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047 of 1997 - Granting to MClmetro Access Transmission Services, Inc.,0 97-1 C 97-430 SALT LAKE CITY ORDINANCE No. 47 of 1997 (Granting to MClmetro Access Transmission Services, Inc., and its successors, a telecommunication franchise) WHEREAS, MClmetro Access Transmission Services, Inc., a Delaware corporation (the "Company") desires to provide certain telecommunication services within Salt Lake City, Utah (the "City"), and in connection therewith to establish a network in, under, along, over and across present and future streets, alleys and rights -of -way of the City, consisting of telecommunication lines and cables, together with all necessary appurtenances; and WHEREAS, the City, in the exercise of its police power, ownership, use or rights over and in the public rights -of -way, and pursuant to its other regulatory authority, believes it is in the best interest of the public to provide to the Company, and its successors, a non-exclusive franchise to operate its business within the City; and WHEREAS, the City and the Company propose to enter into a Franchise Agreement, the substantially final form of which has been presented to the City Council at the meeting at which this Ordinance is being considered for adoption; and WHEREAS, the City desires to approve the execution and delivery of such Franchise Agreement and to otherwise take all actions necessary to grant the referenced Franchise to the Company; and WHEREAS, the City believes this Ordinance to be in the best interest of the citizens of the City, NOW, THEREFORE, be it ordained by the City Council of Salt Lake City, Utah, as follows: SECTION 1. Purpose. The purpose of this Franchise Ordinance is to grant to the Company, and its successors and assigns, a non-exclusive right to use the public streets, alleys and rights -of -way, for its business purposes, under the constraints and for the compensation enumerated in the Franchise Agreement attached hereto as Exhibit A, and by this reference incorporated herein, as if fully set forth herein (the "Franchise Agreement"). SECTION 2. Short Title. This Ordinance shall constitute the MClmetro Access Transmission Services, Inc. Franchise Ordinance. SECTION 3. Franchise Description. There is hereby granted to the Company, and its successors and assigns, in accordance with the terms and conditions of the Franchise Agreement, the right, privilege, and franchise (collectively, the "Franchise"), to construct, maintain and operate in, under, along, over and across the present and future streets, alleys, and rights -of -way and other property of the City, all as more particularly described in Section 3.1 of the Franchise Agreement, together with all the necessary or desirable appurtenances (including, but not limited to, underground conduits and structures, poles, towers, wires and cables, for its own use) for the purpose of supplying telecommunication services to the City, the inhabitants thereof and persons and corporations beyond the limits thereof. The Network will consist of telecommunication lines and cables (including without limitation, fiber-optic and copper lines and cables). This Franchise Ordinance does not relate to, and does not authorize or govern the operation by the Company to provide cable television services as defined in the United States Cable Communication Policy Act of 1984, as amended to any customer in the City without a Franchise. SECTION 4. Term. The term of the Franchise is for a period from and after the effective date of this Ordinance and its acceptance by the Company, until January 1, 2011. 2 The Company shall pay all costs of publishing this Ordinance. SECTION 5. Acceptance by Company. Within thirty (30) days after the effective date of this Ordinance, the Company shall file an unqualified acceptance of this Ordinance, in a form approved by the City Attorney, with the City Recorder of Salt Lake City; otherwise, this Ordinance and the rights granted hereunder shall be null and void. SECTION 6. Consideration and Payment Dates. (a) The Company shall pay to the City for the Franchise a franchise fee (the "Franchise Fee"), equal to the greater of either: (i) The annual sum of Five Thousand Dollars ($5,000.00); provided, however, that the Franchise Fee payable for calendar year 1997 shall be prorated on a monthly basis and payable only for the months or portion thereof during such calendar year for which this Franchise Agreement is in effect. The initial payment shall be due and tendered concurrent with the execution and delivery hereof. Thereafter, the Franchise Fee shall be due on or before January 1 of each year, and shall be considered payment for use of the Franchise for such calendar year. On each payment date, the Franchise Fee payment shall be increased or decreased by the one year percentage increase or decrease, if any, in the Consumer Price Index herein specified. The Consumer Price Index used for this purpose shall be the U.S. City Average Geographic Index for the components including "all urban consumers" based on "all items" as published for the month of October of each year by the U.S. Department of Labor, Bureau of Labor Statistics. If publication of said Consumer Price Index should cease, such annual percentage increase shall be determined by reference to such similar index as shall replace it, or as agreed upon by the parties. OR 3 (ii) An amount equal to six percent (6%) per annum of the Company's Annual Gross Revenue; provided, however, that any sum paid by the Company as a gross receipts or Gross Revenue based tax (including, by way of example and not limitation, the Utility Revenue Tax under the provisions of Section 5.04.170 et seq. of the City Code, or any successor provision), shall be credited against any fee due under this Section 6(a)(ii). In the event the statutory limit on gross receipt based taxes or other charges imposed by Section 11-26-1, Utah Code, or any successor provision, is increased above six percent (6%), the Company shall, at the request of the City, enter into an amendment to this Agreement increasing the Franchise Fee to the level requested by the City, but not to exceed the increased statutory limit; provided, however, in no event shall the Company be obligated to pay a higher percentage of Gross Revenue than is paid by other similarly situated franchises within the City, including U.S. West or its affiliates. (b) The Company shall annually submit to the City, on or before December 31, a certificate signed by a corporate officer of the Company certifying whether or not the Company has derived Gross Revenue in the City during the preceding calendar year. If the Company has earned Gross Revenue during such period, the Company shall provide to the City at the earliest possible