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04-0921_GREENFIELD COMMUNICATIONS_Telecommunications Encroachment Agreement CITY OF SAN JUAN CAPISTRANO TELECOMMUNICATIONS ENCROACHMENT AGREEMENT THIS TELECOMMUNICATIONS ENCROACHMENT AGREEMENT, (the "Agreement") dated September 21, 2004, is between the CITY OF SAN JUAN CAPISTRANO, a municipal corporation of the State of California ("City"), and Greenfield Communications, a ("Grantee"). RECITALS WHEREAS, Grantee wishes to install a fiber optic telecommunications system and related appurtenances within the City at the locations set forth herein; and WHEREAS, City wishes to conserve the limited physical capacity of the public right-of-way held in trust by it, and wishes to secure fair and reasonable compensation for permitting private use of the public right-of-way and other public property by Grantee; AGREEMENT NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND CONDITIONS SET FORTH HEREIN, THE PARTIES ENTER INTO THIS ENCROACHMENT AGREEMENT. SECTION 1. TERM. The term of this Agreement is Fifteen (15) years, commencing on its execution, unless it is terminated earlier as provided for in Section 21. SECTION 2. RIGHTS GRANTED. City grants to Grantee a nonexclusive permit to mount, install, operate, repair, and maintain, at Grantee's sole expense, Grantee's facilities consisting of a fiber telecommunications system and related appurtenances more fully described on Exhibit "A" within the City's public right-of-way, at the locations shown on Exhibit "B" (the "Network") and in accordance with the plans and specifications and routing for the Network indicated on Exhibits A and B. Any additions or modifications to the Network or change in control will require an amendment to this Agreement, except for the running of cables through existing conduits. A. Encroachment Permits. The City's prompt processing and issuance of encroachment permits is a material term of this Agreement. Grantee shall apply for, and City shall issue, subject to the conditions set forth herein, encroachment permits for the installation of the Network. Grantee shall submit detailed construction plans of the proposed work. Grantee shall comply with all federal, state, and local regulatory requirements including, without C:\Douglas\Agreements\Telecommunications Encroachment Agreem t 8-25-04 updated.DOC limitation, compliance with the California Environmental Quality Act. Upon request, but no sooner than thirty (30) days after completion of construction, Grantee shall submit to City accurate as-built plans and record drawings showing in detail, to the reasonable satisfaction of the City Engineer, and with as much accuracy as possible, the location, depth, and size of all Grantee facilities in the public right-of-way. B. Coordination with Other Permittees. To the maximum extent possible and to the extent reasonably feasible and not unduly interfering with Grantee's business plans or customer commitments, Grantee shall coordinate its construction work with other companies known to be installing infrastructure in the City s public right-of-way. To the extent reasonably feasible and not unduly interfering with Grantee's business plans or customer commitments, Grantee shall participate in any possible joint trenching projects, with respect to area in Exhibit B. C. Work in the Public Right-of-Wav An encroachment permit shall be obtain from the City prior to any construction or traffic diversion in public right-of-way, to install, repair, restore, maintain or service Grantee's facilities. Applicant shall pay all required permit fees and comply with the regulations set forth in CSJC Municipal Code for work in the public right-of-way. All construction shall comply with approved City Standard Plans. A separate permit is required every time the public right-of-way is obstructed or the streets/walkways are encroached upon. D. Location of Facilities No above ground facilities shall be placed within the public-right-of way. Any above ground facilities shall be screened from view from the public right-of-way to the satisfaction of the Planning Director. SECTION 3. CONSIDERATION. A. Compensation. Grantee shall pay a fee to the City in the amount of seven percent (7%) of the Gross Revenues earned by any Person, including but not limited to the Grantee, from the provision of all Services relating to or from use of the Network but shall not apply to Cable Services being provided under any cable franchise agreements. B. Acceptance. Grantee agrees and accepts the responsibility to pay reasonable compensation in an amount of seven percent (7 %) of the Gross Revenues generated by Grantee, any Affiliated Person, or any other Person from the provision of any Service upon the Network within the boundaries of the City, but shall not apply to Cable Services being provided under any cable franchise agreements. CADouglas\Agreements%Telxommunications Encroachment Agreement 8-25-04 updated.DOC ._2__ C. Payment Procedure. (i) Payments due under this provision shall be computed quarterly, and shall be paid within 30 days following the end of each such quarter. The payment shall be accompanied by a report showing the basis for the computation and such other relevant facts as may be required by the City. (ii) No acceptance or payment shall be construed as an accord that the amount paid is the correct amount, nor shall acceptance of payments be construed as a release of any claim the City may have for further or additional sums payable. All amounts paid shall be subject to audit and recomputation by the City. (iii) In the event that any payment is not made on or before the dates specified in Section 3(C)(i), the Grantee shall pay as additional compensation all of the following: (a) An interest charge, computed from such due date, at the annual rate equal to the prevailing commercial prime interest rate in effect upon the due date; (b) A sum of money equal to five percent (5%) of the amount due in order to defray those additional expenses and costs incurred by the City by reason of delinquent payments. (iv) No acceptance of any payment shall be construed as a release of, or an accord, or satisfaction of, any claim that the City might have for further or additional sums payable under the terms