shall not waive the Company’s obligation to provide them. 13 The City reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time.
Special Risks or Circumstances
City reserves the right to reasonably modify the limits of the above coverages at the fifteenth (15th) anniversary from the commencement of Construction, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.
Additional Insured
The City, its officers, officials, employees, and volunteers are to be covered as additional insureds on the insurance policies specified in Section 17. A, 1, 2, 3 and 5 above with respect to liability arising out of work or operations performed by or on behalf of Company including materials, parts, or equipment furnished in connection with such work or operations and automobiles owned, leased, hired, or borrowed by or on behalf of Company.
General liability coverage can be provided in the form of an endorsement to the SiFi’s insurance (at least as broad as ISO Form CG 20 10 11 85 or both CG 20 10, CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 forms if later revisions used).
18. Indemnification. To the fullest extent allowed by law, Company specifically agrees to indemnify, defend with a counsel of its choosing, and hold harmless the City, its officers, agents, volunteers and employees (hereinafter collectively the "Owner") from and against any and all actions, claims, demands, losses, expenses (including attorneys' fees and expert witness expenses), damages, and liabilities resulting from injury or death of a person or injury to property or any other claim, arising out of or in any way connected with the performance of this Agreement to the extent directly caused by Company or its contractors. The Company shall pay all costs that may be incurred by the City in enforcing this indemnity, including reasonable attorneys' fees to the extent the Company is found to be directly responsible by a court of appropriate jurisdiction or by way of agreed by Company settlement. City has the right to obtain its own additional counsel in defending a claim giving to the indemnity hereunder, provided that, Company shall not be responsible for the costs associated with such additional counsel.
EXCEPT FOR COMPANY’S INDEMNIFICATION OBLIGATIONS HEREUNDER, IN
NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY
INDIRECT, CONSEQUENTIAL, SPECIAL, INCIDENTAL, RELIANCE, OR PUNITIVE
DAMAGES OF ANY KIND OR NATURE WHATSOEVER, INCLUDING ANY LOST SAVINGS OR HARM TO BUSINESS. EACH PARTY HEREBY RELEASES THE
OTHER PARTY AND ITS AFFILIATES AND THEIR RESPECTIVE DIRECTORS,
OFFICERS, MANAGERS, MEMBERS, EQUITY AND DEBT HOLDERS, PARTNERS,
EMPLOYEES, CONTRACTORS AND REPRESENTATIVES AND THEIR HEIRS, SUCCESSORS AND ASSIGNS, FROM CLAIMS FOR ANY SUCH DAMAGES. THE COMPANY’S AGGREGATE LIABILITY UNDER THIS AGREEMENT SHALL BE LIMITED TO THE HIGHER OF (I) FIVE MILLION DOLLARS ($5,000,000); OR (II)
THE AMOUNT OF AVAILABLE APPLICABLE
14 INSURANCE COVERAGE.
19. Relocation and Rearrangement Obligation; Abandonment.
A. Relocations at Company’ Expense. Whenever, during the term of this Agreement or the Renewal Term, the City changes the grade, width or location of any portion of the ROW or improves any ROW in any manner, including the laying of any sewer, storm drain, conduits, gas, water, electric or other utility system, or other pipes owned or operated by the City or any other Citycontrolled public agency or City-controlled public utility, or constructs any pedestrian tunnels, or moves existing utilities where Company’s facilities are or would be in Conflict (as defined in this Agreement), or other work of the City and such work will be in Conflict, in the sole reasonable opinion of the City, render necessary any change in the position or location of any facilities of Company in or into the street, Company will, at its sole cost and expense, take any and all actions necessary to effect such change in position or location, in conformity with the written notice of the City to Company (“Relocation Order”). Notwithstanding the foregoing, Company shall not be required to relocate its facilities for any routine curb and gutter and sidewalk maintenance and repair, including, without limitation, repair of potholes, milling and repaving of roadways. City requires its contractors who work in the Public Way exercise reasonable care and in the event the City or its contractors are alleged to have damaged Company’s property, the resolution of such potential claim against the City will be in accordance with the California Government Claims Act set forth in the California Government Code.