date, but in no event later than March 1, an auditor's statement detailing such Gross Revenue. Failure to properly report any Gross Revenue or provide the required certificate and statement shall be grounds for termination of the Franchise, in accordance with Section 9, Early Termination or Revocation of Franchise, hereof. SECTION 7. Rights Reserved to the City. Without limitation upon the rights that the 4 City might otherwise have, the City expressly reserves the following rights, powers and authorities to: (a) Exercise its governmental powers now or hereafter to the full extent that such powers may be vested in or granted to the City; (b) Grant additional franchises to the same property covered by the Franchise within the City to others, under competitively neutral and nondiscriminating basis as conditions acceptable to the City; or (c) Exercise any other rights, powers, or duties required or authorized, under the Constitution of the State of Utah, the law of Utah, or the City ordinances. SECTION 8. Extension of City Limits. Upon the annexation of any territory to the City, the right and Franchise hereby granted shall extend to the territory so annexed to the extent the City has authority. All facilities owned, maintained, or operated by the Company located within, under, or over streets, alleys and rights -of -way of the territory so annexed shall thereafter be subject to all terms hereof. SECTION 9. Early Termination or Revocation of Franchise. 9.1 The City may terminate or revoke the Franchise and all rights and privileges herein provided for any of the following reasons: (a) The Company fails to make timely payments of the Franchise Fee as required under Article II of this Agreement and does not correct such failure within twenty (20) business days after receipt of written notice by the City of such failure; (b) The Company by act or omission, materially violates a term or condition herein set forth within the Company's control, and with respect to which redress is not otherwise herein provided. In such event, the City, acting by or through its City Council, may after public hearing, determine that such failure is of a material nature; and thereupon, after written notice given 5 Company of such determination, Company shall, within thirty (30) days of such notice, commence efforts to remedy the conditions identified in the notice, and will have six (6) months from the date it receives notice to remedy the conditions identified in the notice, and will have six (6) months period and failure to correct such conditions, the City may declare the Franchise forfeited and this Agreement terminated, and thereupon the Company shall have no further rights or authority hereunder; provided however, that any such declaration of forfeiture and termination shall be subject to judicial review as provided by law, and provided further that in the event such failure is of such nature that it cannot be reasonably corrected within the six (6) month period above, the City shall provide additional time for the reasonable correction of such alleged failure; (c) The Company becomes insolvent, unable or unwilling to pay its debts, is adjudged bankrupt, or all or part of its facilities should be sold under an instrument to secure a debt and is not redeemed by the Company within sixty (60) days; or (d) In furtherance of the Company policy or through acts or omissions done within the scope and course of employment , a member of the Board of Directors or an officer of the Company knowingly engages in conduct or makes a material misrepresentation with or to the City, that is fraudulent or in violation of a felony criminal statute of the State of Utah. 9.2 Nothing contained herein shall be deemed to preclude the Company for pursuing any legal or equitable rights or remedies it may have to challenge the action of the City. No Franchise revocation or termination may be effected until the City Council shall first adopt an ordinance terminating the Franchise and setting forth the reasons therefor, following not less than thirty (30) days prior written notice to the Company of the proposed date of the ordinance adoption. The Company shall have an opportunity on said ordinance adoption date to 6 be heard upon the proposed termination. SECTION 10. Severability. 10.1 If any section, sentence, paragraph, term or provision of the Franchise Agreement or this Franchise Ordinance is for any reason determined to be or rendered illegal, invalid, or superseded by other lawful authority including any state or federal, legislative, regulatory or administrative authority having jurisdiction thereof or determined to be unconstitutional, illegal or invalid by any court or competent jurisdiction, such portion shall be deemed a separate, distinct, and independent provision and such determination shall have no effect on the validity of any other section, sentence, paragraph, term or provision hereof or thereof, all of which will remain in full force and effect for the term of the Franchise or any renewal or renewals thereof, except for Article II of the Franchise Agreement. 10.2 If the City stipulates in writing to judicial, administrative or regulatory action that seeks a determination that any Article II of the Franchise Agreement is invalid, illegal, superseded or unconstitutional, then a determination that said Article of the Franchise Agreement is invalid, illegal, unconstitutional or superseded shall have no effect on the validity or effectiveness of any other section, sentence, paragraph, term or provision of the Franchise, which shall remain in full force and effect. SECTION 11. The City is currently considering the preparation and adoption of a telecommunications ordinance which shall address various aspects of the telecommunications industry. Such ordinance may effect the manner in which franchises such as this Franchise Agreement are issued, and may effect the terms and conditions of such franchises. The Franchise Agreement is being issued, and this Ordinance is being adopted, prior to the adoption of such 7 Ordinance as an accommodation to the Company so as to avoid delay pending the adoption of the ordinance. Accordingly, the Company recognizes and agrees that this Ordinance and the Franchise Agreement are and shall be subject to the terms and conditions of such ordinance; provided, however, that the Company shall have the right to terminate the Franchise Agreement upon ninety (90) days prior to written notice in the event the terms and conditions of the ordinance are unacceptable to the Company, and provided further that the provisions of such ordinance shall apply to the Company only to the extent that (i) such provisions are generally applicable to other similarly situated providers of telecommunication services, or (ii) if such is not the case, application of the ordinance to the Company does not place the Company at a competitive disadvantage as to those telecommunication providers to which the provisions of such ordinance does not apply. SECTION 12. This Ordinance shall take effect immediately upon publication. Passed by the City Council of Salt Lake City, Utah, this 12 thday of Augus t 1997. ATTEST AND COUNTERSIGN: IEF DEPUTE CITY IECORDER 8 Salt 1..pAtta Ciiy 011'."