01-270Council File # p r- a.10
ORIGINAL
Presented By
Referred To
CITY
Committee: Date
4a
1 WFIEREAS, CityNet Telecommunications, Inc. ("CityNet") desires to install, place and
2 maintain telecommunicarions facilities in portions of the City's sewer system for the purpose of
3 operating dazk (unlit) fiber optic facilities, and
WHEREAS, CityNet has already entered into similar agreements with the cities of
Albuquerque, Omaha, and Indianapolis; and
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WHEREAS, the City desires to find new and innovative ways to provide fiber optic access to its
citizens, businesses, and other users in order to attract new business and retain existing business, attract
and expand a highly skilled workforce, and promote general economic development throughout the City
by way of technology availability and upgrades; and
WHEREAS, the City also desires to protect and preserve its rights-of-way and infrastructure and
more efficientiy use its monetary and personnel resources by finding and authorizing innovative methods
of deploying fiber optic systems which do not involve digging and trenching in the sh and other
public right of ways and which minimize the disruption of traffic flow and commerce and the economic
loss assaciated with such disruption; and
WHEREAS, the City also desires to identify new and additional methods of inspection,
maintenance and metering of its sewer system to insure compliance with federal and state environmental
laws and regulations; now therefore
BE IT RESOLVED, that the proper city officials aze hereby authorized to execute and enter into
an agreement with CityNet, in the same or substantially the same form as the attached agreement, a copy
of which agreement was before the City Council and which is made a part hereof by reference.
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Requested by Department of:
By:
Adopted by Council: Date � � � }p�y �
Adoption Certified by Council Secretary
By: II \ �� `J� _
Approve�yor\ Date / ( � �/
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By: �J
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RESOLUTION
'AUL, NIINNESOTA
Form Approved by City Attorney
B Cyv� .Y► . !��- � < � •
Approved by Mayor for Submission to Council
By:
Green Sheet # � p y�y 5
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SEWERLEASEAGREEMENT �,�,��� v�rai�
Between �ei� �i,a�ao�
THE CITY OF SAINT PAUL, NIII�TNESOTA
and
CITYNET TELECONIMLTDiICATIONS, INC.
This AGREEMENT, is made and entered into as of this day of
, by and between CityNet Telecommunications, Inc., a Delawaze corporation, hauing an
office at 8403 Colesvilie Road, Fourteenth Floor, Silver Spring, Maryland, 20910 (hereinafter
"CityNeY'), and the City of Saint Paul, Minnesota, a Minnesota municipal corporation
(hereinafter "Cit}�').
WHEREAS, City currently owns and operates a Sewer System, located in the City of
Saint Paul, State of Minnesota, said existing Sewer System being more particularly described on
Exhibit A(hereinafter the "Sewer System"); and
WHEREAS, CityNet desires to install, place and maintain telecommunications facilities
(hereinafter "Facilities") in portions of the Sewer System for the purpose of operating dark (unlit)
fiber optic Facilities; and
WHEREAS, CityNet desires to lease space in the City's Sewer System, rather than using
space in the City's streets and rights-of-way, in order to auoid the additional costs, expenses,
disruption, delays and inconvenience of excauating and obstructing the City's streets and Rights-
of-Way; and
WHEREAS, the City has agreed to lease to CityNet space in the Sewer System for the
placement of CityNeYs Facilities in order to avoid the inconvenience, disruption, delays and costs
of CityNeYs obstructing or excavating the City's streets and Rights-of-Way that would otherwise
be required in the absence of this Agreement; and
WHEREAS, the City has also agreed to this Agreement because City desires to find new
and innovative ways to provide fiber optic access to its citizens and other users, and to provide
such access uniformly throughout the City, in order to attract new business and retain existing
business, attract and expand a highly skilled workforce and promote general economic
development throughout the City by way of technology availability and upgrades; and
WHEREAS, the City has also agreed to this Agreement because City desires to protect
and preserve its infrastructure and more efficiently use its monetary and personnel resources by
finding and authorizing innovarive methods of deploying fiber optic systems which do not
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involve digging and trenching in the streets and other public right of ways and which m;n;mi�e
the disruption of traffic flow and commerce and the economic loss associated with such
disruprion; and
WHEREAS, the City has also agreed to this agreement because City desires to identify
additional methods of inspection, maintenance and metering of its sewer system to insure
compliance with federal and state environmental laws and regulations; and
W�EREAS, nothing in this Agreement shall be construed to limit in any way CityNeYs
right to apply for and obtain City authorizations and permits, to construct and maintain and own a
fiber optics system or facilities, and to apply for and obtain other rights-of-way agreements from
the City or other rights-of-way providers; and
WHEREAS, CityNet aclaiowledges that, notwithstanding any other provision wiflun ttris
Agreement, it shall comply with any and all existing or future Laws, including but not lunited to
those regulafing the City's public Rights-of-Way found in Chapters 116 and 135 of the City of
St. Paul L,egislative Code, before exercising any right under this Agreement, and that nothing
herein shall constitute a permission or authorization or waiver from the City of its right to require
such prior compliance by CityNet;
NOW THEREFORE, in consideration of the foregoing and of the mutual covenants
provided herein, the parties agree as follows:
GENERALLY
L Incorporation. The foregoing recitals, as well as Appendix 1 and Exhibits A, B and
C, are hereby incorporated in this Agreement as if set forth here verbatim.
2. De6nirions. The following words, terms and phrases, when used in this Agreement,
shall haue the meanings ascribed to them in this section, except where the context clearly
indicates a different meaning:
Sewer Svstem: A system of sanitary sewers as described in Exhibit A. "Sewer System"
specifically excludes any and all storm sewers, tunnels, and/or relief sewers, except as
specifically authorized in advance by the Saint Paul Director of Public Works, who shall
haue sole discretion regazding whether to authorize CityNeYs use of non-sanitary sewers.
Facilities: The fiber optic Telecommunicafions transmission facilities consisting of fiber
optic cables, and associated appurtenances, as described in Exhibit C, to be installed by
CityNet, and to be located within portions of City's Sewer System pursuant to this
Agreement, solely to provide Telecommunications Services.
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Fee: Any monetary assessment, license, cost, chazge, fee, imposition, or taac, of any kind
whatsoever, including but not limited to: A levy of general application to entities doing
business in the City lawfully imposed by any govemmental body; Any real estate or
personal taa�es on equipment or praperty owned by CityNet, whether general or special;
Any public urility rates, dues, or charges of any kind for utilities used by CityNet; Any
fees, costs or expenses of insurance; and any other expenses, costs, or other applicable
tariffs resulting from the performance of this Agreement.
Law or Laws : Any and all statutes, constitutions, ordinances, resolurions, regulations,
judicial decisions, rules, tariffs, administrative orders, certificates, orders, as well as any
other requirements of the City or any other governmental agency having joint or several
jurisdiction over the parties to this Agreement.
Person: Any individual,�person or entity, however organized, whether public or private,
whether domesric or foreign, whether for profit or nonprofit, and whether natural,
corporate, or political.
Right-of-Wav or Public Ri�ht-of-Wav: The azea in, on, below or above a public
roadway, highway, street, cartway, boulevard, bicycle lane, sidewalk, parkway or alley
which the City owns, including areas used for sewer utility ptuposes, or over which it has
a real properiy easement or interest, including other dedicated Rights-of-Way.
Telecommunications: The transmission, between or among points specified by the user,
of information of the user's choosing, without change in the form or content of the
information as sent or received.
Telecommunications Services: The offering of indefeasible rights of use on a
nondiscriminatory basis for a fee direcfly or ind'uectly to telecommunications providers.
Cable Television Service: Multi-channel video programming services whose providers
aze required under City Charter or ordinance to obtain a franchise in order to use the
City's Right-of-Way.
LEASE OF SEWER SYSTEM
3. Lease: Subject to the provisions of this Agreement, including the specifications and
rules contained in Appendix 1, City hereby leases to CityNet for its non-exclusive occupancy of
space located within City's Sewer System for the placement of Facilities. The Facilities will be
installed, with prior approval of the City, in such portions of the City's Sewer System as shall be
jointly identified by the City and CityNet as providing sufficient potenrial market for the
Faciliries as to make installation economically feasible (as provided in E�ibit B, "Potential
Areas of Installation); provide however, that CityNet alone shall determine the actual
configuration and locarion of the Facilities based upon CityNeYs business and economic
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considerations. City shall have the right to withhold approval of access by CityNet to any potion
of the Sewer System that the City deems to be physically or structurally inappropriate far the
installation of the Facilities.
CityNet may use the leased portions of City's Sewer System only for the purpose of
installing, maintaining, operating and licensing to third parties for a fee the use of the Facilities in
the Sewer System for providing Telecommunicarions Services and any uses incidental thereto.
CityNet may, with the City's prior written consent, which shall not be unreasonably withheld,
modify, alter or upgrade the Facilities during the Initial Term and any and all Renewal Terms,
subject however, to the terms and conditions of this Agreement. CityNet shali not use, allow or
suffer the leased portion of the Sewer System to be used for any other purpose, provided,
however, that City and CityNet may, by amendment to this Agreement, provide for other uses.
Any unauthorized use will allow City, at its option, to terxninate this Agreement.
4. Government Permits: Prior to the installation of CityNeYs Facilities within the
Sewer System, CityNet shall obtain from the appropriate governmental authorities, inciuding the
City itself, any required pemuts or licenses necessary for such installation, and shall provide to
City copies of such permits or licenses upon request. City agrees to provide reasonable
assistance to CityNet in obtaining such pernuts or licenses. CityNet shall norify City immediately
if City or any governmental authority indicates that a pernut or a license will not be issued, at
wluch time CityNet may at its option choose to temrinate the agreement immediately, without
cause.
5. Reserved Right: This Agreement shall not constitute an assignment of any of City's
rights to use the Right-of-Way or the public or private property upon which the Sewer System is
located. Nothing contained in this Agreement shall be conshued as a limitation, restriction or
prohibition against City with respect to any agreement or arrangement which City has heretofore
entered into, or may in the fuhxre enter into, with other persons regarding the Sewer System ar
Right-of-Way. City agrees, however, that the use and occupancy of the Sewer System by such
other persons shall not interfere with CityNet's rights of occupancy granted pursuant to this
Agreement. Subject to the terms and conditions of this agreement, all right, title and interest in
the Sewer System shail at all times remain exclusively with City, and all right, title and interest in
CityNeYs Facilifies shall at all times remain exclusively with CityNet.
6. Scoue of A¢reement. Any and all rights expressly granted to CityNet under this
Agreement, which shall be exercised at CityNeYs sole cost and expense, shall be subject to the
prior, continuing, and any future right of the City under applicable Laws to use any and all parts
of the Sewer System and the public Right-of-Way exclusively or concurrently with any other
person and shall be fiuther subject to all deeds, easements, dedications, conditions, covenants,
restrictions, encumbrances, and claims of title of record which may affect the City's Sewer
System. Nothing in tlus Agreement shall be deemed to grant, convey, create, or vest in CityNet a
properiy right or interest, including but not limited to any real properiy interest in land, or any
fee, leasehold interest, or easement other than such interests that aze expliciUy conveyed in this
Agreement. Any work performed pursuant to this Agreement shall be subject to the reasonable
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prior review and approval of the City, and subject to CityNeYs prior compliance with any and all
e7cisting and future laws, including but not limited to public Right-of-Way registrarion and use
laws found in Chapters 116 and 135 of the City's Legislative Code.
7. Term: The initial term of this Agreement shali be three (3) yeazs unless eazlier
terminated in accordance with the provisions here (hereinafter "Initial Term'�. The term shall
commence on the date above first written.
8. Ontion to Renew: Provided this Agreement has not been eazlier tenuinated and
CityNet is not in default of any of the covenants of this Agreement, then subject to the provisions
contained herein, City grants CityNet the option to elect to extend this agreement for seven (7)
addifional three (3) yeaz renewal periods (each being a"Renewal Term") commencing on the day
following the expiration date of the Inirial Term or any subsequent Renewal Term. Such op6ons
may be exercised by CityNet giving to the City written notice of its election to renew, not later
than one hundred eighty (180) days prior to the expiration of the Initial Term or the then current
Renewal Term, as the case may be. If CityNet should elect to renew this Agreement, any such
renewal shall be upon the same terms, covenants and conditions as provided in this Agreement
for the Initial Term.
9. Installation, Maintenance and Reuairs: CityNet shall have the right at its sole cost
and expense to install, maintain, and operate the Facilities in the Sewer System. CityNet's
instaliation of the Facilities shall be made according to plans approved by the City, which
approval shall not be unreasonably withheld, delayed, or conditioned. CityNet shall perform a
video inspection and shall create a videotape of each such inspection, which videotape shall
document those portions of the Sewer System in which CityNet intends to conshuct ar install its
Facilities. CityNet shall, immediately upon completion of each such videotaped inspecrion,
provide the City with a copy of the videotape which the City may retain at no cost to the City. In
connection therewith, the City shall respond to CityNet in writing with respect to any submittal
of such plans or drawings (which shall include the results of a video inspection) after receipt
thereof with any disapproval, objection or proposed modification within thirty (30) days of said
receipt, or such plans or drawings shall be deemed approved by the City. CityNet sha11 also
perform a video inspection subsequent to the installation of the Pacilities and provide the City
with a copy thereof. The City shall have no obligation to maintain, inspect or repair the Facilities
so as to cause them to conform to any performance specification, and CityNet shall, at its own
cost and expense, install, maintain, repair, and secure its Facilities so that they remain in good
and safe condition and in compliance with the provisions of this Agreement and all applicable
fire, health, building, and any other life safety codes or Laws.
During the first two yeazs following the installation of the Facility, CityNet shall twice
annually jet-wash that portion of the Sewer System containing the Facility. Thereafter, CityNet
and the City shall agree on an appropriate regular schedule for such cleaning to be done by
CityNet, at CityNeYs sole cost and expense.
The Facilities shall remain the exclusive property of CityNet, and CityNet shall have the
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right to remove all or any portion of the Facilities at any tune during the term of this Agreement,
provided that the same does not otherwise interfere with the City's operations of the Sewer
System. The Faciliries shaJl be deemed personai property for purposes of this Agreement,
regardless of whether any portion thereof is deemed real or personal property under applicable
law. All work by CityNet shall be performed in compliance with applicable laws and ordinances.
CityNet is not authorized to contract for or on behalf of the City for work on, or the fiunishing of
materials to the Sewer System or any part thereof, and CityNet shall pay any and all
subcontractors, material men, mechanics and laborers promptly for any work performed or
materials furnished at the instance of CityNet on the Sewer System. CityNet shall place its
equipment in a manner that will not interfere with City sewer service workers or sewer
contractors access to or work in City manholes.
10. Rental Fee: The annual lease Rental Fee to be paid by CityNet to City, on a quarterly
basis, is two and one half percent (2.5%) of the "Gross Revenues" (as defined below) received by
CityNet from the operation of the Facilities in the Sewer System pursuant to this Agreement.
Such payment shall be made within forty-five (45) days after the expiration of each quarter at the
City's address specified in Section 26 hereof. For purposes of this Section, "Gross Revenues" of
CityNet shall be all gross revenues, determined in accordance with generally accepted accounting
principals ("GAAP"), derived and received by CityNet from its operation of the Facilities in the
Sewer System. Gross Revenues include, but are not limited to, charges made by CityNet or any
affiliate of CityNet for the use of the Facilities by other persons ar entifies. Notwithstanding
anything to the contrary in this Section, Gross Revenues shall not include (i) any taac or fee
imposed on the users of the Facilities by the City or any other governmental authority and
collected by CityNet on behalf of such governmental entity, (ii) the revenues of any Affiliate (as
defined in Section 25) of CityNet to the extent such Affiliate revenues are costs of CityNet and
recovered by CityNet through charges to subscribers, and further to the extent that such revenues
are included in gross revenues on which fees aze paid, (iii) actual bad debt, refunds or credits,
provided any such bad debt subsequently collected sha11 be included in gross revenues in the
period collected, and (iv) the revenues of CityNet or any Affiliate of CityNet with respect to their
respective operations which do not use the Sewer System. Gross revenues shall be adjusted to
reflect contributed goods and/or services provided to the City by CityNet under the terms and
conditions of this Agreement. Acceptance by the City of any payment due under this Agreement
shall not be deemed to be a waiver by the City of any breach of this Agreement occurring prior
thereto, nor shall the acceptance by the City of any such payments preclude the City from later
establishing that a lazger amount was actuaily due or from collecting any balance due to the City.
City may, at any time, at City's sole oprion, upon ninety (90) days written notice, require
CityNet to discontinue the lease Rental Fee payments. Upon receiving such notice CityNet shall,
no later than ninety (90) days after receiving such notice, cease maldng all compensation
payments that would haue been payable after such ninety (90) day notice period. If City requires
such a discontinuarion of Rental Fee payments, the City may then charge, on an annual basis, its
actual Right-of-Way management or management costs (pursuant to Minnesota Statutes §
237.162, Subd. 9 and § 237.163, Subd. 2(b), and pursuant to any relevant local, state or federal
ordinance, statute, regulation, law or other rule), that aze incurred after the eacpiration of the
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ninety (90) day period described above, provided that in no event will CityNeYs payment be
greater than the amount established as the Rental Fee herein.
CityNet shall also file quarterly a report ("Compensation Report") with the City, by
sending copies to the individuals listed in Secrion 26 herein. The Compensarion Report shall
show the Rental Fees paid to the City, as well as all CityNet revenues for the pre�eding quarter
based upon CityNeYs services or operations withiu the City of Saint Paul that made up the Gross
Revenues. The Compensation Report shall also show any adjushnents as provided for in this
Agreement for bad debt, and the Compensation Report shall be executed and attested to by an
authorized officer of CityNet verifying the accuracy of the Compensation Report and amount of
all fees, compensation, or other payments under this Agreement.
CityNet shall keep accurate books of account, in accordance with GAAP, for the purpose
of determining the amounts due to the City under this Agreement. The City may inspect
CityNeYs books of account relative to the City at any time during regular business hours on thirty
(30) days prior written notice and may audit the books from time to time at the City's sole
expense in order to verify the accuracy of payments due under this Agreement. The City may
also, at its option, require that CityNeYs compliance with the terms and condifions of this
Agreement, including, but not limited to, the computation of any fees or payments, be verified by
a certified public accountant or compazably qualified consultant at the sole expense of the City.
11. Other Charges. CityNet shall be solely responsible for the payment of all Fees,
expenses, costs, compensation, or any other chazges nnposed or based upon CityNeYs
performance under this Agreement. CityNet shall pay any such Fees ar charges within thirty (30)
days of notice of the same from the City. CityNet shall pay any personal property tases assessed
on, or any portion of such tases attributable to, the Facilities located in the Sewer System.
12. Removal or Relocation. CityNet understands and acknowledges that City may
require it to remove or relocate some or all of its Facilities, and shall at City's direction remove
or relocate such Faciliries whenever City reasonably determines that the removal or relocation is
needed for any of the following purposes: (a) for the construction, completion, repair, relocation,
or maintenance of a City pro}ect or a public Right-of-Way, (b) because the Facilities aze
interfering with or adversely affecting proper operation or maintenance of any other fixtures or
facilities or uses of the sewer utility or public Right-of-Way; (c) to protect or preserve the public
health, welfaze or safety, or (d) as a result of any law, ruling, judgment ar decision of an
administrative or legal authority, including but not limited to a district court of the State of
Minnesota. If CityNet shall fail to zemove or relocate any Facilities as requested by the City
within a reasonable time under the circumstances, City shall be entitled to remove or relocate the
Faciliries at CityNeYs sole cost and expense, without further norice to CityNet. In the event that
City is required for any reason to remove, relocate or discontinue leasing or operating the Sewer
System, or any porhion thereof, either parry shall have the option to terminate this Agreement.
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13. Damaee to Public Rieht-of-WaV or Sewer Svstem. Whenever the installarion,
removal or relocation of Facilities is required or permitted under this Agreement, and such
installafion, removal or relocation shall cause the Public Right-of-Way or Sewer System to be
damaged, CityNet, at its sole cost and expense, shall comply with all laws governing use of the
Public Right-of-Way or the Sewer System, which includes the obligation to promptly repair and
return the same to a safe and satisfactory condition in accordance with applicable Laws, normal
wear and teaz excepted. If CityNet does not repair the site as just described, then the City shall
have the oprion, upon fifteen (15) days prior written notice to CityNet, to perform or cause to be
performed such reasonable and necessary work on behalf of CityNet and to charge CityNet for
the proposed costs to be incurred or the actual costs incurred by the City at City's standard rates.
Upon the receipt of a demand for payment by the City, CityNet shall promptly reimburse the City
for such costs. The provisions and rights in this section are in addition to, and not in lieu of, any
right of the City under existing or future applicable Laws.
14. Condemnation: In the event that the Sewer System, or any portion thereof, shail be
taken or condemned, either permanently or temporarily, for any public or quasi-public purpose by
any person or authority in appropriation proceedings or by any right of eminent domain, or in the
event that City's pernut and right to occupy the public Right-of-Way with its Sewer System or to
Lease portions o£its Sewer System is revoked or deemed illegal, this Agreement shall
automatically terminate on such date and any damages arising therefrom shall be payable to City.
CityNet shall have the right to claim and recover from the condemning authority, such
compensation as may be separately awarded or recoverable by CityNet.
15. EmerEencv Reuairs. GityNet understands and agrees that the prunary and
paramount purpose of the Sewer System is for the transfer of sewage and storxn water, which in
no way shall be compromised or abridged by any right conferred under this Agreement.
Historically the Sewer System occasionally ceases to drain normally due to blockage or structural
failure. On these occasions it is City's responsibility to restore normal flow as soon as possible.
Under such circumstances, the City shall not be responsible for any damage to the Facilities or
for temporary interruption of service provided through the Facilities. The City will make every
reasonable attempt to notify CityNet as soon as possible of any City work that may impact the
Facilities under this Section.
16. Access to the Sewer Ssstem. CityNet may, at all times during the term of this
Agreement, subject to prior compliance with City ordinances and to reasonable supervision,
which supervision costs or fees shall be paid for exclusively by CityNet, have pedestrian and
vehicular ingress and egress to and from the Sewer System, on a 24-hour, 7-day per week basis,
for the purpose of accessing the Facilities to the extent reasonably necessary to install, field-test,
maintain and operate the Facilities.
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17. Renewal of Lease. If both City and CityNet wish to enter into a new lease
agreement then, before expiration of the final Renewal Term, the City and CityNet may enter into
good faith negotiations the object of which will to agree upon the terms of a new lease
agreement.
ADDITIONAL PROVISIONS
18. Indenendent Contractor: In perfomuug this Agreement, City and CilyNet shall
operate as, and for all purposes be considered, independent contractors and not agents, and
neither party shall haue authority to bind or otherwise obligate the other in any manner
whatsoever. All personnel performing services shall remain under the exclusive direction and
control of their respective parties and shall not be deemed to be employees or agents of the other
party. No employee or agent of CityNet shall be deemed an employee of City for the purposes of
this Agreement, nar shall City be responsible for any payments such as compensation, wages,
benefits, taxes, workers' compensation, disability or other insurance or any other payments with
respect to any such CityNet employee or agent.
19. Force Maieure Susuension and Termination: In the event that either party to this
Agreement is unable to perform any of its obligarions under this Agreement or to enjoy any of
the benefits thereof because of natural disaster, actions, Laws, orders or decrees of governmentai
bodies or failure of power supply, or any condition that is beyond that party's reasonable control,
including but not limited to acts of God, fire, flood, or other catastrophe (hereinafter "Force
Majeure Events"), the non-perforxning party shall immediately provide notice thereof to the other
parly and shall do everything possible to resume performance. Upon receipt of such notice by
the performing party, this Agreement shall immediately be suspended. If the period of
nonperformance exceeds foriy-five (45) days from the receipt of notice of the Farce Majeure
Event, either pariy shall have the option to terminate this Agreement by giving written notice to
the other party.
20. Indemnification: CityNet shall indemnify, defend, protect, and hold harmless the
City, its council members, officers, agents, contractors and employees from and against any and
all claims, demands, losses, damages, liabilities, fines, charges, penalties, administrative and
judicial proceedings and orders, judgments, and all costs and expenses incurred in connection
therewith, including reasonable attomey's fees and costs of defense, occasioned by or arising out
of CityNeY s activities undertaken pursuant to this Agreement, except to the extent arising from
ar caused by the negligence or willful misconduct of the City, its council members, officers,
employees, agents, or contractors. The foregoing notwithstanding, CityNet shall defend and
indemnify the City, and its officers and employees, even in the case of negligence, unless the
allegations allege (a) independent negligence on the part of the City, its officers and employees or
(b) a wrongful act or omission on the part of the City or its officers or employees. CityNet shall
also defend and indemnify the City, its officers and employees, even in the case of negligence, if
the allegarions aze based on the City's or its officers or employees' negligence or otherwise
wrongful act or omission in approving this Agreement, or in failing to properly or adequately
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inspect or enforce compliance with the terms, condifions or purpose of this Agreement. CityNet
shall also defend and indemnify the City, its of�cers and employees, in the case of CityNeYs use
of Hazardous Materials. "Hazardous Materials" means asbestos, petroleum products, or any
toxic or hazazdous substance, waste or materials as defined in any federal, state or local
environmental or safety law or regulation including, but not limited to, CERCLA, MPCA, and
MERLA. The provisions of this secrion shall survive any termination or expiration of this
Agreement. Without limiting the foregoing, CityNet shall obtain a bond in the sum of $150,000,
in a form acceptable to the City Attorney, to secure its obligarion to defend and indemnify the
Ciry against any claim asserted by a City-franchised provider of cable television service, alleging
injury based upon usage of the CityNet Facilities in violation of the City franchise ordinance for
the provision of cable television service. Said bond requirement shall be reduced and retired on a
dollaz-for-dollar basis by the delivery of rental fees to the City by CityNet pursuant to Paragraphs
10 and 46 of this Agreement.
21. Limitation on Liabilitv and Waiver: NOTWITHSTANDING ANY PROVISION
HEREIN, NETTHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT,
SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT LIMITATION,
THOSE BASED UPON INTERRUPTION OF SERVICE OR FOR ANX LOSS OF
REVENLTES, PROFITS, OR BUSINESS OPPORTUNITIES RESULTING THEREFROM,
WHETHER OR NOT EITHER PARTY HAD OR SHOULD HAVE HAD ANY
KNOWLEDGE, ACTUAL OR CONSTItUCTIVE, THAT ANY SUCH DAMAGES MIGHT
BE INCURRBD. CityNet also waives any and all claims, demands, causes of action, and rights
it may assert against the City on account of any loss, damage, or injury Yo its Facilities or any loss
ar degradation of the services provided by its Facilities. The City shall be liable only for the cost
of repair to damaged Facilities arising from the independent negligence or willful misconduct of
City, its employees, agents, or contractors. In no event shall the City be liable for vandalism,
malicious mischief, or acts of God that damage CityNeYs Facilities. In no event shall either party
be liable for special, consequential, exemplary or punitive damages as a result of the performance
or nonperformance of its obligations under this Agreement. The provisions of this section shall
survive any termination or expiration of this Agreement.
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22. Default: If at any time CityNet fails or refuses to perform any of the material
covenants or conditions contained in this Agreement, and such failure or refusal shall continue
for sixty (60) days a8er written norice is provided by City to CityNet, then City, at its election
may re-enter and take possession of the leased portion of the Sewer System, remove CityNePs
Facilities therefrom, re-let the leased portion of the Sewer System or any part thereof on such
terms, conditions and rentals as City may deem proper, and, at City's opfion, either terminate and
cancel this Agreement, or apply the proceeds that may be obtained from said re-letting, after
deducrion of costs and expenses, to the lease rentals required under this Ageement, and hold
CityNet liable for any balance of such rentals which may remain unsatisfied and unpaid. In such
an event, CityNet shall pay to City, as additional rent: (i) all costs and expenses reasonably
incurred by City in making auy alterations to the Sewer System in prepazation for re-letting and
in attempting to re-let the leased portion thereof, and (ii) all costs and expenses, including
attorneys fees and costs, reasonably incurred by City as a result of CityNet's default or enforcing
City's rights and remedies hereunder.
23. Time to Cure: In the event any such default (other than the payment of fees due
hereunder) cannot reasonably be cured within such sixty (60) day period, the rime for curing such
default shall be extended for whatever period of time is required to complete such curing so long
as either party is proceeding with due diligence. The waiver by either party of any breach of any
term, covenant or condition herein contained shall not be deemed to be a waiver of such term,
covenant or condition or any subsequent breach of the same or any other term, covenant or
condition herein contained.
24. Insurance: Cityl3et shall at its own expense obtain and maintain at all times during
the term of this Agreement Commercial General Liability insurance and Commercial Automobile
Liabiliry Insurance protecting CityNet in an amount not less than 9ae Five Millian Dollars
($�5,000,000) per occurrence (combined single limit), including bodily injuty and property
damage, and in an amount not less than �ee Five Million Dollars ($35 000,000) annual
aggregate for each personal injury liability and products-completed operations. The Commercial
General Liability insurance policy shall name the City, its council members, officers, and
employees as addirional insureds as respects any covered liability arising out of CityNeYs
performance of this Agreement. Coverage shall be in an occurrence form and in accordance with
the limits and provisions specified herein. Claims-made policies aze not acceptable. Such
insurance shall not be canceled, nor shall the occurrence or aggregate limits set forth above be
reduced, until the City has received at least thirry (30) days' advance written notice of such
cancellarion or change. CityNet shall be responsible for norifying the City of such change or
cancellation. Prior to any Renewal Term pursuant to § 8 of this Agreement, the City may request
and the parties shall bargain in good faith to increase the above minimum insurance amounts, if
such an increase is warranted by indushy standards or specific identified risk, or by any change in
Minnesota Statute § 466 or any other Law pertaining to municipal liability. Such increase, if any,
shall not be effecrive until the commencement of such Renewal Term. In addition, CityNet shall
maintain Workers Compensation insurance, in an amount equai to at least the amount required
under applicable Minnesota Statute, as may be amended from time to time, as well as Employer's
Liability insurance in an amount not less than Five Million Dollars ($5,000.000�
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Prior to the commencement of any work pursuant to this Agreement, and annually
thereafter, CityNet shall file with the City, pursuant to the Notice provision in Section 26, a
certificate of insurance which shall state the following: the policy number; name of insurance
company�, name and address of the agent or authorized representative; name and address of
insureds; policy expiration date; specific coverage amounts; that the City shall receive thirty (30)
days' prior notice of cancellation; that names the City, its council members, officers, and
employees as addirional insureds as respects any covered liability arising out of CityNeYs
performance ofthis Agreement; and that CityNeYs Commercial General Liability insurance
policy waives any right of recovery the insurance company may have against the City.
An insurance provider of CityNet shall be admitted and authorized to do business in the
State of Minnesota and shall cazry a minnnum rating assigned by A.M. Best and Company's Key
Rating Guide of "A" Overall and a Financial SiZe Category of "X" (i.e., a size of $500,000,000
to $750,000,000 based on capital, surplus, and conditional reserves). Insurance policies and
certificates issued by non-admitted insurance companies are not acceptable. Any deductibles or
self-insured retentions must be stated on the certificate(s) of insurance, which shall be sent to and
approved by the City. "Severability of interesY' or "sepazation of insureds" clauses shall be made
a part of the Commercial General Liability and Commercial Automobile Liability policies.
CityNet may comply with the insurance requirements of this Agreement through the
purchase of an"umbrella" policy acceptable to the City, provided, however, that CityNet shall
first present any such umbrella policy to the City for its review, which the City may in its
reasonable discretion approve or disapprove.
25. Assienment: CityNet shall not assign or otherwise convey any of its rights,
obligations or interests under this Agreement without the express prior written consent of the
City, which consent shall not be unreasonably withheld. This clause also applies to CityNeYs
Affiliates, who shall be fmancially viable. "Affiliate" means a pazent or subsidiary of CityNet,
an entity that owns or controls, is owned or controlled by, or is under common ownership or
control with CityNet, or an entity which merges or is consolidated with CityNet or which
purchases a controlling interest in the ownership or assets of CityNet. In the event CityNet
assigns its rights, obligations or interests under tkris Agreement, CityNet shall remain secondarily
liable to City for the performance of its assignee under ihis Agreement.
City may require an assignee or transferee to post with the City security in the form of a cash
deposit, letter of credit, or surety bond satisfactory in fotm and amount, which shall be fully
refunded or otherwise released to the posting party upon termination of this Agreement and upon
the timely removal of Faciliries pursuant to this Agreement, to the reasonable satisfaction of the
City.
26. Nofice: All norices and other communications which shall or may be given pursuant
to this Agreement shall be in writing and be deemed to have been duly given (i) upon personal
delivery, or (ii) upon placement into the United States mail, certified, postage prepaid, return
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receipt requested, to the pazties at the following addresses:
If to City: Director
Department of Public Works
City of Saint Paul
1000 City Hall Annex
25 West Fourth Street
Saint Paul, Minnesota 55102
With copy to: Saint Paul City Attomey
400 City Hall and Courthouse
15 West Kellogg Boulevard
Saint Paul, MN 55102
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If to CityNet: CityNet Telecommunications, Inc.
8403 Colesville Road, 14th Floor
Silver Spring, Maryland 20910
Attention: Mazk Perkell, General Counsel
or at such other address as the parties hereto may specify from tixne to time by written notice
delivered in accordance herewith.
27. Termination: This Agreement may be termivated by either party upon written
notice to the other pariy upon a material default of any covenant, provision, or term hereof, by the
other pariy, which default is not cured within sixty (60) days of receipt of written notice of
default (or, if such default is not curable within sixty (60) days, if the defaulting party fails to
commence such cure witlun sixty (60) days or fails thereafter diligently to prosecute such cure to
compietion), provided that the grace period for any monetary default shall be ten (10) days from
receipt of notice.
Additional Termination Riehts.
(a) Ci Net. CityNet may, without further obligation to City, upon one hundred eighty
(180) days written notice, terminate its lease or its occupancy of any portion of the Sewer System
without cause.
(b) C�. If any govenunental agency or third party institutes proceedings successfully
imposing public utility or common carrier status on City as a result of its performance of this
Agreement, or if any action is brought by any third party successfully challenging the continued
validity of this Agreement or seelflng to adversely modify, suspend or revoke City's operating
authority for its services or Sewer System as a result of its or CityNeYs performance of this
Agreement, and there is an adverse impact upon the City which cannot be eliminated by CityNet,
City may, without further liability to CityNet, upon one hundred eighty (180) days written notice,
terminate tlus Agreement without cause. City may also, without fiuther liability to CityNet, upon
one-hundred and twenty (120) days written notice, terminate this Agreement in the event that
CityNet fails to commence installation of the Facilities or to maintain Facilities as provided
herein.
28. Insolvencv or Bankruptcv: Notwithstanding any other term or condition contained
herein, and in addition to any other legal or equitable remedy, City shall have the right to
terminate this Agreement at any time if CityNet or any of its affiliates shall be unable to pay its
liabiliries when due, or shall make any assignment for the benefit of creditors or file a voluntary
petition in bazikrnptcy or be adjudicated baulaupt or insolvent, or if any receiver is appointed for
its business or property, or if any trustee in bankrnptcy or insolvency shall be appointed under the
govenvng Laws of the United States or of any state.
29. Surrender and Removal: Upon teimination of this Agreement for any reason, or
expirarion of the Initial Term or any renewal term of this Agreement, CityNet shall, upon written
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request of the City, remove any and all of its Facilifies and any other equipment from the City's
Public Right-of-Way and Sewer System within one hundred twenty (120) days, and shall quit
peacefully, and shall repair any damage to the Public Right-of-Way or Sewer System caused by
such equipment or Faciliries, normal weaz and teaz excepted, all at CityNeYs own cost and
expense, provided, however, that if such removal is not completed within such one hundred
lwenty (120) day period, CityNet may request such additional period as is reasonably necessary
for such removal as long as CityNet diligently makes such removal as promptly as possible
and/or such additional period as is reasonably necessary to account for delays that were caused by
events or circumstances beyond the reasonable control of CityNet, including, without limitarion,
forces of nature. CityNeY s failure to comply with these sunender and removal requirements
shall be deemed a material breach of this Agreement. Under such circumstances City may also, in
its sole discrefion, exercise any rights it has at Law or in equity, including but not limited to
deeming such Facilities to be abandoned and/or a nuisance, and abaring the Facilities. The
provisions of this Section shall survive any ternunation or expiration of this Agreement.
30. Discontinued Operations: In the event that CityNet discontinues its
Telecommunications Services in the City, it shall immediately provide information satisfactory to
the City that its obiigarions for its Facilities under this Agreement have been lawfully assumed by
another entity (including, upon consent, by the City). In the event that its Facilities are no longer
used to provide Telecommunications Services for a period of one (1) yeaz, then CityNet shall
provide nofice of such an event to the City, and shall, pursuant to Section 29 above, remove each
such Facilities, unless this requirement is waived by the City. In addirion, such non-use shall
constitute a material breach and a valid and lawful ground for the City to terminate this
Agreement. In the event of such non-use of a facility or Facilities, the City may exercise any
remedies or rights it has at law or in equity, including but not lunited to declaring the Facilities to
be a nuisance and aba6ng the nuisance under applicable Law, or taking possession of the
Facilities. The provisions of this section shall survive any termination or expiration of this
Agreement.
31. Compliance with Laws: CityNet and its contractors shall comply with all federal,
state and local laws, ordinances, regulations and rules. The parties hereto shall at all times
observe and comply with, and the provisions of this Agreement aze subj ect to all Laws,
ordinances, rulings and regula6ons which in any manner affect the rights and obligations of the
parties hereto under this Agreement, so long as such Laws remain in effect, including but not
limited to those regulating the City's public Rights-of-Way found in Chapters 116 and 135 of the
City of St. Paul I,egislative Code. If, at any time during the term hereof, a certificate or
authorization shall become necessary for CityNet to operate and use the Facilities, CityNet shall
obtain the appropriate governmental authorities and any required authorizations or certificates,
and shall provide to City copies of such authorizations and certificates upon request.
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32. Liens and Encumbrances: Neither party, directly or indirectly, has any power,
authority or right to create and shall not permit, create or impose any lien or encumbrance,
including, without limitation, taac liens, mechanics liens, or other liens or encumbrances, on the
property of the other, or on the Faciliries, or on the Sewer System, or on any rights, ritle, or
interest therein.
33. Nonexclusive Use: CityNet understands that this Agreement does not provide
CityNet with exclusive use of the Sewer System and that City shall have the right to pemvt other
users, including City itself, to install equipment facilities or devices in, or to use, the Sewer
System.
34. Waiver of Breach: The waiver by either party of any breach or violation of any
provision of this Agreement shall not be deemed to be a waiver or a continuing waiver of any
subsequent breach or violation of the same or any other provision of this Agreement.
35. Severabilitv of Provisions: If any one or more of the provisions of this Agreement
shall be held by a court of competent jurisdiction in a final judicial action to be invalid, illegal,
void, voidable, or unenforceable, such provision(s) shall be deemed severable from the remaining
provisions of this Agreement and shall not affect the legality, validity, or constitufionality of the
remaining portions of this Agreement. Notwithstanding the faregoing, the parties agree that if a
court or administrative agency of competent jurisdiction should declare a provision(s) of this
Agreement invalid, then the parties shall each be obligated to negotiate in good faith to amend
that section of this Agreement and if, after one hundred and twenty (120) days from the
commencement of negotiations or such extension thereof that may be agreed by the parties, the
parties are unable to reach agreement on amendments hereto, then this Agreement may be
terminated by either party.
36. Governin¢ Law; Jurisdiction: This Agreement shall be governed and construed
and enforced by and in accordance with the Laws and decisions of the State of Minnesota,
without reference to its conflicts of law principles. If suit is brought by a parry to this
Agreement, the parties agree that trial of such action shall be vested exclusively in the state
courts of Minnesota, County of Ramsey.
37. Consent Criteria: In any case where the approval or consent of one pariy hereto is
required, requested or otherwise to be given under this Agreement, such parly shall not
unreasonably delay, condition, or withhold its approval or consent.
38. Amendment of Aereement: This Agreement may not be amended except pursuant
to a written instrument mutually agreed to and signed by both parties.
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39. Entire Agreement: This Agreement contains the entire understanding between the
parties with respect to the subject matter herein. There are no representations, agreements, or
understandings (whether oral or written) between or among the parties relating to the subject
matter of this Agreement which are not fully expressed herein.
40. Conflicts: Any conflict between the provisions of this Agreement and any other
present or future lawful exercise of the City's regulatory or police powers shall be resolved in
favor of the latter.
41. Bindin� Effect: This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and assigns.
42. No Interference. CityNet in the performance and exercise of its rights and
obligations under this Agreement shall not interfere in any manner with the current or future use,
existence and operation of any and all public and private Rights-of-Way or other information or
communications carrier without the express prior written approval of the City or owner or
owners of the affected property or properties. Any actual or anticipated interference with such
other communications equipment or devices in the Public Right-of-Way shall be resolved by
CityNet and any such other persons without cost to City on the basis of the applicable rules,
regulations, practices, and procedures of the FCC. City agrees to assist CityNet in the resolution
of any such interference dispute at CityNeYs sole expense.
43. Executed Aareement. CityNet shall, within thirty (30) days after the approval and
execution of flus Agreement by all representatives of the City, file with the City an original copy
of this A greement which has been fully executed by all required CityNet representatives and
authorities.
44. Authoritv. Each of the Individuals executing this Agreement on behalf of CityNet
represents that such individual is authorized to do and has the full right, power, legal capacity
and authority to enter into the Agreement on behalf of CityNet.
45. Most Favored Municiaality. City and CityNet acknowledge that the terms,
benefits, and provisions of this Agreement aze taken as a whole and entered into based on
specific requirements of the City and concems for the integrity of the Sewer System. Should
CityNet either before or after the parties' execution and delivery of this Agreement enter into an
agreement with another Minnesota municipality, which agreement contains any terms, benefits or
provisions which taken as a whole are more fawrable than the terms, benefits or provisions
contained herein, then City shall have the right to require that CityNet modify this Agreement to
incorporate the same or more beneficial terms, benefits or provisions for the City.
Notwithstanding the foregoing, if CityNet enters into an agreement with another Minnesota
municipality that contains a Rental Fee in excess of the Rental Fee defined in Section 10, then
the City's Rentai Fee shall be increased to the same amount.
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46. Bond. Within sixty (60) days of the date of this Agreement, CityNet shall pay the
City the non-refundable sum of Fifty Thousand Doilars ($50,000.00), to be credited against the
Gross Revenues payable to the City as established in Section 10 above, with wluch the City may,
among other things, purchase a good and sufficient surety bond or such other compazable
security instrument as may be approved by the City's Office of the City Attorney or City's Risk
Manager, securing the faithful performance by CityNet of all the work, construction,
maintenance, instaliation, removals, maintenance, and other duties required to be performed by
CityNet under tlus Agreement within the time periods set forth hereunder. Notwithstauding any
other provision to the contrary contained within this Agreement, CityNet agrees that in no event
will any part of the $50,000 payment be refundable under any circumstances.
47. ContactinE CitvNet. CityNet or its agents shall be available to the staff employees
of any City department having jurisdiction over CityNeYs activities twenty-four (24) hours a day,
seven (7) days a week, regazding problems or complaints resulting from CityNeYs performance
under this Agreement, including but not lnnited to problems or complaints resulting from the
use, installation, operation, maintenance or removal of FaciliUes. The City may contact by
telephone CityNeYs control center operator at telephone number (888) 248-9184 regarding such
problems or complaints, and all City calls shall be immediately retumed.
48. Future Benefits for CitY. During the Term of this Agreement and any renewals
hereof, CityNet will seek to fmd ways to benefit, or provide additional value for the City by
virtue of CityNeYs access to and use of the Sewer System. Such benefit and additional value
might include (i) assisting the City in the installation of flow meters and other instruinents in the
Sewer System, and (ii) providing record of the condition of the Sewer System to assist the City in
identifying which portions of the Sewer System need repair for purposes of budgeting and
planning of monetary and personnel resources.