of this Agreement, or for any other performance by Grantee of an obligation hereunder. (v) Payments of compensation made by Grantee to the City pursuant to the provisions of this Agreement are in addition to, and exclusive of, any and all authorized taxes, business license fees, and other fees, levies, or assessments now in effect, or subsequently adopted. SECTION 4. EXCESS CAPACITY/COLLOCATION. A. Leased Capacity/Assignment. Grantee shall have the right to offer excess cable or conduit capacity of the Network to third parties, provided that: (1) Unless otherwise mutually agreed, Grantee shall furnish the City sixty (60) days written notice of any proposed lease or agreement with an entity that is intending to provide cable television or open video system services to the City residents. C:\Douglas\Agreements\Telxommunications Encroachment Agreement 8-25-04 updated.DOC --3-- This Agreement does not authorize Grantee to use or allow the use of the Network or any part of the Network to provide Cable Service or video programming to subscribers or to operate an Open Video System, as those terms are defined in federal law (together "Video Programming Services"). Grantee represents and warrants that it will not use nor allow the use of the Network or any part of the Network to provide to customers or transport Video Programming Services without obtaining separate authority from City. Grantee also represents and warrants that it will include a provision in its customer contracts requiring its lessees to obtain all necessary City authorizations prior to using the Network and Grantee agrees to take all reasonable actions necessary to enforce such a provision. (2) The proposed lessee or assignee complies with all of the requirements of the City's ordinances, regulations, and this Agreement prior to providing Services; and (3) Grantee shall continue to be liable for all obligations of this Agreement unless all or a portion of the Agreement is assigned to another provider and City is notified in writing of such assignment and, in said writing, expressly relieves Grantee of all or part of its obligations pursuant to this Agreement. (4) Grantee pays a fee to the City of seven percent (7%) of Gross Revenues generated by the lease, assignment or other use of the Network or any portion thereof in accordance with Section 3 above for all Cable Services excluding services being provided under other cable franchise agreements. B. Physical Location of Facilities. No aboveground facility, service cabinet or utility box shall be placed within the public right-of-way. All facilities shall be constructed, installed and located in accordance with the plans submitted to the City Engineer. Whenever one or more existing telephone, electric utilities, cable systems or telecommunications facilities are located underground within the right-of-way, a Grantee shall occupy the same trench where reasonable and practical; provided, however, that the City's rights pursuant to this Agreement shall not be subordinated or impaired by the utilization of any joint trench or conduit. SECTION 5. INSTALLATION AND USE STANDARDS. A. Conformance with Applicable Law. Grantee shall place, construct, install, own, control, operate, manage, maintain, or use its facilities by first obtaining all necessary or required permits, agreements, or approvals from City and any other governmental entities with jurisdiction over the facility or public right-of-way. Grantee shall maintain its facilities in compliance with such permits, agreements, or approvals, and all applicable statutes, ordinances, rules, regulations, orders, and decisions issued by any federal, state, or local governmental body, agency, or court. C:\Douglas\Agreements\Tckcommunicatims Encroachment Agme t 8-25-04 updated.DOC --4-- B. Time. Place and Manner. Grantee's facilities shall be located, constructed, operated, and maintained in the time, place, and manner that causes the least interference with the public's use of the public right-of-way, and the rights or reasonable convenience of property owners who adjoin the public right-of-way, all as determined by and approved by the City Engineer in conformance with the San Juan Capistrano Municipal Code, including, but not limited to, encroachment permits for street work, street excavation, use, removal and relocation of property within a street, and other street work. C. Relocation/Removal. Grantee shall remove or relocate, without cost or expense to City, any facilities if and when made necessary by any abandonment, change of grade, alignment or width of any street, sidewalk or other public facility, including the construction maintenance, or operation of any other City or other public agency underground or aboveground facilities including but not limited to: any sewer, storm drain, conduits, water, other publicly- owned utility system, or pipes owned by City or any other public agency. In addition, in the event all or any portion of said public right-of-way shall be needed by City or other public agency or in the event the existence of Grantee's facilities shall be considered detrimental to the public health, safety, welfare, or convenience or to governmental activities, including but not limited to, interference with City or other public agency construction projects, or is in conflict vertically and/or horizontally with any proposed City installation, Grantee shall remove and relocate said facilities at their sole expense to such other location or locations on said public right-of-way as may be designated by the City. Said removal or relocation shall be completed within ninety (90) days of notification by City unless exigencies dictate a shorter period for removal or relocation or City agrees in writing to extend the time for removal or relocation, In the event said facilities are not removed or relocated within said period of time, City may cause the same to be done at the sole expense of Grantee. Further, in the event of an emergency, City may remove or relocate such facilities, but shall contact Grantee to arrange for a representative of Grantee to be present, if feasible. D. Underground Service Alert. Grantee acknowledges that it is presently a member of "Underground Service Alert of Southern California" and