• j ave cif Transmitted to the Mayor on August 13, 1997 Mayor's Action: xxx Approved Veto ATTEST AND COUNTERSIGN: EF DEPUTYCI Y CORDER (SEAL) Bill No. 47 of 1997. Published: September 12, 1997 MAYOR 9 ACKNOWLEDGMENT AND ACCEPTANCE MClmetro Access Transmission Services, Inc., a Delaware corporation, in satisfaction of Section 5 of the Franchise Ordinance to which this acceptance is attached, does hereby acknowledge and accept the terms and conditions of such Franchise Ordinance. Dated: .4/' ! &, I Approved as to form: Assistant City Attorney \BC6753\DOCS\mcimetro ordinance - clean - july 29, 1997.doc MClmetro Access Transmission Services, Inc. a Delaware corporation ORIGINAL DOCUMENT 10 PROPERTY OF SALT LAKE RECORDER'S' °MCI 451 SO. STATE, RM. 41 SALT LSO a v, i 841i1 EXHIBIT A FRANCHISE AGREEMENT RECORDED THIS FRANCHISE AGREEMENT (this "Agreement"), dated as of the AUG 1 2d 6f , 1997, by and between Salt Lake City Corporation, a mMuni peal corpora o'n of the State of Utah (the "City"), and MClmetro Access Transmission Services, Inc., a Delaware corporation (the "Company"), WITNESSETH: WHEREAS, in recognition of the separation of powers inherent in the Council -Mayor optional form of government of the City, the Mayor has negotiated this Agreement for legislative and policy approval by the City's legislative body; and WHEREAS, the City Council will adopt by reference this Agreement in a franchise ordinance, to which this Agreement will be annexed and incorporated, NOW, THEREFORE, in consideration of the premises and other good and valuable consideration and, further, in contemplation of subsequent approval by legislative action of the City Council and the Company as hereinafter provided, the parties mutually agree as follows: ARTICLE I FRANCHISE ORDINANCE 1.1 Ordinance. Concurrent herewith, the City shall to adopt a franchise ordinance entitled MClmetro Access Transmission Services, Inc., Franchise Ordinance (the "Ordinance"), and such Ordinance is incorporated herein by reference, and made an integral part of this Agreement. 1.2 Franchise Description. The Ordinance shall confer upon the Company, and its successors and assigns the right, privilege and franchise (the "Franchise"), to construct, maintain and operate in, under, along, over and across the present and future streets, alleys, rights -of -way ORIGINAL DOCUMENT '-STY Of SALT LAKE critY RECORDER'S OtFiCE 451 SC%► STATE, Ns, 4 t t MIT LAU aft USW 841r) :: # 1 and other property of the City, all as more particularly described in Section 3.1 hereof, a network (the "Network"). The Network will consist of telecommunication lines and cables (including, without limitation, fiber-optic and copper lines and cables), together with all necessary and desirable appurtenances (including without limitation underground and above ground conduits and structures, poles, towers, wire and cable) for its own use for the purpose of providing telecommunication services to the City, the inhabitants thereof and persons and corporations beyond the limits thereof. The term of the Franchise is for a period from and after the effective date of the Ordinance and its acceptance by the Company, until January 1, 2011. The Company may not use the Network to provide cable television services as defined in the U.S. Cable Communication Policy Act of 1984, as amended, to any customer in the City without a franchise. ARTICLE II CONSIDERATION AND PAYMENT DATES 2.1 Franchise Fee. (a) The Company shall pay to the City for the Franchise a franchise fee (the "Franchise Fee"), equal to the greater of either: (i) The annual sum of Five Thousand Dollars ($ 5,000.00); provided, however, that the Franchise Fee payable for calendar year 1997 shall be prorated on a monthly basis and payable only for the months or portion thereof during such calendar year for which this Franchise Agreement is in effect. The initial payment shall be due and tendered concurrent with the execution and delivery hereof. Thereafter, the Franchise Fee shall be due on or before January 1 -ORIGINAL D4 :u f1 % 2 nOPER' Y OF SALT LAKE CITY ORDER'°S O E 4$ SQ. STN: .4I SALT LAKE Cin tRAil 0411'? , . of each year, and shall be considered payment for use of the Franchise for such calendar year. On each payment date, the Franchise Fee payment shall be increased or decreased by the one year percentage increase or decrease, if any, in the Consumer Price Index herein specified. The Consumer Price Index used for this purpose shall be the U.S. City Average Geographic Index for the components including "all urban consumers" based on "all items" as published for the month of October of each year by the U.S. Department of Labor, Bureau of Labor Statistics. If publication of said Consumer Price Index should cease, such annual percentage increase shall be determined by reference to such similar index as shall replace it, or as agreed upon by the parties. OR (ii) An amount equal to six percent (6%) per annum of the Company's Annual Gross Revenue; provided, however, that any sum paid by the Company as a gross receipts or Gross Revenue based tax (including, by way of example and not limitation, the Utility Revenue Tax under the provisions of Section 5.04.170 et seq. of the City Code, or any successor provision), shall be credited against any fee due under this Section 2(a)(ii). In the event the statutory limit on gross receipt based taxes or other charges imposed by Section 11-26-1, Utah Code, or any successor provision, is increased above six percent (6%), the Company shall, at the request of the City, enter into an amendment to this Agreement increasing the Franchise Fee to the level requested by the City, but not to exceed the increased statutory limit; provided, however, in no event shall the Company be obligated to pay a higher percentage of Gross Revenue than is paid by other similarly situated franchisees within the City, including U.S. West or its affiliates. 3 ORIGINAL DOCUMENT ''PTY OF SALT LAKE 1 ��A�► it�Al, 41:! (b) The Company shall annually submit to the City, on or before December 31, a certificate signed by a corporate officer of the Company certifying whether or not the Company has derived Gross Revenue in the City during the preceding calendar year. If the Company has earned Gross Revenue during such period, the Company shall provide to the City at the earliest possible date, but in no event later than March 1, an auditor's statement detailing such Gross Revenue. Failure to properly report any Gross Revenue or provide the required certificate and statement shall be grounds for termination of the Franchise, in accordance with Article XV, Early Termination or Revocation of Franchise, hereof. 