49. Protection For Cable Television Franchisees and the CitV's Cabie Office.
Notwithstanding any other provision herein, CityNet shall not itself use or authorize others to use
the Facilities far the transmission of Cable Television Service in violation of any City ordinance
or applicable State authorizations. CityNet shall also include the following paragraph in all
license agreements for the use of the Facilities to which CityNet is a party:
Licensee agrees that it shall not itself use or authorize others
to use CityNet telecommunications facilities far the
transmission of cable television service or multi-channel
video prograzmning in violation of any ordinance or the City
Charter of the City of Saint Paul. Licensee understands and
agrees that this paragraph is specifically intended for the
benefit of the City of 5aint Paul and its franchised
distributors of cable television service and/or multi-channel
video prograuuning, and that said parties have standing to
obtain }udicial enforcement of this covenant and to each
obtain the greater of either actual damages or the sum of
$25,000 for its violafion. Licensee further agrees that the
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covenants contained in this pazagraph shall be included in
any sublicense agreement or assignment for the use of the
CityNet telecommunicarions facilities which aze the subject
of this license agreement.
IN WITNESS WHERE OF, the parties hereto have executed this Agreement as of the
day and yeaz first above written.
CITY OF SAINT PAUL, MINNESOTA
By:
Its: Mayor
Date:
CTTY OF SAINT PAUL, MINNESOTA
By:
Its: Director, Department of Public Works
Date:
CTTY OF SAINT PAUL, MIlVNESOTA
By:
Its: Director, Office of Financial Services
Date:
CITY OF SAINT PAUL, MINNESOTA
By:
Its: City Clerk
Date:
Doc# 1374757�2 19
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CTTY OF SAINT PAUL, MINNESOTA
By:
Its: Assistant City Attomey
Date:
CityNet Telecommunications, Inc.
By:
Its:
Date:
CityNet Telecommunications, Inc.
By:
Its:
Date:
CityNet Telecommunications, Inc.
�
Its:
Date:
Doc# 1374757�2 ' 20
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������
The Sewer System, as referenced herein, is a system of sanitary sewers as set forth in the
maps of Saint Paui's as-built sewer system which aze located at:
http://sewers.ci.stpaul.mn.us/stri�/
The records and images available on this site are for informational use only and aze not to be
used as a substitute for the original document. Documents auailable via tYris site may not reflect
current conditions and are not to be used as a substitute for obtaining current information from
the City of St. Paul, Public Works Department, by written or verbal request. Any documents
obtained from this site aze not to be used as a substitute for the original. Users of this site assume
all liability arising from information obtained herein.
Doc# �37475712 21
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.:,�:
Potential Areas of Installation
1. Ceniral Business District (map attached)
2. Energy Park
3. Midway west of Sneiling
4. University Avenue (Capitol to Snelling)
5. Existing East Side industrial areas (3M, Williams Hill)
6. Phalen Corridor
7. West Seventh business redevelopment areas (Shepazd/Davern,
Riverbend Indushial Pazk
8. West 5ide Flats (i7S Bank development)
9. Maacson SteeUDale Street Shops
Doc#'137475T2 22
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Eghibit C
As shown on the nlates and/or drawinQS attached to this E�ibit C, CityNet's facilities shall
consist of network of three non-corrosive steel alloy-stainless steel conduits each containing fiber
opric cable that will deployed through portions of the sewer system and heid in place using non-
corrosive steel alloy-stainiess steel rings and trays. 'T'"° ��`-°� '� •°�" ����°�' --�"� •,°-�^-.°
,
Doc#137475T2 23
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APPENDIX 1
SPECIFICATIONS
CityNet shall comply with the City's right-of-way requirements found in Chapters 116 and
135 of the St. Paul Legislarive Code. In addition, CityNet shall install, place, maintain and operate its
Facilities according to the following specifications:
1. CityNet shall place its equipment in a manner that it will not interfere with sewer
service workers or sewer contractors access to and work in City manholes. No cable,
equipment or facility of CityNet shall be permitted in City's Sewer System if such
cable, equipment ar facility by its design could cause elechical interference with the
facilities of City or other occupants of the Sewer System. If electrical interference is
caused by any of CityNeYs cable, equipment or Facilities, such interference shall
immediately be removed at the expense of CityNet.
2. CityNeYs cable, equipment and Facilities shall not be designed to use the earth as the
sole conductor for any part of CityNet's circuits.
CityNeYs cable, equipment and Facilities shall be compatible with City's Sewer
System so as not to damage any Facilities of City by conosion or othercvise.
4. New construction splices in CityNeYs cables shall not be located in City's manholes
or other City Sewer System Facilities. CityNet shali construct private manholes or
similar structures for these splices.
5. The m�imum diameter of any conduit of CityNet and the number of cabies of
CityNet to be placed in any of City's Sewer System will be submitted far approval to
the City, which approval will not be unreasonably withheld, prior to conshuction or
installation based upon size and shape of the Sewer System and the size of the
existing cables located within the Sewer System. The azea ofthe conduits, including
the brackets, shall be no more than 3% of the total area of the sewer.
6. City's manholes shall be opened only as authorized by City, whi ch authorization will
not be unreasonably withheld and in the presence of City's authorized representative.
7. No employee, agent or contractor of CityNet shall enter or work in any of City's
manholes unless City's authorized representative is present during the entire period,
or unless the City waives such requirement. CityNet shall pay the cost of having
Ciry's representafive present.
8. Except when emergency conditions necessitate restoring of the Facilifies, Cityl3et
shall notify City two (2) days in advance of any work operafion requiring entry into
any of City's manholes; provided, however, that a particulaz notice requirement may
Doc# 137475T2 24
nl-o170
be waived by City upon CityNeYs request.
9. Clearing obstructions, repairs, dig-ups and any otUer work required to make the
Sewer System usable for the initial piacing of CityNeYs cable shall be done by
CityNet after appropriate approval by City.
10. Cleaning of CityNet Faciliries in the City's Sewer System shall be done by CityNet or
its agent, at CityNet's cost.
11. CityNeYs workers shall not disturb City or City approved equipment located in
CityNeYs manholes without first informing City, and City shall provide all
requirements regazding such equipment.
12. All of CityNet's cables, equipment and Faciliries shall be firmly secured and
supported to the satisfaction of City.
13. All of CityNeYs cables, equipment and Facilifies shall be plainly idenrified in each
manhole with a firmly affixed tag of a type and word satisfactory to City.
14. Where manholes must be pumped in order to allow CityNeYs work operations to
proceed, pumping shall be at CityNeYs expense.
15. All cables placed in ducts or sewers by CityNet shall be tagged with CityNet's name,
and no cables so placed shall be used to carry currents or electricity for lighting or
power purposes.
16. CityNet shall provide the City no less than §� - months advance notice of City
Sewer Systems that are to have cable/conduit installed in them. Such advance notice
shall include cleaning and televising the City Sewer System. CityNet shall provide
City a post-cleaning televised tape of City Sewer System for the purpose of
determining any sewer rehabilitarion needs.
17. CityNet shall record the following regarding the installation of their Facilities:
Record location of bands in reference to upstream manhole (using GIS
designations for manhole)
Record radical location of cable in reference to downstream view.
Verification of location of all wyes in same reach of sewer (manhole to
manhole)
V erify current use of all wyes (life or not)
Verification of condition of sewer in same reach of sewer (manhole to
Doc#'137475T2 ZS
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manhole)
Verification of condition of manhole
18. All as-buiit records of CityNet Facilities shall be transferred to the City within
fifteen (15) days of installation in an electronic format.
19. CityNet Facilities shall not block a service wye or existing service connection.
20. CityNet shall locate all their Faciliries pertaining to Gopher State One Call
System.
21. CityNet shall be responsible for the repair of their Facilities due to private
contractors cleaning of private services.
Doc# 137475T2 2(
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Technology & Management Services� 3-14-01
ONTACT PH2SON & PFIOPIE
Peter Hames 266-8796
IU5f BE ON COUNCILACBmA BY (d1Tq
r�ort
TOTAL � OF SIGNATURE PAGES
Approve an agreement with City Net for leasing out the sewer system.
PLANNING CAMMISSION
CIB CAMMITTEE
CIVIL SERVICE COMMISSION
GREEN SHEET
��
� anwnaeax �e . ❑ arcua�c
� wuxw�a�xxcFSnc � wuxcm.mm�xa
� MxoR�oltAf�rJYrt1 ❑
(CL1P ALL LOCATIONS FOR SIGNATUR�
� m� ce�oNr� �.�a �Mw a�vaa ra m� d��eon
YES NO
Has this DrsoNfiim ever been a dtY emqoYce9
YES NO
Oces thffi PersoNfirtn Possesc a stull not namalbP���d M' a�Y curreM cstY emPbYee?
YES NQ
Is ih� PNaoMrm a 1erH�ed v�vMOYl '
YES NO
No �e��?��
c:;r-__'=_',
City Net provides fiber optic access, through the use of the sewer systein, that does noC re
he expenses, disruption, delays, and inconvenience of exeavating and obstructing the City's
treets and right-of-way.
St. Paul citizens, businesses, and visitors will be able to use the fiber optic access
throughout the City. The City will receive quarterly two percent of City Net's gross
revenues from the operation of its facilities in the sewer system.
None.
Without uniform access to the fiber optics throughout the City, the City will not attract new
businesses and retain some of the existino businesses_
dOUNT OF TRANSACTION
SOURCE
INFORMAiION (IXPWtQ
COET/REVQlUE BUD6ETED (CIRCLE ON�
YES NO
ACTNRY NUMBER
O� -�70
City of Saint Paul
Office of the City Council
310 Ciry Hall
Saint Paul, MN 55102
(612)266-8575
INTER-DEPARTMENTAL MEMORANDiTM
DATE: March 23, 2001
TO: Council President Dan Bostrom
Councilmember Jay Benanav
Councilmember Jerry Blakey
Counciimember Cluis Coleman
( �n„i�n�il'T!.°.:^.�.°.S �.:.�:C �.9II1�
Councilmember Kathy Lanhy
Councilmember Jim Reiter
FROM: Gerry Strathman, Director
SUBJECT: CityNet Lease Agreement (Proposed)
The proposed agreement between the City of Saint Paul and CityNet raises concerns about the
process employed to develop this proposed agreement and its terms. The development of this
proposed agreement has not appropriately involved the City Council nor the public. Also, some
terms may not be in the City's best interests.
Process
Chapter 16 of the Saint Paul City Charter provides a framework to be followed when private
entities are to be gzanted the use of public property to operate utilities. This process is lughly
structured and provides such decisions aze to be made only by the ordinance and only after a
formal public participation process. Additional safeguards aze provided through special public
notice requirements and the prohibition of ex�arte contact� w�tYe �1 PCYP� Q��� '!'tie c:e�r
intent of the City Charter and associated procedural ordiaances is to ensure an open, public, fair
and deliberative process is followed when private entities aze seeking to use public property for
private purposes. The process used to reach this proposed agreement has not been consistent
with the spirit of the Charter.
While State Law deternunes Saint Paul may not require CityNet to obtain a franchise, this does
not meau that the City Council and the public are to be excluded from the process. Yet the
Administration has negotiated this proposed agreement with little involvement by the City
Council. There has been no public participation. The acceptance of an agreement reached in this
manner wouid effectively transfer powers tradifionally exercised by the Ciry Council to the
Administration. The City Council should insist on playing an active role in the development of
agreements of this type and insist the public be allowed to e�ress themselves before its appmval.
Terms ' -
An overall reading of the proposed ageement leaves two general impressions. The first
impression is the Public Works Department has included terms in tiie agreement to ensure that
CityNet will not interfere with its ability to manage and operate the sewer system in Saint Paul.
The second impression is the remainaer of the agreement is unbalanced to favor of CityNet. The
proposed agreement contains teims that grant CityNet unprecedented generous benefits while
accepting faz less for the City than has been the case in similar situations in the past. Some
examples of the extraordinary benefits to be granted to CityNet aze outlined below.
Duration of the A¢reement The nroposed agreement nrovides for an initial three-yeat term
renewable, upon the same terms, covenants and conditions, at CityNeYs option, of seven ('n
additionat three (3) year renewai terms. Ttus means tfiat CiryNet may elect to operate its
business in Saint Paul for 24 years under the terms in ttis proposed agreement. Such a duration is
unprecedented in Saint Paul and greatly exceeds the duration of any similar agreement The cable
television franchise, for example, had an original term af fifteen (15) years. The most recent cable
television franchise has a term of ten (10) yeats with a five (5) year e�ension - at the City's
option. The CiTy.Charter limits the durafion of franchises to twenty (20), peazs unless approved by
a majority of electors voting thereon. While this Charter provisibn may not be direotly applicable
in ttus situation, it reflects the e�raordinary nahue of a proposal to hav@ an,agreement run for 2_4 _
yeazs. Tliis means, if at any renewal point durmg'ttus 24=year penod; CityNet deeins itie leitris. of
this agreement no loager fo be in their interest, they may elect not to renew. Tf, however, the City
finds the temis of this agreement ao 2onger to be in the City's best interest, it is boimd for fhe
entire 24 years if CityNet elects to exercise its renewal options.
Rental Fees. The pmposed ageement provides that CityNet pay the City rental fees in the
amount of 2.5% of its gross revenues. This is far less than the at least 5% of gross earnings
proposed in the City Charter for franchises. This is the rate currently paid by the cable television
,fa�a ,nrly�ic�� _ Ft �hn„r+�n ci D thn C'�t� c�,]�inia]�i.��tfihic,l�•#-ra�r�tyl-f�a-�irr•....8"..�"_
may elect to instaII their system in tiie pubfic rigfit-of-way without paying any rental or franchise
fee. "WIuYe tlus aiay be tr`ae, thi§ is clearIy not CityNet's business model and they are electing to
try to use city sewers because they can instail their system far more quickly and inexpensively than
if they had to absorb the full cost of right-of-way construckion. The proposal that the City should
accept lower fees because CityNet coutd do something that is faz more costly to them and not
part of their business plan, seems naive.
Bon . It is a common practice for the City to.require parties that pmpose to conduct business
using public rights-of-ways to provide bonds to secure tlieir obligation to defend and indenuvfy
the City against claims arising from usage of CityNet facilities. Such bonds aze customarily
�
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considered a cost-of-doing-business to be bome by the facilities operator. Also, construction
performance bonds aze commonly paid by the facilities operator. This proposed agreement
provides for such bonds but the cost of these bonds aze to be bome by the City not CityNet. For
the proposed $150,000 bond to secure the City against claims CityNet is violating the provision of
the cable television franchise, this bond is to be reduced and retired on a dollar-to-dollaz basis by
the delivery of rental fees to the City. This appears to mean that ttus bond will vanish upon
CityNet's payment of $ I50,000 in zental fees and from that point forwazd the City will be
required to pay for its own defense for activities related to CityNet It is also common practice
for contractors to be required to provide bonds to assure performance under the terms of an
agreement. Such bonds are also considered a cost-of-doing-business to be paid by the builder. In
this proposed agreement, the financial burden for tlus bond is again slufted to the City. CityNet
proposes to pay the City $50,000 with wlrich the City may purchase a surety bond to protect
against CityNePs failure to perform. This advance is, however, to be fully recovered by CityNet
by receiving full credit for this advance against rental fees. Again, the uitimate cost of the surety
twnd falts �o the �iYy, rioi i.ifyiJeY.
Protection of Cable Television Franchisees. Joe Van Eaton of Miller & Van Eaton, a City cable
law consultant, has repeatedly raised concerns this proposed agreement may undermine the City's
current cable television francluse. While an attempt has been made to address this risk by adding
certain provisions to the proposed agreement, Mr. Van Eaton is still of the view the City remains
at risk. He has proposed solutions to this problem but they have been rejected by CityNet. Tlus
proposed agreement does nof, therefore, adequately protect the City in t}us regazd,
Besides these majorcoricerns; §everal other lesser concerns remain. These concerns should,:
however, be resolveable through fiulher negotiations and iinproved drafting of the document,
Recommendations.
Based on a cazeful review of both the specific terms for the proposed agreement and the process
through which it was developed, Council Reseazch makes the following recommendations to the
City Council:
1. The City Council shouid reassert its authority to be actively involved in the development and
approval of any aereements v�h�rP rriy� �a.�es �e pr�t<cs:.-�.:,; �s� £::y y��pe cy vr F;riva�e
purposes.
2. The City Council should conduct a public hearing on the Cityl�et proposal to receive
information from all interested parties including prospective customers, competitors and the
public.
3. The City Council should advise CityNet the City will not enter into any agreement for the use
of the public right-of-way thaf exceeds 10 yeazs in total duration.
.
3. The City Council shouid require CityNet pay rental fees of at least 5% of gross earnings
derived from the use of City rights-of-way.
4. The City CouncIl should require CityNet to provide appropriate bonds at their expense and
such bonds shall remain in effect for the duration of the agreement
5. The City Council should direct City staff that any agreement with CityNet must provide
protections for the City's cable television francluse as proposed by Miller & Van Eaton.
6. The City Council should direct City staffto redraft the agreement to address less serious
concems to be identified by Council Reseazch.
7. The City Couacil should commit to an open, public process for reviewing and evatuating any
CityNet agreement This should include timely public notification and a public hearing.
8. The City Council should establish a process, by ordinance, for the development, review and
approval of any such similaz agreement in the fuUue.
cc: Susan Kimberly, Mayor's Office
Clayton Robinson, City Attorney
Sean Kershaw, PED
Tom Eggum; Axblic Works _
� ' ":. - Roger Puchreiter; Publio Works .
` Peter Aames, OFS _.
Legislative Ai�es -
.... . . _._ --- -- -- ............._._....
_ _...._ �.�_
_ ,_ .
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surre ttao
S 7. Pw �, M uags o 7A 5510 7
LINDQUIST & VETtNCTM P.�.�.P. ���Z.
ATTOw�rsAiL�w
73tomas L Fabd �
(651)312-1200 �
Apri15, 2001
President Dan Bostrom and
Members of the Saint Paul City Council
Saint Paul City Hall
15 West Kellogg Boulevard
Sairt P�it, M±nees�ta 55;n2-
.zuows�
805ovn�E�+rrHSrnEer
MSDE�APOLIS. MINNESOTA 554D2-2205
TaErHONE:61&371-3271
Fax:512�3713207
Re: �tyNet Contract for Instaltation of �ber Optic Cable In City Sewer System
Dear President Bostrom and Members of the City Council:
On behatf of CityNet Telecommunicarions, Inc., I would like to thank you for your consideration
of the proposed CityNet Agreement with the City of St. Paui. The proposed Agreement
authorizes CityNet to build a fiber optic network utilizing St. Paul's sewer system. The, proposed
Agreement is the result of lengthy, intense negotiations between CityNet and the City's staff. We
aze confident tfiat after your review of this Agreement you wi11 agree that it is fair, balanced and
reflects the serious "give and take” of good faith negotiations.
We are aware that you have received a preliminary analysis of the Agreement from Council
Research Director Gerry Strathman. Mr. Strathman raises four points of concem regarding the
Agreement. Each of these is addressed below.
Dura#ion of the Agreemen�. Mr. Strathman's memorandum raises a concem regarding the
durarion ofthe proposed 24-year Agreement with CityNet. It should first be noted that any
company that builds a fiber network in St. Paul using the t*adifie*eal s±*..°rt a��?+a..^.v {�e±�c3s t��s t;�
rigiit to use the City's rights-of-way for an infinite period of time, without any paymenf obligation
to the City. Under such traditional installatioq the City woutd also be subjected to the tra$c
disruption and degradation of its streets resutting from the miles of street cuts involved in
construction. All of this, of course, would be avoided with the CityNet system.
In order to lease the fiber optics to other telecommunications carriers, CityNet must be able to
ensure that the dura6on of its Agreement with the City of St. PauI provides an adequate time
frame for CityNet to guarantee that its network will be available to its customers. The
telecommunications industry standard for the duration of leases for fiber optics is twenty (20)
years. This is driven by the fact that telecommunications camers treat the costs associated with
the lease as a depreciable asset. In order to accomplish this, the carriers must acquire the rights to
LINDQUIST R: `TENNUM P,LLP.
President Dan Bostrom and Members of the Saint Paul City Council
Aprit 5, 2001
Page 2
the fiber for 75% of the economic life of the fiber, or 18.75 years (the economic life of fiber optics
is 25 years). Thus, the industry practice has been to acquire fiber under 20.year teases. Thus, an
agreemeirt of less than 20 years (plus four yeazs for network design and construction) will result
ia CityNet's inability to Iease to its customers and would make the proposed vem�ue untenable.
F"mally, in this regard, Mr. Strathman's memorandum actrnowledges that the City Charter
provision that limits the duration of franchises to 20 years is not appIicable to the CityNet
e r-rnoTMnn= �ero. 4 ' A ' a� s 4...:..L:.. _ = rt`i s_�B �-- ' r_- �-
'-a'^"'•"•. ��-� �+--� ��°...�°++.�,^:: 3 ii;s. &uwn.aua i�in.tucid. aumcia5t8 uic i}yiC3t uwa`f.�i3� �
of existing franchise ageements should not be controlling.
Rental Fees. Mr. Strathman qnestions why the proposed Agreement provides that CityNet will
pay the City 2.5% of its gross revenues rather than the 5% fee paid by cable franchisees. As
noted above, the proposed Agreement is not a franchise and CityNet is not seeldng eacclusivity.
Moreover, under 1vTinnesota Iaw, the City may not charge atry fee upon a telecommunica6ons
provider to use its rights-of-way. The CityNet fge is permissible only because its system will be
occapying Cify property (the'sewers) ratfier than;the nght;of-wag Thus, any comparison to the
5% received from a cable francivse is inappropnafe. It is more appropriate.to compa;e the _
CityNet proposal to a competing compazry that ]ays fiber using traditional street cutting methods,
resulting in no payment to the City.
It aiso deserves note that the 2.5% fee does not reflect the additional services that CityNet has
agreed to provide to the City. CityNet estimates that the value of its sewer cleaning, inspection,
mapping and repairs covld be as high as $1.5 million. Taken with the revenue payments, this totai
couid be greater than the 5% paid by franchisees. It is also true that the 2.5% fee does not reflect
the value to the City of having "direct fiber connectivit}�' to buildings that will enhance the City's
void'mg i�eets being trenchP,d a.�� a�rn� y�x aamo, � ber de e fo t�ie �ty of
velopmecrt methods.
Bonds. The concerns raised regarding the bonds aze essenfsally that Yhe costs of the bonds are
funded by CityNet revenue to the City, rather than as an additional cost to CityNet. The bond
provisions were negotiated to provide the City with additionai protections for events that, as
discussed below, are unlikely to occur. If the City chooses to purchase bonds (which other cities
have not deemed necessary) the cost witt be paid with funds that the City would not I�ave except
as a result of the Agreement.
Regarding a performance bond, these aormally are required to protect a city ict those instances
when a builder fails to complete construction. Under its business plan„Cit}�Net_witl nof. `
commence construction of its network unt� it has entered irno agreements_witlr its: ciistomers to
.
;
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LINDQUIST R: `JENNUM P.LLP.
Presidern Dan Bostrom and Members of the Sairn Paul City Council
April 5, 2001
Page 3
lease the fiber in the network Therefore, in the unlikely event that CityNet cannot Iease fiber to
its customers, no construction will begin and the Ciry wilt not be disadvantaged or hazmed as a
result of this Agreemem. In fact, the City will still have the benefit of the sewer ma.pping and
video inspection that precedes the conshuction of the network.
Protection of Cable Television Franchisees. The possibility that the proposed Agree�nem
creates a risk that the City's current cable fianchise wiii be undermined if a CityNet customer uses
the network tb provide calile tetevision service withouf an appropriate franchise is exceedingly
remote. This concern, which was raised by a cable industry consultant, has been reviewed by both
the City Attorney and a telecommunications law expert retained by the City, both of whom have
detemrined that any such risk has been addressed and minimized by the cable franchise protection
provisions ofthe Agreement. In addirion to the lirigation bond provision, CityNet has agreed to
include a provision in CityNet's contracts with its customers that creates a third-party beneficiary
remedy for the City and any cable franchisee, which will result in a substantiai financial penaky if a
CityNet customer violates the provisions of the Agreement. Additionally, it should be noted that
CityNet fiber will serve high-density commercial buildings which aze unlikely to be customers of a
cable television provider: �_ , � � �" . _ : � � _ � _ � � � � -
In conclusion, CityNet looks forward to your approval of the Ageement as proposed and to a
successful partnership between the City and CityNet in this endeavor. Of course, CityNet is
available to address any questions, concems or requests for additional information you may have.
Very truly yours,
LII�TDQUIST & VENNUM P.L.L.P.
�
/ �'� i��
Thomas L. Fabel
TLF/ing
cc: Mr. Gerry Strathman
, Mr. Tom Eggum
Mr._�earrKersha�v�- �
„ Mr.:Clayton ltobiason
p�.?'10
SEWER LEASE AGREEMENT
Between
TFIE CITY OF SAINT PAUL, NIINNESOTA
and
CITYNET TELECONTMUNICATIONS, INC.
This AGREEMENT, is made and entered into as of this
, by and between CityNet Telecommunicarions, Inc., a 3
office at 8403 Colesville Road Fourteenth Floor, Silver Spring,
"CityNet"), and the City of Saint Paul, Minnesota, a Minnesot�f
(hereinafter "City"). �
day of ,
corporation, hauing an
I, 20910 (hereinafter
corporation
WHEREAS, City currently owns and operates a ewer System, located in the City of
Saint Paul, State of Minnesota, said existing Sewer Sys m being more particularly described on
Exhibit A(hereinafter the "Sewer System"); and
WHEREAS, CityNet desires to install, pl e and maintain telecommunications facilities
(hereinafter "Facilifies") in portions of the Sewe ystem for the purpose of operating dark (unlit)
fiber opric Faciliries; and
WHEREAS, CityNet desires to leas space in the City's Sewer System, rather than using
space in the City's streets and rights-of-w , in order to avoid the additional costs, expenses,
disruption, delays and inconvenience of cavating and obstructing the City's streets and Rights-
of-Way; and
WHEREAS, the City has a ed to lease to CityNet space in the Sewer System for the
placement of CityNeYs Facilities i rder to avoid the inconvenience, disruption, delays and costs
of CityNeYs obstructing or excav ' g the City's streets and Rights-of-Way that would otherwise
be required in the absence of thi Agreement; and
WHEREAS, the Ci has also agreed to this Agreement because City desires to fmd new
and innovative ways to pro ide fiber optic access to its citizens and other users, and to provide
such access uniformiy ughout the City, in order to attract new business and retain existing
business, attract and ex and a highly skilled workforce and promote general economic
development through. t the City by way of technology availability and upgrades; and
f ,,
WHEREAS, the City has also agreed to this Agreement because City desires to protect
and preserve its infrastructure and more efficienUy use its monetary and personnel resources by
Doc# 1374757�2
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finding and authorizing innovative methods o£ deploying fiber optic systems which do not
involve digging and trenching in the streets and other public right of ways and which min;mize
the disruption of traffic flow and commerce and the economic loss associated with such
disruprion; and
WHEREAS, the City has also agreed to this agreement because City desires to ide fy
additional methods of inspection, maintenance and metering of its sewer system to insur
compliance with federal and state environmental laws and regulations; and
WHEREAS, nothing in this Agreement shall be construed to limit in any ay CityNeYs
right to apply far and obtain City authorizarions and permits, to construct and aintain and own
a fiber optics system or facilities, and to apply for and obtain other rights-of- ay agreements
from the City or other rights-of-way providers; and
WHEREAS, CityNet acknowledges that, notwithstanding
Agreement, it shall comply with any and all existing or future La�
those regulating the City's public Rights-of-Way found in Chaptei
St. Paul Legislative Code, before exercising any right under this
herein shall constitute a permission or authorization or waiver�
such prior compliance by CityNet;
NOW THEREFORE, in consideration of the
provided herein, the parties agree as follows:
GENERALLY
provision within this
�e but not limited to
'116 and 135 of the City of
reement, and that nothing
the City of its right to require
and of the mutual covenants
1. Incorporation. The foregoing recitals, well as Appendix 1 and Exhibits A, B and
C, are hereby incorporated in this Agreement as i set forth here verbatim.
2. Definitions. The following words, erms and phrases, when used in this Agreement,
shall have the meanings ascribed to them in 's section, except where the context clearly
indicates a different meaning:
Sewer System: A system of s� ary, storm water and relief sewers as described in
Exhibit A.
Facilities: The fiber optic elecommunications transm3ssion facilities consisting of fiber
optic cables, and associa d appurtenances, as described in Eachibit C, to be installed by
CityNet, and to be loc ed within portions of City's Sewer System pursuant to this
Agreement, solely t rovide Telecommunications Services.
Fee: Any monetary assessment, license, cost, chazge, fee, nnposirion, or tas, of any Idnd
whatsoever, including but not limited to: A levy of general application to entiries doing
Doc#137475T2
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business in the City lawfully imposed by any governmental body; Any real estate or
personal ta7ces on equipment or property owned by CityNet, whether general or special;
Any public urility rates, dues, or chazges of any kind for utilities used by CityNet; Any
fees, costs or eapenses of insurance; and any other expenses, costs, or other applicable
tariffs resulting from the performance of this Agreement.
Law or Laws : Any and all statutes, constitutions, ordinances, resolutions, regul�
judicial decisions, rules, tariffs, administrative orders, certificates, orders, as well
other requirements of the City or any other govemmental agency having joint or �
jurisdiction over the parties to this Agreement. �
Person: Any individual, person or entity, however organized, whether pub �c or private,
whether domestic or foreign, whether for profit or nonprofit, and whether atural,
corporate, or political. "
Rirht-of-Wav or Public RiQht-of-Wap: The area in, on, below or ove a public
roadway, highway, street, cartway, boulevazd, bicycle lane, side alk, parkway or alley
which the City owns, including areas used for sewer utility p oses, or over which it has
a real property easement or interest, including other dedicat Rights-of-Way.
Telecommunications: The transmission, behveen or ng points specified by the user,
of information of the user's choosing, without change ' the form or content of the
information as sent or received.
Telecommunications Services: The offering
nondiscriminatory basis for a fee directly or i
LEASE OF
rights of use on a
to telecommunications providers.
SYSTEM
3. Lease: Subject to the provisions o is Agreement, including the specifications and
rules contained in Appendix l, City hereby ases to CityNet for its non-exclusive occupancy of
space located within City's Sewer System or the placement of Facilities. The Facilities will be
installed, with prior approval of the
jointly identified by the City and Ci
Facilities as to make installarion ecc
Areas of Installation); provide
configuration and location of t
considerations. City shall hav
of the Sewer System that the�Q
installation of the Facilitiesl
CityNet may
in such portions of the City's Sewer System as shall be
as providing sufficient potential mazket for the
�ally feasible (as provided in Exhibit B, "Potential
�ver, that CityNet alone shall determine the actual
�acilities based upon CityNeYs business and economic
� right to withhold approval of access by CityNet to any potion
deems to be physically or shucturally inappropriate for the
the leased portions of City's Sewer System only for the purpose of
Doc# 137475T2
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installing, maintauvng, operating and licensing to third parties for a fee the use of the Facilities in
the Sewer System for providing Telecommunications Services and any uses incidental thereto.
CityNet may, with the City's prior written consent, which shail not be unreasonably withheld,
modify, alter or upgrade the Facilities during the Initial Term and any and all Renewal Terms,
subject however, to the terms and conditions of this Agreement. CityNet shall not use, allow
suffer the leased portion of the Sewer System to be used for any other purpose, provided, howe er,
that City and CityNet may, by amendment to this Agreement, provide for other us Any
unauthorized use will allow City, at its oprion, to temunate this Agreement.
4. Government Permits: Prior to the installation of CityNeYs Facilities w' �n the
Sewer System, CityNet shall obtain from the appropriate govemmental authoriti , including the
City itself, any required permits or licenses necessary for such installation, an hall provide to
City copies of such permits or licenses upon request. City agrees to provide easonable
assistance to CityNet in obtaining such permits or licenses. CityNet shall tify City immediately
if City or any govemmental authority indicates that a permit or a licens 'll not be issued, at
which time CityNet may at its option choose to terminate the agreem t immediately, without
cause.
5. Reserved Right: This Agreement shall not constitut an assignment of any of City's
rights to use the Right-of-Way or the public or private prope upon which the Sewer System is
located. Nothing contained in this Agreement shall be cons ed as a limitation, restriction or
prohibirion against City with respect to any agreement or gement which City has heretofore
entered into, or may in the future enter into, with other p sons regazding the Sewer System or
Right-of-Way. City agrees, however, that the use and
other persons shall not interfere with CityNet's rights
Agreement. Subject to the terms and conditions of :
the Sewer System shall at all times remain exclus' ely
in CityNeYs Faciliries shall at all times remain e clusi
6. Scone of Agreement. Any and
Agreement, which shall be exercised at
prior, continuing, and any future right
of the Sewer System and the public Ri
person and shall be further subject to
restrictions, encuxnbrances, and clai s
cupancy of the Sewer System by such
f occupancy granted pursuant to this
agreement, all right, title and interest in
with City, and all right, title and interest
�ely with CityNet.
rights expressly granted to CityNet under this
eYs sole cost and expense, shall be subject to the
of e City under applicable Laws to use any and all parts
t-of-Way exclusively or concurrently with any other
1 deeds, easements, dedications, conditions, covenants,
of ritle of record which may affect the City's Sewer
System. Nothing in this Agreeme shall be deemed to grant, convey, create, or vest in CityNet a
property right or interest, includ' g but not limited to any real property interest in land, or any
fee, leasehold interest, or ease ent other than such interests that are explicitly conveyed in this
Agreement. Any work perfo ed pursuant to this Agreement shall be subject to the reasonable
prior review and approval the City, and subject to CityNeYs prior compliance with any and all
existing and future laws, � cluding but not limited to public Right-of-Way registration and use
laws found in Chapte 16 and 135 of the City's Legislative Code.
Doc#137475T2 4
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7. Term: The initial term of this Agreement shall be three (3) years unless earlier
terminated in accordance with the provisions here (hereinafter "Inirial Term"). The term
shall commence on the date above first written.
8. Option to Renew: Provided this Agreement has not been earlier terminated and
CityNet is not in default of any of the covenants of this Agreement, then subject to the pr 'sions
contained herein, City grants CityNet the oprion to elect to extend this agreement for s en ('�
additional three (3) year renewal periods (each being a"Renewal Term") commenc on the day
following the expiration date of the Inirial Term or any subsequent Renewal Term Such options
may be exercised by CityNet giving to the City written notice of its election to r ew, not later
than one hundred eighty (180) days prior to the expiration ofthe Initial Term the then current
Renewal Term, as the case may be. If CityNet should elect to renew this A eement, any such
renewal shall be upon the same terms, covenants and conditions as provid in this Agreement
for the Initial Term.
9. Installation, Maintenance and Renairs: CityNet shall h e the right at its sole cost
and expense to install, maintain, and operate the Facilities in the Se er System. CityNet's
installation of the Faciliries shall be made according to plans appr ed by the City, which
approval shall not be unreasonably withheld, delayed, or conditi ned. CityNet shall perform a
video inspection of those portions of the Sewer System in whi CityNet intends to construct its
Faciliries. In connection therewith, the City shall respond to ityNet in writing with respect to
any submittal of such plans or drawings (which shall inclu e the results of a video inspection)
after receipt thereof with any disapproval, objection or p posed modification within thirty (30)
days of said receipt, or such plans or drawings shall be eemed approved by the City. CityNet
shall also perform a video inspection subsequent to installation of the Facilities and provide
the City with a copy thereof. The City shal] have n obligation to maintain, inspect or repair the
Facilities so as to cause them to conform to any p ormance specification, and C3tyNet shall, at
its own cost and expense, install, maintain, rep �, and secure its Facilities so that they remain in
good and safe condirion and in compliance wi the provisions of this Agreement and all
applicable fire, health, building, and any oth life safety codes or Laws.
During the first two years follo ' g the installation of the Facility, CityNet shall twice
annually jet-spray that portion of the S er System containing the Facility. Thereafter, CityNet
and the City shall agree on an approp ate regular schedule for such cleaning to be done by
CityNet, at CityNeYs sole cost and pense.
The Faciliries shall rema' the exclusive property of CityNet, and CityNet shall have the
right to remove all or any port n of the Facilities at any time during the term of this Agreement,
provided that the same does ot otherwise interfere with the City's operarions of the Sewer
System. The Faciliries sha be deemed personal property for purposes of this Agreement,
regazdless of whether an portion thereof is deemed real or personal property under applicable
law.
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All work by CityNet shall be performed in compliance with applicable laws and
ordinances. CityNet is not authorized to contract for or on behalf of the City for work on, or the
fixrnishing of materials to the Sewer System or any part thereof, and CityNet shall pay any and all
subcontractors, material men, mechanics and laborers promptly for any work performed or
materials fi�mished at the instance of CityNet on the Sewer System.
10. Rental Fee_ The annual lease Rental Fee to be paid by CityNet to City ori a
quarterly basis, is two and one haif percent (2.5%) of the "Gross Revenues" (as fined below)
received by CityNet from the operation of the Facilities in the Sewer System p uant to this
Agreement. Such payment shall be made within forty-five (45) days after th expiration of each
quarter at the City's address specified in Section 26 hereof. For purposes o this Section, "Gross
Revenues" of CityNet shall be all gross revenues, determined in accord ce with generally
accepted accounting principals ("GAAP'�, derived and received by Ci et from its operation of
the Facilities in the Sewer System. Gross Revenues include, but aze ot limited to, chazges made
by CityNet or any affiliate of CityNet for the use of the Facilities b other persons or entities.
Notwithstanding anything to the contrary in this Section, Gross evenues shall not include (i)
any taac or fee imposed on the users of the Facilities by the Cit or any other governmental
authority and collected by CityNet on behalf of such gove ental entity, (ii) the revenues of any
Affiliate (as defined in Section 25) of CityNet to the exten such Affiliate revenues are costs of
CityNet and recovered by CityNet through charges to su scribers that are included in gross
revenues on which fees are paid, (iii) actual bad debt, r funds or credits, provided any such bad
debt subsequently collected shall be included in gros revenues in the period collected, and (iv)
the revenues of CityNet or any Affiliate of CityNe 'th respect to their respective operations
which do not use the Sewer System. Gross reven es shall be adjusted to reflect contributed goods
and/or services provided to the City by CityNe der the terms and conditions of this
Agreement. Acceptance by the City of any p ent due under this Agreement shall not be
deemed to be a waiver by the City of any b ach of this Agreement occurring prior thereto, nor
shall the acceptance by the City of any su payments preclude the City from later establishing
that a larger amount was actually due or om collecting any balance due to the City.
City may, at any time, at Ci s sole option, upon ninety (90) days written notice, require
CityNet to discontinue the lease R tal Fee payments. Upon receiving such notice CityNet shall,
no later than ninety (90) days aft receiving such notice, cease maldng all compensation
payments that would have been ayable after such ninety (90) day norice period. If City requires
such a discontinuation of Ren Fee payments, the City may then charge, on an annual basis, its
actual Right-of-Way manag ent or management costs (pursuant to Minnesota Statutes §
237.162, Subd. 9 and § 23 .163, Subd. 2(b), and pursuant to any relevant local, state or federal
ordinance, statute, regula on, law or other rule), that are incurred after the expiration of the
ninety (90) day period escribed above, provided that in no event will CityNeYs payment be
greater than the amo t established as the Rental Fee herein.
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CityNet shall also file quarterly a report ("Compensation Report") with the City, by
sending copies to the individuals listed in Section 26 herein. The Compensarion Report shall
show the Rental Fees paid to the City, as well as all CityNet revenues for the preceding quarter
based upon CityNeYs services or operations within the City of Saint Paul that made up Gross
Revenues. The Compensation Report shall also show any adjustments as provided for � �s
Agreement for bad debt, and the Compensation Report shall be executed and attested t by an
authorized officer of CityNet verifying the accuracy of the Compensation Report an amount of
all fees, compensation, or other payments under this Agreement.
CityNet shall keep accurate books of account, in accordance with G , for the purpose
of determining the amounts due to the City under this Agreement. The City ay inspect
CityNeYs books of account relative to the City at any time during regular usiness hours on
thirty (30) days prior written notice and may audit the books from time tune at the City's sole
expense in order to verify the accuracy of payments due under this A eement. The City may
also, at its option, require that CityNeYs compliance with the term d conditions of this
Agreement, including, but not limited to, the computarion of any ees or payments, be verified by
a certified public accountant or compazably qualified consult at the sole expense of the City.
11. Other CharQes. CityNet shall be solely resp sible for the payment of all Fees,
expenses, costs, compensation, or any other charges im sed or based upon CityNeYs
performance under this Agreement. CityNet shall pay y such Fees ar charges within thirty (30)
days of notice of the same from the City. CityNet s I pay any personal property tases assessed
on, or any portion of such taxes attributable to, th acilities located in the Sewer System.
12. Removal or Relocation. CityN understands and acknowledges that City may
require it to remove or relocate some or all o its Facilities, and shall at City's direction remove
or relocate such Facilities whenever City r onably determines that the removal or relocation is
needed for any of the following purp
or maintenance of a City project or a
interfering with or adversely affectin
facilities or uses of the sewer utility
health, welfare or safety, or (d) as
administrative or legal authority, � c]
es (a) for the construction, completion, repair, relocation,
lic Right-of-Way, (b) because the Facilities are
roper operation or maintenance of any other fixtures or
public Right-of-Way; (c) to protect or preserve the public
ult of any law, nxling, judgment or decision of an
iinQ but not limited to a district court of the State of
Minnesota. If CityNet shall fail o remove or relocate any Facilities as requested by the City
within a reasonable time unde e circumstances, City shall be entitled to remove or relocate the
Facilities at CityNeYs sole c t and expense, without further notice to CityNet. In the event that
City is required for any re n to remove, relocate or discontinue leasing or operating the Sewer
System, or any portion th eof, either party shall have the option to terminate this Agreement.
Doc# 137475T2
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13. Damage to Public Right-of-Wa�r Sewer System. Whenever the installation,
removal or relocation of Facilifies is required or pernutted under this Agreement, and such
installarion, removal or relocarion shall cause the Public Right-of-Way or Sewe ystem to be
damaged, CityNet, at its sole cost and expense, shall comply with ali laws gov ' g use of the
Public Right-of-Way or the Sewer System, which includes the obligation to �omptly repair and
retum the same to a safe and satisfactory condirion in accordance with
wear and tear excepted. If CityNet does not repair the site as just desc�
have the option, upon fifteen (15) days prior written notice to CityNet,
performed such reasonable and necessary work on behalf of CityNet
the proposed costs to be incurred or the actual costs incurred by the ii
�plj��'able Laws, normal
�e�fl, then the City shall
�perform or cause to be
to charge CityNet for
at City's standard rates.
Upon the receipt of a demand for payment by the City, CityNet s 1 promptly reimburse the
City for such costs. The provisions and rights in this section are n addition to, and not in lieu of,
any right of the City under existing or future applicable Laws.
14. Condemnation: In the event that the Sewer S tem, or any portion thereof, shall be
taken or condemned, either permanently or temporarily, r any public or quasi-public purpose
by any person or authority in appropriation proceeding or by any right of eminent domain, or in
the event that City's permit and right to occupy the p lic Right-of-Way with its Sewer System
or to Lease portions of its Sewer System is revoked r deemed illegal, this Agreement shall
automatically terminate on such date and any dam ges arising therefrom shall be payable to City.
CityNet shall have the right to claim and recove om the condemning authority, such
compensation as may be separately awarded or ecoverable by CityNet.
15. Emergenc�Reaairs. CityN
paramount purpose of the Sewer System i�'for Uae transfer of sewage and storm water, which in
no way shall be compromised or abridg by any right conferred under this Agreement.
o ally ceases to drain normally due to blockage or
t is City's responsibility to restore normal flow as soon as
Historically the Sewer System �
struchxral failure. On these occ
possible. Under such circumsta
Facilities or for temporary inte�
make every reasonable attempt
impact the Facilities under this
16. Access to tB
Agreement, subject to p:
which supervision costs
vehicular ingress and e
for the purpose of ac�
maintain and operat e
and agrees that the primary and
the City shall not be responsible for any damage to the
n of service provided through the Facilities. The City will
ify CityNet as soon as possible of any City work that may
: S er S stem. CityNet may, at all times during the term of this
io compliance with City ordinances and to reasonable supervision,
fees shall be paid for exclusively by CityNet, have pedestrian and
ess to and from the Sewer System, on a 24-hour, 7-day per week basis,
ing the Facilifies to the extent reasonably necessary to install, field-test,
Facilities.