agrees to maintain and keep current its membership in said organization throughout the term of this Agreement. E. City Enaineer. The decision of the City Engineer shall be final as to whether any material or workmanship meets the applicable standards, specifications, plans, and grades. C:\Douglms Agrcements\Telecommunications Encroachment Agteetnent 8-25-04 updated.DOC --5_- F. Correction of Plans. Approval by City of the plans and specifications shall not release Grantee from the responsibility for or the correction of any errors, omissions or other mistakes that may be contained in the plans and specifications. G. Malfunctioning Equipment. Grantee shall remove and replace or repair any non-functioning or malfunctioning equipment within forty-eight (48) hours of receiving notice of the malfunctioning or nonfunctioning equipment as determined by the City Engineer. Any work in the public right-of-way will require an encroachment permit prior to the start of work. H. Restoration Upon Completion. Upon the completion of each installation or removal of equipment or facilities by Grantee under this Agreement, Grantee shall promptly restore all affected areas to a clean and safe condition, normal wear and tear excepted, and to new construction standards. The provisions of this section shall survive the expiration. completion or earlier termination of this Agreement. I. Standard of Care. Grantee shall use and exercise due care, caution, skill and expertise in performing all work under this Agreement and shall take all reasonable steps to safeguard work site areas, including without limitation existing facilities and property. J. Protection of Traffic. Grantee shall plan, organize and perform its work under this Agreement in the manner that results in the least amount of traffic disruption. Grantee shall submit for approval a traffic control plan with all signs, barricades, arrow boards, lights, high-level flag trees, flag personnel and other devices, materials or personnel that may be needed in connection with the safe and careful performance of any work in right-of-way allowed. The traffic control plan must be prepared in accordance with the Manual on Uniform Traffic Control Devices and Work Area Traffic Control Handbook Standards. K. Protection of Other Utilities. Grantee shall not disturb or disrupt the operation or maintenance of any sanitary sewers, storm drains, gas or water mains, or other underground conduits, cables or mains in connection with the workto be performed or services to be provided by Grantee under this Agreement. L. Repair or Replacements. Grantee agrees to promptly repair or replace at Grantee's sole expense and to City Engineer's satisfaction any facilities or property that City reasonably determines C:\Douglas\Agrme is\Telecommunications Encroachment Agreement 8-25-04 updated.DOC has been damaged, destroyed, defaced or otherwise injured as a result of the work performed or services Provided by Grantee under this Agreement. M. Toll Free Number. Grantee agrees to provide a toll free public information telephone number to City for referral of any inquiries that may arise regarding the installation of Grantee's facilities. N. Performance by City. In the event Grantee fails to perform any of its obligations under this Agreement within a reasonable period after delivery of written notice of such failure and City performs any work including, but not limited to repairing or maintaining the street improvements, City shall only be obligated to perform such work in a manner consistent with the standard practices of the City in performing street work and construction. City shall not be obligated to repair or replace any materials or improvements in a form or manner consistent with Grantee's plans and specifications, and City shall not be responsible for any damages to Grantee as a result of City performing such work, including, but not limited to, severance damages. Grantee shall reimburse City for its reasonable costs, including allocated overhead, of any work performed by City pursuant to this subsection. O. Directional Boring. Directional boring and use of trench plates are at the discretion of the City during issuance of Encroachment Permits. P. Hours of Construction. Constructions hours shall be as specified in the Encroachment and/or Excavation Permit. Construction must generally occur between 8:30 a.m. and 3:30 p.m. Construction outside these hours must be approved in advance in writing by the City Engineer. Q. Underarounding. All new lines must be underground. R. Abandonment. If the Network, or any part thereof, is abandoned for a period of one year or more, Grantee shall notify City and shall promptly vacate and remove the Network or the abandoned part thereof at Grantee's sole expense. Alternatively, City may allow Grantee, in its sole discretion, to abandon the Network in place and convey it to City. If Grantee fails to remove the Network as required by City within one hundred and twenty (120) days after receipt of notice from City, City may, in its sole discretion, (a) remove C:\Douglas\Agreements\Telecommunications Encroachment Agreement 8-25-04 updated.DOC --7-_ the Network at Grantee's sole expense, which Grantee shall promptly reimburse to City, or (b) deem the Network, or any part thereof, to have been conveyed to City. SECTION 6. SECURITY Prior to the commencement of any work hereunder, Grantee shall furnish or cause to be furnished to City a good and sufficient bond, in the form and from an entity approved by the City Attorney, entitled Performance Bond in an amount to be determined by the City Engineer after submittal of plans, or such other comparable security instrument as approved by the City Attorney, securing the faithful performance by Grantee of all the terms and conditions of this Agreement. If construction is completed prior to final paving (surface course) of the streets, the Performance Bond will be waived. SECTION 7. INDEMNITY. Grantee agrees to and shall defend, indemnify and hold City, its officers, agents, employees, and representatives harmless from all third party suits and causes of action, claims, charges, damages, demands, judgments, civil fines, and penalties or losses of any kind or nature whatsoever, arising out of this