2.2 Off -Set for Telecommunications Services Used in the Company's Business. The foregoing notwithstanding, the sum of any Franchise Fee or any tax or other charges imposed under the provisions of Section 5.04.170 et seq. of the City Code, or any successor provision, that is paid to another franchisee by the Company, directly or indirectly, and that is based on the purchase of telecommunication services used in the Company's business for resale, shall be credited against the Franchise Fee due hereunder; provided, however, that no part of any charge, tax or franchise fee paid by the Company for uses or purchases, other than the telecommunication services purchased or used for resale, shall be entitled to said credit. 2.3 Definition: "Gross Revenue". The term "Gross Revenue" as used herein means any revenue of the Company derived from the sale of its telecommunication services to its customers within the City, without regard to the billing address of the customer; provided that Gross Revenue shall not include revenue derived by the Company from services provided to its parent, subsidiaries of its parent, or affiliated companies of the Company; and provided further that with respect to telephone services, gross revenues will be limited to the extent provided in § 11-26-1 of ORIGINAL OCU< :� NT 4 " afl DESALT LAVE 1:Trf RED ORDEWS O A the Utah Code or any successor Section. Without limiting the generality of the foregoing "Gross Revenue" shall include revenue received by the Company through any interconnection or similar agreement relating to use of the Network.. 2.4 Payment of Franchise Fee. (a) In the event the Franchise Fee is calculated pursuant to Section 2. 1 (a)(i) hereof, such Franchise Fee shall be paid annually on or before January 1 of each year, as described in Section 2.1(a)(i) hereof. (b) In the event the Franchise Fee is calculated pursuant to Section 2.1(a)(ii) hereof, then the Franchise Fee shall be paid as follows: (1) On or before December 31 of each year, beginning December 31, 1997, the Company shall provide to the City an estimate of its Gross Revenue for the next succeeding calendar year, and the resulting estimated Franchise Fee for each month during such calendar year; provided, however, that such estimate shall not be required to be given for any year in which the estimated Franchise Fee is less than $100,000.00. The Company reserves the right to provide the City a disclaimer of any estimates when providing such information. (2) Within forty-five (45) days after the close of each calendar month, from and including the month in which this Franchise Agreement is executed and delivered, the Company shall pay to the City the Franchise Fee for that month, based upon actual Gross Revenue for such month. (c) All payments shall be made to Salt Lake City Corporation and sent to the City's Property, 5 ORIGINALDOCUMET\YT PRopeArry MET LAKE *WV RECORDER'S OFFICE 3 1 SO, STAN. IA 413 ELT L.AI Manager at the City and County Building, 451 South State Street, Room 245, Salt Lake City Utah, 84111, unless notified of change of address in writing by the City. Any payment not paid when due shall be subject to a delinquency penalty charge of ten percent (10%) of the payment. Failure to make any payment and penalty charges within sixty (60) days of the applicable payment date shall constitute breach of the terms of this Agreement and constitute just cause for termination in accordance with Article XV hereof. All overdue amounts, including penalty charges, shall bear interest until paid at the rate of an additional ten percent (10%) per annum. (d) In the event the Franchise should be terminated or forfeited prior to the end of its term, the Company shall submit to the City within thirty (30) days of receipt of written notice of termination or forfeiture of the Franchise, a financial statement showing the Gross Revenue of the Company for any months for which payment of the Franchise Fee has not been made, and the Company shall pay to the City not later than forty-five (45) days following receipt of notice of the termination of the Franchise any sums legally due and owing to the City. 2,5 Reconciliation. Within thirty (30) days after the filing of any report or the making of any payment, or within such reasonable additional time as the City Treasurer may request, the City Treasurer shall examine such report or payment, determine the accuracy thereof, and if the City Treasurer finds any errors, report such errors to the Company for correction. If any Franchise Fee as paid shall be found deficient, the Company shall promptly remit the difference, and if the Franchise Fee as paid be found excessive, the City shall promptly refund the difference. In the event of a disagreement, the Company shall make payment under protest pending the resolution of the dispute between the parties or through the courts. Neither payments of the Franchise Fee nor failure to make such investigation shall be deemed to estop the City or 6OkiCi NAL i ° ,:%' LIAkil%fir` „ §' 'R OF SALT LAKE RECORDt-W5 C FFiCt i 30:STAT ,AM413 .1:TL44►imp ?)9 the Company in any way or prevent subsequent investigation by either and collection or return of any amount properly due. No acceptance of any payment by the City shall be construed as a release of or an accord or satisfaction of any claim the City might have for further or additional sums payable under the terms of this Agreement or for the performance of any other obligation of the Company hereunder. 2.6 Extensions Not Statute of Limitation or Repose. The aforesaid thirty (30) day notice period is not intended and shall not act as a statute of limitation or repose, which shall be governed by Utah law. 2,7 Record Inspection. (1) The records of the Company pertaining to the reports and payment required in this Franchise Agreement, including but not limited to any records deemed necessary or useful by the City to calculate or confirm Gross Revenues, shall be open for inspection by the City and its duly authorized representatives upon reasonable notice at all reasonable business hours of the Company. (2) The Company agrees to use its best efforts to provide a local office within the City for purposes of acceptance of process. Otherwise, the Company agrees to advise City of a person or office such process may be served. 