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17. Renewal of Lease. If both City and CityNet wish to enter into a new lease
agreement then, before expiration of the final Renewal Term, the City and CityNet may enter
into good faith negoriations the object of which will to agree upon the terms of a new lease
agreement.
ADDITIONAL PROVISIONS
18. Independent Contractor: In performing this Agreement, City and City et shall
operate as, and for all purposes be considered, independent contractors and not age s, and
neither party shall have authority to bind or otherwise obligate the other in any m er
whatsoever. All personnel perfornung seroices shall remain under the exclusiv direction and
control of their respective parties and shail not be deemed to be employees o gents of the other
party. No employee or agent of CityNet shall be deemed an employee of � for the purposes of
this Agreement, nor shall City be responsible for any payments such as c pensation, wages,
benefits, taaces, workers' compensation, disability or other insurance or y other payments with
respect to any such CityNet employee or agent.
19. Force Majeure Susuension and Termination: In t event that either party to this
Agreement is unable to perform any of its obligations under � Agreement or to enjoy any of
the benefits thereof because of natural disaster, acrions, Law orders or decrees of governmental
bodies or failure of power supply, or any condition that is yond that party's reasonable control,
including but not limited to acts of God, fire, flood, or ot er catastrophe (hereinafter "Force
Majeure Events"), the non-performing party shall imm iately provide notice thereof to the other
party and shall do everything possible to resume perf ance. Upon receipt of such notice by
the performing party, this Agreement shall immedi ely be suspended. If the period of
nonperformance exceeds forty-five (45) days
Event, either party shall have the option to te:
the other pariy.
e receipt of notice of the Force Majeure
this Agreement by giving written notice to
20. Indemnifica6on: CityNet sh indemnify, defend, protect, and hold hazmless the
City, its council members, officers, agen , contractors and employees from and against any and
all claims, demands, losses, damages, ' bilities, fines, charges, penalties, administrative and
judicial proceedings and orders, jud ents, and all costs and expenses incurred in connection
therewith, including reasonable att ey's fees and costs of defense, occasioned by or arising out
of CityNeYs activities undertak utsuant to this Agreement, except to the extent arising from
or caused by Uae negligence or llful misconduct of the City, its council members, officers,
employees, agents, or cont�
indemnify the City, and its
allegations allege (a) ind
or (b) a wrongful act or m
shall also defend and ' den
negligence, if the a gatioi
rs. The foregoing notwithstanding, CityNet shall defend and
ficers and employees, even in the case of negligence, unless the
dent negligence on the part of the City, its officers and employees
�ion on the part of the City or its officers or employees. CityNet
ify the City, its officers and employees, even in the case of
are based on the City's or its officers or employees' negligence or
Doc#137475T2
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otherwise wrongful act or omission in approving this Agreement, or in failing to properly or
adequately inspect or enforce compliance with the terms, conditions or purpose of this
Agreement. CityNet shall also defend and indemnify the City, its officers and employees, in the
case of CityNet's use of Hazardous Materials. "Hazazdous Materials" means asbestos, petroleum
products, or any to�c or hazardous substance, waste or materials as defined in any federal, , ate
or local environmental or safety law or regulation including, but not limited to, CERCL
MPCA, and MERLA. The provisions of this secrion shall survive any termination or e iration
of this Agreement. Without limiting the foregoing, CityNet shall obtain a bond in th sum of
$150,000, in a form acceptable to the City Attomey, to secure its obligation to def d and
indemnify the City against any claim asserted by a City-franchised provider of c le television
service, alleging injury based upon usage of the CityNet Facilities in violatio f the City
franchise ordinance for the provision of cable television service. Said bond equirement shall be
reduced and rerired on a dollar-for-dollar basis by the delivery of rental f s to the City by
CityNet pursuant to Paragraphs 10 and 46 of this Agreement.
21. Limitation on Liability and Waiver: NOTWITHST ING ANY PROVISION
HEREIN, NEITHER PARTY SHALL BE LIABLE TO THE O R FOR ANY INDIRECT,
SPECIAL OR CONSEQLTENTIAL DAMAGES, INCLUDIN , WITHOLTT LIMITATION,
THOSE BASED UPON INTERRUPTION OF SERVICE O FOR ANY LOSS OF
REVENUES, PROFITS, OR BUSINESS OPPORT
WHETHER OR NOT EITHER PARTY HAD OR ;
KNOWLEDGE, ACTUAL OR CONSTRUCTIVE, THf4T ANY SUCH DAMAGES MIGHT
BE INCURRED. CityNet also waives any and all cl ' s, demands, causes of action, and rights
it may assert against the City on account of any loss damage, or injury to its Facilities or any
loss or degradation of the services provided by its acilities. The City shall be liable only for the
e independent negligence or willful
ntractors. In no event shall the City be liable for
iat damage CityNeYs Facilities. In no event shall
cost of repair to damaged Faciliries arising fr�
misconduct of City, its employees, agents, or
vandalism, malicious mischief, or acts of Go�
either party be liable for special, consequen �
perfornnance or nonperformance of its obl' a1
secrion shall survive any termination or pir
RESULTING THEREFROM,
HAVE HAD ANY
exemplary or punitive damages as a result of the
is under this Agreement. The provisions of this
on of this Agreement.
22. Default: If at any time tyNet fails or refuses to perform any of the material
covenants or conditions contained i this Agreement, and such failure or refusal shall continue
for sixty (60) days after written n ice is provided by City to CityNet, then City, at its election
may re-enter and take possessio of the leased portion of the Sewer System, remove CityNeYs
Facilifies therefrom, re-let the ased portion of the Sewer System or any part thereof on such
terms, condirions and rentals City may deem proper, and, at City's option, either terminate and
cancel this Agreement, or ply the proceeds that may be obtained from said re-letting, after
deduction of costs and e enses, to the lease rentals required under this Agreement, and hold
CityNet liable for any ance of such rentals which may remain unsatisfied and unpaid. In such
an event, CityNet sh pay to City, as addirional rent: (i) all costs and expenses reasonably
incurred by City in aking any alterations to the Sewer System in preparation for re-letting and
Doc# 137475T2 � 1 �
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in attempting to re-let the leased portion thereof, and (ii) ali costs and expenses, including
attorneys fees and costs, reasonably incurred by City as a result of CityNet's default or enforcing
City's rights and remedies hereunder.
23. Time to Cure: In the event any such default (other than the payment of fees due ,
hereunder) cannot reasonably be cured within such sixty (60) day period, the time for c' such
default shall be extended for whatever period of time is required to complete such curin o long
as either party is proceeding with due diligence. The waiver by either pariy of any br ch of any
term, covenant or condition herein contained shall not be deemed to be a waiver of ch term,
covenant or condirion or any subsequent breach of the same or any other term, co enant or
condition herein contained.
24. Insurance: CityNet shall at its own expense obtain and maint ' at all times during
the term of this Agreement Commercial General Liability insurance and ommercial
Automobile Liability Insurance protecting CityNet in an amount not le than One Million
Dollars ($1,000,000) per occurrence (combined single limit), includi bodily injury and
properiy damage, and in an amount not less than Three Million Do s($3,000,000) annual
aggregate for each personal injury liability and products-complet operations. The Commercial
General Liability ansurance policy shall name the City, its coun 1 members, officers, and
employees as additional insureds as respects any covered liab' ity arising out of CityNeYs
performance of this Agreement. Coverage shall be in an oc ence form and in accordance with
the limits and provisions specified herein. Claims-made p licies are not acceptable. Such
insurance shall not be canceled, nor shall the occurrence r aggregate limits set forth above be
reduced, until the City has received at least thirty (30) ays' advance written notice of such
cancellation or change. CityNet shall be responsible r notifying the City of such change or
cancellation. Prior to any Renewal Term pursuant § 8 of this Agreement, the City may request
and the parties shall bazgain in good faith to incr se the above minimum insurance amounts, if
such an increase is watranted by indushy stand ds or specific identified risk, or by any change
in Minnesota Statute § 466 or any other Law ertaining to municipal liability. Such increase, if
any, shall not be effective until the comme ement of such Renewal Term.
Prior to the commencement of work pursuant to this Agreement, and annually
thereafter, CityNet shall file with the ty, pwsuant to the Norice provision in Section 26, a
certificate of insurance which shall s te the following: the policy number; name of insurance
company; name and address of the gent or authorized representative; name and address of
insureds; policy expiration date; ecific coverage amounts; that the City shall receive thirty (30)
days' prior notice of cancellatio ; that names the City, its council members, officers, and
employees as additional i
performance of this Agre�
policy waives any right o
s as respects any covered liability arising out of CityNeYs
and that CityNeYs Commercial General Liability insurance
�ry the insurance company may have against the City.
Doc#137475� 11
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An insurance provider of CityNet shall be admitted and authorized to do business in the
State of Minnesota and shall carry a min;mum rating assigned by A.M. Best and Company's Key
Rating Guide of "A" Overall and a Financial Size Category of "X" (i.e., a size of $500,000,000
to $750,OOQ000 based on capital, surplus, and conditional reserves). Insurance polici d
certificates issued by non-admitted insurance companies are not acceptable. Any d ctibles or
self-insured retentions must be stated on the certificate(s) of insurance, which shal e sent to and
approved by the City. "Severability of interesY' or "separation of nvsweds" clau s shall be made
a part of the Commercial General Liability and Commercial Automobile Liab� ty policies.
25. Assi�nment: CityNet shall not assign or otherwise convey an of its rights,
obligations or interests under this Agreement without the express prior �tten consent of the
City, which consent shall not be unreasonably withheld. This clause a o applies to CityNeYs
Affiliates, who shall be financially viable. "Affiliate" means a pazen or subsidiary of CityNet,
an entity that owns or controls, is owned or controlled by, or is un r common ownership or
control with CityNet, or an entity which merges or is consolidate with CityNet or which
purchases a controlling interest in the ownership or assets of C� Net. In the event CityNet
assigns its rights, obligations or interests under this Agreeme , CityNet shall remain secondarily
liable to City for the performance of its assignee under this greement.
City may require an assignee or transferee to po with the City security in the form of a
cash deposit, letter of credit, or surety bond satisfacto in form and amount, which shall be fully
refunded or otherwise released to the posting party on termination of this Agreement and upon
the timely removal of Facilities pursuant to this A eement, to the reasonable satisfaction of the
City. [King's Paragraph]
26. Nofice: All notices and other co unications which shall or may be given pursuant
to this Agreement shall be in writing and b deemed to have been duly given (i) upon personal
delivery, or (ii) upon placement into the ited States mail, certified, postage prepaid, retum
receipt requested, to the parties at the fo owing addresses:
If to City: Director
Deparhnent fPublic Works
City of Sai t Paul
1000 Ci all Annex
25 Wes ourth Street
Saint aul, Minnesota 55102
With copy to: S� t Paul City Attorney
0 City Hall and Courthouse
15 West Kellogg Boulevard
Saint Paul, MN 55102
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If to CityNet:
CityNet Telecommunications, Inc.
8403 Colesville Road, 14� Floor
Silver Spring, Maryland 20910
Attenrion: Mark Perkeli, General Counsel
or at such other address as the parties hereto may specify from time to time by writte otice
delivered in accordance herewith.
27. Terminafion: This Agreement may be termiiaated by either party pon written
notice to the other pariy upon a material default of any covenant, provision r term hereof, by
the other pariy, which default is not cured within sixty (60) days of recei of written norice of
default (or, if such default is not curable within sixty (60) days, if the faulting party fails to
commence such cure within sixty (60) days or fails thereafter dilige y to prosecute such cure to
completion), provided that the grace period for any monetary
receipt of notice.
Additional Termination Ri¢hts.
(a) Ci Net. CiryNet may, without further
(180) days written notice, terminate its lease or its
without cause.
shall be ten (10) days from
to City, upon one hundred eighty
of any portion of the Sewer System
(b) C�. If any govemmental agency o third party institutes proceedings successfully
imposing public utility or common carrier sta s on City as a result of its performance of this
Agreement, or if any action is brou�t by third party successfully challenging the continued
validity of this Agreement or seeking to a ersely modify, suspend or revoke City's operaring
authority for its services or Sewer Syste as a result of its or CityNeYs performance of this
Agreement, and there is an adverse im act upon the City which cannot be eliminated by CityNet,
City may, without fiirther liability to ityNet, upon one hundred eighty (180) days written
notice, terminate this Agreement � out cause. City may also, without fixrther liability to
CityNet, upon one-hundred and enty (120) days written notice, terminate this Agreement in
the event that CityNet fails to i� iate and diligently pursue installation of the Facilities or to
maintain Facilities as
28.
Norivithstanding any other term or condition contained
herein, and in addirion to y other legal or equitable remedy, City shall have the right to
terminate this Agreeme at any time if CityNet or any of its affiliates shall be unable to pay its
liabilifies when due, o shall make any assignment for the benefit of creditors or file a voluntary
petition in bankrapt or be adjudicated banknipt or insolvent, or if any receiver is appointed for
its business or pro rty, or if any trustee in bankniptcy or insolvency shall be appointed under
the governing L s of the United States or of any state.
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29. Surrender and Removal: Upon terminarion of this Agreement for any reason, or
expirarion of the Initial Term or any renewal term of this Agreement, CityNet shall, upon written
request of the City, remove any and all of its Facilities and any other equipment from the City's
Public Right-of-Way and Sewer System within one hundred hventy (120) days, and shall quit
peacefully, and shall repair any damage to the Public Right-of-Way or Sewer System caused by
such equipment or Pacilities, normal wear and tear excepted, all at CityNeYs own cos�d
expense, provided, however, that if such removal is not completed within such one h dred
twenty (120) day period, CityNet may request such additional period as is reaso
for such removal as long as CityNet diligently makes such removal as promptly
and/or such additional period as is reasonably necessary to account for delays t�
by events or circumstances beyond the reasonable control of CityNet,
limitation, forces of nature. CityNeYs failure to comply with these sw
requirements shall be deemed a material breach of this Agreement. Ur
City may also, in its sole discretion, exercise any rights it has at Law c
not limited to deeming such Facilities to be abandoned and/or a nuis
Facilities. The provisions of this Section shall survive any termina 'o�
Agreement.
�b necessary
possible
t were caused
nclu � g, without
end and removal
�e ch circumstances
n equity, including but
e, and abating the
or expiration of this
30. Discontinued Operations: In the event that Ci et discontinues its
Telecommunications Services in the City, it shall immedia ly provide information satisfactory
to the City that its obligations for its Facilities under this greement have been lawfully assumed
by another entity (including, upon consent, by the City . In the event that its Facilities aze no
longer used to provide Telecommunications Services or a period of one (1) yeaz, then CityNet
shall provide notice of such an event to the City, shall, pursuant to Section 29 above,
remove each such Facilities, unless this requirem t is waived by the City. In addition, such
non-use shall constitute a material breach and alid and lawful ground for the City to terminate
this Agreement. In the event of such non-use f a facility or Facilities, the City may exercise any
remedies or rights it has at taw or in equity ncluding but not limited to declaring the Facilities to
be a nuisance and abating the nuisance er applicable Law, or taking possession of the
Facilities. The provisions of this sectio shall survive any termination or expiration of this
Agreement.
31.
�s: The parties hereto shall at all times observe and comply
with, and the provisions of this greement are subject to all Laws, ordinances, rulings and
regulations which in any m r affect the rights and obligations of the parties hereto under this
Agreement, so long as such aws remain in effect, including but not limited to those regulating
the City's public Rights-o ay found in Chapters 116 and 135 of the City of St. Paul
Legislative Code. If, at y time during the term hereof, a certificate or authorization sha11
become necessary for tyNet to operate and use the Facilities, CityNet shall obtain the
appropnate go�
provide to City
rtal authorities and any required authorizations or certificates, and shall
of such authorizations and certificates upon request.
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32. Liens and Encumbrances: Neither pariy, directly or indirectiy, has any power,
authority or right to create and shall not permit, create or impose any lien or encumbrance,
including, without limitation, tax liens, mechanics liens, or other liens or encumbrances, on the
property of the other, or on the Facilities, or on the Sewer System, or on any rights, title, qr
interesttherein_ ��
33. Nonexclusive Use: CityNet understands that this Agreement does not rovide
CityNet with exclusive use of the Sewer System and that City shall have the ri to pernut other
users, including City itself, to install equipment facilities or devices in, or to e, the Sewer
System.
34. Waiver of Breach: The waiver by either party of any brea or violation of any
provision of this Agreement shall not be deemed to be a waiver or a c ntinuing waiver of any
subsequent breach or violation of the same or any other provision o this Agreement.
35. Severabilitv of Provisions: If any one or more of e provisions of this Agreement
shall be held by a court of competent jurisdiction in a final ju cial action to be invalid, illegal,
void, voidable, or unenforceable, such provision(s) shall be eemed severable from the remaining
provisions of this Agreement and shall not affect the leg ty, validity, or constitutionality of the
remaining portions of this Agreement. Notwithstandin he foregoing, the parties agree that if a
court or adminish agency of competent jurisdicf n should declare a provision(s) of this
Agreement invalid, then the parties shall each be o igated to negotiate in good faith to amend
that section of this Agreement and if, after one h dred and twenty (120) days from the
commencement of negotiations or such extensi thereof that may be agreed by the parties, the
parties are unable to reach agreement on ame dments hereto, then this Agreement may be
terminated by either party.
36. Governin Law• Jurisdic ' n: This Agreement shall be governed and construed
and enforced by and in accordance wi the Laws and decisions of the State of Minnesota,
without reference to its conflicts of w principles. If suit is brought by a party to this
Agreement, the parties agree that al of such action shall be vested exclusively in the state
courts of Minnesota, County of amsey.
37. Consent Cnteri . In any case where the approval or consent of one party hereto is
required, requested or othe 'se to be given under this Agreement, such parry shall not
unreasonably delay, cond� ion, or withhold its approval or consent.
38.
to a written
This Agreement may not be amended except pursuant
mutually agreed to and signed by both parties.
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39. Enrire Agreement: This Agreement contains the entire understanding between the
parties with respect to the subject matter herein. There are no representations, agreements, or
understandings (whether oral or written) between or among the parties relating to the subject
matter of this Agreement which aze not fully expressed herein.
40. Conflicts: Any conflict between the provisions of this Agreement and
present or future lawful exercise of the City's regulatory or police powers shall be �
favor of the latter. ,
41. Bindin� Effect: This Agreement shall be binding upon and
of the parties hereto and their respective successors and assigns.
in
to the benefit
42. No Interference. CityNet in the perFormance and exercise f its rights and
obligations under this Agreement shall not interfere in any manner � the current or future use,
existence and operation of any and all public and private Ri
communications carrier without the express prior written a�
owners of the affected property or properties. Any actual or
other communicarions equipment or devices in the Public R
CityNet and any such other persons without cost to City on
regulations, practices, and procedures of the FCC. City a e
of any such interference dispute at CityNeYs sole expe e.
43. Executed Agreement. CityNet shall,
execution of this Agreement by all representarive
of tYus Agreement which has been fully executa�
authoriries. �
� or other information or
e City or owner or
interference with such
it-of-Way shall be resolved by
: basis of the applicable rules,
to assist CityNet in the resolution
ithin thirty (30) days a$er the approval and
'the City, file with the City an original copy
all required CityNet representatives and
44. Authori . Each of the Indivi als executing this Ageement on behalf of CityNet
represents that such individual is authori d to do and has the full right, power, legal capacity
and authority to enter into the Agreem t on behalf of CityNet.
45. Most Favored Munici li . City and CityNet aclrnowledge that the terms,
benefits, and provisions of this A eement are taken as a whole and entered into based on
specific requirements of the City and concerns for the integrity of the Sewer System. Should
CityNet either before or after e parties' execution and delivery of tYris Agreement enter into an
agreement with another N
or provisions which taken
contained herein,then Ci
incorporate the same or
Notwithstanding the f eg
municipality that
the City's Rental
sota municipality, which agreement contains any terms, benefits
a whole are more favorable than the terms, benefits or provisions
shall have the right to require that CityNet modify this Agreement to
�re beneficial terms, benefits or provisions for the City.
oing, if CityNet enters into an agreement with another Minnesota
a Rental Fee in excess of the Rental Fee defined in Section 10, then
shall be increased to the same amount.
Doc#'137475T2 16
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46. Bond. Within sixty (60) days of the date of this Agreement, CityNet shall pay the
City the sum of Fifty Thousand Dollars ($50,000.00), to be credited against the Gross Revenues
payable to the City as established in Section 10 above, with which the City may purchase a good
and sufficient surety bond or such other compazable security instnmient as may be approved by
the City's Office of the City Attomey or City's Risk Manager, securing the faithful pe rmance
by CityNet of all the work, construction, maintenance, installation, removals, mainte an e, and
other duries required to be performed by CityNet under tius Agreement within the e periods
set forth hereunder.
47. Contacting CitvNet. CityNet or its agents shall be available
of any City depariment having jurisdiction over CityNeYs activities riven
day, seven (7) days a week, regarding problems or complaints ri
performance under this Agreement, including but not limited to
from the use, installation, operation, maintenance or removal of
by telephone CityNeYs control center operator at telephone nun
such problems or complaints.
��
`o e staff employees
-four (24) hours a
>m CityNeYs
or complaints resulting
The City may contact
regazding
48. Future Benefits for Citv. During the Term of t s Agreement and any renewals
hereof, CityNet will seek to find ways to benefit, or provid additional value for the City by
virtue of CityNeYs access to and use of the Sewer Syste . Such benefit and additional value
might include (i) assisting the City in the installation of ow meters and other instruments in the
Sewer System, and (ii) providing record of the condif n of the Sewer System to assist the City
in idenrifying which portions of the Sewer System ed repair for purposes of budgeting and
planning of monetary and personnel resources.
49.
Protection For Cable Televisi n Franchisees. CityNet shall not itself use or
authorize others to use the fac' ities for the transmission of cable television service
in violation of any City ordi ance. In fulfillment of this covenant CityNet shall
include the following paza aph in all license agreements for the use of the
Facilities to which City t is a pariy:
Licensee agr s that it shall not itself use or
authorize o ers to use CityNet telecommunications
facilities r the transmission of cable television
service ' violation of any ordinance of the City of
Saint aul. Licensee understands and agrees that
this aragraph is specifically intended for the
b efit of the City of Saint Paul and its franchised
istributors of cable television service, and that said
parties have standing to obtain judicial enforcement
of this covenant and to obtain liquidated damages in
the sum of $25,000 for its violation. Licensee
fiirther agrees that the covenants contained in this
Doc# 1374757\2 17
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paragraph shall be included in any sublicense
agreement for the use of the CityNet
telecommunications facilities which aze the sub}ect
of this license agreement.
IN WITNESS WHERE OF, the parties hereto have executed this Agreement as
day and year first above written. /
CITY OF SAINT PAUL, MINNESOTA
By:
Its: Mayor
Date:
CITY OF SAINT PAUL, MINNESOTA
By:
Its: Director, Deparhnent of Public Works
Date:
CITY OF SAlNT' PAUL,
By:
Its: Director, Office of Finan �al Services
Date:
CITY OF SAINT P
By:
Its: City Clerk
Date:
Doc#'137475T2 18
O�-Y1�
CITY OF SAINT PAUL, MINNESOTA
B
Its: Assistant City Attorney
Date:
CityNe
By:
Its:
Date:
CityNe
B
Its:
Date:
CityNe
By:
Its:
Date:
Doc# 137475T2 19
�
����
The Sewer System, as referenced herein, is a system of sanitary,
storm water and relief sewers as set forth in the maps of Saint P:
as-built sewer system which are located at: /
http://sewers. ci.st�aul.mn.us/siri�/
The records and images available on this site are for 'nformational use
only and aze not to be used as a substitute for the "ginal docuxnent.
Documents available via this site may not reflec current conditions and are
not to be used as a substitute for obtaining c ent information from the City
of 3t. Paul, Public Works Department, by rten or verbal request. Any
documents obtained from this site aze not o be used as a substitute for the
original. Users of this site assume all li ility arising from information
obtained herein.
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f
EXHIBIT B
Potential Areas of Installation
1. Central Business District (map attached)
2.
3.
4.
5.
6.
7.
8.
9.
Energy Park
Midway west of Snelling
University Avenue (Capitol to Snelling)
Existing East Side industrial areas (3M,
Phalen Corridor
West Seventh business redevelopme
Riverbend Industrial Park}
West Side Flats (US Bank devel men
Maxson Steel/Dale Street Sh s
Hill)
areas (Shepard/Davern,
0
8 �-�10
o�-a��
EXHIBIT C
CityNeYs facilities shall consist of network of three non-
corrosive steel alloy conduits each containing fiber optic
cabfe that wilt be depfoyed through portions of the sewer
system and held in place using non-corrosive steel alloy
rings and trays. The network will connect with various
te(ecommunications providers and certain high density
commercial and residential buildings, thus providing sa'
buildings with fiber optic connectivity.
CityNet shali compiy with the
116 and 135 of the St. Paul Legislat
maintain and operate its Facilities a
right-of-way requirements found in Chapters
de. In addition, CityNet shall install, place,
ig to the following specifications:
Doc# 737644t11
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1. No cable, equipment or facility of CityNet sha11 be permitted in City's Sewer System
if such cable, equipment or facility by its design could cause electrical interference
with the facilities of City or other occupants of the Sewer System. If elec cal
interference is caused by any of CityNeYs cable, equipment or Faciliries such
interference shall immediately be removed at the eapense of CityNet.
2. CityNet's cable, equipment and Facilities shall not be designed to use e earth as the
sole conductor for any part of CityNeY s circuits.
3. CityNeYs cable, equipment and Facilities shall be compa � e with City's Sewer
System so as not to damage any Facilities of City by co sion or otherwise.
4. New construction spiices in CityNeYs cables shall n be located in City's manholes
or other City Sewer System Facilities. CityNet all construct private manholes or
similar structures for these splices.
5. The maximum diameter of any conduit f CityNet and the number of cables of
CityNet to be placed in any of City's wer System wili be submitted for approval
to the City, which approval will not unreasonably withheld, prior to construction
or installation based upon size an shape of the Sewer System and the size of the
eacisting cables located within tYi ewer System. The azea of the conduits, inciuding
the brackets, sha11 be no more an 3% of the total area of the sewer.
6. City's manholes shall be o ened only as authorized by City, which authorization will
not be unreasonably wit eld and in the presence of City's authorized representative.
7. No employee, age or contractor of CityNet shall enter or work in any of City's
manholes unless ty's authorized representative is present during the enfire period,
or unless the C� waives such requirement. CityNet shall pay the cost of having
City's repres tative present.
8. Except w en emergency condirions necessitate restoring of the Facilities, CityNet
shall no fy City two (2) days in advance of any work operation requiring enhy into
any o ity's manholes; provided, however, that a particular norice requirement may
be aived by City upon CityNeYs request.
9. learing obstrucfions, repairs, dig-ups and any other work required to make the
Sewer System usable for the initial placing of CityNeYs cable shall be done by
CityNet after appropriate approval by City.
Doc#137475T1
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10. Cleaning of CityNet Facilities in the City's Sewer System shall be done by CityNet
or its agent, at CityNet's cost.
11. CityNet's workers shall not disturb City or City approved equipment cated in
CityNet's manholes without first inforniing City, and City shall rovide all
requirements regarding such equipment.
12. All of CityNeYs cables, equipment and Facilities shall be ly secured and
supported to the satisfaction of City.
13. Ali of CityNeYs cables, equipment and Facilities shall e plainly identified in each
manhole with a firmly affixed tag of a type and wor satisfactory to City.
14. Where manholes must be pumped in order to low CityNeYs work operations to
proceed, pumping shall be at CityNet's exp se.
15. Ail cables placed in ducts or sewers by CiftyNet shall be tagged with CityNet's name,
and no cables so placed shall be uses��o carry currents or electricity for lighting or
power purposes.
16. CityNet shall provida the Ci no less than twelve (12) months advance norice of
City Sewer Systems that ar to haue cable/conduit installed in them. Such advance
notice shall include cle ' g and televising the City Sewer System. CityNet shall
provide City a post-cle ' g televised tape of City Sewer System for the purpose of
determining any sew rehabilitation needs.
17. CityNet shall rec�frd the following regazding the installation of their Facilifies:
• Rec� location of bands in reference to upstream manhole (using GIS
des ations for manhole)
• X2ecord radical location of cable in reference to downstream view.
• f Verification of location of all wyes in same reach of sewer (manhole to
� manhole)
• Verify current use of all wyes (life or not)
• Verification of condirion of sewer in same reach of sewer (manhole to
manhole)
• Verification of condition of manhole
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18. All as-built records of CityNet Facilities shail be transfened to the City within
fifteen (15) days of installation in an electronic format.
19. CityNet Faciliries shall not block a service wye or eausting service connection.
20. CityNet sha11 locate all their Facilities pertaining to Gopher State One Call
System.
21.
Doc#137475T1
Council File # p r- a.10
ORIGINAL
Presented By
Referred To
CITY
Committee: Date
4a
1 WFIEREAS, CityNet Telecommunications, Inc. ("CityNet") desires to install, place and
2 maintain telecommunicarions facilities in portions of the City's sewer system for the purpose of
3 operating dazk (unlit) fiber optic facilities, and
WHEREAS, CityNet has already entered into similar agreements with the cities of
Albuquerque, Omaha, and Indianapolis; and
9
10
11
12
13
14
15
16
17
18
19
20
2l
22
23
24
25
WHEREAS, the City desires to find new and innovative ways to provide fiber optic access to its
citizens, businesses, and other users in order to attract new business and retain existing business, attract
and expand a highly skilled workforce, and promote general economic development throughout the City
by way of technology availability and upgrades; and
WHEREAS, the City also desires to protect and preserve its rights-of-way and infrastructure and
more efficientiy use its monetary and personnel resources by finding and authorizing innovative methods
of deploying fiber optic systems which do not involve digging and trenching in the sh and other
public right of ways and which minimize the disruption of traffic flow and commerce and the economic
loss assaciated with such disruption; and
WHEREAS, the City also desires to identify new and additional methods of inspection,
maintenance and metering of its sewer system to insure compliance with federal and state environmental
laws and regulations; now therefore
BE IT RESOLVED, that the proper city officials aze hereby authorized to execute and enter into
an agreement with CityNet, in the same or substantially the same form as the attached agreement, a copy
of which agreement was before the City Council and which is made a part hereof by reference.
„��ae��,�,�.,,��,.�„o„�a, ,,
Requested by Department of:
By:
Adopted by Council: Date � � � }p�y �
Adoption Certified by Council Secretary
By: II \ �� `J� _
Approve�yor\ Date / ( � �/
!
By: �J
�
RESOLUTION
'AUL, NIINNESOTA
Form Approved by City Attorney
B Cyv� .Y► . !��- � < � •
Approved by Mayor for Submission to Council
By:
Green Sheet # � p y�y 5
o►_ a�to
SEWERLEASEAGREEMENT �,�,��� v�rai�
Between �ei� �i,a�ao�
THE CITY OF SAINT PAUL, NIII�TNESOTA
and
CITYNET TELECONIMLTDiICATIONS, INC.
This AGREEMENT, is made and entered into as of this day of
, by and between CityNet Telecommunications, Inc., a Delawaze corporation, hauing an
office at 8403 Colesvilie Road, Fourteenth Floor, Silver Spring, Maryland, 20910 (hereinafter
"CityNeY'), and the City of Saint Paul, Minnesota, a Minnesota municipal corporation
(hereinafter "Cit}�').
WHEREAS, City currently owns and operates a Sewer System, located in the City of
Saint Paul, State of Minnesota, said existing Sewer System being more particularly described on
Exhibit A(hereinafter the "Sewer System"); and
WHEREAS, CityNet desires to install, place and maintain telecommunications facilities
(hereinafter "Facilities") in portions of the Sewer System for the purpose of operating dark (unlit)
fiber optic Facilities; and
WHEREAS, CityNet desires to lease space in the City's Sewer System, rather than using
space in the City's streets and rights-of-way, in order to auoid the additional costs, expenses,
disruption, delays and inconvenience of excauating and obstructing the City's streets and Rights-
of-Way; and
WHEREAS, the City has agreed to lease to CityNet space in the Sewer System for the
placement of CityNeYs Facilities in order to avoid the inconvenience, disruption, delays and costs
of CityNeYs obstructing or excavating the City's streets and Rights-of-Way that would otherwise
be required in the absence of this Agreement; and
WHEREAS, the City has also agreed to this Agreement because City desires to find new
and innovative ways to provide fiber optic access to its citizens and other users, and to provide
such access uniformly throughout the City, in order to attract new business and retain existing
business, attract and expand a highly skilled workforce and promote general economic
development throughout the City by way of technology availability and upgrades; and
WHEREAS, the City has also agreed to this Agreement because City desires to protect
and preserve its infrastructure and more efficiently use its monetary and personnel resources by
finding and authorizing innovarive methods of deploying fiber optic systems which do not
Doc# 137475T2
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involve digging and trenching in the streets and other public right of ways and which m;n;mi�e
the disruption of traffic flow and commerce and the economic loss associated with such
disruprion; and
WHEREAS, the City has also agreed to this agreement because City desires to identify
additional methods of inspection, maintenance and metering of its sewer system to insure
compliance with federal and state environmental laws and regulations; and
W�EREAS, nothing in this Agreement shall be construed to limit in any way CityNeYs
right to apply for and obtain City authorizations and permits, to construct and maintain and own a
fiber optics system or facilities, and to apply for and obtain other rights-of-way agreements from
the City or other rights-of-way providers; and
WHEREAS, CityNet aclaiowledges that, notwithstanding any other provision wiflun ttris
Agreement, it shall comply with any and all existing or future Laws, including but not lunited to
those regulafing the City's public Rights-of-Way found in Chapters 116 and 135 of the City of
St. Paul L,egislative Code, before exercising any right under this Agreement, and that nothing
herein shall constitute a permission or authorization or waiver from the City of its right to require
such prior compliance by CityNet;
NOW THEREFORE, in consideration of the foregoing and of the mutual covenants
provided herein, the parties agree as follows:
GENERALLY
L Incorporation. The foregoing recitals, as well as Appendix 1 and Exhibits A, B and
C, are hereby incorporated in this Agreement as if set forth here verbatim.
2. De6nirions. The following words, terms and phrases, when used in this Agreement,
shall haue the meanings ascribed to them in this section, except where the context clearly
indicates a different meaning:
Sewer Svstem: A system of sanitary sewers as described in Exhibit A. "Sewer System"
specifically excludes any and all storm sewers, tunnels, and/or relief sewers, except as
specifically authorized in advance by the Saint Paul Director of Public Works, who shall
haue sole discretion regazding whether to authorize CityNeYs use of non-sanitary sewers.
Facilities: The fiber optic Telecommunicafions transmission facilities consisting of fiber
optic cables, and associated appurtenances, as described in Exhibit C, to be installed by
CityNet, and to be located within portions of City's Sewer System pursuant to this
Agreement, solely to provide Telecommunications Services.
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Fee: Any monetary assessment, license, cost, chazge, fee, imposition, or taac, of any kind
whatsoever, including but not limited to: A levy of general application to entities doing
business in the City lawfully imposed by any govemmental body; Any real estate or
personal taa�es on equipment or praperty owned by CityNet, whether general or special;
Any public urility rates, dues, or charges of any kind for utilities used by CityNet; Any
fees, costs or expenses of insurance; and any other expenses, costs, or other applicable
tariffs resulting from the performance of this Agreement.
Law or Laws : Any and all statutes, constitutions, ordinances, resolurions, regulations,
judicial decisions, rules, tariffs, administrative orders, certificates, orders, as well as any
other requirements of the City or any other governmental agency having joint or several
jurisdiction over the parties to this Agreement.
Person: Any individual,�person or entity, however organized, whether public or private,
whether domesric or foreign, whether for profit or nonprofit, and whether natural,
corporate, or political.
Right-of-Wav or Public Ri�ht-of-Wav: The azea in, on, below or above a public
roadway, highway, street, cartway, boulevard, bicycle lane, sidewalk, parkway or alley
which the City owns, including areas used for sewer utility ptuposes, or over which it has
a real properiy easement or interest, including other dedicated Rights-of-Way.
Telecommunications: The transmission, between or among points specified by the user,
of information of the user's choosing, without change in the form or content of the
information as sent or received.
Telecommunications Services: The offering of indefeasible rights of use on a
nondiscriminatory basis for a fee direcfly or ind'uectly to telecommunications providers.
Cable Television Service: Multi-channel video programming services whose providers
aze required under City Charter or ordinance to obtain a franchise in order to use the
City's Right-of-Way.
LEASE OF SEWER SYSTEM
3. Lease: Subject to the provisions of this Agreement, including the specifications and
rules contained in Appendix 1, City hereby leases to CityNet for its non-exclusive occupancy of
space located within City's Sewer System for the placement of Facilities. The Facilities will be
installed, with prior approval of the City, in such portions of the City's Sewer System as shall be
jointly identified by the City and CityNet as providing sufficient potenrial market for the
Faciliries as to make installation economically feasible (as provided in E�ibit B, "Potential
Areas of Installation); provide however, that CityNet alone shall determine the actual
configuration and locarion of the Facilities based upon CityNeYs business and economic
Doc# 1374757�2
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considerations. City shall have the right to withhold approval of access by CityNet to any potion
of the Sewer System that the City deems to be physically or structurally inappropriate far the
installation of the Facilities.
CityNet may use the leased portions of City's Sewer System only for the purpose of
installing, maintaining, operating and licensing to third parties for a fee the use of the Facilities in
the Sewer System for providing Telecommunicarions Services and any uses incidental thereto.
CityNet may, with the City's prior written consent, which shall not be unreasonably withheld,
modify, alter or upgrade the Facilities during the Initial Term and any and all Renewal Terms,
subject however, to the terms and conditions of this Agreement. CityNet shali not use, allow or
suffer the leased portion of the Sewer System to be used for any other purpose, provided,
however, that City and CityNet may, by amendment to this Agreement, provide for other uses.
Any unauthorized use will allow City, at its option, to terxninate this Agreement.
4. Government Permits: Prior to the installation of CityNeYs Facilities within the
Sewer System, CityNet shall obtain from the appropriate governmental authorities, inciuding the
City itself, any required pemuts or licenses necessary for such installation, and shall provide to
City copies of such permits or licenses upon request. City agrees to provide reasonable
assistance to CityNet in obtaining such pernuts or licenses. CityNet shall norify City immediately
if City or any governmental authority indicates that a pernut or a license will not be issued, at
wluch time CityNet may at its option choose to temrinate the agreement immediately, without
cause.
5. Reserved Right: This Agreement shall not constitute an assignment of any of City's
rights to use the Right-of-Way or the public or private property upon which the Sewer System is
located. Nothing contained in this Agreement shall be conshued as a limitation, restriction or
prohibition against City with respect to any agreement or arrangement which City has heretofore
entered into, or may in the fuhxre enter into, with other persons regarding the Sewer System ar
Right-of-Way. City agrees, however, that the use and occupancy of the Sewer System by such
other persons shall not interfere with CityNet's rights of occupancy granted pursuant to this
Agreement. Subject to the terms and conditions of this agreement, all right, title and interest in
the Sewer System shail at all times remain exclusively with City, and all right, title and interest in
CityNeYs Facilifies shall at all times remain exclusively with CityNet.
6. Scoue of A¢reement. Any and all rights expressly granted to CityNet under this
Agreement, which shall be exercised at CityNeYs sole cost and expense, shall be subject to the
prior, continuing, and any future right of the City under applicable Laws to use any and all parts
of the Sewer System and the public Right-of-Way exclusively or concurrently with any other
person and shall be fiuther subject to all deeds, easements, dedications, conditions, covenants,
restrictions, encumbrances, and claims of title of record which may affect the City's Sewer
System. Nothing in tlus Agreement shall be deemed to grant, convey, create, or vest in CityNet a
properiy right or interest, including but not limited to any real properiy interest in land, or any
fee, leasehold interest, or easement other than such interests that aze expliciUy conveyed in this
Agreement. Any work performed pursuant to this Agreement shall be subject to the reasonable
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prior review and approval of the City, and subject to CityNeYs prior compliance with any and all
e7cisting and future laws, including but not limited to public Right-of-Way registrarion and use
laws found in Chapters 116 and 135 of the City's Legislative Code.
7. Term: The initial term of this Agreement shali be three (3) yeazs unless eazlier
terminated in accordance with the provisions here (hereinafter "Initial Term'�. The term shall
commence on the date above first written.
8. Ontion to Renew: Provided this Agreement has not been eazlier tenuinated and
CityNet is not in default of any of the covenants of this Agreement, then subject to the provisions
contained herein, City grants CityNet the option to elect to extend this agreement for seven (7)
addifional three (3) yeaz renewal periods (each being a"Renewal Term") commencing on the day
following the expiration date of the Inirial Term or any subsequent Renewal Term. Such op6ons
may be exercised by CityNet giving to the City written notice of its election to renew, not later
than one hundred eighty (180) days prior to the expiration of the Initial Term or the then current
Renewal Term, as the case may be. If CityNet should elect to renew this Agreement, any such
renewal shall be upon the same terms, covenants and conditions as provided in this Agreement
for the Initial Term.
9. Installation, Maintenance and Reuairs: CityNet shall have the right at its sole cost
and expense to install, maintain, and operate the Facilities in the Sewer System. CityNet's
instaliation of the Facilities shall be made according to plans approved by the City, which
approval shall not be unreasonably withheld, delayed, or conditioned. CityNet shall perform a
video inspection and shall create a videotape of each such inspection, which videotape shall
document those portions of the Sewer System in which CityNet intends to conshuct ar install its
Facilities. CityNet shall, immediately upon completion of each such videotaped inspecrion,
provide the City with a copy of the videotape which the City may retain at no cost to the City. In
connection therewith, the City shall respond to CityNet in writing with respect to any submittal
of such plans or drawings (which shall include the results of a video inspection) after receipt
thereof with any disapproval, objection or proposed modification within thirty (30) days of said
receipt, or such plans or drawings shall be deemed approved by the City. CityNet sha11 also
perform a video inspection subsequent to the installation of the Pacilities and provide the City
with a copy thereof. The City shall have no obligation to maintain, inspect or repair the Facilities
so as to cause them to conform to any performance specification, and CityNet shall, at its own
cost and expense, install, maintain, repair, and secure its Facilities so that they remain in good
and safe condition and in compliance with the provisions of this Agreement and all applicable
fire, health, building, and any other life safety codes or Laws.
During the first two yeazs following the installation of the Facility, CityNet shall twice
annually jet-wash that portion of the Sewer System containing the Facility. Thereafter, CityNet
and the City shall agree on an appropriate regular schedule for such cleaning to be done by
CityNet, at CityNeYs sole cost and expense.
The Facilities shall remain the exclusive property of CityNet, and CityNet shall have the
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right to remove all or any portion of the Facilities at any tune during the term of this Agreement,
provided that the same does not otherwise interfere with the City's operations of the Sewer
System. The Faciliries shaJl be deemed personai property for purposes of this Agreement,
regardless of whether any portion thereof is deemed real or personal property under applicable
law. All work by CityNet shall be performed in compliance with applicable laws and ordinances.
CityNet is not authorized to contract for or on behalf of the City for work on, or the fiunishing of
materials to the Sewer System or any part thereof, and CityNet shall pay any and all
subcontractors, material men, mechanics and laborers promptly for any work performed or
materials furnished at the instance of CityNet on the Sewer System. CityNet shall place its
equipment in a manner that will not interfere with City sewer service workers or sewer
contractors access to or work in City manholes.