B. Relocation Order. To the extent feasible and to the extent that City is involved in any relocation or rearrangement, City will endeavor to provide Company with at least one hundred (120) days’ prior written notice of any relocation or rearrangement of facilities which Company is required to make hereunder. Such notice will specify, in reasonable detail, the work to be done by Company and will specify the time that such work is to be accomplished. In the event that the City changes the provisions of any such notice given to Company, Company will be given additional time to accomplish such work.
C. Company’s Failure to Remove and Relocate. If, after its receipt of a Conflict relocation notice per the preceding paragraph, Company fails or refuses to relocate, within the time period identified in such notice, its facilities located in, on, upon, along, under, over, across or above any Public Way or to pave, surface, grade, repave, resurface or regrade as required, pursuant to any provision of the Agreement, the City or other public entity may cause the work to be done and will keep an itemized account of the entire cost thereof, and Company shall hold harmless the City, its officers and employees from any liability, claims or damages which may arise or be claimed to arise from the moving, cutting, or alteration of any of Company’s facilities, or the turning on or off of water, oil, or other liquid, gas, or electricity. In addition, Company agrees to, and shall, reimburse the City for such cost within forty-five (45) days after presentation to Company of an itemized account of such costs.
D. City will provide Company with at least sixty (60) days prior written notice when work to be performed by the City or its contractors is reasonably required to be within a two inch (2”) radius from the Project in accordance with industry standards (“Conflict”), and City shall provide all reasonable accommodations including excavating to the impacted Company facilities as reasonably requested by Company to allow and facilitate coordination with the City contractor in order for Company to protect, or to temporarily or permanently relocate the impacted portion of the Project; provided that Company shall bear the direct reasonable incremental cost for additional delays or costs incurred by the City for such Conflict work.
15 E. Abandonment. Within one hundred eighty (180) days of the expiration or earlier termination of this Agreement, Company shall provide written notice to the City should it choose to remove its above ground facilities in the ROW. Upon failure to timely give such notice, City will provide written notice to Company of such failure and if Company fails to again provide notice of its intent within thirty (30) days thereafter, the system shall be deemed abandoned by Company and become property of the City.If the Company timely notifies the City of itsintent to remove its above ground facilities, the same shall be accomplished within one hundred eighty (180) days of such written notice. Alternatively, the parties may negotiate an extension of the Agreement.
20. Monetary Obligations.
A. Company is responsible for the payment of all fees and any other monetary obligations applicable to and legally owed by the Company when due as specified in this Agreement. 16 In addition to any specific provisions of this Agreement, City may invoice Company monthly for City's costs and expenses incurred in City performance of its obligations under this Agreement.
Each such monthly invoice shall be payable within thirty (30) days of receipt.
21. Maintenance Bond.
A. Maintenance Obligation. From the Commencement of Construction and throughout the Term of this Agreement, Company shall be obligated to maintain and restore the condition of the Public Way directly impacted by the construction of the System and such obligation shall be supported by cash on deposit with the City, subject to a mutually agreed cash deposit agreement prior to Commencement of Construction, in an aggregate annual amount of five hundred thousand dollars ($500,000.00), in Company’s sole option with ninety (90) days advanced written notice to replace such cash in escrow with either: (i) a maintenance bond in accordance with the City’s bonding requirements, or (ii) a letter of credit from a bank of SiFi’s choosing, in each case in the same amount. Should company elect to utilize a bond or letter of credit, the forms thereof shall be as set forth on Exhibit B attached hereto but only if acceptable to and agreed by the respective bank or financial institution. In the event of a letter of credit, the issuer shall be a bank or other financial institution reasonably acceptable to the City. The funds in the Cash Deposit shall remain the property of SiFi until such funds are either (a) applied by the City or (b) released to SiFi, in each case in accordance with Section 21.C below. The funds in the Cash Deposit shall be held as a trust fund and shall not be subject to any lien, attachment, trustee process or any other judicial process of any creditor of any party hereto.
B. Reporting. City will, at the end of each fiscal quarter, report to SiFi: (a) the balance of the Cash Deposit, (b) any accrued interest based on the prevailing interest earned by City on its own bank deposits and (c) if applicable, any investment income relating thereto. Additionally, any time City intends to draw on the Cash Deposit as provided in Section 21.C below, City will provide to SiFi a written notice and report indicating (i) the amount to be drawn, (ii) City’s reasons for the drawing and (iii) the remaining balance thereon.