Agreement or Grantee's installation and maintenance of its facilities for all third party claims of any kind including without limitation, for damage or claims for damage for personal injury, including death, and claims for property damage that may arise directly or indirectly from this Agreement, Grantee's installation and maintenance of its facilities or damage to Grantee's facilities, except and to the extent caused by City's sole negligence, willful misconduct or criminal acts, including but not limited to those that arise out of : (1) the performance or the failure to perform the obligations in this Agreement by Grantee, or its contractors, subcontractors, agents, employees, or other persons acting on Grantee's behalf and, (2) the design, placement, maintenance, repair, or condition of Grantee's installation of its facilities. This indemnity and obligation to hold harmless shall apply regardless of whether or not City prepared, supplied, or approved plans or specifications or inspected any of the work or improvements installed and constructed pursuant to this Agreement and shall survive termination or expiration of this Agreement. Specifically, and without limiting the foregoing, Grantee agrees to defend, indemnify and hold harmless City, and its officers, agents and employees and representatives from the following damages or claims for damages, except and to the extent caused by City's sole negligence, willful misconduct or criminal acts, including but not limited to those that arise out of (1) any damage or claims for damage to Grantee's facilities caused by any excavation or work performed by City at or near the location of Grantee's facilities, (2) any indirect, special, putative or consequential damages (including, but not limited to, any claim for loss of services) to Grantee, or any other person arising from any damage to Grantee's facilities, and (3) any damage or claims for damages resulting from damage to Grantee's facilities caused by third persons. In the event Grantee subcontracts or assigns any portion of the Grantee's duties under this Agreement, the Grantee shall require its subcontractor or assignee to comply with the terms of this Section in the same manner as required by the Grantee. C:\Douglas\Agreements\Telecommunications Encroachrnent Agreement 8-25-04 updated.DOC --8-- SECTION 8. LIMITS OF CITY LIABILITY. In no event shall City be liable, under any theory, to Grantee for any damage to Grantee's facilities caused by any excavation or work performed by City at or near the location of Grantee's facilities except and to the extent caused by City's sole gross negligence, willful misconduct or criminal acts. City shall not be liable, under any theory, to Grantee for any indirect special, punitive or consequential damages (including, but not limited to, any claim for loss of services) nor shall City be liable, under any theory, for damage to Grantee's facilities caused by any other persons. Grantee hereby waives any right it may possess to seek damages from the City for any act or omission relating to Grantee's occupation of the public right-of-way, of the City, its officers, boards, commissions, agents, or employees for which immunity does not otherwise apply, except for damages caused by the City's gross negligence, willful misconduct or criminal acts which result in personal bodily injury to Grantee, or its employees, officers, officials, agents, transferees or independent contractors or results in physical injury to Grantee's property or rights. Grantee's equitable remedies shall not be limited by this provision. SECTION 9. INSURANCE. Grantee, at its sole, cost and expense, for the full term of this Agreement, shall obtain and maintain at minimum all of the following insurance coverage: A. Types of Insurance and Minimum Limits. The coverage may be satisfied by any combination of specific liability and excess liability policies. (1) Workers' Compensation and Employee Liability Insurance in conformance with the laws of the State of California for the statutory limits, (2) Grantee's vehicles, including owned, non-owned (e.g. owned by Grantee's employees and used in the course and scope of employment), leased or hired vehicles, shall each be covered with Automobile Liability insurance in the minimum amount of Two Million Dollars ($2,000,000.00) combined single limit per accident for bodily injury and property damage. (3) Grantee shall obtain and maintain comprehensive or commercial General Liability Insurance coverage and shall include, but not be limited to, coverage for premises operation, explosion and collapse hazard, underground hazards, contractual insurance, broad form property damage, independent contractors, and personal injury liability. The limit of such insurance shall be at least Two Million Dollars ($2,000,000.00) combined single limit liability for personal injury and property damage. (4) City may, by resolution, from time to time, reasonably increase said insurance to the amounts which other contractors operating within the public right-of- C:\Douglm\Agree is\Telecommunications Encroachment Agreement 8-25-04 updated.DOC __9__ way in a manner similar to Grantee and operating in the jurisdiction of City are required to provide so long as said increased coverage is reasonably available. (5) City and its officers and employees shall be named as additionally insured by endorsement (except for workers' compensation) at no cost to City. (6) Prior to commencement of any work, Grantee shall furnish proof to City that satisfactory policies of insurance described above are in place issued by companies licensed in California rated Grade "A" or better and Class VII or better by the latest edition of Best's Key Rating Guide. A Grade B will be accepted for workers' compensation. (7) All insurance policies shall provide that in the event of material change, reduction, cancellation, or non-renewal by the insurance carrier for any reason, not less than thirty (30) days notice will be given to the City by registered mail of one (1) copy of a written notice of such intent to cancel or not to renew the coverage. An authorized agent of such insurance carrier shall provide to City, on such schedule as is reasonably requested by City, a certification that all