10. Rental Fee: The annual lease Rental Fee to be paid by CityNet to City, on a quarterly
basis, is two and one half percent (2.5%) of the "Gross Revenues" (as defined below) received by
CityNet from the operation of the Facilities in the Sewer System pursuant to this Agreement.
Such payment shall be made within forty-five (45) days after the expiration of each quarter at the
City's address specified in Section 26 hereof. For purposes of this Section, "Gross Revenues" of
CityNet shall be all gross revenues, determined in accordance with generally accepted accounting
principals ("GAAP"), derived and received by CityNet from its operation of the Facilities in the
Sewer System. Gross Revenues include, but are not limited to, charges made by CityNet or any
affiliate of CityNet for the use of the Facilities by other persons ar entifies. Notwithstanding
anything to the contrary in this Section, Gross Revenues shall not include (i) any taac or fee
imposed on the users of the Facilities by the City or any other governmental authority and
collected by CityNet on behalf of such governmental entity, (ii) the revenues of any Affiliate (as
defined in Section 25) of CityNet to the extent such Affiliate revenues are costs of CityNet and
recovered by CityNet through charges to subscribers, and further to the extent that such revenues
are included in gross revenues on which fees aze paid, (iii) actual bad debt, refunds or credits,
provided any such bad debt subsequently collected sha11 be included in gross revenues in the
period collected, and (iv) the revenues of CityNet or any Affiliate of CityNet with respect to their
respective operations which do not use the Sewer System. Gross revenues shall be adjusted to
reflect contributed goods and/or services provided to the City by CityNet under the terms and
conditions of this Agreement. Acceptance by the City of any payment due under this Agreement
shall not be deemed to be a waiver by the City of any breach of this Agreement occurring prior
thereto, nor shall the acceptance by the City of any such payments preclude the City from later
establishing that a lazger amount was actuaily due or from collecting any balance due to the City.
City may, at any time, at City's sole oprion, upon ninety (90) days written notice, require
CityNet to discontinue the lease Rental Fee payments. Upon receiving such notice CityNet shall,
no later than ninety (90) days after receiving such notice, cease maldng all compensation
payments that would haue been payable after such ninety (90) day notice period. If City requires
such a discontinuarion of Rental Fee payments, the City may then charge, on an annual basis, its
actual Right-of-Way management or management costs (pursuant to Minnesota Statutes §
237.162, Subd. 9 and § 237.163, Subd. 2(b), and pursuant to any relevant local, state or federal
ordinance, statute, regulation, law or other rule), that aze incurred after the eacpiration of the
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ninety (90) day period described above, provided that in no event will CityNeYs payment be
greater than the amount established as the Rental Fee herein.
CityNet shall also file quarterly a report ("Compensation Report") with the City, by
sending copies to the individuals listed in Secrion 26 herein. The Compensarion Report shall
show the Rental Fees paid to the City, as well as all CityNet revenues for the pre�eding quarter
based upon CityNeYs services or operations withiu the City of Saint Paul that made up the Gross
Revenues. The Compensation Report shall also show any adjushnents as provided for in this
Agreement for bad debt, and the Compensation Report shall be executed and attested to by an
authorized officer of CityNet verifying the accuracy of the Compensation Report and amount of
all fees, compensation, or other payments under this Agreement.
CityNet shall keep accurate books of account, in accordance with GAAP, for the purpose
of determining the amounts due to the City under this Agreement. The City may inspect
CityNeYs books of account relative to the City at any time during regular business hours on thirty
(30) days prior written notice and may audit the books from time to time at the City's sole
expense in order to verify the accuracy of payments due under this Agreement. The City may
also, at its option, require that CityNeYs compliance with the terms and condifions of this
Agreement, including, but not limited to, the computation of any fees or payments, be verified by
a certified public accountant or compazably qualified consultant at the sole expense of the City.
11. Other Charges. CityNet shall be solely responsible for the payment of all Fees,
expenses, costs, compensation, or any other chazges nnposed or based upon CityNeYs
performance under this Agreement. CityNet shall pay any such Fees ar charges within thirty (30)
days of notice of the same from the City. CityNet shall pay any personal property tases assessed
on, or any portion of such tases attributable to, the Facilities located in the Sewer System.
12. Removal or Relocation. CityNet understands and acknowledges that City may
require it to remove or relocate some or all of its Facilities, and shall at City's direction remove
or relocate such Faciliries whenever City reasonably determines that the removal or relocation is
needed for any of the following purposes: (a) for the construction, completion, repair, relocation,
or maintenance of a City pro}ect or a public Right-of-Way, (b) because the Facilities aze
interfering with or adversely affecting proper operation or maintenance of any other fixtures or
facilities or uses of the sewer utility or public Right-of-Way; (c) to protect or preserve the public
health, welfaze or safety, or (d) as a result of any law, ruling, judgment ar decision of an
administrative or legal authority, including but not limited to a district court of the State of
Minnesota. If CityNet shall fail to zemove or relocate any Facilities as requested by the City
within a reasonable time under the circumstances, City shall be entitled to remove or relocate the
Faciliries at CityNeYs sole cost and expense, without further norice to CityNet. In the event that
City is required for any reason to remove, relocate or discontinue leasing or operating the Sewer
System, or any porhion thereof, either parry shall have the option to terminate this Agreement.
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13. Damaee to Public Rieht-of-WaV or Sewer Svstem. Whenever the installarion,
removal or relocation of Facilities is required or permitted under this Agreement, and such
installafion, removal or relocation shall cause the Public Right-of-Way or Sewer System to be
damaged, CityNet, at its sole cost and expense, shall comply with all laws governing use of the
Public Right-of-Way or the Sewer System, which includes the obligation to promptly repair and
return the same to a safe and satisfactory condition in accordance with applicable Laws, normal
wear and teaz excepted. If CityNet does not repair the site as just described, then the City shall
have the oprion, upon fifteen (15) days prior written notice to CityNet, to perform or cause to be
performed such reasonable and necessary work on behalf of CityNet and to charge CityNet for
the proposed costs to be incurred or the actual costs incurred by the City at City's standard rates.
Upon the receipt of a demand for payment by the City, CityNet shall promptly reimburse the City
for such costs. The provisions and rights in this section are in addition to, and not in lieu of, any
right of the City under existing or future applicable Laws.
14. Condemnation: In the event that the Sewer System, or any portion thereof, shail be
taken or condemned, either permanently or temporarily, for any public or quasi-public purpose by
any person or authority in appropriation proceedings or by any right of eminent domain, or in the
event that City's pernut and right to occupy the public Right-of-Way with its Sewer System or to
Lease portions o£its Sewer System is revoked or deemed illegal, this Agreement shall
automatically terminate on such date and any damages arising therefrom shall be payable to City.
CityNet shall have the right to claim and recover from the condemning authority, such
compensation as may be separately awarded or recoverable by CityNet.
15. EmerEencv Reuairs. GityNet understands and agrees that the prunary and
paramount purpose of the Sewer System is for the transfer of sewage and storxn water, which in
no way shall be compromised or abridged by any right conferred under this Agreement.
Historically the Sewer System occasionally ceases to drain normally due to blockage or structural
failure. On these occasions it is City's responsibility to restore normal flow as soon as possible.
Under such circumstances, the City shall not be responsible for any damage to the Facilities or
for temporary interruption of service provided through the Facilities. The City will make every
reasonable attempt to notify CityNet as soon as possible of any City work that may impact the
Facilities under this Section.
16. Access to the Sewer Ssstem. CityNet may, at all times during the term of this
Agreement, subject to prior compliance with City ordinances and to reasonable supervision,
which supervision costs or fees shall be paid for exclusively by CityNet, have pedestrian and
vehicular ingress and egress to and from the Sewer System, on a 24-hour, 7-day per week basis,
for the purpose of accessing the Facilities to the extent reasonably necessary to install, field-test,
maintain and operate the Facilities.
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17. Renewal of Lease. If both City and CityNet wish to enter into a new lease
agreement then, before expiration of the final Renewal Term, the City and CityNet may enter into
good faith negotiations the object of which will to agree upon the terms of a new lease
agreement.
ADDITIONAL PROVISIONS
18. Indenendent Contractor: In perfomuug this Agreement, City and CilyNet shall
operate as, and for all purposes be considered, independent contractors and not agents, and
neither party shall haue authority to bind or otherwise obligate the other in any manner
whatsoever. All personnel performing services shall remain under the exclusive direction and
control of their respective parties and shall not be deemed to be employees or agents of the other
party. No employee or agent of CityNet shall be deemed an employee of City for the purposes of
this Agreement, nar shall City be responsible for any payments such as compensation, wages,
benefits, taxes, workers' compensation, disability or other insurance or any other payments with
respect to any such CityNet employee or agent.
19. Force Maieure Susuension and Termination: In the event that either party to this
Agreement is unable to perform any of its obligarions under this Agreement or to enjoy any of
the benefits thereof because of natural disaster, actions, Laws, orders or decrees of governmentai
bodies or failure of power supply, or any condition that is beyond that party's reasonable control,
including but not limited to acts of God, fire, flood, or other catastrophe (hereinafter "Force
Majeure Events"), the non-perforxning party shall immediately provide notice thereof to the other
parly and shall do everything possible to resume performance. Upon receipt of such notice by
the performing party, this Agreement shall immediately be suspended. If the period of
nonperformance exceeds foriy-five (45) days from the receipt of notice of the Farce Majeure
Event, either pariy shall have the option to terminate this Agreement by giving written notice to
the other party.
20. Indemnification: CityNet shall indemnify, defend, protect, and hold harmless the
City, its council members, officers, agents, contractors and employees from and against any and
all claims, demands, losses, damages, liabilities, fines, charges, penalties, administrative and
judicial proceedings and orders, judgments, and all costs and expenses incurred in connection
therewith, including reasonable attomey's fees and costs of defense, occasioned by or arising out
of CityNeY s activities undertaken pursuant to this Agreement, except to the extent arising from
ar caused by the negligence or willful misconduct of the City, its council members, officers,
employees, agents, or contractors. The foregoing notwithstanding, CityNet shall defend and
indemnify the City, and its officers and employees, even in the case of negligence, unless the
allegations allege (a) independent negligence on the part of the City, its officers and employees or
(b) a wrongful act or omission on the part of the City or its officers or employees. CityNet shall
also defend and indemnify the City, its officers and employees, even in the case of negligence, if
the allegarions aze based on the City's or its officers or employees' negligence or otherwise
wrongful act or omission in approving this Agreement, or in failing to properly or adequately
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inspect or enforce compliance with the terms, condifions or purpose of this Agreement. CityNet
shall also defend and indemnify the City, its of�cers and employees, in the case of CityNeYs use
of Hazardous Materials. "Hazardous Materials" means asbestos, petroleum products, or any
toxic or hazazdous substance, waste or materials as defined in any federal, state or local
environmental or safety law or regulation including, but not limited to, CERCLA, MPCA, and
MERLA. The provisions of this secrion shall survive any termination or expiration of this
Agreement. Without limiting the foregoing, CityNet shall obtain a bond in the sum of $150,000,
in a form acceptable to the City Attorney, to secure its obligarion to defend and indemnify the
Ciry against any claim asserted by a City-franchised provider of cable television service, alleging
injury based upon usage of the CityNet Facilities in violation of the City franchise ordinance for
the provision of cable television service. Said bond requirement shall be reduced and retired on a
dollaz-for-dollar basis by the delivery of rental fees to the City by CityNet pursuant to Paragraphs
10 and 46 of this Agreement.
21. Limitation on Liabilitv and Waiver: NOTWITHSTANDING ANY PROVISION
HEREIN, NETTHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT,
SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT LIMITATION,
THOSE BASED UPON INTERRUPTION OF SERVICE OR FOR ANX LOSS OF
REVENLTES, PROFITS, OR BUSINESS OPPORTUNITIES RESULTING THEREFROM,
WHETHER OR NOT EITHER PARTY HAD OR SHOULD HAVE HAD ANY
KNOWLEDGE, ACTUAL OR CONSTItUCTIVE, THAT ANY SUCH DAMAGES MIGHT
BE INCURRBD. CityNet also waives any and all claims, demands, causes of action, and rights
it may assert against the City on account of any loss, damage, or injury Yo its Facilities or any loss
ar degradation of the services provided by its Facilities. The City shall be liable only for the cost
of repair to damaged Facilities arising from the independent negligence or willful misconduct of
City, its employees, agents, or contractors. In no event shall the City be liable for vandalism,
malicious mischief, or acts of God that damage CityNeYs Facilities. In no event shall either party
be liable for special, consequential, exemplary or punitive damages as a result of the performance
or nonperformance of its obligations under this Agreement. The provisions of this section shall
survive any termination or expiration of this Agreement.
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22. Default: If at any time CityNet fails or refuses to perform any of the material
covenants or conditions contained in this Agreement, and such failure or refusal shall continue
for sixty (60) days a8er written norice is provided by City to CityNet, then City, at its election
may re-enter and take possession of the leased portion of the Sewer System, remove CityNePs
Facilities therefrom, re-let the leased portion of the Sewer System or any part thereof on such
terms, conditions and rentals as City may deem proper, and, at City's opfion, either terminate and
cancel this Agreement, or apply the proceeds that may be obtained from said re-letting, after
deducrion of costs and expenses, to the lease rentals required under this Ageement, and hold
CityNet liable for any balance of such rentals which may remain unsatisfied and unpaid. In such
an event, CityNet shall pay to City, as additional rent: (i) all costs and expenses reasonably
incurred by City in making auy alterations to the Sewer System in prepazation for re-letting and
in attempting to re-let the leased portion thereof, and (ii) all costs and expenses, including
attorneys fees and costs, reasonably incurred by City as a result of CityNet's default or enforcing
City's rights and remedies hereunder.
23. Time to Cure: In the event any such default (other than the payment of fees due
hereunder) cannot reasonably be cured within such sixty (60) day period, the rime for curing such
default shall be extended for whatever period of time is required to complete such curing so long
as either party is proceeding with due diligence. The waiver by either party of any breach of any
term, covenant or condition herein contained shall not be deemed to be a waiver of such term,
covenant or condition or any subsequent breach of the same or any other term, covenant or
condition herein contained.
24. Insurance: Cityl3et shall at its own expense obtain and maintain at all times during
the term of this Agreement Commercial General Liability insurance and Commercial Automobile
Liabiliry Insurance protecting CityNet in an amount not less than 9ae Five Millian Dollars
($�5,000,000) per occurrence (combined single limit), including bodily injuty and property
damage, and in an amount not less than �ee Five Million Dollars ($35 000,000) annual
aggregate for each personal injury liability and products-completed operations. The Commercial
General Liability insurance policy shall name the City, its council members, officers, and
employees as addirional insureds as respects any covered liability arising out of CityNeYs
performance of this Agreement. Coverage shall be in an occurrence form and in accordance with
the limits and provisions specified herein. Claims-made policies aze not acceptable. Such
insurance shall not be canceled, nor shall the occurrence or aggregate limits set forth above be
reduced, until the City has received at least thirry (30) days' advance written notice of such
cancellarion or change. CityNet shall be responsible for norifying the City of such change or
cancellation. Prior to any Renewal Term pursuant to § 8 of this Agreement, the City may request
and the parties shall bargain in good faith to increase the above minimum insurance amounts, if
such an increase is warranted by indushy standards or specific identified risk, or by any change in
Minnesota Statute § 466 or any other Law pertaining to municipal liability. Such increase, if any,
shall not be effecrive until the commencement of such Renewal Term. In addition, CityNet shall
maintain Workers Compensation insurance, in an amount equai to at least the amount required
under applicable Minnesota Statute, as may be amended from time to time, as well as Employer's
Liability insurance in an amount not less than Five Million Dollars ($5,000.000�
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Prior to the commencement of any work pursuant to this Agreement, and annually
thereafter, CityNet shall file with the City, pursuant to the Notice provision in Section 26, a
certificate of insurance which shall state the following: the policy number; name of insurance
company�, name and address of the agent or authorized representative; name and address of
insureds; policy expiration date; specific coverage amounts; that the City shall receive thirty (30)
days' prior notice of cancellation; that names the City, its council members, officers, and
employees as addirional insureds as respects any covered liability arising out of CityNeYs
performance ofthis Agreement; and that CityNeYs Commercial General Liability insurance
policy waives any right of recovery the insurance company may have against the City.
An insurance provider of CityNet shall be admitted and authorized to do business in the
State of Minnesota and shall cazry a minnnum rating assigned by A.M. Best and Company's Key
Rating Guide of "A" Overall and a Financial SiZe Category of "X" (i.e., a size of $500,000,000
to $750,000,000 based on capital, surplus, and conditional reserves). Insurance policies and
certificates issued by non-admitted insurance companies are not acceptable. Any deductibles or
self-insured retentions must be stated on the certificate(s) of insurance, which shall be sent to and
approved by the City. "Severability of interesY' or "sepazation of insureds" clauses shall be made
a part of the Commercial General Liability and Commercial Automobile Liability policies.
CityNet may comply with the insurance requirements of this Agreement through the
purchase of an"umbrella" policy acceptable to the City, provided, however, that CityNet shall
first present any such umbrella policy to the City for its review, which the City may in its
reasonable discretion approve or disapprove.
25. Assienment: CityNet shall not assign or otherwise convey any of its rights,
obligations or interests under this Agreement without the express prior written consent of the
City, which consent shall not be unreasonably withheld. This clause also applies to CityNeYs
Affiliates, who shall be fmancially viable. "Affiliate" means a pazent or subsidiary of CityNet,
an entity that owns or controls, is owned or controlled by, or is under common ownership or
control with CityNet, or an entity which merges or is consolidated with CityNet or which
purchases a controlling interest in the ownership or assets of CityNet. In the event CityNet
assigns its rights, obligations or interests under tkris Agreement, CityNet shall remain secondarily
liable to City for the performance of its assignee under ihis Agreement.
City may require an assignee or transferee to post with the City security in the form of a cash
deposit, letter of credit, or surety bond satisfactory in fotm and amount, which shall be fully
refunded or otherwise released to the posting party upon termination of this Agreement and upon
the timely removal of Faciliries pursuant to this Agreement, to the reasonable satisfaction of the
City.
26. Nofice: All norices and other communications which shall or may be given pursuant
to this Agreement shall be in writing and be deemed to have been duly given (i) upon personal
delivery, or (ii) upon placement into the United States mail, certified, postage prepaid, return
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receipt requested, to the pazties at the following addresses:
If to City: Director
Department of Public Works
City of Saint Paul
1000 City Hall Annex
25 West Fourth Street
Saint Paul, Minnesota 55102
With copy to: Saint Paul City Attomey
400 City Hall and Courthouse
15 West Kellogg Boulevard
Saint Paul, MN 55102
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If to CityNet: CityNet Telecommunications, Inc.
8403 Colesville Road, 14th Floor
Silver Spring, Maryland 20910
Attention: Mazk Perkell, General Counsel
or at such other address as the parties hereto may specify from tixne to time by written notice
delivered in accordance herewith.
27. Termination: This Agreement may be termivated by either party upon written
notice to the other pariy upon a material default of any covenant, provision, or term hereof, by the
other pariy, which default is not cured within sixty (60) days of receipt of written notice of
default (or, if such default is not curable within sixty (60) days, if the defaulting party fails to
commence such cure witlun sixty (60) days or fails thereafter diligently to prosecute such cure to
compietion), provided that the grace period for any monetary default shall be ten (10) days from
receipt of notice.
Additional Termination Riehts.
(a) Ci Net. CityNet may, without further obligation to City, upon one hundred eighty
(180) days written notice, terminate its lease or its occupancy of any portion of the Sewer System
without cause.
(b) C�. If any govenunental agency or third party institutes proceedings successfully
imposing public utility or common carrier status on City as a result of its performance of this
Agreement, or if any action is brought by any third party successfully challenging the continued
validity of this Agreement or seelflng to adversely modify, suspend or revoke City's operating
authority for its services or Sewer System as a result of its or CityNeYs performance of this
Agreement, and there is an adverse impact upon the City which cannot be eliminated by CityNet,
City may, without further liability to CityNet, upon one hundred eighty (180) days written notice,
terminate tlus Agreement without cause. City may also, without fiuther liability to CityNet, upon
one-hundred and twenty (120) days written notice, terminate this Agreement in the event that
CityNet fails to commence installation of the Facilities or to maintain Facilities as provided
herein.
28. Insolvencv or Bankruptcv: Notwithstanding any other term or condition contained
herein, and in addition to any other legal or equitable remedy, City shall have the right to
terminate this Agreement at any time if CityNet or any of its affiliates shall be unable to pay its
liabiliries when due, or shall make any assignment for the benefit of creditors or file a voluntary
petition in bazikrnptcy or be adjudicated baulaupt or insolvent, or if any receiver is appointed for
its business or property, or if any trustee in bankrnptcy or insolvency shall be appointed under the
govenvng Laws of the United States or of any state.
29. Surrender and Removal: Upon teimination of this Agreement for any reason, or
expirarion of the Initial Term or any renewal term of this Agreement, CityNet shall, upon written
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request of the City, remove any and all of its Facilifies and any other equipment from the City's
Public Right-of-Way and Sewer System within one hundred twenty (120) days, and shall quit
peacefully, and shall repair any damage to the Public Right-of-Way or Sewer System caused by
such equipment or Faciliries, normal weaz and teaz excepted, all at CityNeYs own cost and
expense, provided, however, that if such removal is not completed within such one hundred
lwenty (120) day period, CityNet may request such additional period as is reasonably necessary
for such removal as long as CityNet diligently makes such removal as promptly as possible
and/or such additional period as is reasonably necessary to account for delays that were caused by
events or circumstances beyond the reasonable control of CityNet, including, without limitarion,
forces of nature. CityNeY s failure to comply with these sunender and removal requirements
shall be deemed a material breach of this Agreement. Under such circumstances City may also, in
its sole discrefion, exercise any rights it has at Law or in equity, including but not limited to
deeming such Facilities to be abandoned and/or a nuisance, and abaring the Facilities. The
provisions of this Section shall survive any ternunation or expiration of this Agreement.
30. Discontinued Operations: In the event that CityNet discontinues its
Telecommunications Services in the City, it shall immediately provide information satisfactory to
the City that its obiigarions for its Facilities under this Agreement have been lawfully assumed by
another entity (including, upon consent, by the City). In the event that its Facilities are no longer
used to provide Telecommunications Services for a period of one (1) yeaz, then CityNet shall
provide nofice of such an event to the City, and shall, pursuant to Section 29 above, remove each
such Facilities, unless this requirement is waived by the City. In addirion, such non-use shall
constitute a material breach and a valid and lawful ground for the City to terminate this
Agreement. In the event of such non-use of a facility or Facilities, the City may exercise any
remedies or rights it has at law or in equity, including but not lunited to declaring the Facilities to
be a nuisance and aba6ng the nuisance under applicable Law, or taking possession of the
Facilities. The provisions of this section shall survive any termination or expiration of this
Agreement.
31. Compliance with Laws: CityNet and its contractors shall comply with all federal,
state and local laws, ordinances, regulations and rules. The parties hereto shall at all times
observe and comply with, and the provisions of this Agreement aze subj ect to all Laws,
ordinances, rulings and regula6ons which in any manner affect the rights and obligations of the
parties hereto under this Agreement, so long as such Laws remain in effect, including but not
limited to those regulating the City's public Rights-of-Way found in Chapters 116 and 135 of the
City of St. Paul I,egislative Code. If, at any time during the term hereof, a certificate or
authorization shall become necessary for CityNet to operate and use the Facilities, CityNet shall
obtain the appropriate governmental authorities and any required authorizations or certificates,
and shall provide to City copies of such authorizations and certificates upon request.
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32. Liens and Encumbrances: Neither party, directly or indirectly, has any power,
authority or right to create and shall not permit, create or impose any lien or encumbrance,
including, without limitation, taac liens, mechanics liens, or other liens or encumbrances, on the
property of the other, or on the Faciliries, or on the Sewer System, or on any rights, ritle, or
interest therein.
33. Nonexclusive Use: CityNet understands that this Agreement does not provide
CityNet with exclusive use of the Sewer System and that City shall have the right to pemvt other
users, including City itself, to install equipment facilities or devices in, or to use, the Sewer
System.
34. Waiver of Breach: The waiver by either party of any breach or violation of any
provision of this Agreement shall not be deemed to be a waiver or a continuing waiver of any
subsequent breach or violation of the same or any other provision of this Agreement.
35. Severabilitv of Provisions: If any one or more of the provisions of this Agreement
shall be held by a court of competent jurisdiction in a final judicial action to be invalid, illegal,
void, voidable, or unenforceable, such provision(s) shall be deemed severable from the remaining
provisions of this Agreement and shall not affect the legality, validity, or constitufionality of the
remaining portions of this Agreement. Notwithstanding the faregoing, the parties agree that if a
court or administrative agency of competent jurisdiction should declare a provision(s) of this
Agreement invalid, then the parties shall each be obligated to negotiate in good faith to amend
that section of this Agreement and if, after one hundred and twenty (120) days from the
commencement of negotiations or such extension thereof that may be agreed by the parties, the
parties are unable to reach agreement on amendments hereto, then this Agreement may be
terminated by either party.
36. Governin¢ Law; Jurisdiction: This Agreement shall be governed and construed
and enforced by and in accordance with the Laws and decisions of the State of Minnesota,
without reference to its conflicts of law principles. If suit is brought by a parry to this
Agreement, the parties agree that trial of such action shall be vested exclusively in the state
courts of Minnesota, County of Ramsey.
37. Consent Criteria: In any case where the approval or consent of one pariy hereto is
required, requested or otherwise to be given under this Agreement, such parly shall not
unreasonably delay, condition, or withhold its approval or consent.
38. Amendment of Aereement: This Agreement may not be amended except pursuant
to a written instrument mutually agreed to and signed by both parties.
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39. Entire Agreement: This Agreement contains the entire understanding between the
parties with respect to the subject matter herein. There are no representations, agreements, or
understandings (whether oral or written) between or among the parties relating to the subject
matter of this Agreement which are not fully expressed herein.
40. Conflicts: Any conflict between the provisions of this Agreement and any other
present or future lawful exercise of the City's regulatory or police powers shall be resolved in
favor of the latter.
41. Bindin� Effect: This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and assigns.
42. No Interference. CityNet in the performance and exercise of its rights and
obligations under this Agreement shall not interfere in any manner with the current or future use,
existence and operation of any and all public and private Rights-of-Way or other information or
communications carrier without the express prior written approval of the City or owner or
owners of the affected property or properties. Any actual or anticipated interference with such
other communications equipment or devices in the Public Right-of-Way shall be resolved by
CityNet and any such other persons without cost to City on the basis of the applicable rules,
regulations, practices, and procedures of the FCC. City agrees to assist CityNet in the resolution
of any such interference dispute at CityNeYs sole expense.
43. Executed Aareement. CityNet shall, within thirty (30) days after the approval and
execution of flus Agreement by all representatives of the City, file with the City an original copy
of this A greement which has been fully executed by all required CityNet representatives and
authorities.
44. Authoritv. Each of the Individuals executing this Agreement on behalf of CityNet
represents that such individual is authorized to do and has the full right, power, legal capacity
and authority to enter into the Agreement on behalf of CityNet.
45. Most Favored Municiaality. City and CityNet acknowledge that the terms,
benefits, and provisions of this Agreement aze taken as a whole and entered into based on
specific requirements of the City and concems for the integrity of the Sewer System. Should
CityNet either before or after the parties' execution and delivery of this Agreement enter into an
agreement with another Minnesota municipality, which agreement contains any terms, benefits or
provisions which taken as a whole are more fawrable than the terms, benefits or provisions
contained herein, then City shall have the right to require that CityNet modify this Agreement to
incorporate the same or more beneficial terms, benefits or provisions for the City.
Notwithstanding the foregoing, if CityNet enters into an agreement with another Minnesota
municipality that contains a Rental Fee in excess of the Rental Fee defined in Section 10, then
the City's Rentai Fee shall be increased to the same amount.
Doc# t37475T2 1�
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46. Bond. Within sixty (60) days of the date of this Agreement, CityNet shall pay the
City the non-refundable sum of Fifty Thousand Doilars ($50,000.00), to be credited against the
Gross Revenues payable to the City as established in Section 10 above, with wluch the City may,
among other things, purchase a good and sufficient surety bond or such other compazable
security instrument as may be approved by the City's Office of the City Attorney or City's Risk
Manager, securing the faithful performance by CityNet of all the work, construction,
maintenance, instaliation, removals, maintenance, and other duties required to be performed by
CityNet under tlus Agreement within the time periods set forth hereunder. Notwithstauding any
other provision to the contrary contained within this Agreement, CityNet agrees that in no event
will any part of the $50,000 payment be refundable under any circumstances.
47. ContactinE CitvNet. CityNet or its agents shall be available to the staff employees
of any City department having jurisdiction over CityNeYs activities twenty-four (24) hours a day,
seven (7) days a week, regazding problems or complaints resulting from CityNeYs performance
under this Agreement, including but not lnnited to problems or complaints resulting from the
use, installation, operation, maintenance or removal of FaciliUes. The City may contact by
telephone CityNeYs control center operator at telephone number (888) 248-9184 regarding such
problems or complaints, and all City calls shall be immediately retumed.
48. Future Benefits for CitY. During the Term of this Agreement and any renewals
hereof, CityNet will seek to fmd ways to benefit, or provide additional value for the City by
virtue of CityNeYs access to and use of the Sewer System. Such benefit and additional value
might include (i) assisting the City in the installation of flow meters and other instruinents in the
Sewer System, and (ii) providing record of the condition of the Sewer System to assist the City in
identifying which portions of the Sewer System need repair for purposes of budgeting and
planning of monetary and personnel resources.
49. Protection For Cable Television Franchisees and the CitV's Cabie Office.
Notwithstanding any other provision herein, CityNet shall not itself use or authorize others to use
the Facilities far the transmission of Cable Television Service in violation of any City ordinance
or applicable State authorizations. CityNet shall also include the following paragraph in all
license agreements for the use of the Facilities to which CityNet is a party:
Licensee agrees that it shall not itself use or authorize others
to use CityNet telecommunications facilities far the
transmission of cable television service or multi-channel
video prograzmning in violation of any ordinance or the City
Charter of the City of Saint Paul. Licensee understands and
agrees that this paragraph is specifically intended for the
benefit of the City of 5aint Paul and its franchised
distributors of cable television service and/or multi-channel
video prograuuning, and that said parties have standing to
obtain }udicial enforcement of this covenant and to each
obtain the greater of either actual damages or the sum of
$25,000 for its violafion. Licensee further agrees that the
Doc# 137475T2 1 g
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covenants contained in this pazagraph shall be included in
any sublicense agreement or assignment for the use of the
CityNet telecommunicarions facilities which aze the subject
of this license agreement.
IN WITNESS WHERE OF, the parties hereto have executed this Agreement as of the
day and yeaz first above written.
CITY OF SAINT PAUL, MINNESOTA
By:
Its: Mayor
Date:
CTTY OF SAINT PAUL, MINNESOTA
By:
Its: Director, Department of Public Works
Date:
CTTY OF SAINT PAUL, MIlVNESOTA
By:
Its: Director, Office of Financial Services
Date:
CITY OF SAINT PAUL, MINNESOTA
By:
Its: City Clerk
Date:
Doc# 1374757�2 19
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CTTY OF SAINT PAUL, MINNESOTA
By:
Its: Assistant City Attomey
Date:
CityNet Telecommunications, Inc.
By:
Its:
Date:
CityNet Telecommunications, Inc.
By:
Its:
Date:
CityNet Telecommunications, Inc.
�
Its:
Date:
Doc# 1374757�2 ' 20
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������
The Sewer System, as referenced herein, is a system of sanitary sewers as set forth in the
maps of Saint Paui's as-built sewer system which aze located at:
http://sewers.ci.stpaul.mn.us/stri�/
The records and images available on this site are for informational use only and aze not to be
used as a substitute for the original document. Documents auailable via tYris site may not reflect
current conditions and are not to be used as a substitute for obtaining current information from
the City of St. Paul, Public Works Department, by written or verbal request. Any documents
obtained from this site aze not to be used as a substitute for the original. Users of this site assume
all liability arising from information obtained herein.
Doc# �37475712 21
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.:,�:
Potential Areas of Installation
1. Ceniral Business District (map attached)
2. Energy Park
3. Midway west of Sneiling
4. University Avenue (Capitol to Snelling)
5. Existing East Side industrial areas (3M, Williams Hill)
6. Phalen Corridor
7. West Seventh business redevelopment areas (Shepazd/Davern,
Riverbend Indushial Pazk
8. West 5ide Flats (i7S Bank development)
9. Maacson SteeUDale Street Shops
Doc#'137475T2 22
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Eghibit C
As shown on the nlates and/or drawinQS attached to this E�ibit C, CityNet's facilities shall
consist of network of three non-corrosive steel alloy-stainless steel conduits each containing fiber
opric cable that will deployed through portions of the sewer system and heid in place using non-
corrosive steel alloy-stainiess steel rings and trays. 'T'"° ��`-°� '� •°�" ����°�' --�"� •,°-�^-.°
,
Doc#137475T2 23
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APPENDIX 1
SPECIFICATIONS
CityNet shall comply with the City's right-of-way requirements found in Chapters 116 and
135 of the St. Paul Legislarive Code. In addition, CityNet shall install, place, maintain and operate its
Facilities according to the following specifications:
1. CityNet shall place its equipment in a manner that it will not interfere with sewer
service workers or sewer contractors access to and work in City manholes. No cable,
equipment or facility of CityNet shall be permitted in City's Sewer System if such
cable, equipment ar facility by its design could cause elechical interference with the
facilities of City or other occupants of the Sewer System. If electrical interference is
caused by any of CityNeYs cable, equipment or Facilities, such interference shall
immediately be removed at the expense of CityNet.
2. CityNeYs cable, equipment and Facilities shall not be designed to use the earth as the
sole conductor for any part of CityNet's circuits.
CityNeYs cable, equipment and Facilities shall be compatible with City's Sewer
System so as not to damage any Facilities of City by conosion or othercvise.
4. New construction splices in CityNeYs cables shall not be located in City's manholes
or other City Sewer System Facilities. CityNet shali construct private manholes or
similar structures for these splices.
5. The m�imum diameter of any conduit of CityNet and the number of cabies of
CityNet to be placed in any of City's Sewer System will be submitted far approval to
the City, which approval will not be unreasonably withheld, prior to conshuction or
installation based upon size and shape of the Sewer System and the size of the
existing cables located within the Sewer System. The azea ofthe conduits, including
the brackets, shall be no more than 3% of the total area of the sewer.
6. City's manholes shall be opened only as authorized by City, whi ch authorization will
not be unreasonably withheld and in the presence of City's authorized representative.
7. No employee, agent or contractor of CityNet shall enter or work in any of City's
manholes unless City's authorized representative is present during the entire period,
or unless the City waives such requirement. CityNet shall pay the cost of having
Ciry's representafive present.
8. Except when emergency conditions necessitate restoring of the Facilifies, Cityl3et
shall notify City two (2) days in advance of any work operafion requiring entry into
any of City's manholes; provided, however, that a particulaz notice requirement may
Doc# 137475T2 24
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be waived by City upon CityNeYs request.
9. Clearing obstructions, repairs, dig-ups and any otUer work required to make the
Sewer System usable for the initial piacing of CityNeYs cable shall be done by
CityNet after appropriate approval by City.
10. Cleaning of CityNet Faciliries in the City's Sewer System shall be done by CityNet or
its agent, at CityNet's cost.
11. CityNeYs workers shall not disturb City or City approved equipment located in
CityNeYs manholes without first informing City, and City shall provide all
requirements regazding such equipment.
12. All of CityNet's cables, equipment and Faciliries shall be firmly secured and
supported to the satisfaction of City.
13. All of CityNeYs cables, equipment and Facilifies shall be plainly idenrified in each
manhole with a firmly affixed tag of a type and word satisfactory to City.
14. Where manholes must be pumped in order to allow CityNeYs work operations to
proceed, pumping shall be at CityNeYs expense.
15. All cables placed in ducts or sewers by CityNet shall be tagged with CityNet's name,
and no cables so placed shall be used to carry currents or electricity for lighting or
power purposes.
16. CityNet shall provide the City no less than §� - months advance notice of City
Sewer Systems that are to have cable/conduit installed in them. Such advance notice
shall include cleaning and televising the City Sewer System. CityNet shall provide
City a post-cleaning televised tape of City Sewer System for the purpose of
determining any sewer rehabilitarion needs.
17. CityNet shall record the following regarding the installation of their Facilities:
Record location of bands in reference to upstream manhole (using GIS
designations for manhole)
Record radical location of cable in reference to downstream view.
Verification of location of all wyes in same reach of sewer (manhole to
manhole)
V erify current use of all wyes (life or not)
Verification of condition of sewer in same reach of sewer (manhole to
Doc#'137475T2 ZS
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manhole)
Verification of condition of manhole
18. All as-buiit records of CityNet Facilities shall be transferred to the City within
fifteen (15) days of installation in an electronic format.
19. CityNet Facilities shall not block a service wye or existing service connection.
20. CityNet shall locate all their Faciliries pertaining to Gopher State One Call
System.
21. CityNet shall be responsible for the repair of their Facilities due to private
contractors cleaning of private services.
Doc# 137475T2 2(
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Technology & Management Services� 3-14-01
ONTACT PH2SON & PFIOPIE
Peter Hames 266-8796
IU5f BE ON COUNCILACBmA BY (d1Tq
r�ort
TOTAL � OF SIGNATURE PAGES
Approve an agreement with City Net for leasing out the sewer system.
PLANNING CAMMISSION
CIB CAMMITTEE
CIVIL SERVICE COMMISSION
GREEN SHEET
��
� anwnaeax �e . ❑ arcua�c
� wuxw�a�xxcFSnc � wuxcm.mm�xa
� MxoR�oltAf�rJYrt1 ❑
(CL1P ALL LOCATIONS FOR SIGNATUR�
� m� ce�oNr� �.�a �Mw a�vaa ra m� d��eon
YES NO
Has this DrsoNfiim ever been a dtY emqoYce9
YES NO
Oces thffi PersoNfirtn Possesc a stull not namalbP���d M' a�Y curreM cstY emPbYee?
YES NQ
Is ih� PNaoMrm a 1erH�ed v�vMOYl '
YES NO
No �e��?��
c:;r-__'=_',
City Net provides fiber optic access, through the use of the sewer systein, that does noC re
he expenses, disruption, delays, and inconvenience of exeavating and obstructing the City's
treets and right-of-way.
St. Paul citizens, businesses, and visitors will be able to use the fiber optic access
throughout the City. The City will receive quarterly two percent of City Net's gross
revenues from the operation of its facilities in the sewer system.
None.
Without uniform access to the fiber optics throughout the City, the City will not attract new
businesses and retain some of the existino businesses_
dOUNT OF TRANSACTION
SOURCE
INFORMAiION (IXPWtQ
COET/REVQlUE BUD6ETED (CIRCLE ON�
YES NO
ACTNRY NUMBER
O� -�70
City of Saint Paul
Office of the City Council
310 Ciry Hall
Saint Paul, MN 55102
(612)266-8575
INTER-DEPARTMENTAL MEMORANDiTM
DATE: March 23, 2001
TO: Council President Dan Bostrom
Councilmember Jay Benanav
Councilmember Jerry Blakey
Counciimember Cluis Coleman
( �n„i�n�il'T!.°.:^.�.°.S �.:.�:C �.9II1�
Councilmember Kathy Lanhy
Councilmember Jim Reiter
FROM: Gerry Strathman, Director
SUBJECT: CityNet Lease Agreement (Proposed)
The proposed agreement between the City of Saint Paul and CityNet raises concerns about the
process employed to develop this proposed agreement and its terms. The development of this
proposed agreement has not appropriately involved the City Council nor the public. Also, some
terms may not be in the City's best interests.
Process
Chapter 16 of the Saint Paul City Charter provides a framework to be followed when private
entities are to be gzanted the use of public property to operate utilities. This process is lughly
structured and provides such decisions aze to be made only by the ordinance and only after a
formal public participation process. Additional safeguards aze provided through special public
notice requirements and the prohibition of ex�arte contact� w�tYe �1 PCYP� Q��� '!'tie c:e�r
intent of the City Charter and associated procedural ordiaances is to ensure an open, public, fair
and deliberative process is followed when private entities aze seeking to use public property for
private purposes. The process used to reach this proposed agreement has not been consistent
with the spirit of the Charter.
While State Law deternunes Saint Paul may not require CityNet to obtain a franchise, this does
not meau that the City Council and the public are to be excluded from the process. Yet the
Administration has negotiated this proposed agreement with little involvement by the City
Council. There has been no public participation. The acceptance of an agreement reached in this
manner wouid effectively transfer powers tradifionally exercised by the Ciry Council to the
Administration. The City Council should insist on playing an active role in the development of
agreements of this type and insist the public be allowed to e�ress themselves before its appmval.
Terms ' -
An overall reading of the proposed ageement leaves two general impressions. The first
impression is the Public Works Department has included terms in tiie agreement to ensure that
CityNet will not interfere with its ability to manage and operate the sewer system in Saint Paul.
The second impression is the remainaer of the agreement is unbalanced to favor of CityNet. The
proposed agreement contains teims that grant CityNet unprecedented generous benefits while
accepting faz less for the City than has been the case in similar situations in the past. Some
examples of the extraordinary benefits to be granted to CityNet aze outlined below.
Duration of the A¢reement The nroposed agreement nrovides for an initial three-yeat term
renewable, upon the same terms, covenants and conditions, at CityNeYs option, of seven ('n
additionat three (3) year renewai terms. Ttus means tfiat CiryNet may elect to operate its
business in Saint Paul for 24 years under the terms in ttis proposed agreement. Such a duration is
unprecedented in Saint Paul and greatly exceeds the duration of any similar agreement The cable
television franchise, for example, had an original term af fifteen (15) years. The most recent cable
television franchise has a term of ten (10) yeats with a five (5) year e�ension - at the City's
option. The CiTy.Charter limits the durafion of franchises to twenty (20), peazs unless approved by
a majority of electors voting thereon. While this Charter provisibn may not be direotly applicable
in ttus situation, it reflects the e�raordinary nahue of a proposal to hav@ an,agreement run for 2_4 _
yeazs. Tliis means, if at any renewal point durmg'ttus 24=year penod; CityNet deeins itie leitris. of
this agreement no loager fo be in their interest, they may elect not to renew. Tf, however, the City
finds the temis of this agreement ao 2onger to be in the City's best interest, it is boimd for fhe
entire 24 years if CityNet elects to exercise its renewal options.
Rental Fees. The pmposed ageement provides that CityNet pay the City rental fees in the
amount of 2.5% of its gross revenues. This is far less than the at least 5% of gross earnings
proposed in the City Charter for franchises. This is the rate currently paid by the cable television
,fa�a ,nrly�ic�� _ Ft �hn„r+�n ci D thn C'�t� c�,]�inia]�i.��tfihic,l�•#-ra�r�tyl-f�a-�irr•....8"..�"_
may elect to instaII their system in tiie pubfic rigfit-of-way without paying any rental or franchise
fee. "WIuYe tlus aiay be tr`ae, thi§ is clearIy not CityNet's business model and they are electing to
try to use city sewers because they can instail their system far more quickly and inexpensively than
if they had to absorb the full cost of right-of-way construckion. The proposal that the City should
accept lower fees because CityNet coutd do something that is faz more costly to them and not
part of their business plan, seems naive.
Bon . It is a common practice for the City to.require parties that pmpose to conduct business
using public rights-of-ways to provide bonds to secure tlieir obligation to defend and indenuvfy
the City against claims arising from usage of CityNet facilities. Such bonds aze customarily
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considered a cost-of-doing-business to be bome by the facilities operator. Also, construction
performance bonds aze commonly paid by the facilities operator. This proposed agreement
provides for such bonds but the cost of these bonds aze to be bome by the City not CityNet. For
the proposed $150,000 bond to secure the City against claims CityNet is violating the provision of
the cable television franchise, this bond is to be reduced and retired on a dollar-to-dollaz basis by
the delivery of rental fees to the City. This appears to mean that ttus bond will vanish upon
CityNet's payment of $ I50,000 in zental fees and from that point forwazd the City will be
required to pay for its own defense for activities related to CityNet It is also common practice
for contractors to be required to provide bonds to assure performance under the terms of an
agreement. Such bonds are also considered a cost-of-doing-business to be paid by the builder. In
this proposed agreement, the financial burden for tlus bond is again slufted to the City. CityNet
proposes to pay the City $50,000 with wlrich the City may purchase a surety bond to protect
against CityNePs failure to perform. This advance is, however, to be fully recovered by CityNet
by receiving full credit for this advance against rental fees. Again, the uitimate cost of the surety
twnd falts �o the �iYy, rioi i.ifyiJeY.