C. FORFEITURE AND RELEASE. SiFi agrees and acknowledges that if SiFi fails to perform its maintenance obligations specified in the Agreement, the Cash Deposit will be used to cover incidental expenses and costs, damages and fees not covered by any insurance policies, including but not limited to: interest, charges by the City to maintain and restore the Right-of-Way sites disturbed by SiFi or its contractors to their prior condition, reasonable wear and tear excepted, pursuant to this Agreement, and any unpaid permit and administrative fees. Any amount in the Cash Deposit, including any investment income related thereto or any accrued interest based on the prevailing interest earned by City on its own bank deposits, shall be released back to SiFi after either (a) one (1) year following completion of construction, or (b) the receipt by City of alternative performance security in accordance with Section 21. A above.
B.D. Bonds shall be executed by an “admitted surety insurer”, as defined in Code of Civil Procedure Section 995.120, authorized to do business in the State of California and reasonably acceptable to City, and the bonds shall be kept in place for the duration of this Agreement. The bond is conditioned upon the performance by Company of all the terms and conditions of this Agreement and upon the further condition that if Company fails to comply with any terms or conditions governing this Agreement, there shall be recoverable jointly and severally from the 17 principal and surety of the bond, any damage or loss suffered by City as a result.
C.E. Reservation of City Rights. The rights reserved by City with respect to the maintenance bond are in addition to all other rights and remedies City may have under this Agreement or any other law.
22. Miscellaneous.
A. Governing Law; Jurisdiction. This Agreement shall be governed and construed by and in accordance with the laws of the State of California, without reference to its conflicts of law principles. If suit is brought by a party to this Agreement, the parties agree that trial of such action shall be vested exclusively in the courts of Yuba County, California or in the relevant United States District Court.
B. Disputes. For all claims, disputes or controversies arising out of, or in connection with, the breach, interpretation, application, or enforcement of this Agreement, or arising out of, or in connection with, the Project which cannot be settled through good faith negotiation, the Parties agree, prior to commencing litigation, to attempt in good faith to resolve such dispute by mediation in Yuba County, CA.
C. Attorneys’ Fees. Except for an action brought by the City to enforce the Maintenance Bond specified in Section 21, should any dispute arising out of this Agreement lead to litigation, each party will bear their own attorneys' fees with respect to such dispute and the prevailing party shall be entitled to recover its reasonable attorneys' fees.
23. Representations and Warranties.
A. The City hereby represents and warrants that: (a) it has full authority (including the authority required by any applicable law, ordinance, rule, or regulation) to enter into and perform this Agreement and the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby and thereby are within the right, power and authority of the City and have been duly authorized by all necessary action on the part of City, (b) this Agreement has been duly executed and delivered by the City and it constitutes a legal, valid, and binding agreement of the City enforceable against the City in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, 7 moratorium or similar laws affecting creditors’ rights generally and by general principles of equity) and (c) the execution and delivery of this Agreement by the City and its performance hereunder and thereunder will not violate any law, ordinance, rule, or regulation applicable to the City.
B. Company hereby represents and warrants that: (a) it has full authority to enter into and perform this Agreement and the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby and thereby are within the power and authority of Company and have been duly authorized by all necessary action on the part of Company, (b) this Agreement has been duly executed and delivered by Company and it constitutes a legal, valid and binding agreement ofCompany enforceable againstCompany in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general principles of equity) and (c) the execution and delivery of this Agreement by Company and its performance hereunder and thereunder will not violate any law, rule, or regulation applicable to Company.
C. Force Majeure. Except as otherwise expressly set forth in this Agreement, Company will not be held in default under, or in breach or noncompliance with, the provisions of this Agreement, nor suffer any enforcement or penalty relating to noncompliance or default (including termination, cancellation or revocation of this Agreement), where such noncompliance or alleged defaults occurred or were caused by any of the following events (each a “Force Majeure Event”):
failure by the City to issue permit(s) required to construct the Project or any part thereof to Company or its contractor(s), failure by the City to comply with this Agreement, conduct by the City that materially interferes with Company’s ability to perform, labor strike, riot, war, earthquake, flood, hurricane, health crisis, pandemic, drought, tornado, unusually severe weather conditions, or other act of nature, labor disputes, failure of utility service necessary to construct the Project, governmental, administrative or judicial order, or other event that is beyond Company’s reasonable control. Force Majeure Events also include work delays caused by waiting for (i) utility providers to service or monitor their own utility infrastructure on which Company’s fiber optic cable and/or equipment may be deployed, as well as unavailability of materials and/or reasonably qualified labor to perform the work or (ii) third parties’ acts or omissions within the ROW which materially interfere with Company’s ability to perform its obligations under this Agreement.