insurance premiums have been paid and all coverage is in force. If for any reason Grantee fails to obtain or keep my of such insurance in force, City may, but shall not be required to, obtain such insurance, in which event Grantee shall promptly reimburse City's premium cost therefore plus one and one-half percent (1 -1/2%) monthly interest thereon until paid. SECTION 10. REIMBURSEMENT OF CITY'S EXPENSES. In connection with the work to be performed by Grantee under this Agreement, Grantee shall reimburse the City for any and all direct expenses in connection with: the review of the application for, the negotiation of this Agreement including any expense incurred by the City for technical or legal services to review any such application or revisions of the Agreement; City's costs of reviewing the bonds and insurance; and any and all permit and inspection fees and incidental costs. SECTION 11. USE OF FACILITIES. Grantee's facilities shall be placed, constructed, owned, controlled, operated, managed, and used solely and exclusively for the purposes and uses expressly set forth in this Agreement. Grantee shall not in any way use, or authorize or allow another person to use, any facility subject to this Agreement for any purpose or use other than the purposes and uses expressly set forth in this Agreement. SECTION 12. SUBORDINATE USE OF RIGHTS OF WAY. Any privilege claimed by Grantee, in the public right-of-way shall be subordinate to any prior lawful occupancy of the public right-of-way. C:\Douglas\Agreements\Telecommunications Encroachment Agreement B-25-04 updated.DOC __Ip__ SECTION 13. DISCLAIMER OF GUARANTEES. (1) Nothing in this Agreement shall be deemed to be a representation or guarantee by City that its interest or other right to control the use of the property that is the subject herein is sufficient to permit its use for the purposes specified in this Agreement. This Agreement shall be deemed to grant no more than the rights that City may have the authority to grant. (2) Grantee acknowledges that City has made no warranties or representations regarding the fitness or suitability of any of City's property for the installation of Grantee's facilities or for this project and that any performance of work or costs incurred by Grantee or provision of services contemplated under this Agreement by Grantee is at Grantee's sole risk. Grantee acknowledges that City has made no warranties or representations that Grantee shall be provided uninterrupted power service. (3) Grantee acknowledges and agrees that Grantee bears all risk of loss or damage of its facilities, equipment and material installed on City property or in City's public right-of-way pursuant to this Agreement except to the extent said loss or damage was caused by the acts or omissions of City, its employees or agents. SECTION 14. NON-EXCLUSIVE USE. The rights to Grantee allowed hereunder shall be for the nonexclusive use of the public right-of-way. By executing this Agreement, City does not agree to restrict the number of right-of-way agreements to be executed that cover all or an art of Cit for 9 Y 9 YP Y any person in the same business, a competing business, or a related business as Grantee, SECTION 15. RIGHTS RESERVED TO THE CITY. (1) This Agreement shall not contract away, modify, abridge, impair, or affect, in any way, to any extent, the right of City to acquire any facility located in the public right-of-way through the exercise of the right of eminent domain, (2) There is reserved to City every right and power which is required to be reserved or provided by any ordinance of City, and Grantee, by the use of the public right-of-way, agrees to be bound thereby and to comply with any lawful action or requirements of City in its exercise of such rights or power, heretofore or hereafter enacted or established. (3) This Agreement shall not constitute a waiver or bar to the exercise of any governmental right or power of City, including City's authority to make any proper public use of the public right-of-way. (4) City shall have the right to supervise all construction or installation work performed subject to the provisions of this chapter and make such inspections as it C:\Douglas\Ageements\Telmommunicationa Encroachment Agreeement 8-25-04 updated.DOC finds necessary to ensure compliance with the terms hereunder, or any other local, state, or federal law, regulation, permit, or standard. SECTION 16. INDEPENDENT CONTRACTOR. Grantee is acting as an independent contractor performing work under this Agreement and is not an agent, servant or employee of City. Nothing in this Agreement shall be interpreted or construed as creating or establishing the relationship of employer and employee between City and Grantee. Grantee is responsible for paying all required state and federal taxes. SECTION 17. NOTICES. All notices hereunder must be in writing and, unless otherwise provided herein, shall be deemed validly given on the date either personally delivered to the address indicated below; or when received by certified mail, return receipt requested via U.S. Mail; or when sent via facsimile to a party at the facsimile number set forth below or to such other or further facsimile number provided in a notice sent under the terms of this paragraph, on the date of transmission of that facsimile. Should City or Grantee have a change of address, the other party shall immediately be notified in writing of such change, provided, however, that each address for notice must include a street address and not merely a post office box. All notices, demands or requests from Grantee to City shall be given to City addressed as follows: To City: City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Attention: City Manager's Office To Grantee: Greenfield Communications 31882 Camino Capistrano, Ste. 103 San Juan Capistrano, CA 92675 Attention: Mike Powers, President SECTION 18. ASSIGNMENT. Grantee may not assign or transfer any interest in this Agreement or the Network without the prior written consent of the City which consent shall not be unreasonably withheld, except as expressly provided herein. SECTION 19. TERMINATION. (1) If Grantee defaults in the performance of this Agreement, materially breaches any of its provisions, including without