Protection of Cable Television Franchisees. Joe Van Eaton of Miller & Van Eaton, a City cable
law consultant, has repeatedly raised concerns this proposed agreement may undermine the City's
current cable television francluse. While an attempt has been made to address this risk by adding
certain provisions to the proposed agreement, Mr. Van Eaton is still of the view the City remains
at risk. He has proposed solutions to this problem but they have been rejected by CityNet. Tlus
proposed agreement does nof, therefore, adequately protect the City in t}us regazd,
Besides these majorcoricerns; §everal other lesser concerns remain. These concerns should,:
however, be resolveable through fiulher negotiations and iinproved drafting of the document,
Recommendations.
Based on a cazeful review of both the specific terms for the proposed agreement and the process
through which it was developed, Council Reseazch makes the following recommendations to the
City Council:
1. The City Council shouid reassert its authority to be actively involved in the development and
approval of any aereements v�h�rP rriy� �a.�es �e pr�t<cs:.-�.:,; �s� £::y y��pe cy vr F;riva�e
purposes.
2. The City Council should conduct a public hearing on the Cityl�et proposal to receive
information from all interested parties including prospective customers, competitors and the
public.
3. The City Council should advise CityNet the City will not enter into any agreement for the use
of the public right-of-way thaf exceeds 10 yeazs in total duration.
.
3. The City Council shouid require CityNet pay rental fees of at least 5% of gross earnings
derived from the use of City rights-of-way.
4. The City CouncIl should require CityNet to provide appropriate bonds at their expense and
such bonds shall remain in effect for the duration of the agreement
5. The City Council should direct City staff that any agreement with CityNet must provide
protections for the City's cable television francluse as proposed by Miller & Van Eaton.
6. The City Council should direct City staffto redraft the agreement to address less serious
concems to be identified by Council Reseazch.
7. The City Couacil should commit to an open, public process for reviewing and evatuating any
CityNet agreement This should include timely public notification and a public hearing.
8. The City Council should establish a process, by ordinance, for the development, review and
approval of any such similaz agreement in the fuUue.
cc: Susan Kimberly, Mayor's Office
Clayton Robinson, City Attorney
Sean Kershaw, PED
Tom Eggum; Axblic Works _
� ' ":. - Roger Puchreiter; Publio Works .
` Peter Aames, OFS _.
Legislative Ai�es -
.... . . _._ --- -- -- ............._._....
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S 7. Pw �, M uags o 7A 5510 7
LINDQUIST & VETtNCTM P.�.�.P. ���Z.
ATTOw�rsAiL�w
73tomas L Fabd �
(651)312-1200 �
Apri15, 2001
President Dan Bostrom and
Members of the Saint Paul City Council
Saint Paul City Hall
15 West Kellogg Boulevard
Sairt P�it, M±nees�ta 55;n2-
.zuows�
805ovn�E�+rrHSrnEer
MSDE�APOLIS. MINNESOTA 554D2-2205
TaErHONE:61&371-3271
Fax:512�3713207
Re: �tyNet Contract for Instaltation of �ber Optic Cable In City Sewer System
Dear President Bostrom and Members of the City Council:
On behatf of CityNet Telecommunicarions, Inc., I would like to thank you for your consideration
of the proposed CityNet Agreement with the City of St. Paui. The proposed Agreement
authorizes CityNet to build a fiber optic network utilizing St. Paul's sewer system. The, proposed
Agreement is the result of lengthy, intense negotiations between CityNet and the City's staff. We
aze confident tfiat after your review of this Agreement you wi11 agree that it is fair, balanced and
reflects the serious "give and take” of good faith negotiations.
We are aware that you have received a preliminary analysis of the Agreement from Council
Research Director Gerry Strathman. Mr. Strathman raises four points of concem regarding the
Agreement. Each of these is addressed below.
Dura#ion of the Agreemen�. Mr. Strathman's memorandum raises a concem regarding the
durarion ofthe proposed 24-year Agreement with CityNet. It should first be noted that any
company that builds a fiber network in St. Paul using the t*adifie*eal s±*..°rt a��?+a..^.v {�e±�c3s t��s t;�
rigiit to use the City's rights-of-way for an infinite period of time, without any paymenf obligation
to the City. Under such traditional installatioq the City woutd also be subjected to the tra$c
disruption and degradation of its streets resutting from the miles of street cuts involved in
construction. All of this, of course, would be avoided with the CityNet system.
In order to lease the fiber optics to other telecommunications carriers, CityNet must be able to
ensure that the dura6on of its Agreement with the City of St. PauI provides an adequate time
frame for CityNet to guarantee that its network will be available to its customers. The
telecommunications industry standard for the duration of leases for fiber optics is twenty (20)
years. This is driven by the fact that telecommunications camers treat the costs associated with
the lease as a depreciable asset. In order to accomplish this, the carriers must acquire the rights to
LINDQUIST R: `TENNUM P,LLP.
President Dan Bostrom and Members of the Saint Paul City Council
Aprit 5, 2001
Page 2
the fiber for 75% of the economic life of the fiber, or 18.75 years (the economic life of fiber optics
is 25 years). Thus, the industry practice has been to acquire fiber under 20.year teases. Thus, an
agreemeirt of less than 20 years (plus four yeazs for network design and construction) will result
ia CityNet's inability to Iease to its customers and would make the proposed vem�ue untenable.
F"mally, in this regard, Mr. Strathman's memorandum actrnowledges that the City Charter
provision that limits the duration of franchises to 20 years is not appIicable to the CityNet
e r-rnoTMnn= �ero. 4 ' A ' a� s 4...:..L:.. _ = rt`i s_�B �-- ' r_- �-
'-a'^"'•"•. ��-� �+--� ��°...�°++.�,^:: 3 ii;s. &uwn.aua i�in.tucid. aumcia5t8 uic i}yiC3t uwa`f.�i3� �
of existing franchise ageements should not be controlling.
Rental Fees. Mr. Strathman qnestions why the proposed Agreement provides that CityNet will
pay the City 2.5% of its gross revenues rather than the 5% fee paid by cable franchisees. As
noted above, the proposed Agreement is not a franchise and CityNet is not seeldng eacclusivity.
Moreover, under 1vTinnesota Iaw, the City may not charge atry fee upon a telecommunica6ons
provider to use its rights-of-way. The CityNet fge is permissible only because its system will be
occapying Cify property (the'sewers) ratfier than;the nght;of-wag Thus, any comparison to the
5% received from a cable francivse is inappropnafe. It is more appropriate.to compa;e the _
CityNet proposal to a competing compazry that ]ays fiber using traditional street cutting methods,
resulting in no payment to the City.
It aiso deserves note that the 2.5% fee does not reflect the additional services that CityNet has
agreed to provide to the City. CityNet estimates that the value of its sewer cleaning, inspection,
mapping and repairs covld be as high as $1.5 million. Taken with the revenue payments, this totai
couid be greater than the 5% paid by franchisees. It is also true that the 2.5% fee does not reflect
the value to the City of having "direct fiber connectivit}�' to buildings that will enhance the City's
void'mg i�eets being trenchP,d a.�� a�rn� y�x aamo, � ber de e fo t�ie �ty of
velopmecrt methods.
Bonds. The concerns raised regarding the bonds aze essenfsally that Yhe costs of the bonds are
funded by CityNet revenue to the City, rather than as an additional cost to CityNet. The bond
provisions were negotiated to provide the City with additionai protections for events that, as
discussed below, are unlikely to occur. If the City chooses to purchase bonds (which other cities
have not deemed necessary) the cost witt be paid with funds that the City would not I�ave except
as a result of the Agreement.
Regarding a performance bond, these aormally are required to protect a city ict those instances
when a builder fails to complete construction. Under its business plan„Cit}�Net_witl nof. `
commence construction of its network unt� it has entered irno agreements_witlr its: ciistomers to
.
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LINDQUIST R: `JENNUM P.LLP.
Presidern Dan Bostrom and Members of the Sairn Paul City Council
April 5, 2001
Page 3
lease the fiber in the network Therefore, in the unlikely event that CityNet cannot Iease fiber to
its customers, no construction will begin and the Ciry wilt not be disadvantaged or hazmed as a
result of this Agreemem. In fact, the City will still have the benefit of the sewer ma.pping and
video inspection that precedes the conshuction of the network.
Protection of Cable Television Franchisees. The possibility that the proposed Agree�nem
creates a risk that the City's current cable fianchise wiii be undermined if a CityNet customer uses
the network tb provide calile tetevision service withouf an appropriate franchise is exceedingly
remote. This concern, which was raised by a cable industry consultant, has been reviewed by both
the City Attorney and a telecommunications law expert retained by the City, both of whom have
detemrined that any such risk has been addressed and minimized by the cable franchise protection
provisions ofthe Agreement. In addirion to the lirigation bond provision, CityNet has agreed to
include a provision in CityNet's contracts with its customers that creates a third-party beneficiary
remedy for the City and any cable franchisee, which will result in a substantiai financial penaky if a
CityNet customer violates the provisions of the Agreement. Additionally, it should be noted that
CityNet fiber will serve high-density commercial buildings which aze unlikely to be customers of a
cable television provider: �_ , � � �" . _ : � � _ � _ � � � � -
In conclusion, CityNet looks forward to your approval of the Ageement as proposed and to a
successful partnership between the City and CityNet in this endeavor. Of course, CityNet is
available to address any questions, concems or requests for additional information you may have.
Very truly yours,
LII�TDQUIST & VENNUM P.L.L.P.
�
/ �'� i��
Thomas L. Fabel
TLF/ing
cc: Mr. Gerry Strathman
, Mr. Tom Eggum
Mr._�earrKersha�v�- �
„ Mr.:Clayton ltobiason
p�.?'10
SEWER LEASE AGREEMENT
Between
TFIE CITY OF SAINT PAUL, NIINNESOTA
and
CITYNET TELECONTMUNICATIONS, INC.
This AGREEMENT, is made and entered into as of this
, by and between CityNet Telecommunicarions, Inc., a 3
office at 8403 Colesville Road Fourteenth Floor, Silver Spring,
"CityNet"), and the City of Saint Paul, Minnesota, a Minnesot�f
(hereinafter "City"). �
day of ,
corporation, hauing an
I, 20910 (hereinafter
corporation
WHEREAS, City currently owns and operates a ewer System, located in the City of
Saint Paul, State of Minnesota, said existing Sewer Sys m being more particularly described on
Exhibit A(hereinafter the "Sewer System"); and
WHEREAS, CityNet desires to install, pl e and maintain telecommunications facilities
(hereinafter "Facilifies") in portions of the Sewe ystem for the purpose of operating dark (unlit)
fiber opric Faciliries; and
WHEREAS, CityNet desires to leas space in the City's Sewer System, rather than using
space in the City's streets and rights-of-w , in order to avoid the additional costs, expenses,
disruption, delays and inconvenience of cavating and obstructing the City's streets and Rights-
of-Way; and
WHEREAS, the City has a ed to lease to CityNet space in the Sewer System for the
placement of CityNeYs Facilities i rder to avoid the inconvenience, disruption, delays and costs
of CityNeYs obstructing or excav ' g the City's streets and Rights-of-Way that would otherwise
be required in the absence of thi Agreement; and
WHEREAS, the Ci has also agreed to this Agreement because City desires to fmd new
and innovative ways to pro ide fiber optic access to its citizens and other users, and to provide
such access uniformiy ughout the City, in order to attract new business and retain existing
business, attract and ex and a highly skilled workforce and promote general economic
development through. t the City by way of technology availability and upgrades; and
f ,,
WHEREAS, the City has also agreed to this Agreement because City desires to protect
and preserve its infrastructure and more efficienUy use its monetary and personnel resources by
Doc# 1374757�2
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finding and authorizing innovative methods o£ deploying fiber optic systems which do not
involve digging and trenching in the streets and other public right of ways and which min;mize
the disruption of traffic flow and commerce and the economic loss associated with such
disruprion; and
WHEREAS, the City has also agreed to this agreement because City desires to ide fy
additional methods of inspection, maintenance and metering of its sewer system to insur
compliance with federal and state environmental laws and regulations; and
WHEREAS, nothing in this Agreement shall be construed to limit in any ay CityNeYs
right to apply far and obtain City authorizarions and permits, to construct and aintain and own
a fiber optics system or facilities, and to apply for and obtain other rights-of- ay agreements
from the City or other rights-of-way providers; and
WHEREAS, CityNet acknowledges that, notwithstanding
Agreement, it shall comply with any and all existing or future La�
those regulating the City's public Rights-of-Way found in Chaptei
St. Paul Legislative Code, before exercising any right under this
herein shall constitute a permission or authorization or waiver�
such prior compliance by CityNet;
NOW THEREFORE, in consideration of the
provided herein, the parties agree as follows:
GENERALLY
provision within this
�e but not limited to
'116 and 135 of the City of
reement, and that nothing
the City of its right to require
and of the mutual covenants
1. Incorporation. The foregoing recitals, well as Appendix 1 and Exhibits A, B and
C, are hereby incorporated in this Agreement as i set forth here verbatim.
2. Definitions. The following words, erms and phrases, when used in this Agreement,
shall have the meanings ascribed to them in 's section, except where the context clearly
indicates a different meaning:
Sewer System: A system of s� ary, storm water and relief sewers as described in
Exhibit A.
Facilities: The fiber optic elecommunications transm3ssion facilities consisting of fiber
optic cables, and associa d appurtenances, as described in Eachibit C, to be installed by
CityNet, and to be loc ed within portions of City's Sewer System pursuant to this
Agreement, solely t rovide Telecommunications Services.
Fee: Any monetary assessment, license, cost, chazge, fee, nnposirion, or tas, of any Idnd
whatsoever, including but not limited to: A levy of general application to entiries doing
Doc#137475T2
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business in the City lawfully imposed by any governmental body; Any real estate or
personal ta7ces on equipment or property owned by CityNet, whether general or special;
Any public urility rates, dues, or chazges of any kind for utilities used by CityNet; Any
fees, costs or eapenses of insurance; and any other expenses, costs, or other applicable
tariffs resulting from the performance of this Agreement.
Law or Laws : Any and all statutes, constitutions, ordinances, resolutions, regul�
judicial decisions, rules, tariffs, administrative orders, certificates, orders, as well
other requirements of the City or any other govemmental agency having joint or �
jurisdiction over the parties to this Agreement. �
Person: Any individual, person or entity, however organized, whether pub �c or private,
whether domestic or foreign, whether for profit or nonprofit, and whether atural,
corporate, or political. "
Rirht-of-Wav or Public RiQht-of-Wap: The area in, on, below or ove a public
roadway, highway, street, cartway, boulevazd, bicycle lane, side alk, parkway or alley
which the City owns, including areas used for sewer utility p oses, or over which it has
a real property easement or interest, including other dedicat Rights-of-Way.
Telecommunications: The transmission, behveen or ng points specified by the user,
of information of the user's choosing, without change ' the form or content of the
information as sent or received.
Telecommunications Services: The offering
nondiscriminatory basis for a fee directly or i
LEASE OF
rights of use on a
to telecommunications providers.
SYSTEM
3. Lease: Subject to the provisions o is Agreement, including the specifications and
rules contained in Appendix l, City hereby ases to CityNet for its non-exclusive occupancy of
space located within City's Sewer System or the placement of Facilities. The Facilities will be
installed, with prior approval of the
jointly identified by the City and Ci
Facilities as to make installarion ecc
Areas of Installation); provide
configuration and location of t
considerations. City shall hav
of the Sewer System that the�Q
installation of the Facilitiesl
CityNet may
in such portions of the City's Sewer System as shall be
as providing sufficient potential mazket for the
�ally feasible (as provided in Exhibit B, "Potential
�ver, that CityNet alone shall determine the actual
�acilities based upon CityNeYs business and economic
� right to withhold approval of access by CityNet to any potion
deems to be physically or shucturally inappropriate for the
the leased portions of City's Sewer System only for the purpose of
Doc# 137475T2
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installing, maintauvng, operating and licensing to third parties for a fee the use of the Facilities in
the Sewer System for providing Telecommunications Services and any uses incidental thereto.
CityNet may, with the City's prior written consent, which shail not be unreasonably withheld,
modify, alter or upgrade the Facilities during the Initial Term and any and all Renewal Terms,
subject however, to the terms and conditions of this Agreement. CityNet shall not use, allow
suffer the leased portion of the Sewer System to be used for any other purpose, provided, howe er,
that City and CityNet may, by amendment to this Agreement, provide for other us Any
unauthorized use will allow City, at its oprion, to temunate this Agreement.
4. Government Permits: Prior to the installation of CityNeYs Facilities w' �n the
Sewer System, CityNet shall obtain from the appropriate govemmental authoriti , including the
City itself, any required permits or licenses necessary for such installation, an hall provide to
City copies of such permits or licenses upon request. City agrees to provide easonable
assistance to CityNet in obtaining such permits or licenses. CityNet shall tify City immediately
if City or any govemmental authority indicates that a permit or a licens 'll not be issued, at
which time CityNet may at its option choose to terminate the agreem t immediately, without
cause.
5. Reserved Right: This Agreement shall not constitut an assignment of any of City's
rights to use the Right-of-Way or the public or private prope upon which the Sewer System is
located. Nothing contained in this Agreement shall be cons ed as a limitation, restriction or
prohibirion against City with respect to any agreement or gement which City has heretofore
entered into, or may in the future enter into, with other p sons regazding the Sewer System or
Right-of-Way. City agrees, however, that the use and
other persons shall not interfere with CityNet's rights
Agreement. Subject to the terms and conditions of :
the Sewer System shall at all times remain exclus' ely
in CityNeYs Faciliries shall at all times remain e clusi
6. Scone of Agreement. Any and
Agreement, which shall be exercised at
prior, continuing, and any future right
of the Sewer System and the public Ri
person and shall be further subject to
restrictions, encuxnbrances, and clai s
cupancy of the Sewer System by such
f occupancy granted pursuant to this
agreement, all right, title and interest in
with City, and all right, title and interest
�ely with CityNet.
rights expressly granted to CityNet under this
eYs sole cost and expense, shall be subject to the
of e City under applicable Laws to use any and all parts
t-of-Way exclusively or concurrently with any other
1 deeds, easements, dedications, conditions, covenants,
of ritle of record which may affect the City's Sewer
System. Nothing in this Agreeme shall be deemed to grant, convey, create, or vest in CityNet a
property right or interest, includ' g but not limited to any real property interest in land, or any
fee, leasehold interest, or ease ent other than such interests that are explicitly conveyed in this
Agreement. Any work perfo ed pursuant to this Agreement shall be subject to the reasonable
prior review and approval the City, and subject to CityNeYs prior compliance with any and all
existing and future laws, � cluding but not limited to public Right-of-Way registration and use
laws found in Chapte 16 and 135 of the City's Legislative Code.
Doc#137475T2 4
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7. Term: The initial term of this Agreement shall be three (3) years unless earlier
terminated in accordance with the provisions here (hereinafter "Inirial Term"). The term
shall commence on the date above first written.
8. Option to Renew: Provided this Agreement has not been earlier terminated and
CityNet is not in default of any of the covenants of this Agreement, then subject to the pr 'sions
contained herein, City grants CityNet the oprion to elect to extend this agreement for s en ('�
additional three (3) year renewal periods (each being a"Renewal Term") commenc on the day
following the expiration date of the Inirial Term or any subsequent Renewal Term Such options
may be exercised by CityNet giving to the City written notice of its election to r ew, not later
than one hundred eighty (180) days prior to the expiration ofthe Initial Term the then current
Renewal Term, as the case may be. If CityNet should elect to renew this A eement, any such
renewal shall be upon the same terms, covenants and conditions as provid in this Agreement
for the Initial Term.
9. Installation, Maintenance and Renairs: CityNet shall h e the right at its sole cost
and expense to install, maintain, and operate the Facilities in the Se er System. CityNet's
installation of the Faciliries shall be made according to plans appr ed by the City, which
approval shall not be unreasonably withheld, delayed, or conditi ned. CityNet shall perform a
video inspection of those portions of the Sewer System in whi CityNet intends to construct its
Faciliries. In connection therewith, the City shall respond to ityNet in writing with respect to
any submittal of such plans or drawings (which shall inclu e the results of a video inspection)
after receipt thereof with any disapproval, objection or p posed modification within thirty (30)
days of said receipt, or such plans or drawings shall be eemed approved by the City. CityNet
shall also perform a video inspection subsequent to installation of the Facilities and provide
the City with a copy thereof. The City shal] have n obligation to maintain, inspect or repair the
Facilities so as to cause them to conform to any p ormance specification, and C3tyNet shall, at
its own cost and expense, install, maintain, rep �, and secure its Facilities so that they remain in
good and safe condirion and in compliance wi the provisions of this Agreement and all
applicable fire, health, building, and any oth life safety codes or Laws.
During the first two years follo ' g the installation of the Facility, CityNet shall twice
annually jet-spray that portion of the S er System containing the Facility. Thereafter, CityNet
and the City shall agree on an approp ate regular schedule for such cleaning to be done by
CityNet, at CityNeYs sole cost and pense.
The Faciliries shall rema' the exclusive property of CityNet, and CityNet shall have the
right to remove all or any port n of the Facilities at any time during the term of this Agreement,
provided that the same does ot otherwise interfere with the City's operarions of the Sewer
System. The Faciliries sha be deemed personal property for purposes of this Agreement,
regazdless of whether an portion thereof is deemed real or personal property under applicable
law.
Doc# 1374757�2
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All work by CityNet shall be performed in compliance with applicable laws and
ordinances. CityNet is not authorized to contract for or on behalf of the City for work on, or the
fixrnishing of materials to the Sewer System or any part thereof, and CityNet shall pay any and all
subcontractors, material men, mechanics and laborers promptly for any work performed or
materials fi�mished at the instance of CityNet on the Sewer System.
10. Rental Fee_ The annual lease Rental Fee to be paid by CityNet to City ori a
quarterly basis, is two and one haif percent (2.5%) of the "Gross Revenues" (as fined below)
received by CityNet from the operation of the Facilities in the Sewer System p uant to this
Agreement. Such payment shall be made within forty-five (45) days after th expiration of each
quarter at the City's address specified in Section 26 hereof. For purposes o this Section, "Gross
Revenues" of CityNet shall be all gross revenues, determined in accord ce with generally
accepted accounting principals ("GAAP'�, derived and received by Ci et from its operation of
the Facilities in the Sewer System. Gross Revenues include, but aze ot limited to, chazges made
by CityNet or any affiliate of CityNet for the use of the Facilities b other persons or entities.
Notwithstanding anything to the contrary in this Section, Gross evenues shall not include (i)
any taac or fee imposed on the users of the Facilities by the Cit or any other governmental
authority and collected by CityNet on behalf of such gove ental entity, (ii) the revenues of any
Affiliate (as defined in Section 25) of CityNet to the exten such Affiliate revenues are costs of
CityNet and recovered by CityNet through charges to su scribers that are included in gross
revenues on which fees are paid, (iii) actual bad debt, r funds or credits, provided any such bad
debt subsequently collected shall be included in gros revenues in the period collected, and (iv)
the revenues of CityNet or any Affiliate of CityNe 'th respect to their respective operations
which do not use the Sewer System. Gross reven es shall be adjusted to reflect contributed goods
and/or services provided to the City by CityNe der the terms and conditions of this
Agreement. Acceptance by the City of any p ent due under this Agreement shall not be
deemed to be a waiver by the City of any b ach of this Agreement occurring prior thereto, nor
shall the acceptance by the City of any su payments preclude the City from later establishing
that a larger amount was actually due or om collecting any balance due to the City.
City may, at any time, at Ci s sole option, upon ninety (90) days written notice, require
CityNet to discontinue the lease R tal Fee payments. Upon receiving such notice CityNet shall,
no later than ninety (90) days aft receiving such notice, cease maldng all compensation
payments that would have been ayable after such ninety (90) day norice period. If City requires
such a discontinuation of Ren Fee payments, the City may then charge, on an annual basis, its
actual Right-of-Way manag ent or management costs (pursuant to Minnesota Statutes §
237.162, Subd. 9 and § 23 .163, Subd. 2(b), and pursuant to any relevant local, state or federal
ordinance, statute, regula on, law or other rule), that are incurred after the expiration of the
ninety (90) day period escribed above, provided that in no event will CityNeYs payment be
greater than the amo t established as the Rental Fee herein.
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CityNet shall also file quarterly a report ("Compensation Report") with the City, by
sending copies to the individuals listed in Section 26 herein. The Compensarion Report shall
show the Rental Fees paid to the City, as well as all CityNet revenues for the preceding quarter
based upon CityNeYs services or operations within the City of Saint Paul that made up Gross
Revenues. The Compensation Report shall also show any adjustments as provided for � �s
Agreement for bad debt, and the Compensation Report shall be executed and attested t by an
authorized officer of CityNet verifying the accuracy of the Compensation Report an amount of
all fees, compensation, or other payments under this Agreement.
CityNet shall keep accurate books of account, in accordance with G , for the purpose
of determining the amounts due to the City under this Agreement. The City ay inspect
CityNeYs books of account relative to the City at any time during regular usiness hours on
thirty (30) days prior written notice and may audit the books from time tune at the City's sole
expense in order to verify the accuracy of payments due under this A eement. The City may
also, at its option, require that CityNeYs compliance with the term d conditions of this
Agreement, including, but not limited to, the computarion of any ees or payments, be verified by
a certified public accountant or compazably qualified consult at the sole expense of the City.
11. Other CharQes. CityNet shall be solely resp sible for the payment of all Fees,
expenses, costs, compensation, or any other charges im sed or based upon CityNeYs
performance under this Agreement. CityNet shall pay y such Fees ar charges within thirty (30)
days of notice of the same from the City. CityNet s I pay any personal property tases assessed
on, or any portion of such taxes attributable to, th acilities located in the Sewer System.
12. Removal or Relocation. CityN understands and acknowledges that City may
require it to remove or relocate some or all o its Facilities, and shall at City's direction remove
or relocate such Facilities whenever City r onably determines that the removal or relocation is
needed for any of the following purp
or maintenance of a City project or a
interfering with or adversely affectin
facilities or uses of the sewer utility
health, welfare or safety, or (d) as
administrative or legal authority, � c]
es (a) for the construction, completion, repair, relocation,
lic Right-of-Way, (b) because the Facilities are
roper operation or maintenance of any other fixtures or
public Right-of-Way; (c) to protect or preserve the public
ult of any law, nxling, judgment or decision of an
iinQ but not limited to a district court of the State of
Minnesota. If CityNet shall fail o remove or relocate any Facilities as requested by the City
within a reasonable time unde e circumstances, City shall be entitled to remove or relocate the
Facilities at CityNeYs sole c t and expense, without further notice to CityNet. In the event that
City is required for any re n to remove, relocate or discontinue leasing or operating the Sewer
System, or any portion th eof, either party shall have the option to terminate this Agreement.
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13. Damage to Public Right-of-Wa�r Sewer System. Whenever the installation,
removal or relocation of Facilifies is required or pernutted under this Agreement, and such
installarion, removal or relocarion shall cause the Public Right-of-Way or Sewe ystem to be
damaged, CityNet, at its sole cost and expense, shall comply with ali laws gov ' g use of the
Public Right-of-Way or the Sewer System, which includes the obligation to �omptly repair and
retum the same to a safe and satisfactory condirion in accordance with
wear and tear excepted. If CityNet does not repair the site as just desc�
have the option, upon fifteen (15) days prior written notice to CityNet,
performed such reasonable and necessary work on behalf of CityNet
the proposed costs to be incurred or the actual costs incurred by the ii
�plj��'able Laws, normal
�e�fl, then the City shall
�perform or cause to be
to charge CityNet for
at City's standard rates.
Upon the receipt of a demand for payment by the City, CityNet s 1 promptly reimburse the
City for such costs. The provisions and rights in this section are n addition to, and not in lieu of,
any right of the City under existing or future applicable Laws.
14. Condemnation: In the event that the Sewer S tem, or any portion thereof, shall be
taken or condemned, either permanently or temporarily, r any public or quasi-public purpose
by any person or authority in appropriation proceeding or by any right of eminent domain, or in
the event that City's permit and right to occupy the p lic Right-of-Way with its Sewer System
or to Lease portions of its Sewer System is revoked r deemed illegal, this Agreement shall
automatically terminate on such date and any dam ges arising therefrom shall be payable to City.
CityNet shall have the right to claim and recove om the condemning authority, such
compensation as may be separately awarded or ecoverable by CityNet.
15. Emergenc�Reaairs. CityN
paramount purpose of the Sewer System i�'for Uae transfer of sewage and storm water, which in
no way shall be compromised or abridg by any right conferred under this Agreement.
o ally ceases to drain normally due to blockage or
t is City's responsibility to restore normal flow as soon as
Historically the Sewer System �
struchxral failure. On these occ
possible. Under such circumsta
Facilities or for temporary inte�
make every reasonable attempt
impact the Facilities under this
16. Access to tB
Agreement, subject to p:
which supervision costs
vehicular ingress and e
for the purpose of ac�
maintain and operat e
and agrees that the primary and
the City shall not be responsible for any damage to the
n of service provided through the Facilities. The City will
ify CityNet as soon as possible of any City work that may
: S er S stem. CityNet may, at all times during the term of this
io compliance with City ordinances and to reasonable supervision,
fees shall be paid for exclusively by CityNet, have pedestrian and
ess to and from the Sewer System, on a 24-hour, 7-day per week basis,
ing the Facilifies to the extent reasonably necessary to install, field-test,
Facilities.
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17. Renewal of Lease. If both City and CityNet wish to enter into a new lease
agreement then, before expiration of the final Renewal Term, the City and CityNet may enter
into good faith negoriations the object of which will to agree upon the terms of a new lease
agreement.
ADDITIONAL PROVISIONS
18. Independent Contractor: In performing this Agreement, City and City et shall
operate as, and for all purposes be considered, independent contractors and not age s, and
neither party shall have authority to bind or otherwise obligate the other in any m er
whatsoever. All personnel perfornung seroices shall remain under the exclusiv direction and
control of their respective parties and shail not be deemed to be employees o gents of the other
party. No employee or agent of CityNet shall be deemed an employee of � for the purposes of
this Agreement, nor shall City be responsible for any payments such as c pensation, wages,
benefits, taaces, workers' compensation, disability or other insurance or y other payments with
respect to any such CityNet employee or agent.
19. Force Majeure Susuension and Termination: In t event that either party to this
Agreement is unable to perform any of its obligations under � Agreement or to enjoy any of
the benefits thereof because of natural disaster, acrions, Law orders or decrees of governmental
bodies or failure of power supply, or any condition that is yond that party's reasonable control,
including but not limited to acts of God, fire, flood, or ot er catastrophe (hereinafter "Force
Majeure Events"), the non-performing party shall imm iately provide notice thereof to the other
party and shall do everything possible to resume perf ance. Upon receipt of such notice by
the performing party, this Agreement shall immedi ely be suspended. If the period of
nonperformance exceeds forty-five (45) days
Event, either party shall have the option to te:
the other pariy.
e receipt of notice of the Force Majeure
this Agreement by giving written notice to
20. Indemnifica6on: CityNet sh indemnify, defend, protect, and hold hazmless the
City, its council members, officers, agen , contractors and employees from and against any and
all claims, demands, losses, damages, ' bilities, fines, charges, penalties, administrative and
judicial proceedings and orders, jud ents, and all costs and expenses incurred in connection
therewith, including reasonable att ey's fees and costs of defense, occasioned by or arising out
of CityNeYs activities undertak utsuant to this Agreement, except to the extent arising from
or caused by Uae negligence or llful misconduct of the City, its council members, officers,
employees, agents, or cont�
indemnify the City, and its
allegations allege (a) ind
or (b) a wrongful act or m
shall also defend and ' den
negligence, if the a gatioi
rs. The foregoing notwithstanding, CityNet shall defend and
ficers and employees, even in the case of negligence, unless the
dent negligence on the part of the City, its officers and employees
�ion on the part of the City or its officers or employees. CityNet
ify the City, its officers and employees, even in the case of
are based on the City's or its officers or employees' negligence or
Doc#137475T2
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otherwise wrongful act or omission in approving this Agreement, or in failing to properly or
adequately inspect or enforce compliance with the terms, conditions or purpose of this
Agreement. CityNet shall also defend and indemnify the City, its officers and employees, in the
case of CityNet's use of Hazardous Materials. "Hazazdous Materials" means asbestos, petroleum
products, or any to�c or hazardous substance, waste or materials as defined in any federal, , ate
or local environmental or safety law or regulation including, but not limited to, CERCL
MPCA, and MERLA. The provisions of this secrion shall survive any termination or e iration
of this Agreement. Without limiting the foregoing, CityNet shall obtain a bond in th sum of
$150,000, in a form acceptable to the City Attomey, to secure its obligation to def d and
indemnify the City against any claim asserted by a City-franchised provider of c le television
service, alleging injury based upon usage of the CityNet Facilities in violatio f the City
franchise ordinance for the provision of cable television service. Said bond equirement shall be
reduced and rerired on a dollar-for-dollar basis by the delivery of rental f s to the City by
CityNet pursuant to Paragraphs 10 and 46 of this Agreement.
21. Limitation on Liability and Waiver: NOTWITHST ING ANY PROVISION
HEREIN, NEITHER PARTY SHALL BE LIABLE TO THE O R FOR ANY INDIRECT,
SPECIAL OR CONSEQLTENTIAL DAMAGES, INCLUDIN , WITHOLTT LIMITATION,
THOSE BASED UPON INTERRUPTION OF SERVICE O FOR ANY LOSS OF
REVENUES, PROFITS, OR BUSINESS OPPORT
WHETHER OR NOT EITHER PARTY HAD OR ;
KNOWLEDGE, ACTUAL OR CONSTRUCTIVE, THf4T ANY SUCH DAMAGES MIGHT
BE INCURRED. CityNet also waives any and all cl ' s, demands, causes of action, and rights
it may assert against the City on account of any loss damage, or injury to its Facilities or any
loss or degradation of the services provided by its acilities. The City shall be liable only for the
e independent negligence or willful
ntractors. In no event shall the City be liable for
iat damage CityNeYs Facilities. In no event shall
cost of repair to damaged Faciliries arising fr�
misconduct of City, its employees, agents, or
vandalism, malicious mischief, or acts of Go�
either party be liable for special, consequen �
perfornnance or nonperformance of its obl' a1
secrion shall survive any termination or pir
RESULTING THEREFROM,
HAVE HAD ANY
exemplary or punitive damages as a result of the
is under this Agreement. The provisions of this
on of this Agreement.
22. Default: If at any time tyNet fails or refuses to perform any of the material
covenants or conditions contained i this Agreement, and such failure or refusal shall continue
for sixty (60) days after written n ice is provided by City to CityNet, then City, at its election
may re-enter and take possessio of the leased portion of the Sewer System, remove CityNeYs
Facilifies therefrom, re-let the ased portion of the Sewer System or any part thereof on such
terms, condirions and rentals City may deem proper, and, at City's option, either terminate and
cancel this Agreement, or ply the proceeds that may be obtained from said re-letting, after
deduction of costs and e enses, to the lease rentals required under this Agreement, and hold
CityNet liable for any ance of such rentals which may remain unsatisfied and unpaid. In such
an event, CityNet sh pay to City, as addirional rent: (i) all costs and expenses reasonably
incurred by City in aking any alterations to the Sewer System in preparation for re-letting and
Doc# 137475T2 � 1 �
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in attempting to re-let the leased portion thereof, and (ii) ali costs and expenses, including
attorneys fees and costs, reasonably incurred by City as a result of CityNet's default or enforcing
City's rights and remedies hereunder.
23. Time to Cure: In the event any such default (other than the payment of fees due ,
hereunder) cannot reasonably be cured within such sixty (60) day period, the time for c' such
default shall be extended for whatever period of time is required to complete such curin o long
as either party is proceeding with due diligence. The waiver by either pariy of any br ch of any
term, covenant or condition herein contained shall not be deemed to be a waiver of ch term,
covenant or condirion or any subsequent breach of the same or any other term, co enant or
condition herein contained.
24. Insurance: CityNet shall at its own expense obtain and maint ' at all times during
the term of this Agreement Commercial General Liability insurance and ommercial
Automobile Liability Insurance protecting CityNet in an amount not le than One Million
Dollars ($1,000,000) per occurrence (combined single limit), includi bodily injury and
properiy damage, and in an amount not less than Three Million Do s($3,000,000) annual
aggregate for each personal injury liability and products-complet operations. The Commercial
General Liability ansurance policy shall name the City, its coun 1 members, officers, and
employees as additional insureds as respects any covered liab' ity arising out of CityNeYs
performance of this Agreement. Coverage shall be in an oc ence form and in accordance with
the limits and provisions specified herein. Claims-made p licies are not acceptable. Such
insurance shall not be canceled, nor shall the occurrence r aggregate limits set forth above be
reduced, until the City has received at least thirty (30) ays' advance written notice of such
cancellation or change. CityNet shall be responsible r notifying the City of such change or
cancellation. Prior to any Renewal Term pursuant § 8 of this Agreement, the City may request
and the parties shall bazgain in good faith to incr se the above minimum insurance amounts, if
such an increase is watranted by indushy stand ds or specific identified risk, or by any change
in Minnesota Statute § 466 or any other Law ertaining to municipal liability. Such increase, if
any, shall not be effective until the comme ement of such Renewal Term.
Prior to the commencement of work pursuant to this Agreement, and annually
thereafter, CityNet shall file with the ty, pwsuant to the Norice provision in Section 26, a
certificate of insurance which shall s te the following: the policy number; name of insurance
company; name and address of the gent or authorized representative; name and address of
insureds; policy expiration date; ecific coverage amounts; that the City shall receive thirty (30)
days' prior notice of cancellatio ; that names the City, its council members, officers, and
employees as additional i
performance of this Agre�
policy waives any right o
s as respects any covered liability arising out of CityNeYs
and that CityNeYs Commercial General Liability insurance
�ry the insurance company may have against the City.
Doc#137475� 11
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An insurance provider of CityNet shall be admitted and authorized to do business in the
State of Minnesota and shall carry a min;mum rating assigned by A.M. Best and Company's Key
Rating Guide of "A" Overall and a Financial Size Category of "X" (i.e., a size of $500,000,000
to $750,OOQ000 based on capital, surplus, and conditional reserves). Insurance polici d
certificates issued by non-admitted insurance companies are not acceptable. Any d ctibles or
self-insured retentions must be stated on the certificate(s) of insurance, which shal e sent to and
approved by the City. "Severability of interesY' or "separation of nvsweds" clau s shall be made
a part of the Commercial General Liability and Commercial Automobile Liab� ty policies.
25. Assi�nment: CityNet shall not assign or otherwise convey an of its rights,
obligations or interests under this Agreement without the express prior �tten consent of the
City, which consent shall not be unreasonably withheld. This clause a o applies to CityNeYs
Affiliates, who shall be financially viable. "Affiliate" means a pazen or subsidiary of CityNet,
an entity that owns or controls, is owned or controlled by, or is un r common ownership or
control with CityNet, or an entity which merges or is consolidate with CityNet or which
purchases a controlling interest in the ownership or assets of C� Net. In the event CityNet
assigns its rights, obligations or interests under this Agreeme , CityNet shall remain secondarily
liable to City for the performance of its assignee under this greement.
City may require an assignee or transferee to po with the City security in the form of a
cash deposit, letter of credit, or surety bond satisfacto in form and amount, which shall be fully
refunded or otherwise released to the posting party on termination of this Agreement and upon
the timely removal of Facilities pursuant to this A eement, to the reasonable satisfaction of the
City. [King's Paragraph]
26. Nofice: All notices and other co unications which shall or may be given pursuant
to this Agreement shall be in writing and b deemed to have been duly given (i) upon personal
delivery, or (ii) upon placement into the ited States mail, certified, postage prepaid, retum
receipt requested, to the parties at the fo owing addresses:
If to City: Director
Deparhnent fPublic Works
City of Sai t Paul
1000 Ci all Annex
25 Wes ourth Street
Saint aul, Minnesota 55102
With copy to: S� t Paul City Attorney
0 City Hall and Courthouse
15 West Kellogg Boulevard
Saint Paul, MN 55102
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If to CityNet:
CityNet Telecommunications, Inc.
8403 Colesville Road, 14� Floor
Silver Spring, Maryland 20910
Attenrion: Mark Perkeli, General Counsel
or at such other address as the parties hereto may specify from time to time by writte otice
delivered in accordance herewith.
27. Terminafion: This Agreement may be termiiaated by either party pon written
notice to the other pariy upon a material default of any covenant, provision r term hereof, by
the other pariy, which default is not cured within sixty (60) days of recei of written norice of
default (or, if such default is not curable within sixty (60) days, if the faulting party fails to
commence such cure within sixty (60) days or fails thereafter dilige y to prosecute such cure to
completion), provided that the grace period for any monetary
receipt of notice.
Additional Termination Ri¢hts.
(a) Ci Net. CiryNet may, without further
(180) days written notice, terminate its lease or its
without cause.
shall be ten (10) days from
to City, upon one hundred eighty
of any portion of the Sewer System
(b) C�. If any govemmental agency o third party institutes proceedings successfully
imposing public utility or common carrier sta s on City as a result of its performance of this
Agreement, or if any action is brou�t by third party successfully challenging the continued
validity of this Agreement or seeking to a ersely modify, suspend or revoke City's operaring
authority for its services or Sewer Syste as a result of its or CityNeYs performance of this
Agreement, and there is an adverse im act upon the City which cannot be eliminated by CityNet,
City may, without fiirther liability to ityNet, upon one hundred eighty (180) days written
notice, terminate this Agreement � out cause. City may also, without fixrther liability to
CityNet, upon one-hundred and enty (120) days written notice, terminate this Agreement in
the event that CityNet fails to i� iate and diligently pursue installation of the Facilities or to
maintain Facilities as
28.
Norivithstanding any other term or condition contained
herein, and in addirion to y other legal or equitable remedy, City shall have the right to
terminate this Agreeme at any time if CityNet or any of its affiliates shall be unable to pay its
liabilifies when due, o shall make any assignment for the benefit of creditors or file a voluntary
petition in bankrapt or be adjudicated banknipt or insolvent, or if any receiver is appointed for
its business or pro rty, or if any trustee in bankniptcy or insolvency shall be appointed under
the governing L s of the United States or of any state.
Doc# 137475T2 13
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29. Surrender and Removal: Upon terminarion of this Agreement for any reason, or
expirarion of the Initial Term or any renewal term of this Agreement, CityNet shall, upon written
request of the City, remove any and all of its Facilities and any other equipment from the City's
Public Right-of-Way and Sewer System within one hundred hventy (120) days, and shall quit
peacefully, and shall repair any damage to the Public Right-of-Way or Sewer System caused by
such equipment or Pacilities, normal wear and tear excepted, all at CityNeYs own cos�d
expense, provided, however, that if such removal is not completed within such one h dred
twenty (120) day period, CityNet may request such additional period as is reaso
for such removal as long as CityNet diligently makes such removal as promptly
and/or such additional period as is reasonably necessary to account for delays t�
by events or circumstances beyond the reasonable control of CityNet,
limitation, forces of nature. CityNeYs failure to comply with these sw
requirements shall be deemed a material breach of this Agreement. Ur
City may also, in its sole discretion, exercise any rights it has at Law c
not limited to deeming such Facilities to be abandoned and/or a nuis
Facilities. The provisions of this Section shall survive any termina 'o�
Agreement.