2.8 Revenue Report Following Termination. In the event this Franchise Agreement should be terminated, forfeited or determined to be void or invalid pursuant to Articles XV or XXI hereof, or any order or decree by a court of competent jurisdiction, the Company shall, not later than thirty (30) days following such termination, forfeiture or determination, submit to the City a report prepared as before required, showing the Gross Revenue of the Company for the ORIGINAL DOCUMENT 7--.Rartny OF SALT LAKE. f"iP RecoRDE z'SO FfOE •13 ;Si'ATE;RS.4tS, ,kLT LACE OA t1MA04i41t! 7 • time elapsed since the last period for which the Company has paid the Franchise Fee. Coincidental with the submission of the report, the Company shall pay to the City the Franchise Fee due and owing to the City for such period. 2.9 Equal Treatment. It is the City's express intention to treat all providers, including the incumbent local exchange providers (ILECs), of telecommunication services in a substantially equal manner to one another, including competitive local exchange providers (CLECs) pursuant to the U.S. and State Constitution and the laws of the State of Utah and U.S., including the state PSC and federal FCC, and to avoid disparate treatment that would put any such provider on a non-competitive and discriminating basis relative to any other such provider. The City is seeking a competitive, nonexclusive, level playing field among the telecommunications providers. ARTICLE III COMPANY EXCAVATIONS AND RELOCATIONS 3.1 Franchise Rights to Use Public Property. The Company shall have the right to excavate in, occupy and use any and all streets, alleys, viaducts, bridges, roads, lanes and public ways within the City. The Company may also excavate in, occupy and use any other property owned by the City, including without limitation City parks, pleasure grounds or other recreational areas, with the express written consent of the director of the City department which controls such property. The Company shall not, pursuant to this Agreement, place any new poles, mains, cables, structures, pipes, conduits, or wires on, over, under or within any City park, pleasure grounds or other recreational areas; provided that the City may grant a revocable permit for such purpose. In addition, the Company shall have the right to utilize any easement across private property granted to the City for utility purposes, provided (a) the prior written consent of 8 ?itCPE T `' OF S/";13 LAKE RECUZ ' ; Ori'F MIT LAKE CITY, t itAll the director of the City department which controls such easement is obtained in each case, and (b) the documents granting such easement to the City authorize such use. In all cases, the precise location of the Company's facilities within, on, over, across or through any City street, alley, viaduct, bridge, road, lane, public way or other property shall be subject to City approval, and the right to use such City streets and other property shall be subject to all applicable City ordinances, rules and regulations now existing or from time to time adopted or promulgated. The City will timely process any request under this Section, and will not unreasonably withhold its written consent. 3.2 Company Duty to Relocate. Whenever the City shall, for a lawful purpose, require the relocation or reinstallation of any property of the Company or its successors in any of the streets, alleys, rights -of -way or public property of the City, it shall be the obligation of the Company, upon notice of such requirement and written demand made of the Company, and within a reasonable time thereof, but not less than sixty (60) days, to remove and relocate or reinstall such facilities as may be reasonably necessary to meet the requirements of the City. The City agrees to cooperate with the Company to provide alternate space where available. Such relocation, removal or reinstallation by the Company shall be at no cost to the City; provided, however, that the Company, and its successors and assigns, may maintain and operate such facilities, with the necessary appurtenances, in the new location or locations without additional payment if the new location is a public place. Any money and all rights to reimbursement from the State of Utah or the federal government to which the Company may be entitled for work done by the Company pursuant to this paragraph, shall be the property of the Company. City shall assign or otherwise transfer to the Company all rights it may have to recover costs for such work 9 o, IGsNizL LULU MtiNsi c.:TrY RECORDS CFI 51 SO.. STATE, WA. 413 LT'AKE a (HAM 841t/ performed by the Company and shall reasonably cooperate with the Company's efforts to obtain reimbursement. In the event the City has required the Company to relocate its facilities to accommodate a private third party, the City shall require such third party to pay all costs of relocation. 3.3 City Duty to Obtain Approval to Move Company Property: Emergency. Except as otherwise provided herein, the City shall not, without the prior written approval of the Company, intentionally alter, remove, relocate or otherwise interfere with any Company facilities. However, if it becomes necessary (in the judgment of the Mayor, City Engineer, Chief of the Fire Department, Chief of the Police Department or Director of Public Utilities) to cut or move any of the cables, appliances or other fixtures of the Company because of a fire, flood, emergency, earthquake disaster or other imminent threat thereof, these acts may be done without prior written approval of the Company and the repairs thereby rendered necessary shall be made by the Company, without charge to the City, but the Company shall not be precluded from making a claim against any third party who may have caused said damage for the cost of such repairs. Any written approval required shall be promptly reviewed and processed by the Company and approval shall not be unreasonably withheld. ARTICLE IV PLAN. DESIGN. CONSTRUCTION. INSTALLATION AND MAINTENANCE OF THE COMPANY FACILITIES 4.1 Annual Information Coordination. On or before February 28 of each calendar year, or such other date the Company and City may agree upon from year to year, the Company and the City shall meet for the purpose of exchanging information and documents regarding ORIGINAL DOCUVENT 10 PROPERTY Of sAir L art MGR DET;','S OFFICE a51 30. STA .