limitation, the obligations to make payments pursuant to Section 3. C:\Douglas\Agrwm is\Telecommunications Encroachment Agreement 8-25-04 updated.DOC --12-- (2) Upon expiration or termination, and if requested in writing by the City Engineer, Grantee shall remove its facilities at its own expense and shall repair and restore all City property and all public right-of-way that were affected by the placement, maintenance, and removal of such facilities to a condition satisfactory to City. If removal of the facilities is required by the City Engineer, such removal and the repair of City property and public right-of-way shall be completed within ninety (90) days of the later of the effective termination date of this Agreement or the date the City Engineer requests removal. If Grantee does not remove its facilities within this period, of if the City Engineer does not request removal, Grantee shall be deemed to have abandoned its facilities in place. Such abandoned facilities shall be deemed conveyed to City, and Grantee shall have no further obligation under this Agreement. The provisions of this subsection shall survive the expiration or termination of this Agreement. SECTION 20. PURCHASE OR CONDEMNATION BY CITY. There is reserved to City the right to acquire the property of Grantee utilized in the performance of this Agreement, by purchase or through the exercise of the right of eminent domain, in accordance with the conditions set forth in applicable State law. SECTION 21. ENTIRE AGREEMENT; AMENDMENTS. This Agreement, including the exhibits referenced herein and incorporated herein, constitutes the entire Agreement between the parties relating to the rights of the parties hereunder. No modification of this Agreement shall be effective unless and until such modification is evidenced in writing signed by all parties. SECTION 22. TIME OF ESSENCE. Time shall be of the essence in this Agreement. SECTION 23. NON-WAIVER. A waiver by City of any breach of any term covenant, or condition contained in this Agreement shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition contained in this Agreement whether of the same or different character. SECTION 24. GOVERNING LAW/EXCLUSIVE VENUE. This Agreement shall be governed and construed in accordance with the internal laws of the State of California and exclusive venue shall be in the County of Orange, whether litigation ensues in State or Federal court. SECTION 25. SEVERABILITY. If any part of this Agreement is held invalid, the remaining terms and conditions shall not be affected unless their enforcement under these circumstances would be unreasonable, inequitable, or otherwise frustrate the purposes of this Agreement. C:\Douglw\Ag=e is\Telecommunications Encroachment Ageement 8-25-04 updated.DOC 13-- SECTION 26. PROPERTY TAXES. Pursuant to Revenue and Taxation Code section 107.7, the property interest created herein may be subject to property taxation and Grantee may be subject to property taxes levied on such interest. In no event shall City be liable for any taxes owed as a result of this Agreement. SECTION 27. DEFAULT. In the event of default by either party to this Agreement, City, but not Grantee, shall have available all remedies at law or in equity not otherwise provided for herein, including by way of illustration but not limitation, suits for injunctive or declaratory relief, specific performance, relief in the nature of mandamus, or action for damages. Grantee shall possess all remedies with the exception of an action for damages, which will not be available against City or any related person or entity except and to the extent of City's sole negligence, willful misconduct or criminal acts. All remedies, including the remedies specified in this Agreement, shall be cumulative and not exclusive of one another, and the exercise of any one or more of said remedies shall not constitute a waiver or election with respect to other available remedy. SECTION 28. ABANDONMENT. If the Network, or any part thereof, is abandoned for a period of one year or more, Grantee shall notify City and shall promptly vacate and remove the Network or the abandoned part thereof at Grantee's sole expense. Alternatively, City may allow Grantee, in its sole discretion, to abandon the Network in place and convey it to City, If Grantee fails to remove the Network as required by City within one hundred and twenty (120) days after receipt of notice from City, City may, in its sole discretion, (a) remove the Network at Grantees sole expense, which Grantee shall promptly reimburse to City, or (b) deem the Network, or any part thereof, to have been conveyed to City. Notwithstanding the foregoing, if this Agreement expires or is terminated, the foregoing shall not apply to the extent it is preempted by California Public Utilities Code section 7901 or otherwise prohibited by other applicable law. SECTION 29. WAIVER OF CHALLENGES. City and Grantee jointly agree that this Agreement is valid, binding, and enforceable as to Grantee, any lawful successor thereof, and the Network, that neither party will challenge or otherwise contest the enforceability thereof in any proceeding, administrative or judicial, that the parties will comply therewith and that the parties hereby waive any rights which they may have to challenge this Agreement. More specifically, and without limitation, Grantee agrees that for the term of this Agreement, it will make all payments to the City required thereby and expressly waives any right to challenge the legality and/or enforceability of said obligation. C:\Douglas\Agreements\Telecommunications Encroachment Agreement 8-25-04 updated.DOC SECTION 30. AUTHORITY EXISTS. Each party warrants that it has the power, right and authority to agree to the terms set forth in this Agreement. SECTION 31. NO INDUCEMENT. The parties further declare and represent that no promise, inducement, or agreement not herein expressed or incorporated by reference has been made to any party hereto, that this Agreement contains the entire agreement between the parties, and that the terms of this Agreement are contractual and not merely recitals. No modification or waiver of any of the provisions hereof shall be valid unless and until it is put into writing and executed