D. No Rights to the System. The City expressly agrees that, except as expressly set forth in this Agreement, it does not and shall not claim at any time any interest or estate of any kind or extent whatsoever in the Project, throughout the term of this Agreement. Company shall, at all times, retain title to and ownership of the Project and all future extensions of the Project, and shall have the right to lease the Project or parts thereof to a provider(s) of internet, data, voice, video and other services.
Neither the City nor the Company shall be considered in breach of this Agreement to the extent that performance of their respective obligations (excluding payment obligations) is prevented by an event of Force Majeure. The party (the "Effected Party") prevented from carrying out its obligations hereunder shall give notice to the other party of an event of force majeure upon it being foreseen by, or becoming known to, the effected party. The extent an Effected Party suffers a delay during construction as a result of the event of Force Majeure it shall be entitled to an extension of time equal to the amount of delay caused by the event of Force Majeure.
Irrespective of any extension of time, if an event of Force Majeure occurs and its effect continues for a period of one hundred eighty (180) days, either the City or the Company may give the other a notice of termination.
8 24. Emergency and General Contact Information for Company.
The emergency contact phone number to reach Company 24 hours a day, seven days a week is 888-766-9475. Should this number be disabled or revised for any reason, Company shall give the City immediate notice of an alternate emergency contact number. In addition, Company may be reached during business hours as follows:
Corporate Contact:
Name: Rich Adams
Title: Chief Operating Officer
Address: 103 Foulk Road, Suite 500, Wilmington, DE
19803
Phone Number:
Email Address: [email protected]
California Office:
Name: Scott Kamali
Title: Project Manager
Address: Suite 109, 680 Langsdorf Drive, Fullerton, CA 92831 Phone Number:818-205-5070
Email Address: [email protected]
25. Miscellaneous Provisions.
A. Termination. Upon the Company's material default of this Agreement the City may terminate this Agreement if after having been provided a written notice of such alleged breach, Company has failed to cure or dispute such breach within forty-five (45) days following receipt of such notice of breach.
B. Remedies and Limitations. None of the remedies available to the City shall be exclusive of any other remedy, and each such remedy shall be cumulative and in addition to every other remedy given hereunder or now or hereafter existing at law or in equity. The City may exercise any remedy, now or hereafter existing, without exhausting and without regard to any other remedy.
C. Non-Waiver. No delay or omission of a party to this Agreement in the exercise of any right arising upon any default shall impair any such right or be construed to be a waiver of any such default. Either party may exercise from time to time and as often as shall be deemed expedient by the City, any remedy or right provided by law or pursuant to this Agreement.
D. Amendment. No amendment or variation of the terms of this Agreement shall be valid unless made in writing and signed by both the City and the Company.
Requests for amendments must be in writing.
9 E. Compliance with Applicable Laws, Rules and Requirements. The Company must, at all times, comply with and require its contractors and subcontractors to comply with all applicable federal and state laws, rules, guidelines, regulations, and requirements including but not limited to any applicable competitive bidding laws and prevailing wage laws.
F. Continuous Use of Project: No Lease. Sale. Transfer of Ownership, or Disposal of Project. The Company agrees that, except as provided in this Agreement sell, transfer ownership of, or dispose of all or a significant part or portion of the Project and facilities constructed pursuant to this Agreement during the term of this Agreement without prior written consent of the City, which approval shall not be unreasonably withheld, delayed, or conditioned.
G. Independent Actor. The Company and its agents and employees, if any, in the performance ofthis Agreement, shall act in an independent capacity and not as officers, employees, or agents of the City.
H. Integration. This Agreement constitutes the complete and final agreement between the parties. No oral or written understanding or agreement not incorporated in this Agreement shall be binding on either party.
I. No Third-Party Rights. The parties to this Agreement do not create rights in, or grant remedies to, any third party as a beneficiary ofthis Agreement, or of any duty, covenant, obligation or undertaking established herein.