�b necessary
possible
t were caused
nclu � g, without
end and removal
�e ch circumstances
n equity, including but
e, and abating the
or expiration of this
30. Discontinued Operations: In the event that Ci et discontinues its
Telecommunications Services in the City, it shall immedia ly provide information satisfactory
to the City that its obligations for its Facilities under this greement have been lawfully assumed
by another entity (including, upon consent, by the City . In the event that its Facilities aze no
longer used to provide Telecommunications Services or a period of one (1) yeaz, then CityNet
shall provide notice of such an event to the City, shall, pursuant to Section 29 above,
remove each such Facilities, unless this requirem t is waived by the City. In addition, such
non-use shall constitute a material breach and alid and lawful ground for the City to terminate
this Agreement. In the event of such non-use f a facility or Facilities, the City may exercise any
remedies or rights it has at taw or in equity ncluding but not limited to declaring the Facilities to
be a nuisance and abating the nuisance er applicable Law, or taking possession of the
Facilities. The provisions of this sectio shall survive any termination or expiration of this
Agreement.
31.
�s: The parties hereto shall at all times observe and comply
with, and the provisions of this greement are subject to all Laws, ordinances, rulings and
regulations which in any m r affect the rights and obligations of the parties hereto under this
Agreement, so long as such aws remain in effect, including but not limited to those regulating
the City's public Rights-o ay found in Chapters 116 and 135 of the City of St. Paul
Legislative Code. If, at y time during the term hereof, a certificate or authorization sha11
become necessary for tyNet to operate and use the Facilities, CityNet shall obtain the
appropnate go�
provide to City
rtal authorities and any required authorizations or certificates, and shall
of such authorizations and certificates upon request.
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32. Liens and Encumbrances: Neither pariy, directly or indirectiy, has any power,
authority or right to create and shall not permit, create or impose any lien or encumbrance,
including, without limitation, tax liens, mechanics liens, or other liens or encumbrances, on the
property of the other, or on the Facilities, or on the Sewer System, or on any rights, title, qr
interesttherein_ ��
33. Nonexclusive Use: CityNet understands that this Agreement does not rovide
CityNet with exclusive use of the Sewer System and that City shall have the ri to pernut other
users, including City itself, to install equipment facilities or devices in, or to e, the Sewer
System.
34. Waiver of Breach: The waiver by either party of any brea or violation of any
provision of this Agreement shall not be deemed to be a waiver or a c ntinuing waiver of any
subsequent breach or violation of the same or any other provision o this Agreement.
35. Severabilitv of Provisions: If any one or more of e provisions of this Agreement
shall be held by a court of competent jurisdiction in a final ju cial action to be invalid, illegal,
void, voidable, or unenforceable, such provision(s) shall be eemed severable from the remaining
provisions of this Agreement and shall not affect the leg ty, validity, or constitutionality of the
remaining portions of this Agreement. Notwithstandin he foregoing, the parties agree that if a
court or adminish agency of competent jurisdicf n should declare a provision(s) of this
Agreement invalid, then the parties shall each be o igated to negotiate in good faith to amend
that section of this Agreement and if, after one h dred and twenty (120) days from the
commencement of negotiations or such extensi thereof that may be agreed by the parties, the
parties are unable to reach agreement on ame dments hereto, then this Agreement may be
terminated by either party.
36. Governin Law• Jurisdic ' n: This Agreement shall be governed and construed
and enforced by and in accordance wi the Laws and decisions of the State of Minnesota,
without reference to its conflicts of w principles. If suit is brought by a party to this
Agreement, the parties agree that al of such action shall be vested exclusively in the state
courts of Minnesota, County of amsey.
37. Consent Cnteri . In any case where the approval or consent of one party hereto is
required, requested or othe 'se to be given under this Agreement, such parry shall not
unreasonably delay, cond� ion, or withhold its approval or consent.
38.
to a written
This Agreement may not be amended except pursuant
mutually agreed to and signed by both parties.
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39. Enrire Agreement: This Agreement contains the entire understanding between the
parties with respect to the subject matter herein. There are no representations, agreements, or
understandings (whether oral or written) between or among the parties relating to the subject
matter of this Agreement which aze not fully expressed herein.
40. Conflicts: Any conflict between the provisions of this Agreement and
present or future lawful exercise of the City's regulatory or police powers shall be �
favor of the latter. ,
41. Bindin� Effect: This Agreement shall be binding upon and
of the parties hereto and their respective successors and assigns.
in
to the benefit
42. No Interference. CityNet in the perFormance and exercise f its rights and
obligations under this Agreement shall not interfere in any manner � the current or future use,
existence and operation of any and all public and private Ri
communications carrier without the express prior written a�
owners of the affected property or properties. Any actual or
other communicarions equipment or devices in the Public R
CityNet and any such other persons without cost to City on
regulations, practices, and procedures of the FCC. City a e
of any such interference dispute at CityNeYs sole expe e.
43. Executed Agreement. CityNet shall,
execution of this Agreement by all representarive
of tYus Agreement which has been fully executa�
authoriries. �
� or other information or
e City or owner or
interference with such
it-of-Way shall be resolved by
: basis of the applicable rules,
to assist CityNet in the resolution
ithin thirty (30) days a$er the approval and
'the City, file with the City an original copy
all required CityNet representatives and
44. Authori . Each of the Indivi als executing this Ageement on behalf of CityNet
represents that such individual is authori d to do and has the full right, power, legal capacity
and authority to enter into the Agreem t on behalf of CityNet.
45. Most Favored Munici li . City and CityNet aclrnowledge that the terms,
benefits, and provisions of this A eement are taken as a whole and entered into based on
specific requirements of the City and concerns for the integrity of the Sewer System. Should
CityNet either before or after e parties' execution and delivery of tYris Agreement enter into an
agreement with another N
or provisions which taken
contained herein,then Ci
incorporate the same or
Notwithstanding the f eg
municipality that
the City's Rental
sota municipality, which agreement contains any terms, benefits
a whole are more favorable than the terms, benefits or provisions
shall have the right to require that CityNet modify this Agreement to
�re beneficial terms, benefits or provisions for the City.
oing, if CityNet enters into an agreement with another Minnesota
a Rental Fee in excess of the Rental Fee defined in Section 10, then
shall be increased to the same amount.
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46. Bond. Within sixty (60) days of the date of this Agreement, CityNet shall pay the
City the sum of Fifty Thousand Dollars ($50,000.00), to be credited against the Gross Revenues
payable to the City as established in Section 10 above, with which the City may purchase a good
and sufficient surety bond or such other compazable security instnmient as may be approved by
the City's Office of the City Attomey or City's Risk Manager, securing the faithful pe rmance
by CityNet of all the work, construction, maintenance, installation, removals, mainte an e, and
other duries required to be performed by CityNet under tius Agreement within the e periods
set forth hereunder.
47. Contacting CitvNet. CityNet or its agents shall be available
of any City depariment having jurisdiction over CityNeYs activities riven
day, seven (7) days a week, regarding problems or complaints ri
performance under this Agreement, including but not limited to
from the use, installation, operation, maintenance or removal of
by telephone CityNeYs control center operator at telephone nun
such problems or complaints.
��
`o e staff employees
-four (24) hours a
>m CityNeYs
or complaints resulting
The City may contact
regazding
48. Future Benefits for Citv. During the Term of t s Agreement and any renewals
hereof, CityNet will seek to find ways to benefit, or provid additional value for the City by
virtue of CityNeYs access to and use of the Sewer Syste . Such benefit and additional value
might include (i) assisting the City in the installation of ow meters and other instruments in the
Sewer System, and (ii) providing record of the condif n of the Sewer System to assist the City
in idenrifying which portions of the Sewer System ed repair for purposes of budgeting and
planning of monetary and personnel resources.
49.
Protection For Cable Televisi n Franchisees. CityNet shall not itself use or
authorize others to use the fac' ities for the transmission of cable television service
in violation of any City ordi ance. In fulfillment of this covenant CityNet shall
include the following paza aph in all license agreements for the use of the
Facilities to which City t is a pariy:
Licensee agr s that it shall not itself use or
authorize o ers to use CityNet telecommunications
facilities r the transmission of cable television
service ' violation of any ordinance of the City of
Saint aul. Licensee understands and agrees that
this aragraph is specifically intended for the
b efit of the City of Saint Paul and its franchised
istributors of cable television service, and that said
parties have standing to obtain judicial enforcement
of this covenant and to obtain liquidated damages in
the sum of $25,000 for its violation. Licensee
fiirther agrees that the covenants contained in this
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D\ -�
paragraph shall be included in any sublicense
agreement for the use of the CityNet
telecommunications facilities which aze the sub}ect
of this license agreement.
IN WITNESS WHERE OF, the parties hereto have executed this Agreement as
day and year first above written. /
CITY OF SAINT PAUL, MINNESOTA
By:
Its: Mayor
Date:
CITY OF SAINT PAUL, MINNESOTA
By:
Its: Director, Deparhnent of Public Works
Date:
CITY OF SAlNT' PAUL,
By:
Its: Director, Office of Finan �al Services
Date:
CITY OF SAINT P
By:
Its: City Clerk
Date:
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O�-Y1�
CITY OF SAINT PAUL, MINNESOTA
B
Its: Assistant City Attorney
Date:
CityNe
By:
Its:
Date:
CityNe
B
Its:
Date:
CityNe
By:
Its:
Date:
Doc# 137475T2 19
�
����
The Sewer System, as referenced herein, is a system of sanitary,
storm water and relief sewers as set forth in the maps of Saint P:
as-built sewer system which are located at: /
http://sewers. ci.st�aul.mn.us/siri�/
The records and images available on this site are for 'nformational use
only and aze not to be used as a substitute for the "ginal docuxnent.
Documents available via this site may not reflec current conditions and are
not to be used as a substitute for obtaining c ent information from the City
of 3t. Paul, Public Works Department, by rten or verbal request. Any
documents obtained from this site aze not o be used as a substitute for the
original. Users of this site assume all li ility arising from information
obtained herein.
��-a�o
f
EXHIBIT B
Potential Areas of Installation
1. Central Business District (map attached)
2.
3.
4.
5.
6.
7.
8.
9.
Energy Park
Midway west of Snelling
University Avenue (Capitol to Snelling)
Existing East Side industrial areas (3M,
Phalen Corridor
West Seventh business redevelopme
Riverbend Industrial Park}
West Side Flats (US Bank devel men
Maxson Steel/Dale Street Sh s
Hill)
areas (Shepard/Davern,
0
8 �-�10
o�-a��
EXHIBIT C
CityNeYs facilities shall consist of network of three non-
corrosive steel alloy conduits each containing fiber optic
cabfe that wilt be depfoyed through portions of the sewer
system and held in place using non-corrosive steel alloy
rings and trays. The network will connect with various
te(ecommunications providers and certain high density
commercial and residential buildings, thus providing sa'
buildings with fiber optic connectivity.
CityNet shali compiy with the
116 and 135 of the St. Paul Legislat
maintain and operate its Facilities a
right-of-way requirements found in Chapters
de. In addition, CityNet shall install, place,
ig to the following specifications:
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1. No cable, equipment or facility of CityNet sha11 be permitted in City's Sewer System
if such cable, equipment or facility by its design could cause electrical interference
with the facilities of City or other occupants of the Sewer System. If elec cal
interference is caused by any of CityNeYs cable, equipment or Faciliries such
interference shall immediately be removed at the eapense of CityNet.
2. CityNet's cable, equipment and Facilities shall not be designed to use e earth as the
sole conductor for any part of CityNeY s circuits.
3. CityNeYs cable, equipment and Facilities shall be compa � e with City's Sewer
System so as not to damage any Facilities of City by co sion or otherwise.
4. New construction spiices in CityNeYs cables shall n be located in City's manholes
or other City Sewer System Facilities. CityNet all construct private manholes or
similar structures for these splices.
5. The maximum diameter of any conduit f CityNet and the number of cables of
CityNet to be placed in any of City's wer System wili be submitted for approval
to the City, which approval will not unreasonably withheld, prior to construction
or installation based upon size an shape of the Sewer System and the size of the
eacisting cables located within tYi ewer System. The azea of the conduits, inciuding
the brackets, sha11 be no more an 3% of the total area of the sewer.
6. City's manholes shall be o ened only as authorized by City, which authorization will
not be unreasonably wit eld and in the presence of City's authorized representative.
7. No employee, age or contractor of CityNet shall enter or work in any of City's
manholes unless ty's authorized representative is present during the enfire period,
or unless the C� waives such requirement. CityNet shall pay the cost of having
City's repres tative present.
8. Except w en emergency condirions necessitate restoring of the Facilities, CityNet
shall no fy City two (2) days in advance of any work operation requiring enhy into
any o ity's manholes; provided, however, that a particular norice requirement may
be aived by City upon CityNeYs request.
9. learing obstrucfions, repairs, dig-ups and any other work required to make the
Sewer System usable for the initial placing of CityNeYs cable shall be done by
CityNet after appropriate approval by City.
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10. Cleaning of CityNet Facilities in the City's Sewer System shall be done by CityNet
or its agent, at CityNet's cost.
11. CityNet's workers shall not disturb City or City approved equipment cated in
CityNet's manholes without first inforniing City, and City shall rovide all
requirements regarding such equipment.
12. All of CityNeYs cables, equipment and Facilities shall be ly secured and
supported to the satisfaction of City.
13. Ali of CityNeYs cables, equipment and Facilities shall e plainly identified in each
manhole with a firmly affixed tag of a type and wor satisfactory to City.
14. Where manholes must be pumped in order to low CityNeYs work operations to
proceed, pumping shall be at CityNet's exp se.
15. Ail cables placed in ducts or sewers by CiftyNet shall be tagged with CityNet's name,
and no cables so placed shall be uses��o carry currents or electricity for lighting or
power purposes.
16. CityNet shall provida the Ci no less than twelve (12) months advance norice of
City Sewer Systems that ar to haue cable/conduit installed in them. Such advance
notice shall include cle ' g and televising the City Sewer System. CityNet shall
provide City a post-cle ' g televised tape of City Sewer System for the purpose of
determining any sew rehabilitation needs.
17. CityNet shall rec�frd the following regazding the installation of their Facilifies:
• Rec� location of bands in reference to upstream manhole (using GIS
des ations for manhole)
• X2ecord radical location of cable in reference to downstream view.
• f Verification of location of all wyes in same reach of sewer (manhole to
� manhole)
• Verify current use of all wyes (life or not)
• Verification of condirion of sewer in same reach of sewer (manhole to
manhole)
• Verification of condition of manhole
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18. All as-built records of CityNet Facilities shail be transfened to the City within
fifteen (15) days of installation in an electronic format.
19. CityNet Faciliries shall not block a service wye or eausting service connection.
20. CityNet sha11 locate all their Facilities pertaining to Gopher State One Call
System.
21.
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Council File # p r- a.10
ORIGINAL
Presented By
Referred To
CITY
Committee: Date
4a
1 WFIEREAS, CityNet Telecommunications, Inc. ("CityNet") desires to install, place and
2 maintain telecommunicarions facilities in portions of the City's sewer system for the purpose of
3 operating dazk (unlit) fiber optic facilities, and
WHEREAS, CityNet has already entered into similar agreements with the cities of
Albuquerque, Omaha, and Indianapolis; and
9
10
11
12
13
14
15
16
17
18
19
20
2l
22
23
24
25
WHEREAS, the City desires to find new and innovative ways to provide fiber optic access to its
citizens, businesses, and other users in order to attract new business and retain existing business, attract
and expand a highly skilled workforce, and promote general economic development throughout the City
by way of technology availability and upgrades; and
WHEREAS, the City also desires to protect and preserve its rights-of-way and infrastructure and
more efficientiy use its monetary and personnel resources by finding and authorizing innovative methods
of deploying fiber optic systems which do not involve digging and trenching in the sh and other
public right of ways and which minimize the disruption of traffic flow and commerce and the economic
loss assaciated with such disruption; and
WHEREAS, the City also desires to identify new and additional methods of inspection,
maintenance and metering of its sewer system to insure compliance with federal and state environmental
laws and regulations; now therefore
BE IT RESOLVED, that the proper city officials aze hereby authorized to execute and enter into
an agreement with CityNet, in the same or substantially the same form as the attached agreement, a copy
of which agreement was before the City Council and which is made a part hereof by reference.
„��ae��,�,�.,,��,.�„o„�a, ,,
Requested by Department of:
By:
Adopted by Council: Date � � � }p�y �
Adoption Certified by Council Secretary
By: II \ �� `J� _
Approve�yor\ Date / ( � �/
!
By: �J
�
RESOLUTION
'AUL, NIINNESOTA
Form Approved by City Attorney
B Cyv� .Y► . !��- � < � •
Approved by Mayor for Submission to Council
By:
Green Sheet # � p y�y 5
o►_ a�to
SEWERLEASEAGREEMENT �,�,��� v�rai�
Between �ei� �i,a�ao�
THE CITY OF SAINT PAUL, NIII�TNESOTA
and
CITYNET TELECONIMLTDiICATIONS, INC.
This AGREEMENT, is made and entered into as of this day of
, by and between CityNet Telecommunications, Inc., a Delawaze corporation, hauing an
office at 8403 Colesvilie Road, Fourteenth Floor, Silver Spring, Maryland, 20910 (hereinafter
"CityNeY'), and the City of Saint Paul, Minnesota, a Minnesota municipal corporation
(hereinafter "Cit}�').
WHEREAS, City currently owns and operates a Sewer System, located in the City of
Saint Paul, State of Minnesota, said existing Sewer System being more particularly described on
Exhibit A(hereinafter the "Sewer System"); and
WHEREAS, CityNet desires to install, place and maintain telecommunications facilities
(hereinafter "Facilities") in portions of the Sewer System for the purpose of operating dark (unlit)
fiber optic Facilities; and
WHEREAS, CityNet desires to lease space in the City's Sewer System, rather than using
space in the City's streets and rights-of-way, in order to auoid the additional costs, expenses,
disruption, delays and inconvenience of excauating and obstructing the City's streets and Rights-
of-Way; and
WHEREAS, the City has agreed to lease to CityNet space in the Sewer System for the
placement of CityNeYs Facilities in order to avoid the inconvenience, disruption, delays and costs
of CityNeYs obstructing or excavating the City's streets and Rights-of-Way that would otherwise
be required in the absence of this Agreement; and
WHEREAS, the City has also agreed to this Agreement because City desires to find new
and innovative ways to provide fiber optic access to its citizens and other users, and to provide
such access uniformly throughout the City, in order to attract new business and retain existing
business, attract and expand a highly skilled workforce and promote general economic
development throughout the City by way of technology availability and upgrades; and
WHEREAS, the City has also agreed to this Agreement because City desires to protect
and preserve its infrastructure and more efficiently use its monetary and personnel resources by
finding and authorizing innovarive methods of deploying fiber optic systems which do not
Doc# 137475T2
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involve digging and trenching in the streets and other public right of ways and which m;n;mi�e
the disruption of traffic flow and commerce and the economic loss associated with such
disruprion; and
WHEREAS, the City has also agreed to this agreement because City desires to identify
additional methods of inspection, maintenance and metering of its sewer system to insure
compliance with federal and state environmental laws and regulations; and
W�EREAS, nothing in this Agreement shall be construed to limit in any way CityNeYs
right to apply for and obtain City authorizations and permits, to construct and maintain and own a
fiber optics system or facilities, and to apply for and obtain other rights-of-way agreements from
the City or other rights-of-way providers; and
WHEREAS, CityNet aclaiowledges that, notwithstanding any other provision wiflun ttris
Agreement, it shall comply with any and all existing or future Laws, including but not lunited to
those regulafing the City's public Rights-of-Way found in Chapters 116 and 135 of the City of
St. Paul L,egislative Code, before exercising any right under this Agreement, and that nothing
herein shall constitute a permission or authorization or waiver from the City of its right to require
such prior compliance by CityNet;
NOW THEREFORE, in consideration of the foregoing and of the mutual covenants
provided herein, the parties agree as follows:
GENERALLY
L Incorporation. The foregoing recitals, as well as Appendix 1 and Exhibits A, B and
C, are hereby incorporated in this Agreement as if set forth here verbatim.
2. De6nirions. The following words, terms and phrases, when used in this Agreement,
shall haue the meanings ascribed to them in this section, except where the context clearly
indicates a different meaning:
Sewer Svstem: A system of sanitary sewers as described in Exhibit A. "Sewer System"
specifically excludes any and all storm sewers, tunnels, and/or relief sewers, except as
specifically authorized in advance by the Saint Paul Director of Public Works, who shall
haue sole discretion regazding whether to authorize CityNeYs use of non-sanitary sewers.
Facilities: The fiber optic Telecommunicafions transmission facilities consisting of fiber
optic cables, and associated appurtenances, as described in Exhibit C, to be installed by
CityNet, and to be located within portions of City's Sewer System pursuant to this
Agreement, solely to provide Telecommunications Services.
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Fee: Any monetary assessment, license, cost, chazge, fee, imposition, or taac, of any kind
whatsoever, including but not limited to: A levy of general application to entities doing
business in the City lawfully imposed by any govemmental body; Any real estate or
personal taa�es on equipment or praperty owned by CityNet, whether general or special;
Any public urility rates, dues, or charges of any kind for utilities used by CityNet; Any
fees, costs or expenses of insurance; and any other expenses, costs, or other applicable
tariffs resulting from the performance of this Agreement.
Law or Laws : Any and all statutes, constitutions, ordinances, resolurions, regulations,
judicial decisions, rules, tariffs, administrative orders, certificates, orders, as well as any
other requirements of the City or any other governmental agency having joint or several
jurisdiction over the parties to this Agreement.
Person: Any individual,�person or entity, however organized, whether public or private,
whether domesric or foreign, whether for profit or nonprofit, and whether natural,
corporate, or political.
Right-of-Wav or Public Ri�ht-of-Wav: The azea in, on, below or above a public
roadway, highway, street, cartway, boulevard, bicycle lane, sidewalk, parkway or alley
which the City owns, including areas used for sewer utility ptuposes, or over which it has
a real properiy easement or interest, including other dedicated Rights-of-Way.
Telecommunications: The transmission, between or among points specified by the user,
of information of the user's choosing, without change in the form or content of the
information as sent or received.
Telecommunications Services: The offering of indefeasible rights of use on a
nondiscriminatory basis for a fee direcfly or ind'uectly to telecommunications providers.
Cable Television Service: Multi-channel video programming services whose providers
aze required under City Charter or ordinance to obtain a franchise in order to use the
City's Right-of-Way.
LEASE OF SEWER SYSTEM
3. Lease: Subject to the provisions of this Agreement, including the specifications and
rules contained in Appendix 1, City hereby leases to CityNet for its non-exclusive occupancy of
space located within City's Sewer System for the placement of Facilities. The Facilities will be
installed, with prior approval of the City, in such portions of the City's Sewer System as shall be
jointly identified by the City and CityNet as providing sufficient potenrial market for the
Faciliries as to make installation economically feasible (as provided in E�ibit B, "Potential
Areas of Installation); provide however, that CityNet alone shall determine the actual
configuration and locarion of the Facilities based upon CityNeYs business and economic
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considerations. City shall have the right to withhold approval of access by CityNet to any potion
of the Sewer System that the City deems to be physically or structurally inappropriate far the
installation of the Facilities.
CityNet may use the leased portions of City's Sewer System only for the purpose of
installing, maintaining, operating and licensing to third parties for a fee the use of the Facilities in
the Sewer System for providing Telecommunicarions Services and any uses incidental thereto.
CityNet may, with the City's prior written consent, which shall not be unreasonably withheld,
modify, alter or upgrade the Facilities during the Initial Term and any and all Renewal Terms,
subject however, to the terms and conditions of this Agreement. CityNet shali not use, allow or
suffer the leased portion of the Sewer System to be used for any other purpose, provided,
however, that City and CityNet may, by amendment to this Agreement, provide for other uses.
Any unauthorized use will allow City, at its option, to terxninate this Agreement.
4. Government Permits: Prior to the installation of CityNeYs Facilities within the
Sewer System, CityNet shall obtain from the appropriate governmental authorities, inciuding the
City itself, any required pemuts or licenses necessary for such installation, and shall provide to
City copies of such permits or licenses upon request. City agrees to provide reasonable
assistance to CityNet in obtaining such pernuts or licenses. CityNet shall norify City immediately
if City or any governmental authority indicates that a pernut or a license will not be issued, at
wluch time CityNet may at its option choose to temrinate the agreement immediately, without
cause.
5. Reserved Right: This Agreement shall not constitute an assignment of any of City's
rights to use the Right-of-Way or the public or private property upon which the Sewer System is
located. Nothing contained in this Agreement shall be conshued as a limitation, restriction or
prohibition against City with respect to any agreement or arrangement which City has heretofore
entered into, or may in the fuhxre enter into, with other persons regarding the Sewer System ar
Right-of-Way. City agrees, however, that the use and occupancy of the Sewer System by such
other persons shall not interfere with CityNet's rights of occupancy granted pursuant to this
Agreement. Subject to the terms and conditions of this agreement, all right, title and interest in
the Sewer System shail at all times remain exclusively with City, and all right, title and interest in
CityNeYs Facilifies shall at all times remain exclusively with CityNet.
6. Scoue of A¢reement. Any and all rights expressly granted to CityNet under this
Agreement, which shall be exercised at CityNeYs sole cost and expense, shall be subject to the
prior, continuing, and any future right of the City under applicable Laws to use any and all parts
of the Sewer System and the public Right-of-Way exclusively or concurrently with any other
person and shall be fiuther subject to all deeds, easements, dedications, conditions, covenants,
restrictions, encumbrances, and claims of title of record which may affect the City's Sewer
System. Nothing in tlus Agreement shall be deemed to grant, convey, create, or vest in CityNet a
properiy right or interest, including but not limited to any real properiy interest in land, or any
fee, leasehold interest, or easement other than such interests that aze expliciUy conveyed in this
Agreement. Any work performed pursuant to this Agreement shall be subject to the reasonable
Doc# 137475T2
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prior review and approval of the City, and subject to CityNeYs prior compliance with any and all
e7cisting and future laws, including but not limited to public Right-of-Way registrarion and use
laws found in Chapters 116 and 135 of the City's Legislative Code.
7. Term: The initial term of this Agreement shali be three (3) yeazs unless eazlier
terminated in accordance with the provisions here (hereinafter "Initial Term'�. The term shall
commence on the date above first written.
8. Ontion to Renew: Provided this Agreement has not been eazlier tenuinated and
CityNet is not in default of any of the covenants of this Agreement, then subject to the provisions
contained herein, City grants CityNet the option to elect to extend this agreement for seven (7)
addifional three (3) yeaz renewal periods (each being a"Renewal Term") commencing on the day
following the expiration date of the Inirial Term or any subsequent Renewal Term. Such op6ons
may be exercised by CityNet giving to the City written notice of its election to renew, not later
than one hundred eighty (180) days prior to the expiration of the Initial Term or the then current
Renewal Term, as the case may be. If CityNet should elect to renew this Agreement, any such
renewal shall be upon the same terms, covenants and conditions as provided in this Agreement
for the Initial Term.
9. Installation, Maintenance and Reuairs: CityNet shall have the right at its sole cost
and expense to install, maintain, and operate the Facilities in the Sewer System. CityNet's
instaliation of the Facilities shall be made according to plans approved by the City, which
approval shall not be unreasonably withheld, delayed, or conditioned. CityNet shall perform a
video inspection and shall create a videotape of each such inspection, which videotape shall
document those portions of the Sewer System in which CityNet intends to conshuct ar install its
Facilities. CityNet shall, immediately upon completion of each such videotaped inspecrion,
provide the City with a copy of the videotape which the City may retain at no cost to the City. In
connection therewith, the City shall respond to CityNet in writing with respect to any submittal
of such plans or drawings (which shall include the results of a video inspection) after receipt
thereof with any disapproval, objection or proposed modification within thirty (30) days of said
receipt, or such plans or drawings shall be deemed approved by the City. CityNet sha11 also
perform a video inspection subsequent to the installation of the Pacilities and provide the City
with a copy thereof. The City shall have no obligation to maintain, inspect or repair the Facilities
so as to cause them to conform to any performance specification, and CityNet shall, at its own
cost and expense, install, maintain, repair, and secure its Facilities so that they remain in good
and safe condition and in compliance with the provisions of this Agreement and all applicable
fire, health, building, and any other life safety codes or Laws.
During the first two yeazs following the installation of the Facility, CityNet shall twice
annually jet-wash that portion of the Sewer System containing the Facility. Thereafter, CityNet
and the City shall agree on an appropriate regular schedule for such cleaning to be done by
CityNet, at CityNeYs sole cost and expense.
The Facilities shall remain the exclusive property of CityNet, and CityNet shall have the
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right to remove all or any portion of the Facilities at any tune during the term of this Agreement,
provided that the same does not otherwise interfere with the City's operations of the Sewer
System. The Faciliries shaJl be deemed personai property for purposes of this Agreement,
regardless of whether any portion thereof is deemed real or personal property under applicable
law. All work by CityNet shall be performed in compliance with applicable laws and ordinances.
CityNet is not authorized to contract for or on behalf of the City for work on, or the fiunishing of
materials to the Sewer System or any part thereof, and CityNet shall pay any and all
subcontractors, material men, mechanics and laborers promptly for any work performed or
materials furnished at the instance of CityNet on the Sewer System. CityNet shall place its
equipment in a manner that will not interfere with City sewer service workers or sewer
contractors access to or work in City manholes.
10. Rental Fee: The annual lease Rental Fee to be paid by CityNet to City, on a quarterly
basis, is two and one half percent (2.5%) of the "Gross Revenues" (as defined below) received by
CityNet from the operation of the Facilities in the Sewer System pursuant to this Agreement.
Such payment shall be made within forty-five (45) days after the expiration of each quarter at the
City's address specified in Section 26 hereof. For purposes of this Section, "Gross Revenues" of
CityNet shall be all gross revenues, determined in accordance with generally accepted accounting
principals ("GAAP"), derived and received by CityNet from its operation of the Facilities in the
Sewer System. Gross Revenues include, but are not limited to, charges made by CityNet or any
affiliate of CityNet for the use of the Facilities by other persons ar entifies. Notwithstanding
anything to the contrary in this Section, Gross Revenues shall not include (i) any taac or fee
imposed on the users of the Facilities by the City or any other governmental authority and
collected by CityNet on behalf of such governmental entity, (ii) the revenues of any Affiliate (as
defined in Section 25) of CityNet to the extent such Affiliate revenues are costs of CityNet and
recovered by CityNet through charges to subscribers, and further to the extent that such revenues
are included in gross revenues on which fees aze paid, (iii) actual bad debt, refunds or credits,
provided any such bad debt subsequently collected sha11 be included in gross revenues in the
period collected, and (iv) the revenues of CityNet or any Affiliate of CityNet with respect to their
respective operations which do not use the Sewer System. Gross revenues shall be adjusted to
reflect contributed goods and/or services provided to the City by CityNet under the terms and
conditions of this Agreement. Acceptance by the City of any payment due under this Agreement
shall not be deemed to be a waiver by the City of any breach of this Agreement occurring prior
thereto, nor shall the acceptance by the City of any such payments preclude the City from later
establishing that a lazger amount was actuaily due or from collecting any balance due to the City.
City may, at any time, at City's sole oprion, upon ninety (90) days written notice, require
CityNet to discontinue the lease Rental Fee payments. Upon receiving such notice CityNet shall,
no later than ninety (90) days after receiving such notice, cease maldng all compensation
payments that would haue been payable after such ninety (90) day notice period. If City requires
such a discontinuarion of Rental Fee payments, the City may then charge, on an annual basis, its
actual Right-of-Way management or management costs (pursuant to Minnesota Statutes §
237.162, Subd. 9 and § 237.163, Subd. 2(b), and pursuant to any relevant local, state or federal
ordinance, statute, regulation, law or other rule), that aze incurred after the eacpiration of the
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ninety (90) day period described above, provided that in no event will CityNeYs payment be
greater than the amount established as the Rental Fee herein.
CityNet shall also file quarterly a report ("Compensation Report") with the City, by
sending copies to the individuals listed in Secrion 26 herein. The Compensarion Report shall
show the Rental Fees paid to the City, as well as all CityNet revenues for the pre�eding quarter
based upon CityNeYs services or operations withiu the City of Saint Paul that made up the Gross
Revenues. The Compensation Report shall also show any adjushnents as provided for in this
Agreement for bad debt, and the Compensation Report shall be executed and attested to by an
authorized officer of CityNet verifying the accuracy of the Compensation Report and amount of
all fees, compensation, or other payments under this Agreement.
CityNet shall keep accurate books of account, in accordance with GAAP, for the purpose
of determining the amounts due to the City under this Agreement. The City may inspect
CityNeYs books of account relative to the City at any time during regular business hours on thirty
(30) days prior written notice and may audit the books from time to time at the City's sole
expense in order to verify the accuracy of payments due under this Agreement. The City may
also, at its option, require that CityNeYs compliance with the terms and condifions of this
Agreement, including, but not limited to, the computation of any fees or payments, be verified by
a certified public accountant or compazably qualified consultant at the sole expense of the City.
11. Other Charges. CityNet shall be solely responsible for the payment of all Fees,
expenses, costs, compensation, or any other chazges nnposed or based upon CityNeYs
performance under this Agreement. CityNet shall pay any such Fees ar charges within thirty (30)
days of notice of the same from the City. CityNet shall pay any personal property tases assessed
on, or any portion of such tases attributable to, the Facilities located in the Sewer System.
12. Removal or Relocation. CityNet understands and acknowledges that City may
require it to remove or relocate some or all of its Facilities, and shall at City's direction remove
or relocate such Faciliries whenever City reasonably determines that the removal or relocation is
needed for any of the following purposes: (a) for the construction, completion, repair, relocation,
or maintenance of a City pro}ect or a public Right-of-Way, (b) because the Facilities aze
interfering with or adversely affecting proper operation or maintenance of any other fixtures or
facilities or uses of the sewer utility or public Right-of-Way; (c) to protect or preserve the public
health, welfaze or safety, or (d) as a result of any law, ruling, judgment ar decision of an
administrative or legal authority, including but not limited to a district court of the State of
Minnesota. If CityNet shall fail to zemove or relocate any Facilities as requested by the City
within a reasonable time under the circumstances, City shall be entitled to remove or relocate the
Faciliries at CityNeYs sole cost and expense, without further norice to CityNet. In the event that
City is required for any reason to remove, relocate or discontinue leasing or operating the Sewer
System, or any porhion thereof, either parry shall have the option to terminate this Agreement.
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13. Damaee to Public Rieht-of-WaV or Sewer Svstem. Whenever the installarion,
removal or relocation of Facilities is required or permitted under this Agreement, and such
installafion, removal or relocation shall cause the Public Right-of-Way or Sewer System to be
damaged, CityNet, at its sole cost and expense, shall comply with all laws governing use of the
Public Right-of-Way or the Sewer System, which includes the obligation to promptly repair and
return the same to a safe and satisfactory condition in accordance with applicable Laws, normal
wear and teaz excepted. If CityNet does not repair the site as just described, then the City shall
have the oprion, upon fifteen (15) days prior written notice to CityNet, to perform or cause to be
performed such reasonable and necessary work on behalf of CityNet and to charge CityNet for
the proposed costs to be incurred or the actual costs incurred by the City at City's standard rates.
Upon the receipt of a demand for payment by the City, CityNet shall promptly reimburse the City
for such costs. The provisions and rights in this section are in addition to, and not in lieu of, any
right of the City under existing or future applicable Laws.
14. Condemnation: In the event that the Sewer System, or any portion thereof, shail be
taken or condemned, either permanently or temporarily, for any public or quasi-public purpose by
any person or authority in appropriation proceedings or by any right of eminent domain, or in the
event that City's pernut and right to occupy the public Right-of-Way with its Sewer System or to
Lease portions o£its Sewer System is revoked or deemed illegal, this Agreement shall
automatically terminate on such date and any damages arising therefrom shall be payable to City.
CityNet shall have the right to claim and recover from the condemning authority, such
compensation as may be separately awarded or recoverable by CityNet.
15. EmerEencv Reuairs. GityNet understands and agrees that the prunary and
paramount purpose of the Sewer System is for the transfer of sewage and storxn water, which in
no way shall be compromised or abridged by any right conferred under this Agreement.
Historically the Sewer System occasionally ceases to drain normally due to blockage or structural
failure. On these occasions it is City's responsibility to restore normal flow as soon as possible.
Under such circumstances, the City shall not be responsible for any damage to the Facilities or
for temporary interruption of service provided through the Facilities. The City will make every
reasonable attempt to notify CityNet as soon as possible of any City work that may impact the
Facilities under this Section.
16. Access to the Sewer Ssstem. CityNet may, at all times during the term of this
Agreement, subject to prior compliance with City ordinances and to reasonable supervision,
which supervision costs or fees shall be paid for exclusively by CityNet, have pedestrian and
vehicular ingress and egress to and from the Sewer System, on a 24-hour, 7-day per week basis,
for the purpose of accessing the Facilities to the extent reasonably necessary to install, field-test,
maintain and operate the Facilities.
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17. Renewal of Lease. If both City and CityNet wish to enter into a new lease
agreement then, before expiration of the final Renewal Term, the City and CityNet may enter into
good faith negotiations the object of which will to agree upon the terms of a new lease
agreement.
ADDITIONAL PROVISIONS
18. Indenendent Contractor: In perfomuug this Agreement, City and CilyNet shall
operate as, and for all purposes be considered, independent contractors and not agents, and
neither party shall haue authority to bind or otherwise obligate the other in any manner
whatsoever. All personnel performing services shall remain under the exclusive direction and
control of their respective parties and shall not be deemed to be employees or agents of the other
party. No employee or agent of CityNet shall be deemed an employee of City for the purposes of
this Agreement, nar shall City be responsible for any payments such as compensation, wages,
benefits, taxes, workers' compensation, disability or other insurance or any other payments with
respect to any such CityNet employee or agent.
19. Force Maieure Susuension and Termination: In the event that either party to this
Agreement is unable to perform any of its obligarions under this Agreement or to enjoy any of
the benefits thereof because of natural disaster, actions, Laws, orders or decrees of governmentai
bodies or failure of power supply, or any condition that is beyond that party's reasonable control,
including but not limited to acts of God, fire, flood, or other catastrophe (hereinafter "Force
Majeure Events"), the non-perforxning party shall immediately provide notice thereof to the other
parly and shall do everything possible to resume performance. Upon receipt of such notice by
the performing party, this Agreement shall immediately be suspended. If the period of
nonperformance exceeds foriy-five (45) days from the receipt of notice of the Farce Majeure
Event, either pariy shall have the option to terminate this Agreement by giving written notice to
the other party.
20. Indemnification: CityNet shall indemnify, defend, protect, and hold harmless the
City, its council members, officers, agents, contractors and employees from and against any and
all claims, demands, losses, damages, liabilities, fines, charges, penalties, administrative and
judicial proceedings and orders, judgments, and all costs and expenses incurred in connection
therewith, including reasonable attomey's fees and costs of defense, occasioned by or arising out
of CityNeY s activities undertaken pursuant to this Agreement, except to the extent arising from
ar caused by the negligence or willful misconduct of the City, its council members, officers,
employees, agents, or contractors. The foregoing notwithstanding, CityNet shall defend and
indemnify the City, and its officers and employees, even in the case of negligence, unless the
allegations allege (a) independent negligence on the part of the City, its officers and employees or
(b) a wrongful act or omission on the part of the City or its officers or employees. CityNet shall
also defend and indemnify the City, its officers and employees, even in the case of negligence, if
the allegarions aze based on the City's or its officers or employees' negligence or otherwise
wrongful act or omission in approving this Agreement, or in failing to properly or adequately
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inspect or enforce compliance with the terms, condifions or purpose of this Agreement. CityNet
shall also defend and indemnify the City, its of�cers and employees, in the case of CityNeYs use
of Hazardous Materials. "Hazardous Materials" means asbestos, petroleum products, or any
toxic or hazazdous substance, waste or materials as defined in any federal, state or local
environmental or safety law or regulation including, but not limited to, CERCLA, MPCA, and
MERLA. The provisions of this secrion shall survive any termination or expiration of this
Agreement. Without limiting the foregoing, CityNet shall obtain a bond in the sum of $150,000,
in a form acceptable to the City Attorney, to secure its obligarion to defend and indemnify the
Ciry against any claim asserted by a City-franchised provider of cable television service, alleging
injury based upon usage of the CityNet Facilities in violation of the City franchise ordinance for
the provision of cable television service. Said bond requirement shall be reduced and retired on a
dollaz-for-dollar basis by the delivery of rental fees to the City by CityNet pursuant to Paragraphs
10 and 46 of this Agreement.
21. Limitation on Liabilitv and Waiver: NOTWITHSTANDING ANY PROVISION
HEREIN, NETTHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT,
SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT LIMITATION,
THOSE BASED UPON INTERRUPTION OF SERVICE OR FOR ANX LOSS OF
REVENLTES, PROFITS, OR BUSINESS OPPORTUNITIES RESULTING THEREFROM,
WHETHER OR NOT EITHER PARTY HAD OR SHOULD HAVE HAD ANY
KNOWLEDGE, ACTUAL OR CONSTItUCTIVE, THAT ANY SUCH DAMAGES MIGHT
BE INCURRBD. CityNet also waives any and all claims, demands, causes of action, and rights
it may assert against the City on account of any loss, damage, or injury Yo its Facilities or any loss
ar degradation of the services provided by its Facilities. The City shall be liable only for the cost
of repair to damaged Facilities arising from the independent negligence or willful misconduct of
City, its employees, agents, or contractors. In no event shall the City be liable for vandalism,
malicious mischief, or acts of God that damage CityNeYs Facilities. In no event shall either party
be liable for special, consequential, exemplary or punitive damages as a result of the performance
or nonperformance of its obligations under this Agreement. The provisions of this section shall
survive any termination or expiration of this Agreement.
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22. Default: If at any time CityNet fails or refuses to perform any of the material
covenants or conditions contained in this Agreement, and such failure or refusal shall continue
for sixty (60) days a8er written norice is provided by City to CityNet, then City, at its election
may re-enter and take possession of the leased portion of the Sewer System, remove CityNePs
Facilities therefrom, re-let the leased portion of the Sewer System or any part thereof on such
terms, conditions and rentals as City may deem proper, and, at City's opfion, either terminate and
cancel this Agreement, or apply the proceeds that may be obtained from said re-letting, after
deducrion of costs and expenses, to the lease rentals required under this Ageement, and hold
CityNet liable for any balance of such rentals which may remain unsatisfied and unpaid. In such
an event, CityNet shall pay to City, as additional rent: (i) all costs and expenses reasonably
incurred by City in making auy alterations to the Sewer System in prepazation for re-letting and
in attempting to re-let the leased portion thereof, and (ii) all costs and expenses, including
attorneys fees and costs, reasonably incurred by City as a result of CityNet's default or enforcing
City's rights and remedies hereunder.
23. Time to Cure: In the event any such default (other than the payment of fees due
hereunder) cannot reasonably be cured within such sixty (60) day period, the rime for curing such
default shall be extended for whatever period of time is required to complete such curing so long
as either party is proceeding with due diligence. The waiver by either party of any breach of any
term, covenant or condition herein contained shall not be deemed to be a waiver of such term,
covenant or condition or any subsequent breach of the same or any other term, covenant or
condition herein contained.