„ RM. 413 MLT LAKE MY, 8 411, construction and other similar work within the City, with a view toward coordinating their respective activities in those areas where such coordination may prove mutually beneficial. Any information regarding future capital improvements that may involve land acquisition shall be treated with confidentiality upon request. Documents provided by the Company to the City shall not be disclosed by the City to third parties, unless such documents constitute "public records" within the meaning of the Utah Government Records Access and Management Act. The City understands and agrees that such information may be purely speculative, such that the City and others can not rely upon such information, and further that such information shall at all times be subject to the confidentially and proprietary provisions of the Utah Government Records Access and Management Act. 4.2 Conditions of Street Occupancy. (a) Except when necessary to service a subscriber, and subject to the written approval and conditions of the Director of Public Services, the Company shall not erect, authorize, or permit others to erect any above ground poles or facilities within the streets of the City for the operation of the Network, but shall use the existing poles and other equipment of the appropriate electrical power and telephone and other utility companies under such terms and agreements as the Company negotiates with these companies. The City shall cooperate with the Company in negotiating and obtaining permission to use such facilities. Requests for written consent to erect poles or other facilities necessary to service a subscriber shall be processed in a timely manner, and such consent shall not be unreasonably withheld. (b) No poles, cables, equipment, or wires for construction, maintenance and operation of the Network shall be installed or the installation thereof commenced on any existing pole within ft;IGI N AL DOCUMENT PRGTY Of SAtT LAKE f7ry RDER'3.0f IE T LAKE art InAi4 MI it 11 the City until the proposed location, specifications and manner of installation of such cables, equipment, and wires are set forth upon a plot or map showing the existing poles, streets, alleys, or highways where such installations are proposed. The plot or map shall be submitted to the Director of Public Services and the Director of Public Utilities, and approved within a reasonable time in writing. Such approval shall not be unreasonably withheld. (c) If the Company is required, in the conduct of its business, to locate property within the streets of the City other than property which may be attached to utility poles, the nature of such property shall be disclosed to the Director of Public Services and the Director of Public Utilities for approval as to the need thereof and as to the location within the street. The installation shall be made under such conditions as the Director of Public Services and the Director of Public Utilities shall prescribe. (d) The Company may trim trees overhanging the streets of the City to prevent the branches of such trees from coming in contact with the Company's wires and cable. All trimming on City property shall be done under the direction of the City's Urban Forester and at the expense of the Company. (e) The Company shall, at the request of any person holding a building moving permit issued by the City, temporarily raise or lower its wires to permit the moving of such building. The expense of such temporary removal or raising or lowering of the wires shall be paid by the person requesting the same and the Company shall have the authority to require such payment in advance. The City agrees to provide prior written notice of the necessity to move wires as far in advance as possible, provided that in no event will the City give less than forty-eight (48) hours advance notice. In the event of a disagreement between the Company and the holder of a permit, ORIGINAL DCUMEN7 12 PRaTirrYCFSALTL .1130.STATE, OA413 _. AALT tAICIcrrr, tRAI 10 such disagreement will be resolved by the City's Director of Public Services. 4.3 Duty to Underground. In addition to the installation of underground lines as provided in the applicable rules and regulations of the Public Service Commission, the Company shall, upon payment of the charges provided in its tariffs or their equivalent, place newly constructed Network lines underground in new residential subdivision areas, if required by subdivision regulations adopted by the City. In addition, it is the policy of the City to have cable underground, when reasonably possible, and the City may direct the Company to install cables underground when either electric or telephone lines exist underground. If electric utilities or telephone utilities are located underground in any place within the City after the Company has installed its facilities, the Company shall thereafter remove and relocate its facilities underground in such places. Where utilities are underground, the company may locate certain equipment above ground upon a showing of necessity and with written approval from the Director of Public Services. 4.4 Use of Trenches. Whenever the Company proposes to install new underground conduits or replace existing underground conduits within or under the present and future streets, alleys and public ways in the City, it shall notify the Director of Public Utilities as soon as practical and shall allow the City, at its own expense, and without charge, to utilize any such trench opened by the Company to lay its own conduit therein; provided, that such action will not unreasonably interfere with the facilities or delay the accomplishment of the project. 4.5 Company Duty to Comply With Rules and Regulations. Facilities located on, upon, over and under property in which the City has an ownership interest shall be constructed, installed, maintained, cleared of vegetation, renovated or replaced in accordance with such rules ORIGINAL DOCUMENT 13 'ROPERTY Of SALT LAKE ,r tECO SIEVS OF ,51 SO. STATE, RM 413 ALT LAKE MY, tf1KF1$ 41l1 and regulations as the City may issue. The Company will acquire permits in accordance with such rules and regulations, and the City may inspect the manner of such work and require remedies as may be necessary to assure compliance. It is understood that this work involves the health, safety and welfare of the community and from time to time must be done under circumstances that will make the prior acquisition of a permit infeasible. 4.6 Compliance With Pollution Laws. The Company shall continue to use its best efforts to take measures that will result in its facilities within the City meeting the standards required by all applicable federal and state pollution laws. Upon the City's request, the Company will provide the City with a status report of such measures. 4.7 Incorporation of Technology. The Company shall use its best efforts to incorporate technological advances into its equipment and service when such advances have been shown to be technically and economically feasible, safe and beneficial. The Company shall, in the regular course of its business, review technological advances that have occurred in the telecommunication industry. 