by all parties hereto and approved by the City Council of the City of San Juan Capistrano. SECTION 32. INDEPENDENT ADVICE. The parties to this Agreement acknowledge that they have been advised by their own independently selected counsel and other advisors in connection with these agreements and enter into this Agreement solely on the basis of that advice and on the basis of their own independent investigation of the facts, laws and circumstances material to this Agreement or any provision thereof, and not in any manner or to any degree based upon any statement or omission by any other party or its agents, representatives or attorneys, with regard to the subject matter, basis or effect of this Agreement or otherwise, The parties freely and without duress approve and execute this Agreement. SECTION 33. DEFINITIONS. In addition to the definitions contained elsewhere in the San Juan Capistrano Municipal Code, the following words and phrases shall, for the purposes of this chapter, be defined as set forth in the Cable Communications Policy Act of 1984 ("1984 Cable Act'), as amended, the Telecommunications Act of 1996 ("TCA"), the California Public Utilities Code, or as set forth below unless it is clearly apparent from the context that another meaning is intended. Should any of the definitions be in conflict with the other provisions of the San Juan Capistrano Municipal Code, the following definitions shall prevail: A. "Affiliated Person" or "Affiliates" means each Person who falls into one or more of the following categories: (i) each Person having, directly or indirectly, a Controlling interest in Grantee; (ii) each Person in which Grantee has, directly or indirectly, a Controlling Interest; (iii) each officer, director, general partner, limited partner holding an interest of five percent (5%) or more, joint venture, or .joint venture partner in Grantee; and (iv) each Person, directly or indirectly, controlling, controlled by, or under common Control with Grantee; provided that "Affiliated Person" excludes the City, any limited partner holding an interest of less than five percent (5%) in the Grantee, or any creditor of Grantee, solely by virtue of its status as a creditor, and which is not otherwise an Affiliated Person by reason of owning a Controlling Interest in, being C:\Douglas\Agreements\Telecommunications Encroachment Agreement 8-25-04 updated.DOC --75-- owned by, or being under common ownership, common management, or common Control with Grantee. B. "Control" or "Controlling Interest" means actual working control in whatever manner exercised, including, without limitation, working control through ownership, management, debt instruments, or negative control, as the case may be, of the Telecommunications Facilities or the Grantee. A rebuttable presumption of the existence of Control or a Controlling Interest shall arise from the beneficial ownership, directly or indirectly, by any Person or group of Persons acting in concert (other than underwriters during the period in which they are offering securities to the public) of five percent (5%) or more of any Person (which Person or group of Persons is referred to as "Controlling Person"), or being a party to a management contract. C. "Gross Revenues" means all revenue, as determined in accordance with Generally Accepted Accounting Principles, which is received, directly or indirectly, by Grantee, by each Affiliated Person, or any other Person from or in connection with the distribution of any Service. It is intended that all revenue collected by Grantee, and by each Affiliated Person, from the Provision of Service be included in this definition. Gross Revenues also specifically include (i) the fair market value of any nonmonetary (i.e., barter) transaction between Grantee and any Person, other than an Affiliated Person, but not less than the customary prices paid in connection with equivalent transactions; (ii) the fair market value of any nonmonetary (i.e., barter) transaction between Grantee and any Affiliated Persons, but not less than the customary prices paid in connection with equivalent transactions with Persons who are not Affiliated Persons; and (iii) any revenue received, as reasonably determined from time to time by Grantee, through any means which is intended to have the effect of avoiding the payment of compensation that would otherwise be paid to the City. Gross Revenues also includes any bad debts recovered. Gross Revenues also includes all advertising revenue that is received directly or indirectly by Grantee, any Affiliated Person, or any other Person from or in connection with the distribution of any Service or the provision of any Service-related activity in connection with the Network. Gross Revenue does not include: (i) the revenue of any Person to the extent that said revenue is also included in the Gross Revenues of Grantee; (ii) taxes imposed by law on subscribers which Grantee is obligated to collect; and (iii) amounts which must be excluded pursuant to applicable law, D. "Person" means any corporation, partnership, proprietorship, individual, or organization authorized to do business in the State of California. E. "Service" means any Telecommunication, Telecommunications Service, or Information Service. F. "Telecommunications Facilities" means any facility constructed within the City's public right-of-way which are designed or used, in whole or in part, by any Operator to provide Service. C:\Douglm\Agreertattts\Telecommunications Encroachment Agreement 8-25-04 updated.DOC --Ib-- SECTION 34. APPLICABILITY OF FUTURE TELECOMMUNICATIONS ORDINANCE. By accepting this Agreement, Grantee agrees to be bound by all present and future ordinances, regulations, and other legal enactments of the City relating to the construction, installation and/or maintenance of Telecommunications Facilities of any type and/or the provision of Telecommunications, Telecommunications Services, and/or Information Services which may be adopted or enacted from time-to-time by the City Council or other adopting authority of the City. SECTION 35. CABLE TELEVISION FRANCHISE. Grantee and the City acknowledge that the services which Grantee intends to provide pursuant to the Network are materially different, in terms of technological