24. Insurance: Cityl3et shall at its own expense obtain and maintain at all times during
the term of this Agreement Commercial General Liability insurance and Commercial Automobile
Liabiliry Insurance protecting CityNet in an amount not less than 9ae Five Millian Dollars
($�5,000,000) per occurrence (combined single limit), including bodily injuty and property
damage, and in an amount not less than �ee Five Million Dollars ($35 000,000) annual
aggregate for each personal injury liability and products-completed operations. The Commercial
General Liability insurance policy shall name the City, its council members, officers, and
employees as addirional insureds as respects any covered liability arising out of CityNeYs
performance of this Agreement. Coverage shall be in an occurrence form and in accordance with
the limits and provisions specified herein. Claims-made policies aze not acceptable. Such
insurance shall not be canceled, nor shall the occurrence or aggregate limits set forth above be
reduced, until the City has received at least thirry (30) days' advance written notice of such
cancellarion or change. CityNet shall be responsible for norifying the City of such change or
cancellation. Prior to any Renewal Term pursuant to § 8 of this Agreement, the City may request
and the parties shall bargain in good faith to increase the above minimum insurance amounts, if
such an increase is warranted by indushy standards or specific identified risk, or by any change in
Minnesota Statute § 466 or any other Law pertaining to municipal liability. Such increase, if any,
shall not be effecrive until the commencement of such Renewal Term. In addition, CityNet shall
maintain Workers Compensation insurance, in an amount equai to at least the amount required
under applicable Minnesota Statute, as may be amended from time to time, as well as Employer's
Liability insurance in an amount not less than Five Million Dollars ($5,000.000�
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Prior to the commencement of any work pursuant to this Agreement, and annually
thereafter, CityNet shall file with the City, pursuant to the Notice provision in Section 26, a
certificate of insurance which shall state the following: the policy number; name of insurance
company�, name and address of the agent or authorized representative; name and address of
insureds; policy expiration date; specific coverage amounts; that the City shall receive thirty (30)
days' prior notice of cancellation; that names the City, its council members, officers, and
employees as addirional insureds as respects any covered liability arising out of CityNeYs
performance ofthis Agreement; and that CityNeYs Commercial General Liability insurance
policy waives any right of recovery the insurance company may have against the City.
An insurance provider of CityNet shall be admitted and authorized to do business in the
State of Minnesota and shall cazry a minnnum rating assigned by A.M. Best and Company's Key
Rating Guide of "A" Overall and a Financial SiZe Category of "X" (i.e., a size of $500,000,000
to $750,000,000 based on capital, surplus, and conditional reserves). Insurance policies and
certificates issued by non-admitted insurance companies are not acceptable. Any deductibles or
self-insured retentions must be stated on the certificate(s) of insurance, which shall be sent to and
approved by the City. "Severability of interesY' or "sepazation of insureds" clauses shall be made
a part of the Commercial General Liability and Commercial Automobile Liability policies.
CityNet may comply with the insurance requirements of this Agreement through the
purchase of an"umbrella" policy acceptable to the City, provided, however, that CityNet shall
first present any such umbrella policy to the City for its review, which the City may in its
reasonable discretion approve or disapprove.
25. Assienment: CityNet shall not assign or otherwise convey any of its rights,
obligations or interests under this Agreement without the express prior written consent of the
City, which consent shall not be unreasonably withheld. This clause also applies to CityNeYs
Affiliates, who shall be fmancially viable. "Affiliate" means a pazent or subsidiary of CityNet,
an entity that owns or controls, is owned or controlled by, or is under common ownership or
control with CityNet, or an entity which merges or is consolidated with CityNet or which
purchases a controlling interest in the ownership or assets of CityNet. In the event CityNet
assigns its rights, obligations or interests under tkris Agreement, CityNet shall remain secondarily
liable to City for the performance of its assignee under ihis Agreement.
City may require an assignee or transferee to post with the City security in the form of a cash
deposit, letter of credit, or surety bond satisfactory in fotm and amount, which shall be fully
refunded or otherwise released to the posting party upon termination of this Agreement and upon
the timely removal of Faciliries pursuant to this Agreement, to the reasonable satisfaction of the
City.
26. Nofice: All norices and other communications which shall or may be given pursuant
to this Agreement shall be in writing and be deemed to have been duly given (i) upon personal
delivery, or (ii) upon placement into the United States mail, certified, postage prepaid, return
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receipt requested, to the pazties at the following addresses:
If to City: Director
Department of Public Works
City of Saint Paul
1000 City Hall Annex
25 West Fourth Street
Saint Paul, Minnesota 55102
With copy to: Saint Paul City Attomey
400 City Hall and Courthouse
15 West Kellogg Boulevard
Saint Paul, MN 55102
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If to CityNet: CityNet Telecommunications, Inc.
8403 Colesville Road, 14th Floor
Silver Spring, Maryland 20910
Attention: Mazk Perkell, General Counsel
or at such other address as the parties hereto may specify from tixne to time by written notice
delivered in accordance herewith.
27. Termination: This Agreement may be termivated by either party upon written
notice to the other pariy upon a material default of any covenant, provision, or term hereof, by the
other pariy, which default is not cured within sixty (60) days of receipt of written notice of
default (or, if such default is not curable within sixty (60) days, if the defaulting party fails to
commence such cure witlun sixty (60) days or fails thereafter diligently to prosecute such cure to
compietion), provided that the grace period for any monetary default shall be ten (10) days from
receipt of notice.
Additional Termination Riehts.
(a) Ci Net. CityNet may, without further obligation to City, upon one hundred eighty
(180) days written notice, terminate its lease or its occupancy of any portion of the Sewer System
without cause.
(b) C�. If any govenunental agency or third party institutes proceedings successfully
imposing public utility or common carrier status on City as a result of its performance of this
Agreement, or if any action is brought by any third party successfully challenging the continued
validity of this Agreement or seelflng to adversely modify, suspend or revoke City's operating
authority for its services or Sewer System as a result of its or CityNeYs performance of this
Agreement, and there is an adverse impact upon the City which cannot be eliminated by CityNet,
City may, without further liability to CityNet, upon one hundred eighty (180) days written notice,
terminate tlus Agreement without cause. City may also, without fiuther liability to CityNet, upon
one-hundred and twenty (120) days written notice, terminate this Agreement in the event that
CityNet fails to commence installation of the Facilities or to maintain Facilities as provided
herein.
28. Insolvencv or Bankruptcv: Notwithstanding any other term or condition contained
herein, and in addition to any other legal or equitable remedy, City shall have the right to
terminate this Agreement at any time if CityNet or any of its affiliates shall be unable to pay its
liabiliries when due, or shall make any assignment for the benefit of creditors or file a voluntary
petition in bazikrnptcy or be adjudicated baulaupt or insolvent, or if any receiver is appointed for
its business or property, or if any trustee in bankrnptcy or insolvency shall be appointed under the
govenvng Laws of the United States or of any state.
29. Surrender and Removal: Upon teimination of this Agreement for any reason, or
expirarion of the Initial Term or any renewal term of this Agreement, CityNet shall, upon written
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request of the City, remove any and all of its Facilifies and any other equipment from the City's
Public Right-of-Way and Sewer System within one hundred twenty (120) days, and shall quit
peacefully, and shall repair any damage to the Public Right-of-Way or Sewer System caused by
such equipment or Faciliries, normal weaz and teaz excepted, all at CityNeYs own cost and
expense, provided, however, that if such removal is not completed within such one hundred
lwenty (120) day period, CityNet may request such additional period as is reasonably necessary
for such removal as long as CityNet diligently makes such removal as promptly as possible
and/or such additional period as is reasonably necessary to account for delays that were caused by
events or circumstances beyond the reasonable control of CityNet, including, without limitarion,
forces of nature. CityNeY s failure to comply with these sunender and removal requirements
shall be deemed a material breach of this Agreement. Under such circumstances City may also, in
its sole discrefion, exercise any rights it has at Law or in equity, including but not limited to
deeming such Facilities to be abandoned and/or a nuisance, and abaring the Facilities. The
provisions of this Section shall survive any ternunation or expiration of this Agreement.
30. Discontinued Operations: In the event that CityNet discontinues its
Telecommunications Services in the City, it shall immediately provide information satisfactory to
the City that its obiigarions for its Facilities under this Agreement have been lawfully assumed by
another entity (including, upon consent, by the City). In the event that its Facilities are no longer
used to provide Telecommunications Services for a period of one (1) yeaz, then CityNet shall
provide nofice of such an event to the City, and shall, pursuant to Section 29 above, remove each
such Facilities, unless this requirement is waived by the City. In addirion, such non-use shall
constitute a material breach and a valid and lawful ground for the City to terminate this
Agreement. In the event of such non-use of a facility or Facilities, the City may exercise any
remedies or rights it has at law or in equity, including but not lunited to declaring the Facilities to
be a nuisance and aba6ng the nuisance under applicable Law, or taking possession of the
Facilities. The provisions of this section shall survive any termination or expiration of this
Agreement.
31. Compliance with Laws: CityNet and its contractors shall comply with all federal,
state and local laws, ordinances, regulations and rules. The parties hereto shall at all times
observe and comply with, and the provisions of this Agreement aze subj ect to all Laws,
ordinances, rulings and regula6ons which in any manner affect the rights and obligations of the
parties hereto under this Agreement, so long as such Laws remain in effect, including but not
limited to those regulating the City's public Rights-of-Way found in Chapters 116 and 135 of the
City of St. Paul I,egislative Code. If, at any time during the term hereof, a certificate or
authorization shall become necessary for CityNet to operate and use the Facilities, CityNet shall
obtain the appropriate governmental authorities and any required authorizations or certificates,
and shall provide to City copies of such authorizations and certificates upon request.
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32. Liens and Encumbrances: Neither party, directly or indirectly, has any power,
authority or right to create and shall not permit, create or impose any lien or encumbrance,
including, without limitation, taac liens, mechanics liens, or other liens or encumbrances, on the
property of the other, or on the Faciliries, or on the Sewer System, or on any rights, ritle, or
interest therein.
33. Nonexclusive Use: CityNet understands that this Agreement does not provide
CityNet with exclusive use of the Sewer System and that City shall have the right to pemvt other
users, including City itself, to install equipment facilities or devices in, or to use, the Sewer
System.
34. Waiver of Breach: The waiver by either party of any breach or violation of any
provision of this Agreement shall not be deemed to be a waiver or a continuing waiver of any
subsequent breach or violation of the same or any other provision of this Agreement.
35. Severabilitv of Provisions: If any one or more of the provisions of this Agreement
shall be held by a court of competent jurisdiction in a final judicial action to be invalid, illegal,
void, voidable, or unenforceable, such provision(s) shall be deemed severable from the remaining
provisions of this Agreement and shall not affect the legality, validity, or constitufionality of the
remaining portions of this Agreement. Notwithstanding the faregoing, the parties agree that if a
court or administrative agency of competent jurisdiction should declare a provision(s) of this
Agreement invalid, then the parties shall each be obligated to negotiate in good faith to amend
that section of this Agreement and if, after one hundred and twenty (120) days from the
commencement of negotiations or such extension thereof that may be agreed by the parties, the
parties are unable to reach agreement on amendments hereto, then this Agreement may be
terminated by either party.
36. Governin¢ Law; Jurisdiction: This Agreement shall be governed and construed
and enforced by and in accordance with the Laws and decisions of the State of Minnesota,
without reference to its conflicts of law principles. If suit is brought by a parry to this
Agreement, the parties agree that trial of such action shall be vested exclusively in the state
courts of Minnesota, County of Ramsey.
37. Consent Criteria: In any case where the approval or consent of one pariy hereto is
required, requested or otherwise to be given under this Agreement, such parly shall not
unreasonably delay, condition, or withhold its approval or consent.
38. Amendment of Aereement: This Agreement may not be amended except pursuant
to a written instrument mutually agreed to and signed by both parties.
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39. Entire Agreement: This Agreement contains the entire understanding between the
parties with respect to the subject matter herein. There are no representations, agreements, or
understandings (whether oral or written) between or among the parties relating to the subject
matter of this Agreement which are not fully expressed herein.
40. Conflicts: Any conflict between the provisions of this Agreement and any other
present or future lawful exercise of the City's regulatory or police powers shall be resolved in
favor of the latter.
41. Bindin� Effect: This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and assigns.
42. No Interference. CityNet in the performance and exercise of its rights and
obligations under this Agreement shall not interfere in any manner with the current or future use,
existence and operation of any and all public and private Rights-of-Way or other information or
communications carrier without the express prior written approval of the City or owner or
owners of the affected property or properties. Any actual or anticipated interference with such
other communications equipment or devices in the Public Right-of-Way shall be resolved by
CityNet and any such other persons without cost to City on the basis of the applicable rules,
regulations, practices, and procedures of the FCC. City agrees to assist CityNet in the resolution
of any such interference dispute at CityNeYs sole expense.
43. Executed Aareement. CityNet shall, within thirty (30) days after the approval and
execution of flus Agreement by all representatives of the City, file with the City an original copy
of this A greement which has been fully executed by all required CityNet representatives and
authorities.
44. Authoritv. Each of the Individuals executing this Agreement on behalf of CityNet
represents that such individual is authorized to do and has the full right, power, legal capacity
and authority to enter into the Agreement on behalf of CityNet.
45. Most Favored Municiaality. City and CityNet acknowledge that the terms,
benefits, and provisions of this Agreement aze taken as a whole and entered into based on
specific requirements of the City and concems for the integrity of the Sewer System. Should
CityNet either before or after the parties' execution and delivery of this Agreement enter into an
agreement with another Minnesota municipality, which agreement contains any terms, benefits or
provisions which taken as a whole are more fawrable than the terms, benefits or provisions
contained herein, then City shall have the right to require that CityNet modify this Agreement to
incorporate the same or more beneficial terms, benefits or provisions for the City.
Notwithstanding the foregoing, if CityNet enters into an agreement with another Minnesota
municipality that contains a Rental Fee in excess of the Rental Fee defined in Section 10, then
the City's Rentai Fee shall be increased to the same amount.
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46. Bond. Within sixty (60) days of the date of this Agreement, CityNet shall pay the
City the non-refundable sum of Fifty Thousand Doilars ($50,000.00), to be credited against the
Gross Revenues payable to the City as established in Section 10 above, with wluch the City may,
among other things, purchase a good and sufficient surety bond or such other compazable
security instrument as may be approved by the City's Office of the City Attorney or City's Risk
Manager, securing the faithful performance by CityNet of all the work, construction,
maintenance, instaliation, removals, maintenance, and other duties required to be performed by
CityNet under tlus Agreement within the time periods set forth hereunder. Notwithstauding any
other provision to the contrary contained within this Agreement, CityNet agrees that in no event
will any part of the $50,000 payment be refundable under any circumstances.
47. ContactinE CitvNet. CityNet or its agents shall be available to the staff employees
of any City department having jurisdiction over CityNeYs activities twenty-four (24) hours a day,
seven (7) days a week, regazding problems or complaints resulting from CityNeYs performance
under this Agreement, including but not lnnited to problems or complaints resulting from the
use, installation, operation, maintenance or removal of FaciliUes. The City may contact by
telephone CityNeYs control center operator at telephone number (888) 248-9184 regarding such
problems or complaints, and all City calls shall be immediately retumed.
48. Future Benefits for CitY. During the Term of this Agreement and any renewals
hereof, CityNet will seek to fmd ways to benefit, or provide additional value for the City by
virtue of CityNeYs access to and use of the Sewer System. Such benefit and additional value
might include (i) assisting the City in the installation of flow meters and other instruinents in the
Sewer System, and (ii) providing record of the condition of the Sewer System to assist the City in
identifying which portions of the Sewer System need repair for purposes of budgeting and
planning of monetary and personnel resources.
49. Protection For Cable Television Franchisees and the CitV's Cabie Office.
Notwithstanding any other provision herein, CityNet shall not itself use or authorize others to use
the Facilities far the transmission of Cable Television Service in violation of any City ordinance
or applicable State authorizations. CityNet shall also include the following paragraph in all
license agreements for the use of the Facilities to which CityNet is a party:
Licensee agrees that it shall not itself use or authorize others
to use CityNet telecommunications facilities far the
transmission of cable television service or multi-channel
video prograzmning in violation of any ordinance or the City
Charter of the City of Saint Paul. Licensee understands and
agrees that this paragraph is specifically intended for the
benefit of the City of 5aint Paul and its franchised
distributors of cable television service and/or multi-channel
video prograuuning, and that said parties have standing to
obtain }udicial enforcement of this covenant and to each
obtain the greater of either actual damages or the sum of
$25,000 for its violafion. Licensee further agrees that the
Doc# 137475T2 1 g
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covenants contained in this pazagraph shall be included in
any sublicense agreement or assignment for the use of the
CityNet telecommunicarions facilities which aze the subject
of this license agreement.
IN WITNESS WHERE OF, the parties hereto have executed this Agreement as of the
day and yeaz first above written.
CITY OF SAINT PAUL, MINNESOTA
By:
Its: Mayor
Date:
CTTY OF SAINT PAUL, MINNESOTA
By:
Its: Director, Department of Public Works
Date:
CTTY OF SAINT PAUL, MIlVNESOTA
By:
Its: Director, Office of Financial Services
Date:
CITY OF SAINT PAUL, MINNESOTA
By:
Its: City Clerk
Date:
Doc# 1374757�2 19
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CTTY OF SAINT PAUL, MINNESOTA
By:
Its: Assistant City Attomey
Date:
CityNet Telecommunications, Inc.
By:
Its:
Date:
CityNet Telecommunications, Inc.
By:
Its:
Date:
CityNet Telecommunications, Inc.
�
Its:
Date:
Doc# 1374757�2 ' 20
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������
The Sewer System, as referenced herein, is a system of sanitary sewers as set forth in the
maps of Saint Paui's as-built sewer system which aze located at:
http://sewers.ci.stpaul.mn.us/stri�/
The records and images available on this site are for informational use only and aze not to be
used as a substitute for the original document. Documents auailable via tYris site may not reflect
current conditions and are not to be used as a substitute for obtaining current information from
the City of St. Paul, Public Works Department, by written or verbal request. Any documents
obtained from this site aze not to be used as a substitute for the original. Users of this site assume
all liability arising from information obtained herein.
Doc# �37475712 21
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.:,�:
Potential Areas of Installation
1. Ceniral Business District (map attached)
2. Energy Park
3. Midway west of Sneiling
4. University Avenue (Capitol to Snelling)
5. Existing East Side industrial areas (3M, Williams Hill)
6. Phalen Corridor
7. West Seventh business redevelopment areas (Shepazd/Davern,
Riverbend Indushial Pazk
8. West 5ide Flats (i7S Bank development)
9. Maacson SteeUDale Street Shops
Doc#'137475T2 22
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Eghibit C
As shown on the nlates and/or drawinQS attached to this E�ibit C, CityNet's facilities shall
consist of network of three non-corrosive steel alloy-stainless steel conduits each containing fiber
opric cable that will deployed through portions of the sewer system and heid in place using non-
corrosive steel alloy-stainiess steel rings and trays. 'T'"° ��`-°� '� •°�" ����°�' --�"� •,°-�^-.°
,
Doc#137475T2 23
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APPENDIX 1
SPECIFICATIONS
CityNet shall comply with the City's right-of-way requirements found in Chapters 116 and
135 of the St. Paul Legislarive Code. In addition, CityNet shall install, place, maintain and operate its
Facilities according to the following specifications:
1. CityNet shall place its equipment in a manner that it will not interfere with sewer
service workers or sewer contractors access to and work in City manholes. No cable,
equipment or facility of CityNet shall be permitted in City's Sewer System if such
cable, equipment ar facility by its design could cause elechical interference with the
facilities of City or other occupants of the Sewer System. If electrical interference is
caused by any of CityNeYs cable, equipment or Facilities, such interference shall
immediately be removed at the expense of CityNet.
2. CityNeYs cable, equipment and Facilities shall not be designed to use the earth as the
sole conductor for any part of CityNet's circuits.
CityNeYs cable, equipment and Facilities shall be compatible with City's Sewer
System so as not to damage any Facilities of City by conosion or othercvise.
4. New construction splices in CityNeYs cables shall not be located in City's manholes
or other City Sewer System Facilities. CityNet shali construct private manholes or
similar structures for these splices.
5. The m�imum diameter of any conduit of CityNet and the number of cabies of
CityNet to be placed in any of City's Sewer System will be submitted far approval to
the City, which approval will not be unreasonably withheld, prior to conshuction or
installation based upon size and shape of the Sewer System and the size of the
existing cables located within the Sewer System. The azea ofthe conduits, including
the brackets, shall be no more than 3% of the total area of the sewer.
6. City's manholes shall be opened only as authorized by City, whi ch authorization will
not be unreasonably withheld and in the presence of City's authorized representative.
7. No employee, agent or contractor of CityNet shall enter or work in any of City's
manholes unless City's authorized representative is present during the entire period,
or unless the City waives such requirement. CityNet shall pay the cost of having
Ciry's representafive present.
8. Except when emergency conditions necessitate restoring of the Facilifies, Cityl3et
shall notify City two (2) days in advance of any work operafion requiring entry into
any of City's manholes; provided, however, that a particulaz notice requirement may
Doc# 137475T2 24
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be waived by City upon CityNeYs request.
9. Clearing obstructions, repairs, dig-ups and any otUer work required to make the
Sewer System usable for the initial piacing of CityNeYs cable shall be done by
CityNet after appropriate approval by City.
10. Cleaning of CityNet Faciliries in the City's Sewer System shall be done by CityNet or
its agent, at CityNet's cost.
11. CityNeYs workers shall not disturb City or City approved equipment located in
CityNeYs manholes without first informing City, and City shall provide all
requirements regazding such equipment.
12. All of CityNet's cables, equipment and Faciliries shall be firmly secured and
supported to the satisfaction of City.
13. All of CityNeYs cables, equipment and Facilifies shall be plainly idenrified in each
manhole with a firmly affixed tag of a type and word satisfactory to City.
14. Where manholes must be pumped in order to allow CityNeYs work operations to
proceed, pumping shall be at CityNeYs expense.
15. All cables placed in ducts or sewers by CityNet shall be tagged with CityNet's name,
and no cables so placed shall be used to carry currents or electricity for lighting or
power purposes.
16. CityNet shall provide the City no less than §� - months advance notice of City
Sewer Systems that are to have cable/conduit installed in them. Such advance notice
shall include cleaning and televising the City Sewer System. CityNet shall provide
City a post-cleaning televised tape of City Sewer System for the purpose of
determining any sewer rehabilitarion needs.
17. CityNet shall record the following regarding the installation of their Facilities:
Record location of bands in reference to upstream manhole (using GIS
designations for manhole)
Record radical location of cable in reference to downstream view.
Verification of location of all wyes in same reach of sewer (manhole to
manhole)
V erify current use of all wyes (life or not)
Verification of condition of sewer in same reach of sewer (manhole to
Doc#'137475T2 ZS
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manhole)
Verification of condition of manhole
18. All as-buiit records of CityNet Facilities shall be transferred to the City within
fifteen (15) days of installation in an electronic format.
19. CityNet Facilities shall not block a service wye or existing service connection.
20. CityNet shall locate all their Faciliries pertaining to Gopher State One Call
System.
21. CityNet shall be responsible for the repair of their Facilities due to private
contractors cleaning of private services.
Doc# 137475T2 2(
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Technology & Management Services� 3-14-01
ONTACT PH2SON & PFIOPIE
Peter Hames 266-8796
IU5f BE ON COUNCILACBmA BY (d1Tq
r�ort
TOTAL � OF SIGNATURE PAGES
Approve an agreement with City Net for leasing out the sewer system.
PLANNING CAMMISSION
CIB CAMMITTEE
CIVIL SERVICE COMMISSION
GREEN SHEET
��
� anwnaeax �e . ❑ arcua�c
� wuxw�a�xxcFSnc � wuxcm.mm�xa
� MxoR�oltAf�rJYrt1 ❑
(CL1P ALL LOCATIONS FOR SIGNATUR�
� m� ce�oNr� �.�a �Mw a�vaa ra m� d��eon
YES NO
Has this DrsoNfiim ever been a dtY emqoYce9
YES NO
Oces thffi PersoNfirtn Possesc a stull not namalbP���d M' a�Y curreM cstY emPbYee?
YES NQ
Is ih� PNaoMrm a 1erH�ed v�vMOYl '
YES NO
No �e��?��
c:;r-__'=_',
City Net provides fiber optic access, through the use of the sewer systein, that does noC re
he expenses, disruption, delays, and inconvenience of exeavating and obstructing the City's
treets and right-of-way.
St. Paul citizens, businesses, and visitors will be able to use the fiber optic access
throughout the City. The City will receive quarterly two percent of City Net's gross
revenues from the operation of its facilities in the sewer system.
None.
Without uniform access to the fiber optics throughout the City, the City will not attract new
businesses and retain some of the existino businesses_
dOUNT OF TRANSACTION
SOURCE
INFORMAiION (IXPWtQ
COET/REVQlUE BUD6ETED (CIRCLE ON�
YES NO
ACTNRY NUMBER
O� -�70
City of Saint Paul
Office of the City Council
310 Ciry Hall
Saint Paul, MN 55102
(612)266-8575
INTER-DEPARTMENTAL MEMORANDiTM
DATE: March 23, 2001
TO: Council President Dan Bostrom
Councilmember Jay Benanav
Councilmember Jerry Blakey
Counciimember Cluis Coleman
( �n„i�n�il'T!.°.:^.�.°.S �.:.�:C �.9II1�
Councilmember Kathy Lanhy
Councilmember Jim Reiter
FROM: Gerry Strathman, Director
SUBJECT: CityNet Lease Agreement (Proposed)
The proposed agreement between the City of Saint Paul and CityNet raises concerns about the
process employed to develop this proposed agreement and its terms. The development of this
proposed agreement has not appropriately involved the City Council nor the public. Also, some
terms may not be in the City's best interests.
Process
Chapter 16 of the Saint Paul City Charter provides a framework to be followed when private
entities are to be gzanted the use of public property to operate utilities. This process is lughly
structured and provides such decisions aze to be made only by the ordinance and only after a
formal public participation process. Additional safeguards aze provided through special public
notice requirements and the prohibition of ex�arte contact� w�tYe �1 PCYP� Q��� '!'tie c:e�r
intent of the City Charter and associated procedural ordiaances is to ensure an open, public, fair
and deliberative process is followed when private entities aze seeking to use public property for
private purposes. The process used to reach this proposed agreement has not been consistent
with the spirit of the Charter.
While State Law deternunes Saint Paul may not require CityNet to obtain a franchise, this does
not meau that the City Council and the public are to be excluded from the process. Yet the
Administration has negotiated this proposed agreement with little involvement by the City
Council. There has been no public participation. The acceptance of an agreement reached in this
manner wouid effectively transfer powers tradifionally exercised by the Ciry Council to the
Administration. The City Council should insist on playing an active role in the development of
agreements of this type and insist the public be allowed to e�ress themselves before its appmval.
Terms ' -
An overall reading of the proposed ageement leaves two general impressions. The first
impression is the Public Works Department has included terms in tiie agreement to ensure that
CityNet will not interfere with its ability to manage and operate the sewer system in Saint Paul.
The second impression is the remainaer of the agreement is unbalanced to favor of CityNet. The
proposed agreement contains teims that grant CityNet unprecedented generous benefits while
accepting faz less for the City than has been the case in similar situations in the past. Some
examples of the extraordinary benefits to be granted to CityNet aze outlined below.
Duration of the A¢reement The nroposed agreement nrovides for an initial three-yeat term
renewable, upon the same terms, covenants and conditions, at CityNeYs option, of seven ('n
additionat three (3) year renewai terms. Ttus means tfiat CiryNet may elect to operate its
business in Saint Paul for 24 years under the terms in ttis proposed agreement. Such a duration is
unprecedented in Saint Paul and greatly exceeds the duration of any similar agreement The cable
television franchise, for example, had an original term af fifteen (15) years. The most recent cable
television franchise has a term of ten (10) yeats with a five (5) year e�ension - at the City's
option. The CiTy.Charter limits the durafion of franchises to twenty (20), peazs unless approved by
a majority of electors voting thereon. While this Charter provisibn may not be direotly applicable
in ttus situation, it reflects the e�raordinary nahue of a proposal to hav@ an,agreement run for 2_4 _
yeazs. Tliis means, if at any renewal point durmg'ttus 24=year penod; CityNet deeins itie leitris. of
this agreement no loager fo be in their interest, they may elect not to renew. Tf, however, the City
finds the temis of this agreement ao 2onger to be in the City's best interest, it is boimd for fhe
entire 24 years if CityNet elects to exercise its renewal options.
Rental Fees. The pmposed ageement provides that CityNet pay the City rental fees in the
amount of 2.5% of its gross revenues. This is far less than the at least 5% of gross earnings
proposed in the City Charter for franchises. This is the rate currently paid by the cable television
,fa�a ,nrly�ic�� _ Ft �hn„r+�n ci D thn C'�t� c�,]�inia]�i.��tfihic,l�•#-ra�r�tyl-f�a-�irr•....8"..�"_
may elect to instaII their system in tiie pubfic rigfit-of-way without paying any rental or franchise
fee. "WIuYe tlus aiay be tr`ae, thi§ is clearIy not CityNet's business model and they are electing to
try to use city sewers because they can instail their system far more quickly and inexpensively than
if they had to absorb the full cost of right-of-way construckion. The proposal that the City should
accept lower fees because CityNet coutd do something that is faz more costly to them and not
part of their business plan, seems naive.
Bon . It is a common practice for the City to.require parties that pmpose to conduct business
using public rights-of-ways to provide bonds to secure tlieir obligation to defend and indenuvfy
the City against claims arising from usage of CityNet facilities. Such bonds aze customarily
�
o�-a�o
considered a cost-of-doing-business to be bome by the facilities operator. Also, construction
performance bonds aze commonly paid by the facilities operator. This proposed agreement
provides for such bonds but the cost of these bonds aze to be bome by the City not CityNet. For
the proposed $150,000 bond to secure the City against claims CityNet is violating the provision of
the cable television franchise, this bond is to be reduced and retired on a dollar-to-dollaz basis by
the delivery of rental fees to the City. This appears to mean that ttus bond will vanish upon
CityNet's payment of $ I50,000 in zental fees and from that point forwazd the City will be
required to pay for its own defense for activities related to CityNet It is also common practice
for contractors to be required to provide bonds to assure performance under the terms of an
agreement. Such bonds are also considered a cost-of-doing-business to be paid by the builder. In
this proposed agreement, the financial burden for tlus bond is again slufted to the City. CityNet
proposes to pay the City $50,000 with wlrich the City may purchase a surety bond to protect
against CityNePs failure to perform. This advance is, however, to be fully recovered by CityNet
by receiving full credit for this advance against rental fees. Again, the uitimate cost of the surety
twnd falts �o the �iYy, rioi i.ifyiJeY.
Protection of Cable Television Franchisees. Joe Van Eaton of Miller & Van Eaton, a City cable
law consultant, has repeatedly raised concerns this proposed agreement may undermine the City's
current cable television francluse. While an attempt has been made to address this risk by adding
certain provisions to the proposed agreement, Mr. Van Eaton is still of the view the City remains
at risk. He has proposed solutions to this problem but they have been rejected by CityNet. Tlus
proposed agreement does nof, therefore, adequately protect the City in t}us regazd,
Besides these majorcoricerns; §everal other lesser concerns remain. These concerns should,:
however, be resolveable through fiulher negotiations and iinproved drafting of the document,
Recommendations.
Based on a cazeful review of both the specific terms for the proposed agreement and the process
through which it was developed, Council Reseazch makes the following recommendations to the
City Council:
1. The City Council shouid reassert its authority to be actively involved in the development and
approval of any aereements v�h�rP rriy� �a.�es �e pr�t<cs:.-�.:,; �s� £::y y��pe cy vr F;riva�e
purposes.
2. The City Council should conduct a public hearing on the Cityl�et proposal to receive
information from all interested parties including prospective customers, competitors and the
public.
3. The City Council should advise CityNet the City will not enter into any agreement for the use
of the public right-of-way thaf exceeds 10 yeazs in total duration.
.
3. The City Council shouid require CityNet pay rental fees of at least 5% of gross earnings
derived from the use of City rights-of-way.
4. The City CouncIl should require CityNet to provide appropriate bonds at their expense and
such bonds shall remain in effect for the duration of the agreement
5. The City Council should direct City staff that any agreement with CityNet must provide
protections for the City's cable television francluse as proposed by Miller & Van Eaton.
6. The City Council should direct City staffto redraft the agreement to address less serious
concems to be identified by Council Reseazch.
7. The City Couacil should commit to an open, public process for reviewing and evatuating any
CityNet agreement This should include timely public notification and a public hearing.
8. The City Council should establish a process, by ordinance, for the development, review and
approval of any such similaz agreement in the fuUue.
cc: Susan Kimberly, Mayor's Office
Clayton Robinson, City Attorney
Sean Kershaw, PED
Tom Eggum; Axblic Works _
� ' ":. - Roger Puchreiter; Publio Works .
` Peter Aames, OFS _.
Legislative Ai�es -
.... . . _._ --- -- -- ............._._....
_ _...._ �.�_
_ ,_ .
- . ..._ .. _ ._ q _ , . .--
„���
surre ttao
S 7. Pw �, M uags o 7A 5510 7
LINDQUIST & VETtNCTM P.�.�.P. ���Z.
ATTOw�rsAiL�w
73tomas L Fabd �
(651)312-1200 �
Apri15, 2001
President Dan Bostrom and
Members of the Saint Paul City Council
Saint Paul City Hall
15 West Kellogg Boulevard
Sairt P�it, M±nees�ta 55;n2-
.zuows�
805ovn�E�+rrHSrnEer
MSDE�APOLIS. MINNESOTA 554D2-2205
TaErHONE:61&371-3271
Fax:512�3713207
Re: �tyNet Contract for Instaltation of �ber Optic Cable In City Sewer System
Dear President Bostrom and Members of the City Council:
On behatf of CityNet Telecommunicarions, Inc., I would like to thank you for your consideration
of the proposed CityNet Agreement with the City of St. Paui. The proposed Agreement
authorizes CityNet to build a fiber optic network utilizing St. Paul's sewer system. The, proposed
Agreement is the result of lengthy, intense negotiations between CityNet and the City's staff. We
aze confident tfiat after your review of this Agreement you wi11 agree that it is fair, balanced and
reflects the serious "give and take” of good faith negotiations.
We are aware that you have received a preliminary analysis of the Agreement from Council
Research Director Gerry Strathman. Mr. Strathman raises four points of concem regarding the
Agreement. Each of these is addressed below.
Dura#ion of the Agreemen�. Mr. Strathman's memorandum raises a concem regarding the
durarion ofthe proposed 24-year Agreement with CityNet. It should first be noted that any
company that builds a fiber network in St. Paul using the t*adifie*eal s±*..°rt a��?+a..^.v {�e±�c3s t��s t;�
rigiit to use the City's rights-of-way for an infinite period of time, without any paymenf obligation
to the City. Under such traditional installatioq the City woutd also be subjected to the tra$c
disruption and degradation of its streets resutting from the miles of street cuts involved in
construction. All of this, of course, would be avoided with the CityNet system.
In order to lease the fiber optics to other telecommunications carriers, CityNet must be able to
ensure that the dura6on of its Agreement with the City of St. PauI provides an adequate time
frame for CityNet to guarantee that its network will be available to its customers. The
telecommunications industry standard for the duration of leases for fiber optics is twenty (20)
years. This is driven by the fact that telecommunications camers treat the costs associated with
the lease as a depreciable asset. In order to accomplish this, the carriers must acquire the rights to
LINDQUIST R: `TENNUM P,LLP.
President Dan Bostrom and Members of the Saint Paul City Council
Aprit 5, 2001
Page 2
the fiber for 75% of the economic life of the fiber, or 18.75 years (the economic life of fiber optics
is 25 years). Thus, the industry practice has been to acquire fiber under 20.year teases. Thus, an
agreemeirt of less than 20 years (plus four yeazs for network design and construction) will result
ia CityNet's inability to Iease to its customers and would make the proposed vem�ue untenable.
F"mally, in this regard, Mr. Strathman's memorandum actrnowledges that the City Charter
provision that limits the duration of franchises to 20 years is not appIicable to the CityNet
e r-rnoTMnn= �ero. 4 ' A ' a� s 4...:..L:.. _ = rt`i s_�B �-- ' r_- �-
'-a'^"'•"•. ��-� �+--� ��°...�°++.�,^:: 3 ii;s. &uwn.aua i�in.tucid. aumcia5t8 uic i}yiC3t uwa`f.�i3� �
of existing franchise ageements should not be controlling.
Rental Fees. Mr. Strathman qnestions why the proposed Agreement provides that CityNet will
pay the City 2.5% of its gross revenues rather than the 5% fee paid by cable franchisees. As
noted above, the proposed Agreement is not a franchise and CityNet is not seeldng eacclusivity.
Moreover, under 1vTinnesota Iaw, the City may not charge atry fee upon a telecommunica6ons
provider to use its rights-of-way. The CityNet fge is permissible only because its system will be
occapying Cify property (the'sewers) ratfier than;the nght;of-wag Thus, any comparison to the
5% received from a cable francivse is inappropnafe. It is more appropriate.to compa;e the _
CityNet proposal to a competing compazry that ]ays fiber using traditional street cutting methods,
resulting in no payment to the City.
It aiso deserves note that the 2.5% fee does not reflect the additional services that CityNet has
agreed to provide to the City. CityNet estimates that the value of its sewer cleaning, inspection,
mapping and repairs covld be as high as $1.5 million. Taken with the revenue payments, this totai
couid be greater than the 5% paid by franchisees. It is also true that the 2.5% fee does not reflect
the value to the City of having "direct fiber connectivit}�' to buildings that will enhance the City's
void'mg i�eets being trenchP,d a.�� a�rn� y�x aamo, � ber de e fo t�ie �ty of
velopmecrt methods.
Bonds. The concerns raised regarding the bonds aze essenfsally that Yhe costs of the bonds are
funded by CityNet revenue to the City, rather than as an additional cost to CityNet. The bond
provisions were negotiated to provide the City with additionai protections for events that, as
discussed below, are unlikely to occur. If the City chooses to purchase bonds (which other cities
have not deemed necessary) the cost witt be paid with funds that the City would not I�ave except
as a result of the Agreement.
Regarding a performance bond, these aormally are required to protect a city ict those instances
when a builder fails to complete construction. Under its business plan„Cit}�Net_witl nof. `
commence construction of its network unt� it has entered irno agreements_witlr its: ciistomers to
.
;
a�-a?o
LINDQUIST R: `JENNUM P.LLP.
Presidern Dan Bostrom and Members of the Sairn Paul City Council
April 5, 2001
Page 3
lease the fiber in the network Therefore, in the unlikely event that CityNet cannot Iease fiber to
its customers, no construction will begin and the Ciry wilt not be disadvantaged or hazmed as a
result of this Agreemem. In fact, the City will still have the benefit of the sewer ma.pping and
video inspection that precedes the conshuction of the network.
Protection of Cable Television Franchisees. The possibility that the proposed Agree�nem
creates a risk that the City's current cable fianchise wiii be undermined if a CityNet customer uses
the network tb provide calile tetevision service withouf an appropriate franchise is exceedingly
remote. This concern, which was raised by a cable industry consultant, has been reviewed by both
the City Attorney and a telecommunications law expert retained by the City, both of whom have
detemrined that any such risk has been addressed and minimized by the cable franchise protection
provisions ofthe Agreement. In addirion to the lirigation bond provision, CityNet has agreed to
include a provision in CityNet's contracts with its customers that creates a third-party beneficiary
remedy for the City and any cable franchisee, which will result in a substantiai financial penaky if a
CityNet customer violates the provisions of the Agreement. Additionally, it should be noted that
CityNet fiber will serve high-density commercial buildings which aze unlikely to be customers of a
cable television provider: �_ , � � �" . _ : � � _ � _ � � � � -
In conclusion, CityNet looks forward to your approval of the Ageement as proposed and to a
successful partnership between the City and CityNet in this endeavor. Of course, CityNet is
available to address any questions, concems or requests for additional information you may have.
Very truly yours,
LII�TDQUIST & VENNUM P.L.L.P.
�
/ �'� i��
Thomas L. Fabel
TLF/ing
cc: Mr. Gerry Strathman
, Mr. Tom Eggum
Mr._�earrKersha�v�- �
„ Mr.:Clayton ltobiason
p�.?'10
SEWER LEASE AGREEMENT
Between
TFIE CITY OF SAINT PAUL, NIINNESOTA
and
CITYNET TELECONTMUNICATIONS, INC.
This AGREEMENT, is made and entered into as of this
, by and between CityNet Telecommunicarions, Inc., a 3
office at 8403 Colesville Road Fourteenth Floor, Silver Spring,
"CityNet"), and the City of Saint Paul, Minnesota, a Minnesot�f
(hereinafter "City"). �
day of ,
corporation, hauing an
I, 20910 (hereinafter
corporation
WHEREAS, City currently owns and operates a ewer System, located in the City of
Saint Paul, State of Minnesota, said existing Sewer Sys m being more particularly described on
Exhibit A(hereinafter the "Sewer System"); and
WHEREAS, CityNet desires to install, pl e and maintain telecommunications facilities
(hereinafter "Facilifies") in portions of the Sewe ystem for the purpose of operating dark (unlit)
fiber opric Faciliries; and
WHEREAS, CityNet desires to leas space in the City's Sewer System, rather than using
space in the City's streets and rights-of-w , in order to avoid the additional costs, expenses,
disruption, delays and inconvenience of cavating and obstructing the City's streets and Rights-
of-Way; and
WHEREAS, the City has a ed to lease to CityNet space in the Sewer System for the
placement of CityNeYs Facilities i rder to avoid the inconvenience, disruption, delays and costs
of CityNeYs obstructing or excav ' g the City's streets and Rights-of-Way that would otherwise
be required in the absence of thi Agreement; and
WHEREAS, the Ci has also agreed to this Agreement because City desires to fmd new
and innovative ways to pro ide fiber optic access to its citizens and other users, and to provide
such access uniformiy ughout the City, in order to attract new business and retain existing
business, attract and ex and a highly skilled workforce and promote general economic
development through. t the City by way of technology availability and upgrades; and
f ,,
WHEREAS, the City has also agreed to this Agreement because City desires to protect
and preserve its infrastructure and more efficienUy use its monetary and personnel resources by
Doc# 1374757�2
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finding and authorizing innovative methods o£ deploying fiber optic systems which do not
involve digging and trenching in the streets and other public right of ways and which min;mize
the disruption of traffic flow and commerce and the economic loss associated with such
disruprion; and
WHEREAS, the City has also agreed to this agreement because City desires to ide fy
additional methods of inspection, maintenance and metering of its sewer system to insur
compliance with federal and state environmental laws and regulations; and
WHEREAS, nothing in this Agreement shall be construed to limit in any ay CityNeYs
right to apply far and obtain City authorizarions and permits, to construct and aintain and own
a fiber optics system or facilities, and to apply for and obtain other rights-of- ay agreements
from the City or other rights-of-way providers; and
WHEREAS, CityNet acknowledges that, notwithstanding
Agreement, it shall comply with any and all existing or future La�
those regulating the City's public Rights-of-Way found in Chaptei
St. Paul Legislative Code, before exercising any right under this
herein shall constitute a permission or authorization or waiver�
such prior compliance by CityNet;
NOW THEREFORE, in consideration of the
provided herein, the parties agree as follows:
GENERALLY
provision within this
�e but not limited to
'116 and 135 of the City of
reement, and that nothing
the City of its right to require
and of the mutual covenants
1. Incorporation. The foregoing recitals, well as Appendix 1 and Exhibits A, B and
C, are hereby incorporated in this Agreement as i set forth here verbatim.
2. Definitions. The following words, erms and phrases, when used in this Agreement,
shall have the meanings ascribed to them in 's section, except where the context clearly
indicates a different meaning:
Sewer System: A system of s� ary, storm water and relief sewers as described in
Exhibit A.
Facilities: The fiber optic elecommunications transm3ssion facilities consisting of fiber
optic cables, and associa d appurtenances, as described in Eachibit C, to be installed by
CityNet, and to be loc ed within portions of City's Sewer System pursuant to this
Agreement, solely t rovide Telecommunications Services.
Fee: Any monetary assessment, license, cost, chazge, fee, nnposirion, or tas, of any Idnd
whatsoever, including but not limited to: A levy of general application to entiries doing
Doc#137475T2
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business in the City lawfully imposed by any governmental body; Any real estate or
personal ta7ces on equipment or property owned by CityNet, whether general or special;
Any public urility rates, dues, or chazges of any kind for utilities used by CityNet; Any
fees, costs or eapenses of insurance; and any other expenses, costs, or other applicable
tariffs resulting from the performance of this Agreement.