4.8 Extension of Service to City Facilities: Waiver of Advance Payment. The Company, upon receipt of City's authorization for payment and construction, shall extend, within the City, its facilities to provide telecommunication service to the City for municipal uses only and, to the extent permitted by the Public Service Commission, shall not require the City to make advance payments; provided, however, that the provisions of this Section shall not be construed as requiring the Company to extend its facilities until such time as the Company, in its judgment, deems such extension to be technically and economically feasible. IGINAL DOCUMENT PROPEVY OF SALT LACE 14 ctry RECORDER'S OEM = 1 SO. STATE,. W. 415 ,ALT LAKE CITY, MO $41 t1 4.9 Use of Company Corridors. The City may identify corridors which the Company now or in the future owns in fee within the City and which are similar in nature to transmission corridors of electric utility companies. The City may identify portions of such corridors, if any, as being desirable locations for public parks, playgrounds or recreation areas. In such event, and upon notice by the City, the Company and the City will negotiate in good faith to reach an agreement providing for such uses by the City. However, no such use will be allowed where the Company in good faith believes such use would interfere with the Company's use of the corridor or materially prejudice its interests in safety. The Company shall assume no liability nor shall it incur, directly or indirectly any additional expense in connection therewith. 4.10 Compliance With Applicable Laws. All telecommunication lines, poles, towers, pipes, conduits, equipment, property and other structures or assets installed or used under color of this Agreement shall be used, constructed and maintained in accordance with applicable federal, state and city laws and regulations and shall be kept current with new codes; provided that this provision shall not be construed to require the Company to modify or retrofit any existing facilities to meet new code standards unless otherwise required by law. 4.11 Location to Minimize Interference. All lines, poles, towers, pipes, conduits, equipment, property, structures and assets of the Company shall be located so as to cause minimum interference with the use of streets, alleys, rights -of -way and public property by others, and shall cause minimum interference with the rights of the owners of property which abuts any of said streets, alleys, rights -of -way or public property. 4.12 Repair Damage. If during the course of work on its facilities, the Company causes damage to or alters any street, alley, right-of-way or public property, the Company shall (at i Of:; r ��ts�' 15 i�� �t ��f gpO: QLTr uurz OFFICE "51 SO. Suit, RA4 415 `4 LT own cost and expense and in a manner approved by the Director of Public Services) replace and restore such street, alley, right-of-way or public property in accordance with applicable City ordinances, policies and regulations relating to repair work of similar character. Except in case of emergency, the Company shall, prior to commencing work in the public way, street or public property, make application for a permit to perform such work from the office of the City Engineer or other agency designated by the City. Such permit shall not be unreasonably withheld. The Company will abide by all reasonable regulations and requirements of the City Engineer for such work. 4.13 Guarantee of Repairs. For a period of one year following the completion of the repair work performed pursuant to paragraph 4.12, the Company shall maintain, repair, and keep in good condition those portions of said streets, alleys, rights -of -way or public property restored, repaired or replaced, to the satisfaction of the City Engineer; provided, however, that acceptance will not be unreasonably withheld. 4.14 Safety Standards. The Company's work, while in progress, shall be properly protected at all times with suitable barricades, flags, lights, flares, or other devices as are reasonably required by applicable safety regulations or standards imposed by law. 4.15 Landscaping. The Company shall maintain the general appearance of any buildings or similar property located within the City in a manner consistent with the surrounding properties. Such obligation to maintain the appearance of property shall include but not be limited to the landscaping of front yards and parkways in residential zones; the installation of curb, gutter, sidewalk and parkway landscaping in those areas where similar improvements have been, or are being, installed on contiguous properties; and the screening of such property directly r ►R C,�IN, .. OCUM NT PROPERTY Of SALT LAKE t"rREcoRoors OFF. 90. STATE, RM. 413 ALT LAIC! aft OTAH 84111 16 abutting a public street or abutting residential property with appropriate landscaping or screening material as required by the City's Planning Commission. 4.16 Supervision by the City. (a) The Company shall construct, and maintain the Network in strict compliance with all laws, ordinances, rules and regulations of the City and any other agency having jurisdiction over the construction and maintenance of the public right-of-way. (b) The Network and all parts thereof shall be subject to the right of periodic inspection by the City; provided that such inspection shall be conducted at reasonable times and upon reasonable notice to the Company. 4.17 Company's Duty to Remove Its Properties from the Public Streets. (a) Company shall promptly remove from the public streets all or any part of the Network, expressly excluding any existing Western Union network or facilities Company has acquired as successor in interest as of the date of this Franchise, when one or more of the following conditions occur: (i) The Company ceases to operate the Network for a continuous period of six (6) months, except when the cessation of service is a direct result of a natural or man-made disaster; (ii) The Company fails to construct said Network as herein above and hereinafter provided; or (iii) The Franchise is terminated or revoked pursuant to notice as provided herein. (b) Upon receipt by the Company of written notice from the City, setting forth one or more of the occurrences specified in subsection (a) above, the Company shall have ninety (90) days from the date upon which said notice is received to remove or abandon such facilities, or to ORIGIN.A1 17 PV,:iftlii( 1Y Of SALTtA 12Trr► RECCROOZ'S-OFFTCE ' s 1 SO. 3TAT . RM. 413 .rALT LAW art, mil soAti begin operating the facilities. (c) The Company, with the consent of the City, may abandon any underground facilities in place, subject to the reasonable requirements of the Director of Public Services and the Director of Public Utilities. In such an event, the abandoned system shall become the property of the City and Company shall have no further responsibilities or obligations concerning those facilities. 