P. Company's Responsibility for Work. The Company shall be responsible for all work and for persons or entities engaged in work performed pursuant to this Agreement, including, but not limited to, contractors, subcontractors, suppliers, and providers of services. The Company shall be responsible for responding to any and all direct disputes arising out of its contracts for work under this Agreement between Company and its contractors. The City will not mediate disputes between the Company and any other entity concerning responsibility for performance of work.
Q. Timeliness. Time is of the essence in this Agreement.
R. Unenforceable Provision. In the event that any provision of this Agreement is unenforceable or held to be unenforceable, then the parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby.
R.S. Franchise Fees. Company shall include language in all agreements with Service Providers requiring that the Service Providers comply with all State and Federal laws requiring payment of franchise fee payments to the City.
To the extent Company has knowledge that any Service Provider has failed to make the appropriate franchise fee payment to the City, the Service Provider will be considered in default under its agreement with Company and Company has the right to terminate said agreement. In addition, and in the event that any Service Provider fails to pay the appropriate Franchise Fee, Company shall reasonably and to the extent legally allowed cooperate, including but not limited to information on number of Service Provider 10 active subscribers, with any enforcement action brought against the Service Provider.
11 IN WITNESS WHEREOF, and in order to bind themselves legally to the terms and conditions of this Agreement, the duly authorized representatives of the parties hereby executed this Agreement. The date upon which both parties have executed this Agreement shall be the Commencement Date.
Date: “CITY”: CITY OF MARYSVILLE
By: _
Jim Schaad, City Manager
ATTEST:
Nicole Moe, City Clerk
Dated:
APPROVED AS TO FORM:
Brant Bordsen, City Attorney
Date: “COMPANY”: SIFI NETWORKS
MARYSVILLE LLC, a Delaware limited
liability company
_________________________
By: Ben Bawtree-Jobson, CEO
12 Exhibit A
SPECIFICATIONS, SHELTERS, CABINETS
13 Exhibit B
IRREVOCABLE AND UNCONDITIONAL LETTER OF CREDIT
DATE:
BENEFICIARY:
APPLICANT:
AMOUNT:
CITY OF MARYSVILLE
526 C STREET
MARYSVILLE CA 95901
SiFi Networks Marysville LLC, a Delaware Limited Liability Company
$500,000.00
LOCATION FOR
PRESENTATION:
Dear City of Marysville:
We hereby establish our irrevocable and absolute Letter of Credit in your favor available by your draft drawn on us at _C,A, and accompanied by the following documents:
1. The original of this Letter of Credit and all amendments, if any.
2. A dated Demand for Payment signed by the City Manager of the CITY OF MARYSVILLE, demanding payment of any and all sums up to and including FIVE HUNDRED THOUSAND DOLLARS ($500,000.00), the full amount of this Letter of Credit.
Multiple and partial draws are allowed. This Letter of Credit must accompany any drawings hereunder for endorsement of the drawing amount and will be returned to the Beneficiary, the CITY OF MARYSVILLE, unless it is fully utilized. The shal
l not be required or entitled to inquire asto any contracts or any other agreements or dealings between the Beneficiary, the CITY OF MARYSVILLE and the Applicant, SiFi NETWORKS MARYSVILLE LLC, a Delaware Limited Liability Company.
shall honor a presentation of this Letter of Credit
and Demand for Payment no later than the third business day after receipt of the documents described above (i.e., after receipt of the Letter of Credit, any amendments and a Demand for Payment executed by the City Manager of the CITY OF MARYSVILLE).
Venue for any litigation involving this Letter of Credit shall be in the Yuba County Superior Court of California and California Law specifically including Division Five of the Uniform Commercial Code (Letters of Credit) shall apply to this Letter of Credit. The prevailing party in any litigation concerning this Letter of Credit shall be entitled to its 14 reasonable attorney fees in addition to any other relief.
Dated:
Authorized Signature
15 IMPROVEMENT SECURITY BOND
WHEREAS, the City Council of the City of Marysville, State of California and SiFi Networks Marysville LLC, a Delaware Limited Liability Company (hereinafter designated as "principal") have entered into an agreement whereby principal intends to install and complete certain improvements, which said agreement, dated , 2022, is hereby referred to and made a part hereof; and
WHEREAS, said principal is required under the terms of said agreement to furnish a bond for the faithful performance of said agreement to maintain the City property into which the principal has installed fiber optic cable.