Law or Laws : Any and all statutes, constitutions, ordinances, resolutions, regul�
judicial decisions, rules, tariffs, administrative orders, certificates, orders, as well
other requirements of the City or any other govemmental agency having joint or �
jurisdiction over the parties to this Agreement. �
Person: Any individual, person or entity, however organized, whether pub �c or private,
whether domestic or foreign, whether for profit or nonprofit, and whether atural,
corporate, or political. "
Rirht-of-Wav or Public RiQht-of-Wap: The area in, on, below or ove a public
roadway, highway, street, cartway, boulevazd, bicycle lane, side alk, parkway or alley
which the City owns, including areas used for sewer utility p oses, or over which it has
a real property easement or interest, including other dedicat Rights-of-Way.
Telecommunications: The transmission, behveen or ng points specified by the user,
of information of the user's choosing, without change ' the form or content of the
information as sent or received.
Telecommunications Services: The offering
nondiscriminatory basis for a fee directly or i
LEASE OF
rights of use on a
to telecommunications providers.
SYSTEM
3. Lease: Subject to the provisions o is Agreement, including the specifications and
rules contained in Appendix l, City hereby ases to CityNet for its non-exclusive occupancy of
space located within City's Sewer System or the placement of Facilities. The Facilities will be
installed, with prior approval of the
jointly identified by the City and Ci
Facilities as to make installarion ecc
Areas of Installation); provide
configuration and location of t
considerations. City shall hav
of the Sewer System that the�Q
installation of the Facilitiesl
CityNet may
in such portions of the City's Sewer System as shall be
as providing sufficient potential mazket for the
�ally feasible (as provided in Exhibit B, "Potential
�ver, that CityNet alone shall determine the actual
�acilities based upon CityNeYs business and economic
� right to withhold approval of access by CityNet to any potion
deems to be physically or shucturally inappropriate for the
the leased portions of City's Sewer System only for the purpose of
Doc# 137475T2
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installing, maintauvng, operating and licensing to third parties for a fee the use of the Facilities in
the Sewer System for providing Telecommunications Services and any uses incidental thereto.
CityNet may, with the City's prior written consent, which shail not be unreasonably withheld,
modify, alter or upgrade the Facilities during the Initial Term and any and all Renewal Terms,
subject however, to the terms and conditions of this Agreement. CityNet shall not use, allow
suffer the leased portion of the Sewer System to be used for any other purpose, provided, howe er,
that City and CityNet may, by amendment to this Agreement, provide for other us Any
unauthorized use will allow City, at its oprion, to temunate this Agreement.
4. Government Permits: Prior to the installation of CityNeYs Facilities w' �n the
Sewer System, CityNet shall obtain from the appropriate govemmental authoriti , including the
City itself, any required permits or licenses necessary for such installation, an hall provide to
City copies of such permits or licenses upon request. City agrees to provide easonable
assistance to CityNet in obtaining such permits or licenses. CityNet shall tify City immediately
if City or any govemmental authority indicates that a permit or a licens 'll not be issued, at
which time CityNet may at its option choose to terminate the agreem t immediately, without
cause.
5. Reserved Right: This Agreement shall not constitut an assignment of any of City's
rights to use the Right-of-Way or the public or private prope upon which the Sewer System is
located. Nothing contained in this Agreement shall be cons ed as a limitation, restriction or
prohibirion against City with respect to any agreement or gement which City has heretofore
entered into, or may in the future enter into, with other p sons regazding the Sewer System or
Right-of-Way. City agrees, however, that the use and
other persons shall not interfere with CityNet's rights
Agreement. Subject to the terms and conditions of :
the Sewer System shall at all times remain exclus' ely
in CityNeYs Faciliries shall at all times remain e clusi
6. Scone of Agreement. Any and
Agreement, which shall be exercised at
prior, continuing, and any future right
of the Sewer System and the public Ri
person and shall be further subject to
restrictions, encuxnbrances, and clai s
cupancy of the Sewer System by such
f occupancy granted pursuant to this
agreement, all right, title and interest in
with City, and all right, title and interest
�ely with CityNet.
rights expressly granted to CityNet under this
eYs sole cost and expense, shall be subject to the
of e City under applicable Laws to use any and all parts
t-of-Way exclusively or concurrently with any other
1 deeds, easements, dedications, conditions, covenants,
of ritle of record which may affect the City's Sewer
System. Nothing in this Agreeme shall be deemed to grant, convey, create, or vest in CityNet a
property right or interest, includ' g but not limited to any real property interest in land, or any
fee, leasehold interest, or ease ent other than such interests that are explicitly conveyed in this
Agreement. Any work perfo ed pursuant to this Agreement shall be subject to the reasonable
prior review and approval the City, and subject to CityNeYs prior compliance with any and all
existing and future laws, � cluding but not limited to public Right-of-Way registration and use
laws found in Chapte 16 and 135 of the City's Legislative Code.
Doc#137475T2 4
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7. Term: The initial term of this Agreement shall be three (3) years unless earlier
terminated in accordance with the provisions here (hereinafter "Inirial Term"). The term
shall commence on the date above first written.
8. Option to Renew: Provided this Agreement has not been earlier terminated and
CityNet is not in default of any of the covenants of this Agreement, then subject to the pr 'sions
contained herein, City grants CityNet the oprion to elect to extend this agreement for s en ('�
additional three (3) year renewal periods (each being a"Renewal Term") commenc on the day
following the expiration date of the Inirial Term or any subsequent Renewal Term Such options
may be exercised by CityNet giving to the City written notice of its election to r ew, not later
than one hundred eighty (180) days prior to the expiration ofthe Initial Term the then current
Renewal Term, as the case may be. If CityNet should elect to renew this A eement, any such
renewal shall be upon the same terms, covenants and conditions as provid in this Agreement
for the Initial Term.
9. Installation, Maintenance and Renairs: CityNet shall h e the right at its sole cost
and expense to install, maintain, and operate the Facilities in the Se er System. CityNet's
installation of the Faciliries shall be made according to plans appr ed by the City, which
approval shall not be unreasonably withheld, delayed, or conditi ned. CityNet shall perform a
video inspection of those portions of the Sewer System in whi CityNet intends to construct its
Faciliries. In connection therewith, the City shall respond to ityNet in writing with respect to
any submittal of such plans or drawings (which shall inclu e the results of a video inspection)
after receipt thereof with any disapproval, objection or p posed modification within thirty (30)
days of said receipt, or such plans or drawings shall be eemed approved by the City. CityNet
shall also perform a video inspection subsequent to installation of the Facilities and provide
the City with a copy thereof. The City shal] have n obligation to maintain, inspect or repair the
Facilities so as to cause them to conform to any p ormance specification, and C3tyNet shall, at
its own cost and expense, install, maintain, rep �, and secure its Facilities so that they remain in
good and safe condirion and in compliance wi the provisions of this Agreement and all
applicable fire, health, building, and any oth life safety codes or Laws.
During the first two years follo ' g the installation of the Facility, CityNet shall twice
annually jet-spray that portion of the S er System containing the Facility. Thereafter, CityNet
and the City shall agree on an approp ate regular schedule for such cleaning to be done by
CityNet, at CityNeYs sole cost and pense.
The Faciliries shall rema' the exclusive property of CityNet, and CityNet shall have the
right to remove all or any port n of the Facilities at any time during the term of this Agreement,
provided that the same does ot otherwise interfere with the City's operarions of the Sewer
System. The Faciliries sha be deemed personal property for purposes of this Agreement,
regazdless of whether an portion thereof is deemed real or personal property under applicable
law.
Doc# 1374757�2
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All work by CityNet shall be performed in compliance with applicable laws and
ordinances. CityNet is not authorized to contract for or on behalf of the City for work on, or the
fixrnishing of materials to the Sewer System or any part thereof, and CityNet shall pay any and all
subcontractors, material men, mechanics and laborers promptly for any work performed or
materials fi�mished at the instance of CityNet on the Sewer System.
10. Rental Fee_ The annual lease Rental Fee to be paid by CityNet to City ori a
quarterly basis, is two and one haif percent (2.5%) of the "Gross Revenues" (as fined below)
received by CityNet from the operation of the Facilities in the Sewer System p uant to this
Agreement. Such payment shall be made within forty-five (45) days after th expiration of each
quarter at the City's address specified in Section 26 hereof. For purposes o this Section, "Gross
Revenues" of CityNet shall be all gross revenues, determined in accord ce with generally
accepted accounting principals ("GAAP'�, derived and received by Ci et from its operation of
the Facilities in the Sewer System. Gross Revenues include, but aze ot limited to, chazges made
by CityNet or any affiliate of CityNet for the use of the Facilities b other persons or entities.
Notwithstanding anything to the contrary in this Section, Gross evenues shall not include (i)
any taac or fee imposed on the users of the Facilities by the Cit or any other governmental
authority and collected by CityNet on behalf of such gove ental entity, (ii) the revenues of any
Affiliate (as defined in Section 25) of CityNet to the exten such Affiliate revenues are costs of
CityNet and recovered by CityNet through charges to su scribers that are included in gross
revenues on which fees are paid, (iii) actual bad debt, r funds or credits, provided any such bad
debt subsequently collected shall be included in gros revenues in the period collected, and (iv)
the revenues of CityNet or any Affiliate of CityNe 'th respect to their respective operations
which do not use the Sewer System. Gross reven es shall be adjusted to reflect contributed goods
and/or services provided to the City by CityNe der the terms and conditions of this
Agreement. Acceptance by the City of any p ent due under this Agreement shall not be
deemed to be a waiver by the City of any b ach of this Agreement occurring prior thereto, nor
shall the acceptance by the City of any su payments preclude the City from later establishing
that a larger amount was actually due or om collecting any balance due to the City.
City may, at any time, at Ci s sole option, upon ninety (90) days written notice, require
CityNet to discontinue the lease R tal Fee payments. Upon receiving such notice CityNet shall,
no later than ninety (90) days aft receiving such notice, cease maldng all compensation
payments that would have been ayable after such ninety (90) day norice period. If City requires
such a discontinuation of Ren Fee payments, the City may then charge, on an annual basis, its
actual Right-of-Way manag ent or management costs (pursuant to Minnesota Statutes §
237.162, Subd. 9 and § 23 .163, Subd. 2(b), and pursuant to any relevant local, state or federal
ordinance, statute, regula on, law or other rule), that are incurred after the expiration of the
ninety (90) day period escribed above, provided that in no event will CityNeYs payment be
greater than the amo t established as the Rental Fee herein.
Doc# 1374757�2' 6
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CityNet shall also file quarterly a report ("Compensation Report") with the City, by
sending copies to the individuals listed in Section 26 herein. The Compensarion Report shall
show the Rental Fees paid to the City, as well as all CityNet revenues for the preceding quarter
based upon CityNeYs services or operations within the City of Saint Paul that made up Gross
Revenues. The Compensation Report shall also show any adjustments as provided for � �s
Agreement for bad debt, and the Compensation Report shall be executed and attested t by an
authorized officer of CityNet verifying the accuracy of the Compensation Report an amount of
all fees, compensation, or other payments under this Agreement.
CityNet shall keep accurate books of account, in accordance with G , for the purpose
of determining the amounts due to the City under this Agreement. The City ay inspect
CityNeYs books of account relative to the City at any time during regular usiness hours on
thirty (30) days prior written notice and may audit the books from time tune at the City's sole
expense in order to verify the accuracy of payments due under this A eement. The City may
also, at its option, require that CityNeYs compliance with the term d conditions of this
Agreement, including, but not limited to, the computarion of any ees or payments, be verified by
a certified public accountant or compazably qualified consult at the sole expense of the City.
11. Other CharQes. CityNet shall be solely resp sible for the payment of all Fees,
expenses, costs, compensation, or any other charges im sed or based upon CityNeYs
performance under this Agreement. CityNet shall pay y such Fees ar charges within thirty (30)
days of notice of the same from the City. CityNet s I pay any personal property tases assessed
on, or any portion of such taxes attributable to, th acilities located in the Sewer System.
12. Removal or Relocation. CityN understands and acknowledges that City may
require it to remove or relocate some or all o its Facilities, and shall at City's direction remove
or relocate such Facilities whenever City r onably determines that the removal or relocation is
needed for any of the following purp
or maintenance of a City project or a
interfering with or adversely affectin
facilities or uses of the sewer utility
health, welfare or safety, or (d) as
administrative or legal authority, � c]
es (a) for the construction, completion, repair, relocation,
lic Right-of-Way, (b) because the Facilities are
roper operation or maintenance of any other fixtures or
public Right-of-Way; (c) to protect or preserve the public
ult of any law, nxling, judgment or decision of an
iinQ but not limited to a district court of the State of
Minnesota. If CityNet shall fail o remove or relocate any Facilities as requested by the City
within a reasonable time unde e circumstances, City shall be entitled to remove or relocate the
Facilities at CityNeYs sole c t and expense, without further notice to CityNet. In the event that
City is required for any re n to remove, relocate or discontinue leasing or operating the Sewer
System, or any portion th eof, either party shall have the option to terminate this Agreement.
Doc# 137475T2
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13. Damage to Public Right-of-Wa�r Sewer System. Whenever the installation,
removal or relocation of Facilifies is required or pernutted under this Agreement, and such
installarion, removal or relocarion shall cause the Public Right-of-Way or Sewe ystem to be
damaged, CityNet, at its sole cost and expense, shall comply with ali laws gov ' g use of the
Public Right-of-Way or the Sewer System, which includes the obligation to �omptly repair and
retum the same to a safe and satisfactory condirion in accordance with
wear and tear excepted. If CityNet does not repair the site as just desc�
have the option, upon fifteen (15) days prior written notice to CityNet,
performed such reasonable and necessary work on behalf of CityNet
the proposed costs to be incurred or the actual costs incurred by the ii
�plj��'able Laws, normal
�e�fl, then the City shall
�perform or cause to be
to charge CityNet for
at City's standard rates.
Upon the receipt of a demand for payment by the City, CityNet s 1 promptly reimburse the
City for such costs. The provisions and rights in this section are n addition to, and not in lieu of,
any right of the City under existing or future applicable Laws.
14. Condemnation: In the event that the Sewer S tem, or any portion thereof, shall be
taken or condemned, either permanently or temporarily, r any public or quasi-public purpose
by any person or authority in appropriation proceeding or by any right of eminent domain, or in
the event that City's permit and right to occupy the p lic Right-of-Way with its Sewer System
or to Lease portions of its Sewer System is revoked r deemed illegal, this Agreement shall
automatically terminate on such date and any dam ges arising therefrom shall be payable to City.
CityNet shall have the right to claim and recove om the condemning authority, such
compensation as may be separately awarded or ecoverable by CityNet.
15. Emergenc�Reaairs. CityN
paramount purpose of the Sewer System i�'for Uae transfer of sewage and storm water, which in
no way shall be compromised or abridg by any right conferred under this Agreement.
o ally ceases to drain normally due to blockage or
t is City's responsibility to restore normal flow as soon as
Historically the Sewer System �
struchxral failure. On these occ
possible. Under such circumsta
Facilities or for temporary inte�
make every reasonable attempt
impact the Facilities under this
16. Access to tB
Agreement, subject to p:
which supervision costs
vehicular ingress and e
for the purpose of ac�
maintain and operat e
and agrees that the primary and
the City shall not be responsible for any damage to the
n of service provided through the Facilities. The City will
ify CityNet as soon as possible of any City work that may
: S er S stem. CityNet may, at all times during the term of this
io compliance with City ordinances and to reasonable supervision,
fees shall be paid for exclusively by CityNet, have pedestrian and
ess to and from the Sewer System, on a 24-hour, 7-day per week basis,
ing the Facilifies to the extent reasonably necessary to install, field-test,
Facilities.
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17. Renewal of Lease. If both City and CityNet wish to enter into a new lease
agreement then, before expiration of the final Renewal Term, the City and CityNet may enter
into good faith negoriations the object of which will to agree upon the terms of a new lease
agreement.
ADDITIONAL PROVISIONS
18. Independent Contractor: In performing this Agreement, City and City et shall
operate as, and for all purposes be considered, independent contractors and not age s, and
neither party shall have authority to bind or otherwise obligate the other in any m er
whatsoever. All personnel perfornung seroices shall remain under the exclusiv direction and
control of their respective parties and shail not be deemed to be employees o gents of the other
party. No employee or agent of CityNet shall be deemed an employee of � for the purposes of
this Agreement, nor shall City be responsible for any payments such as c pensation, wages,
benefits, taaces, workers' compensation, disability or other insurance or y other payments with
respect to any such CityNet employee or agent.
19. Force Majeure Susuension and Termination: In t event that either party to this
Agreement is unable to perform any of its obligations under � Agreement or to enjoy any of
the benefits thereof because of natural disaster, acrions, Law orders or decrees of governmental
bodies or failure of power supply, or any condition that is yond that party's reasonable control,
including but not limited to acts of God, fire, flood, or ot er catastrophe (hereinafter "Force
Majeure Events"), the non-performing party shall imm iately provide notice thereof to the other
party and shall do everything possible to resume perf ance. Upon receipt of such notice by
the performing party, this Agreement shall immedi ely be suspended. If the period of
nonperformance exceeds forty-five (45) days
Event, either party shall have the option to te:
the other pariy.
e receipt of notice of the Force Majeure
this Agreement by giving written notice to
20. Indemnifica6on: CityNet sh indemnify, defend, protect, and hold hazmless the
City, its council members, officers, agen , contractors and employees from and against any and
all claims, demands, losses, damages, ' bilities, fines, charges, penalties, administrative and
judicial proceedings and orders, jud ents, and all costs and expenses incurred in connection
therewith, including reasonable att ey's fees and costs of defense, occasioned by or arising out
of CityNeYs activities undertak utsuant to this Agreement, except to the extent arising from
or caused by Uae negligence or llful misconduct of the City, its council members, officers,
employees, agents, or cont�
indemnify the City, and its
allegations allege (a) ind
or (b) a wrongful act or m
shall also defend and ' den
negligence, if the a gatioi
rs. The foregoing notwithstanding, CityNet shall defend and
ficers and employees, even in the case of negligence, unless the
dent negligence on the part of the City, its officers and employees
�ion on the part of the City or its officers or employees. CityNet
ify the City, its officers and employees, even in the case of
are based on the City's or its officers or employees' negligence or
Doc#137475T2
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otherwise wrongful act or omission in approving this Agreement, or in failing to properly or
adequately inspect or enforce compliance with the terms, conditions or purpose of this
Agreement. CityNet shall also defend and indemnify the City, its officers and employees, in the
case of CityNet's use of Hazardous Materials. "Hazazdous Materials" means asbestos, petroleum
products, or any to�c or hazardous substance, waste or materials as defined in any federal, , ate
or local environmental or safety law or regulation including, but not limited to, CERCL
MPCA, and MERLA. The provisions of this secrion shall survive any termination or e iration
of this Agreement. Without limiting the foregoing, CityNet shall obtain a bond in th sum of
$150,000, in a form acceptable to the City Attomey, to secure its obligation to def d and
indemnify the City against any claim asserted by a City-franchised provider of c le television
service, alleging injury based upon usage of the CityNet Facilities in violatio f the City
franchise ordinance for the provision of cable television service. Said bond equirement shall be
reduced and rerired on a dollar-for-dollar basis by the delivery of rental f s to the City by
CityNet pursuant to Paragraphs 10 and 46 of this Agreement.
21. Limitation on Liability and Waiver: NOTWITHST ING ANY PROVISION
HEREIN, NEITHER PARTY SHALL BE LIABLE TO THE O R FOR ANY INDIRECT,
SPECIAL OR CONSEQLTENTIAL DAMAGES, INCLUDIN , WITHOLTT LIMITATION,
THOSE BASED UPON INTERRUPTION OF SERVICE O FOR ANY LOSS OF
REVENUES, PROFITS, OR BUSINESS OPPORT
WHETHER OR NOT EITHER PARTY HAD OR ;
KNOWLEDGE, ACTUAL OR CONSTRUCTIVE, THf4T ANY SUCH DAMAGES MIGHT
BE INCURRED. CityNet also waives any and all cl ' s, demands, causes of action, and rights
it may assert against the City on account of any loss damage, or injury to its Facilities or any
loss or degradation of the services provided by its acilities. The City shall be liable only for the
e independent negligence or willful
ntractors. In no event shall the City be liable for
iat damage CityNeYs Facilities. In no event shall
cost of repair to damaged Faciliries arising fr�
misconduct of City, its employees, agents, or
vandalism, malicious mischief, or acts of Go�
either party be liable for special, consequen �
perfornnance or nonperformance of its obl' a1
secrion shall survive any termination or pir
RESULTING THEREFROM,
HAVE HAD ANY
exemplary or punitive damages as a result of the
is under this Agreement. The provisions of this
on of this Agreement.
22. Default: If at any time tyNet fails or refuses to perform any of the material
covenants or conditions contained i this Agreement, and such failure or refusal shall continue
for sixty (60) days after written n ice is provided by City to CityNet, then City, at its election
may re-enter and take possessio of the leased portion of the Sewer System, remove CityNeYs
Facilifies therefrom, re-let the ased portion of the Sewer System or any part thereof on such
terms, condirions and rentals City may deem proper, and, at City's option, either terminate and
cancel this Agreement, or ply the proceeds that may be obtained from said re-letting, after
deduction of costs and e enses, to the lease rentals required under this Agreement, and hold
CityNet liable for any ance of such rentals which may remain unsatisfied and unpaid. In such
an event, CityNet sh pay to City, as addirional rent: (i) all costs and expenses reasonably
incurred by City in aking any alterations to the Sewer System in preparation for re-letting and
Doc# 137475T2 � 1 �
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in attempting to re-let the leased portion thereof, and (ii) ali costs and expenses, including
attorneys fees and costs, reasonably incurred by City as a result of CityNet's default or enforcing
City's rights and remedies hereunder.
23. Time to Cure: In the event any such default (other than the payment of fees due ,
hereunder) cannot reasonably be cured within such sixty (60) day period, the time for c' such
default shall be extended for whatever period of time is required to complete such curin o long
as either party is proceeding with due diligence. The waiver by either pariy of any br ch of any
term, covenant or condition herein contained shall not be deemed to be a waiver of ch term,
covenant or condirion or any subsequent breach of the same or any other term, co enant or
condition herein contained.
24. Insurance: CityNet shall at its own expense obtain and maint ' at all times during
the term of this Agreement Commercial General Liability insurance and ommercial
Automobile Liability Insurance protecting CityNet in an amount not le than One Million
Dollars ($1,000,000) per occurrence (combined single limit), includi bodily injury and
properiy damage, and in an amount not less than Three Million Do s($3,000,000) annual
aggregate for each personal injury liability and products-complet operations. The Commercial
General Liability ansurance policy shall name the City, its coun 1 members, officers, and
employees as additional insureds as respects any covered liab' ity arising out of CityNeYs
performance of this Agreement. Coverage shall be in an oc ence form and in accordance with
the limits and provisions specified herein. Claims-made p licies are not acceptable. Such
insurance shall not be canceled, nor shall the occurrence r aggregate limits set forth above be
reduced, until the City has received at least thirty (30) ays' advance written notice of such
cancellation or change. CityNet shall be responsible r notifying the City of such change or
cancellation. Prior to any Renewal Term pursuant § 8 of this Agreement, the City may request
and the parties shall bazgain in good faith to incr se the above minimum insurance amounts, if
such an increase is watranted by indushy stand ds or specific identified risk, or by any change
in Minnesota Statute § 466 or any other Law ertaining to municipal liability. Such increase, if
any, shall not be effective until the comme ement of such Renewal Term.
Prior to the commencement of work pursuant to this Agreement, and annually
thereafter, CityNet shall file with the ty, pwsuant to the Norice provision in Section 26, a
certificate of insurance which shall s te the following: the policy number; name of insurance
company; name and address of the gent or authorized representative; name and address of
insureds; policy expiration date; ecific coverage amounts; that the City shall receive thirty (30)
days' prior notice of cancellatio ; that names the City, its council members, officers, and
employees as additional i
performance of this Agre�
policy waives any right o
s as respects any covered liability arising out of CityNeYs
and that CityNeYs Commercial General Liability insurance
�ry the insurance company may have against the City.
Doc#137475� 11
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An insurance provider of CityNet shall be admitted and authorized to do business in the
State of Minnesota and shall carry a min;mum rating assigned by A.M. Best and Company's Key
Rating Guide of "A" Overall and a Financial Size Category of "X" (i.e., a size of $500,000,000
to $750,OOQ000 based on capital, surplus, and conditional reserves). Insurance polici d
certificates issued by non-admitted insurance companies are not acceptable. Any d ctibles or
self-insured retentions must be stated on the certificate(s) of insurance, which shal e sent to and
approved by the City. "Severability of interesY' or "separation of nvsweds" clau s shall be made
a part of the Commercial General Liability and Commercial Automobile Liab� ty policies.
25. Assi�nment: CityNet shall not assign or otherwise convey an of its rights,
obligations or interests under this Agreement without the express prior �tten consent of the
City, which consent shall not be unreasonably withheld. This clause a o applies to CityNeYs
Affiliates, who shall be financially viable. "Affiliate" means a pazen or subsidiary of CityNet,
an entity that owns or controls, is owned or controlled by, or is un r common ownership or
control with CityNet, or an entity which merges or is consolidate with CityNet or which
purchases a controlling interest in the ownership or assets of C� Net. In the event CityNet
assigns its rights, obligations or interests under this Agreeme , CityNet shall remain secondarily
liable to City for the performance of its assignee under this greement.
City may require an assignee or transferee to po with the City security in the form of a
cash deposit, letter of credit, or surety bond satisfacto in form and amount, which shall be fully
refunded or otherwise released to the posting party on termination of this Agreement and upon
the timely removal of Facilities pursuant to this A eement, to the reasonable satisfaction of the
City. [King's Paragraph]
26. Nofice: All notices and other co unications which shall or may be given pursuant
to this Agreement shall be in writing and b deemed to have been duly given (i) upon personal
delivery, or (ii) upon placement into the ited States mail, certified, postage prepaid, retum
receipt requested, to the parties at the fo owing addresses:
If to City: Director
Deparhnent fPublic Works
City of Sai t Paul
1000 Ci all Annex
25 Wes ourth Street
Saint aul, Minnesota 55102
With copy to: S� t Paul City Attorney
0 City Hall and Courthouse
15 West Kellogg Boulevard
Saint Paul, MN 55102
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If to CityNet:
CityNet Telecommunications, Inc.
8403 Colesville Road, 14� Floor
Silver Spring, Maryland 20910
Attenrion: Mark Perkeli, General Counsel
or at such other address as the parties hereto may specify from time to time by writte otice
delivered in accordance herewith.
27. Terminafion: This Agreement may be termiiaated by either party pon written
notice to the other pariy upon a material default of any covenant, provision r term hereof, by
the other pariy, which default is not cured within sixty (60) days of recei of written norice of
default (or, if such default is not curable within sixty (60) days, if the faulting party fails to
commence such cure within sixty (60) days or fails thereafter dilige y to prosecute such cure to
completion), provided that the grace period for any monetary
receipt of notice.
Additional Termination Ri¢hts.
(a) Ci Net. CiryNet may, without further
(180) days written notice, terminate its lease or its
without cause.
shall be ten (10) days from
to City, upon one hundred eighty
of any portion of the Sewer System
(b) C�. If any govemmental agency o third party institutes proceedings successfully
imposing public utility or common carrier sta s on City as a result of its performance of this
Agreement, or if any action is brou�t by third party successfully challenging the continued
validity of this Agreement or seeking to a ersely modify, suspend or revoke City's operaring
authority for its services or Sewer Syste as a result of its or CityNeYs performance of this
Agreement, and there is an adverse im act upon the City which cannot be eliminated by CityNet,
City may, without fiirther liability to ityNet, upon one hundred eighty (180) days written
notice, terminate this Agreement � out cause. City may also, without fixrther liability to
CityNet, upon one-hundred and enty (120) days written notice, terminate this Agreement in
the event that CityNet fails to i� iate and diligently pursue installation of the Facilities or to
maintain Facilities as
28.
Norivithstanding any other term or condition contained
herein, and in addirion to y other legal or equitable remedy, City shall have the right to
terminate this Agreeme at any time if CityNet or any of its affiliates shall be unable to pay its
liabilifies when due, o shall make any assignment for the benefit of creditors or file a voluntary
petition in bankrapt or be adjudicated banknipt or insolvent, or if any receiver is appointed for
its business or pro rty, or if any trustee in bankniptcy or insolvency shall be appointed under
the governing L s of the United States or of any state.
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29. Surrender and Removal: Upon terminarion of this Agreement for any reason, or
expirarion of the Initial Term or any renewal term of this Agreement, CityNet shall, upon written
request of the City, remove any and all of its Facilities and any other equipment from the City's
Public Right-of-Way and Sewer System within one hundred hventy (120) days, and shall quit
peacefully, and shall repair any damage to the Public Right-of-Way or Sewer System caused by
such equipment or Pacilities, normal wear and tear excepted, all at CityNeYs own cos�d
expense, provided, however, that if such removal is not completed within such one h dred
twenty (120) day period, CityNet may request such additional period as is reaso
for such removal as long as CityNet diligently makes such removal as promptly
and/or such additional period as is reasonably necessary to account for delays t�
by events or circumstances beyond the reasonable control of CityNet,
limitation, forces of nature. CityNeYs failure to comply with these sw
requirements shall be deemed a material breach of this Agreement. Ur
City may also, in its sole discretion, exercise any rights it has at Law c
not limited to deeming such Facilities to be abandoned and/or a nuis
Facilities. The provisions of this Section shall survive any termina 'o�
Agreement.
�b necessary
possible
t were caused
nclu � g, without
end and removal
�e ch circumstances
n equity, including but
e, and abating the
or expiration of this
30. Discontinued Operations: In the event that Ci et discontinues its
Telecommunications Services in the City, it shall immedia ly provide information satisfactory
to the City that its obligations for its Facilities under this greement have been lawfully assumed
by another entity (including, upon consent, by the City . In the event that its Facilities aze no
longer used to provide Telecommunications Services or a period of one (1) yeaz, then CityNet
shall provide notice of such an event to the City, shall, pursuant to Section 29 above,
remove each such Facilities, unless this requirem t is waived by the City. In addition, such
non-use shall constitute a material breach and alid and lawful ground for the City to terminate
this Agreement. In the event of such non-use f a facility or Facilities, the City may exercise any
remedies or rights it has at taw or in equity ncluding but not limited to declaring the Facilities to
be a nuisance and abating the nuisance er applicable Law, or taking possession of the
Facilities. The provisions of this sectio shall survive any termination or expiration of this
Agreement.
31.
�s: The parties hereto shall at all times observe and comply
with, and the provisions of this greement are subject to all Laws, ordinances, rulings and
regulations which in any m r affect the rights and obligations of the parties hereto under this
Agreement, so long as such aws remain in effect, including but not limited to those regulating
the City's public Rights-o ay found in Chapters 116 and 135 of the City of St. Paul
Legislative Code. If, at y time during the term hereof, a certificate or authorization sha11
become necessary for tyNet to operate and use the Facilities, CityNet shall obtain the
appropnate go�
provide to City
rtal authorities and any required authorizations or certificates, and shall
of such authorizations and certificates upon request.
Doc# 137475T2 � 14
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32. Liens and Encumbrances: Neither pariy, directly or indirectiy, has any power,
authority or right to create and shall not permit, create or impose any lien or encumbrance,
including, without limitation, tax liens, mechanics liens, or other liens or encumbrances, on the
property of the other, or on the Facilities, or on the Sewer System, or on any rights, title, qr
interesttherein_ ��
33. Nonexclusive Use: CityNet understands that this Agreement does not rovide
CityNet with exclusive use of the Sewer System and that City shall have the ri to pernut other
users, including City itself, to install equipment facilities or devices in, or to e, the Sewer
System.
34. Waiver of Breach: The waiver by either party of any brea or violation of any
provision of this Agreement shall not be deemed to be a waiver or a c ntinuing waiver of any
subsequent breach or violation of the same or any other provision o this Agreement.
35. Severabilitv of Provisions: If any one or more of e provisions of this Agreement
shall be held by a court of competent jurisdiction in a final ju cial action to be invalid, illegal,
void, voidable, or unenforceable, such provision(s) shall be eemed severable from the remaining
provisions of this Agreement and shall not affect the leg ty, validity, or constitutionality of the
remaining portions of this Agreement. Notwithstandin he foregoing, the parties agree that if a
court or adminish agency of competent jurisdicf n should declare a provision(s) of this
Agreement invalid, then the parties shall each be o igated to negotiate in good faith to amend
that section of this Agreement and if, after one h dred and twenty (120) days from the
commencement of negotiations or such extensi thereof that may be agreed by the parties, the
parties are unable to reach agreement on ame dments hereto, then this Agreement may be
terminated by either party.
36. Governin Law• Jurisdic ' n: This Agreement shall be governed and construed
and enforced by and in accordance wi the Laws and decisions of the State of Minnesota,
without reference to its conflicts of w principles. If suit is brought by a party to this
Agreement, the parties agree that al of such action shall be vested exclusively in the state
courts of Minnesota, County of amsey.
37. Consent Cnteri . In any case where the approval or consent of one party hereto is
required, requested or othe 'se to be given under this Agreement, such parry shall not
unreasonably delay, cond� ion, or withhold its approval or consent.
38.
to a written
This Agreement may not be amended except pursuant
mutually agreed to and signed by both parties.
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39. Enrire Agreement: This Agreement contains the entire understanding between the
parties with respect to the subject matter herein. There are no representations, agreements, or
understandings (whether oral or written) between or among the parties relating to the subject
matter of this Agreement which aze not fully expressed herein.
40. Conflicts: Any conflict between the provisions of this Agreement and
present or future lawful exercise of the City's regulatory or police powers shall be �
favor of the latter. ,
41. Bindin� Effect: This Agreement shall be binding upon and
of the parties hereto and their respective successors and assigns.
in
to the benefit
42. No Interference. CityNet in the perFormance and exercise f its rights and
obligations under this Agreement shall not interfere in any manner � the current or future use,
existence and operation of any and all public and private Ri
communications carrier without the express prior written a�
owners of the affected property or properties. Any actual or
other communicarions equipment or devices in the Public R
CityNet and any such other persons without cost to City on
regulations, practices, and procedures of the FCC. City a e
of any such interference dispute at CityNeYs sole expe e.
43. Executed Agreement. CityNet shall,
execution of this Agreement by all representarive
of tYus Agreement which has been fully executa�
authoriries. �
� or other information or
e City or owner or
interference with such
it-of-Way shall be resolved by
: basis of the applicable rules,
to assist CityNet in the resolution
ithin thirty (30) days a$er the approval and
'the City, file with the City an original copy
all required CityNet representatives and
44. Authori . Each of the Indivi als executing this Ageement on behalf of CityNet
represents that such individual is authori d to do and has the full right, power, legal capacity
and authority to enter into the Agreem t on behalf of CityNet.
45. Most Favored Munici li . City and CityNet aclrnowledge that the terms,
benefits, and provisions of this A eement are taken as a whole and entered into based on
specific requirements of the City and concerns for the integrity of the Sewer System. Should
CityNet either before or after e parties' execution and delivery of tYris Agreement enter into an
agreement with another N
or provisions which taken
contained herein,then Ci
incorporate the same or
Notwithstanding the f eg
municipality that
the City's Rental
sota municipality, which agreement contains any terms, benefits
a whole are more favorable than the terms, benefits or provisions
shall have the right to require that CityNet modify this Agreement to
�re beneficial terms, benefits or provisions for the City.
oing, if CityNet enters into an agreement with another Minnesota
a Rental Fee in excess of the Rental Fee defined in Section 10, then
shall be increased to the same amount.
Doc#'137475T2 16
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46. Bond. Within sixty (60) days of the date of this Agreement, CityNet shall pay the
City the sum of Fifty Thousand Dollars ($50,000.00), to be credited against the Gross Revenues
payable to the City as established in Section 10 above, with which the City may purchase a good
and sufficient surety bond or such other compazable security instnmient as may be approved by
the City's Office of the City Attomey or City's Risk Manager, securing the faithful pe rmance
by CityNet of all the work, construction, maintenance, installation, removals, mainte an e, and
other duries required to be performed by CityNet under tius Agreement within the e periods
set forth hereunder.
47. Contacting CitvNet. CityNet or its agents shall be available
of any City depariment having jurisdiction over CityNeYs activities riven
day, seven (7) days a week, regarding problems or complaints ri
performance under this Agreement, including but not limited to
from the use, installation, operation, maintenance or removal of
by telephone CityNeYs control center operator at telephone nun
such problems or complaints.
��
`o e staff employees
-four (24) hours a
>m CityNeYs
or complaints resulting
The City may contact
regazding
48. Future Benefits for Citv. During the Term of t s Agreement and any renewals
hereof, CityNet will seek to find ways to benefit, or provid additional value for the City by
virtue of CityNeYs access to and use of the Sewer Syste . Such benefit and additional value
might include (i) assisting the City in the installation of ow meters and other instruments in the
Sewer System, and (ii) providing record of the condif n of the Sewer System to assist the City
in idenrifying which portions of the Sewer System ed repair for purposes of budgeting and
planning of monetary and personnel resources.
49.
Protection For Cable Televisi n Franchisees. CityNet shall not itself use or
authorize others to use the fac' ities for the transmission of cable television service
in violation of any City ordi ance. In fulfillment of this covenant CityNet shall
include the following paza aph in all license agreements for the use of the
Facilities to which City t is a pariy:
Licensee agr s that it shall not itself use or
authorize o ers to use CityNet telecommunications
facilities r the transmission of cable television
service ' violation of any ordinance of the City of
Saint aul. Licensee understands and agrees that
this aragraph is specifically intended for the
b efit of the City of Saint Paul and its franchised
istributors of cable television service, and that said
parties have standing to obtain judicial enforcement
of this covenant and to obtain liquidated damages in
the sum of $25,000 for its violation. Licensee
fiirther agrees that the covenants contained in this
Doc# 1374757\2 17
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paragraph shall be included in any sublicense
agreement for the use of the CityNet
telecommunications facilities which aze the sub}ect
of this license agreement.
IN WITNESS WHERE OF, the parties hereto have executed this Agreement as
day and year first above written. /
CITY OF SAINT PAUL, MINNESOTA
By:
Its: Mayor
Date:
CITY OF SAINT PAUL, MINNESOTA
By:
Its: Director, Deparhnent of Public Works
Date:
CITY OF SAlNT' PAUL,
By:
Its: Director, Office of Finan �al Services
Date:
CITY OF SAINT P
By:
Its: City Clerk
Date:
Doc#'137475T2 18
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CITY OF SAINT PAUL, MINNESOTA
B
Its: Assistant City Attorney
Date:
CityNe
By:
Its:
Date:
CityNe
B
Its:
Date:
CityNe
By:
Its:
Date:
Doc# 137475T2 19
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The Sewer System, as referenced herein, is a system of sanitary,
storm water and relief sewers as set forth in the maps of Saint P:
as-built sewer system which are located at: /
http://sewers. ci.st�aul.mn.us/siri�/
The records and images available on this site are for 'nformational use
only and aze not to be used as a substitute for the "ginal docuxnent.
Documents available via this site may not reflec current conditions and are
not to be used as a substitute for obtaining c ent information from the City
of 3t. Paul, Public Works Department, by rten or verbal request. Any
documents obtained from this site aze not o be used as a substitute for the
original. Users of this site assume all li ility arising from information
obtained herein.
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f
EXHIBIT B
Potential Areas of Installation
1. Central Business District (map attached)
2.
3.
4.
5.
6.
7.
8.
9.
Energy Park
Midway west of Snelling
University Avenue (Capitol to Snelling)
Existing East Side industrial areas (3M,
Phalen Corridor
West Seventh business redevelopme
Riverbend Industrial Park}
West Side Flats (US Bank devel men
Maxson Steel/Dale Street Sh s
Hill)
areas (Shepard/Davern,
0
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EXHIBIT C
CityNeYs facilities shall consist of network of three non-
corrosive steel alloy conduits each containing fiber optic
cabfe that wilt be depfoyed through portions of the sewer
system and held in place using non-corrosive steel alloy
rings and trays. The network will connect with various
te(ecommunications providers and certain high density
commercial and residential buildings, thus providing sa'
buildings with fiber optic connectivity.
CityNet shali compiy with the
116 and 135 of the St. Paul Legislat
maintain and operate its Facilities a
right-of-way requirements found in Chapters
de. In addition, CityNet shall install, place,
ig to the following specifications:
Doc# 737644t11
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1. No cable, equipment or facility of CityNet sha11 be permitted in City's Sewer System
if such cable, equipment or facility by its design could cause electrical interference
with the facilities of City or other occupants of the Sewer System. If elec cal
interference is caused by any of CityNeYs cable, equipment or Faciliries such
interference shall immediately be removed at the eapense of CityNet.
2. CityNet's cable, equipment and Facilities shall not be designed to use e earth as the
sole conductor for any part of CityNeY s circuits.
3. CityNeYs cable, equipment and Facilities shall be compa � e with City's Sewer
System so as not to damage any Facilities of City by co sion or otherwise.
4. New construction spiices in CityNeYs cables shall n be located in City's manholes
or other City Sewer System Facilities. CityNet all construct private manholes or
similar structures for these splices.
5. The maximum diameter of any conduit f CityNet and the number of cables of
CityNet to be placed in any of City's wer System wili be submitted for approval
to the City, which approval will not unreasonably withheld, prior to construction
or installation based upon size an shape of the Sewer System and the size of the
eacisting cables located within tYi ewer System. The azea of the conduits, inciuding
the brackets, sha11 be no more an 3% of the total area of the sewer.
6. City's manholes shall be o ened only as authorized by City, which authorization will
not be unreasonably wit eld and in the presence of City's authorized representative.
7. No employee, age or contractor of CityNet shall enter or work in any of City's
manholes unless ty's authorized representative is present during the enfire period,
or unless the C� waives such requirement. CityNet shall pay the cost of having
City's repres tative present.
8. Except w en emergency condirions necessitate restoring of the Facilities, CityNet
shall no fy City two (2) days in advance of any work operation requiring enhy into
any o ity's manholes; provided, however, that a particular norice requirement may
be aived by City upon CityNeYs request.
9. learing obstrucfions, repairs, dig-ups and any other work required to make the
Sewer System usable for the initial placing of CityNeYs cable shall be done by
CityNet after appropriate approval by City.
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10. Cleaning of CityNet Facilities in the City's Sewer System shall be done by CityNet
or its agent, at CityNet's cost.
11. CityNet's workers shall not disturb City or City approved equipment cated in
CityNet's manholes without first inforniing City, and City shall rovide all
requirements regarding such equipment.
12. All of CityNeYs cables, equipment and Facilities shall be ly secured and
supported to the satisfaction of City.
13. Ali of CityNeYs cables, equipment and Facilities shall e plainly identified in each
manhole with a firmly affixed tag of a type and wor satisfactory to City.
14. Where manholes must be pumped in order to low CityNeYs work operations to
proceed, pumping shall be at CityNet's exp se.
15. Ail cables placed in ducts or sewers by CiftyNet shall be tagged with CityNet's name,
and no cables so placed shall be uses��o carry currents or electricity for lighting or
power purposes.
16. CityNet shall provida the Ci no less than twelve (12) months advance norice of
City Sewer Systems that ar to haue cable/conduit installed in them. Such advance
notice shall include cle ' g and televising the City Sewer System. CityNet shall
provide City a post-cle ' g televised tape of City Sewer System for the purpose of
determining any sew rehabilitation needs.
17. CityNet shall rec�frd the following regazding the installation of their Facilifies:
• Rec� location of bands in reference to upstream manhole (using GIS
des ations for manhole)
• X2ecord radical location of cable in reference to downstream view.
• f Verification of location of all wyes in same reach of sewer (manhole to
� manhole)
• Verify current use of all wyes (life or not)
• Verification of condirion of sewer in same reach of sewer (manhole to
manhole)
• Verification of condition of manhole
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18. All as-built records of CityNet Facilities shail be transfened to the City within
fifteen (15) days of installation in an electronic format.
19. CityNet Faciliries shall not block a service wye or eausting service connection.
20. CityNet sha11 locate all their Facilities pertaining to Gopher State One Call
System.
21.
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