design and delivery mode, than traditional cable modem services. The City and the Grantee further agree and acknowledge that there exists uncertainty as to whether or not traditional cable modem services constitute "Cable Services" within the meaning of the 1984 Cable Act. If, and to the extent, it is determined by a court of competent jurisdiction or a jurisdictional regulatory agency that all or a portion of the Services offered by Grantee, either now or at any time in the future, constitute "Cable Services" within the meaning of the 1984 Cable Act, Grantee will apply for and endeavor to obtain a lawful cable television franchise from the City. Nothing herein shall obligate the City to grant said franchise and the parties expressly agree that the City has not, in any way, confined, limited, delegated, or otherwise interfered with its future legislative discretion in relation to this subject matter. However, Grantee agrees and acknowledges that if, and to the extent, it is granted a lawful cable television franchise from the City, it will comply with the terms and conditions of said cable television franchise and any generally applicable cable television ordinance adopted and/or amended by the City from time to time. Except as otherwise authorized by the City, Grantee agrees and acknowledges that it will discontinue the provision of services which are ultimately determined to be "Cable Services" absent the receipt of a valid cable television franchise or other form of lawful authorization issued by the City. C:\Douglas\Agreements\Telecommunications Encroachment Agreement 8-25-04 updated.DOC --17-- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to b executed on the day first above written. ATTEST: "CITY" IM g ret R. Monahan, City Clerk Joe Sot , Mayor APPROVED AS TO FORM: "GRANTEE" William Marticorena Mike Powers, President Rutan & Tucker, LLP Special Counsel C:\DGuglas\Agreements\Telecort wimtims Encroachment Agmement 8-25-04 updated.DOC --18-- Exhibit "A" Fiber Optic Telecommunications System Description The Fiber Optic Telecommunications System for the Tract #14196 project in the City of San Juan Capistrano is a Fiber to the Home (FTTH) Network. The network consists of the local Headend (also referred to as the local Network Operations Center or NOC) and all Outside Plant substructures, fiber optic cable and equipment within the Pacific Point community. The physical layout of the network is shown on the Master Plan map in Exhibit "B". Local Headend: The local Headend is the main interface and interconnection between the Fiber to the Home network within the community and the telecommunication service providers. The Headend is an environmentally controlled modular building housing opto- electronic equipment, power supplies, racks, supervisory equipment, patch panels, routers, fiber transceivers, jumpers, test equipment, and all other equipment and improvements installed for and/or used in the delivery of Telecommunications Services to the community. Outside Plant (OSP): Outside Plant is defined as that portion of the network from the Headend / NOC to each individual and multi-family dwelling. The demarcation at the Headend / NOC will be the fiber optic punch panels within the Headend / NOC, and the demarcation at the individual and multi-family dwellings will be the Central Service Panel within each dwelling. The Central Service Panel is defined as the location where the Optical-Electronic Converter will be installed (furnished by the Merchant Builders) within each dwelling. The Opto-Electronic Converters (OEC's), also know as Optical Node Units (ONU's), convert the optical signals to electronic signals for connection to the structured wiring within each home. The Outside Plant consists of conduit, substructures, fiber optic cable, passive optical nodes (PON's), splices, and all associated splice covers, terminations, pull boxes and hand holes. There are no active components (requiring electric power) nor above grade pedestals within the Outside Plant. C:\Douglas\Agreements\Telecommunications Encroachment Agreement 8-25-04 updated.DOC IVCNCM LOGArION N07C, LEGEND TRENCH LOGArIONWla PE DC2RMINtl)PY JOINrTRCNCM MN�CRKOUTC RPNATC 57RCL75 AGRECMEW NVD WILL GENERAG-Y FOLLOW rMt POWER, FIBER DROP RCUrC MA11"5TRECr5 MNNFXtF)rLUrCPUHUG STRCET5 SERVICE DROP NOTE, 5CRVCETO t"MOM WILL BE DtrtRMINCD DY Si,CIi7MIN'65 A5 LOGAWNOFTME&WAGE ON M4 LOrANDTME LOGArION Or ME POWER hIM LOGArION. Fork,Norr. UAU-FIBERWla DC PLACED INGONDUIr 2)GONDUITWla HC PLACED INTMC JOINrTRCNCK j A5 PCR7ME JOINT TRCNCMA6RCtMCM. N MNN INC FIBER WILL Bt PLACED INZ"PGV GON'DUIr CNC.ROAGYIMCMN07C: 4)NLL SCRNGE FIBERW/LL BCPL"D IN P'PVG CONDUIT 70 TMCMOMt. PLAGPMENrS IN PURL U STREErS WILL BE COVERED DY Q"CNGROACMMENT AGRCCMCNr. PLAGEMFNr5INPRNArF5MF 5WILIOFCOVERFD BYCGBR'5 a a CQ CiR� /V/ O "f�vGF/iir tiic9 FSO Teti N u *'n Godes tniiiaml � 5FF DErNL 5MCCr Z OFZ ,PI[ SAN JUAN PACFIC PONT ENCROACH NT ORAIIIRNG JUL- CEV ENTRANCE 0 JLMML— CONDUIT '•- W ENTRANCE w GROUND LINE ^F Jl g� it, CEV \\ DETAIL - NTS I I I NNN� Ni n OAT WONFOO EM;&Ma T � i OF WAY Ore _ 77+60 i r r r r `t"---rr SIDEWALK r iT r �_ d ' r r 24 r- _r "r Ar- 25 Exhibit "C" Grantee shall install and dedicate to the City for its exclusive use, at Grantee's sole cost, the following telecommunications facilities: (1) 1 — 12 strand fiber-optic cable parallel to all "FIBER OPTIC CABLE" lines as depicted on Exhibit "B" hereto; the cable will be terminated at the connection points for the 1" PVC service lateral conduits; (2) Grantee's conduit, connection points and access locations (vaults and hand holes) shall be sized to accommodate the 1 — 12 strand fiber-optic cable described in Item 1 above; (3) A 1-strand fiber-optic service cable within Grantee's 1" PVC service lateral conduits as depicted on Exhibit "B" hereto, between the connection point where City's 12-strand fiber-optic cable is terminated (per Item 1 above) and the service panel inside all housing units and buildings served by the network; (4) 1 — 1" PVC conduit and cable (as specified by the City's Water Department) between the water meter vault and the service panel inside all housing units and buildings served by the network. 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