NOW, THEREFORE, we, the principal and---- as surety, are held and firmly bound unto the City of Marysville (hereinafter called "City") in the penal sum of five hundred thousand dollars ($500,000.00) lawful money of the United States, for the payment of which sum well and truly to be made, we bind ourselves, our heirs, successors, executors and administrators, jointly and severally, firmly by these presents.
The condition of this obligation is such that if the above bounded principal, his or its heirs, executors, administrators, successors or assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenants, conditions and provisions in the said agreement and any alteration thereof made astherein provided, on his ortheir part, to be kept and performed at the time and in the manner therein specified, and in all respects according to their true intent and meaning, and shall indemnify and save harmless City, its officers, agents and employees, astherein stipulated, then this obligation shall become null and void; otherwise it shall be and remain in full force and effect.
As part of the obligation secured hereby and in addition to the face amount specified therefor, there shall be included costs and reasonable expenses and fees, including reasonable attorney'sfees, incurred byCity in successfully enforcing such obligation, and all to be taxed as costs and included in any judgment rendered.
The surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the agreement or to the work to be performed thereunder or the specifications accompanying the same shall in any way affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the terms of the agreement or to the work or to the specifications.
The Surety's obligations to the City arise immediately upon the default of the principal, without demand or notice. The Surety waives the provisi_ons of California Civil Code §2845 and, in light of such waiver, the City shall not be required to proceed against the principal, nor shall the City be required to pursue any other remedy in the City's power.
In light of such waiver, the City may proceed directly against the Surety upon default of the principal and itshall not be a defense to the City's claims against the Surety that the City has failed to proceed against the principal (or any other person whom the Surety believes might 16 be responsible for the breach of the principal) or to 1 A-1
pursue any other remedy in the City's power. In addition to the foregoing, the Surety waives any rights or defenses it may have in respect to its obligations as a Surety by reason of any election of remedies by the City.
To the extent that the principal' s obligations are secured by real property or an estate for years, the Surety waives all rights and defenses that it may have because the principal's obligation is so secured. This means, among other things: (1) the City may collect from the Surety without first foreclosing on any real or personal property collateral pledged by the principal; (2) if the City forecloses on any real property collateral pledges by the principal:
(A) the amount of the obligation may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price (B) the City may collect from the Surety even if the City, by foreclosing on the real property collateral has destroyed any rightsthe Surety may have to collect from the principal. This is an unconditional and irrevocable waiver of any rights and defenses that the Surety may have because the principal's obligation is secured by real property. These rights and defenses include, but are not limited to, any rights or defenses based upon Section 1080a, 1080b, 1080d, or 726 of the Code of Civil Procedure.
The Surety waives all rights and defenses arising out of an election of remedies by the City, even though that election ofremedies, such as a non-judicial foreclosure with respect to security for a guaranteed obligation, has destroyed the Surety's rights of subrogation and reimbursement against the principal by the operation of Section 580d of the Code of Civil Procedure, or otherwise.
Because the Surety's obligations to the City are absolute and unconditional upon default of the principal, it shall be no defense to the Surety's obligations to the City that the principal is or has become insolvent or that the project which is the subject of the principal's obligations is or has become economically infeasible. In that regard, doctrines such as "Frustration of Purpose" or " Commercial Frustration" or "Illegal Forfeiture" or similar doctrines shall not defeat the Surety's absolute and unconditional obligation to the City upon the default of the principal. The Surety has specifically undertaken the risks that the principal may be or become insolvent or that the project which is the subject of the principal' s obligation may presently or in the future, lack commercial viability.
The Surety shall be obligated, to the full amount of the penal sum of the bond, with respect to all matters which are the principal's obligation to the City, whether such items are actually included in any cost estimate (or if so included, are estimated at a cost far less than the actual cost to perform such items). Likewise, the adequacy and amount of any premium (and whether or not such premium was sufficient for the risk assumed by Surety) shall have no bearing on Surety's absolute and unconditional obligation to the City upon the principal's defaultofits obligations under this bond.
IN WITNESS WHEREOF, this instrument has been duly executed by the principal and surety above named, on 2022.
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