4.18 Operational Reports. During the period of construction of the Network, the Company shall furnish the Director of Public Services with progress reports indicating in detail the area of construction. Such periodic reports shall be furnished at three-month intervals, the first report to be made three (3) months after the construction commencement date. 4.19 Removal of Facilities Upon Request. Upon termination of service to any subscriber, the Company shall promptly remove all of its facilities and equipment from the premises of such subscriber upon his written request. Such removal shall be at no cost to the subscriber. Notwithstanding the foregoing, as long as regulations of the Utah Public Service Commission govern the removal of Company facilities, and the Company is in compliance with such regulations, this Section 4.19 shall not apply. 4.20 Use of Common Conduits For the purpose of minimizing the adverse impact to City streets and other City facilities caused by construction, repair and maintenance activities by multiple utility franchisees, the City may, by ordinance, by amendment to this Agreement or by such other method as the City shall determine, require wires, cables or other facilities of utility franchisees to be located in one or more common conduits provided the integrity, security and maintenance of the Network is guaranteed to the satisfaction of the Company. The Company r`OC UWIEN , 18 "i.OPERTY OF SALT LAKE RECORDER'S OF i.51 SD: STAT , RM. 411 MLT LAKE ON, UTAH 1411.1 agrees that this Agreement shall be subject to such reasonable conditions as the City may so impose relating to the installation and common use of conduits by the Company and other then existing users of such conduits. ARTICLE V CITY USE RIGHTS 5.1 City Use of Poles and Overhead Structures. The City shall have the right, without cost, to use all poles and suitable overhead structures owned by the Company within the City for fire alarms, police signal systems, or any other lawful emergency use; provided, however, any said uses by the City shall be for activities owned, operated or exclusively used by the City for any public purposes and shall not include the provision of telecommunication services to third parties. 5.2 Limitation on Use Rights. Nothing in this Article shall be construed to require the Company to increase pole capacity, alter the manner in which the Company attaches equipment to the poles, or alter the manner in which it operates and maintains its equipment. Said City attachments shall be attached or installed only after written approval by the Company, which approval will be timely processed and will not be unreasonably withheld. 5.3 Maintenance of City Facilities. The City's use rights also shall be subject to the parties reaching an agreement regarding maintenance of such City attachments, either to be done for a reasonable fee by the Company or by a qualified party who shall fully indemnify and hold the Company harmless from any liability and whose service would not materially prejudice the Company's interests in safety and insulation from liability. ORIGINAL DOCUMENT 19 STY Of SALT LAKE. :Try RECORDER'S OFF $51.SO. STATE, Rh* 43 mix LAKEc iv tiltSOM 5.4 Use of Company Property by Other Franchisees. The Company will allow others holding a franchise from the City, except providers of telecommunication services, to utilize such poles and suitable overhead structures, upon reasonable terms and conditions to be agreed upon by the Company and such other holders of a franchise from the City. The Company shall assume no liability nor shall it incur, directly or indirectly, any additional expense in connection therewith. The use of said poles and structures by the City or others holding a franchise from the City shall be in such a manner as not to constitute a safety hazard or to unreasonably interfere with the Company's use of the same. ARTICLE VI POLICE POWER The City expressly reserves, and the Company expressly recognizes, the City's right and duty to adopt, from time to time, in addition to the provisions herein contained, such ordinances and rules and regulations as the City may deem necessary in the exercise of its police power for the protection of the health, safety and welfare of its citizens and their properties. ARTICLE VII DIRECTOR OF PUBLIC UTILITIES, Director of Management Services 7.1 City Representative. Except as provided hereinafter, the Director of Public Utilities, or his/her designee, or such other person as the Mayor may designate (such official or designee being hereinafter referred to as the "City Representative"), is hereby designated the official of the City having full power and authority to take appropriate action for and on behalf of the City and its inhabitants to enforce the provisions of this Agreement and to investigate any alleged violations or failures of the Company to comply with said provisions or to adequately and fully iiitamiiinryCFSALTL, RECORDER'S OFFICE 30. STATE, VA 43 AL.T LAO cTn ISTA'! Sett 20 discharge its responsibilities and obligations hereunder. The failure or omission of the City Representative to so act shall not constitute any waiver or estoppel. 7.2 Company Duty to Cooperate. In order to facilitate such duties of the City Representative, the Company agrees: a. To allow the City Representative, after a 72 hour written notice, to reasonable access at reasonable times to any part of the Company's Network within the City. b. That the City Representative may convey to the Company, to the Federal Communication Commission, the Utah Public Service Commission and any other regulatory agency having jurisdiction over any complaint of any customer of the Company within the City with respect to the quality and price of telecommunication services and the appropriate standards thereof. c. To submit to the City Representative a letter advising the City of any application by the Company which, if approved, would materially affect Gross Revenue as defined in paragraph 2.3 hereof A copy of such letter shall also be submitted to the City's Director of Management Services. 7.3 City Financial Review. With regard to financial matters, the City designates the Director of Management Services as the official of the City having full power and authority to take appropriate action for and on behalf of the City and its inhabitants to enforce the provisions of this Agreement and investigate any alleged violation or failures of the Company to comply with the provisions hereof or to fully and adequately discharge the responsibilities and obligations hereunder. The failure or omission of the Director of Management Services to act shall not constitute any waiver or estoppel. ORIGINAL DOCUMENT 21 illeAnitTY OF SALT LARGE "ffl/ RECORDER'S OFFICE 31 SO. Si'ATE, Mt 413 LT WEE UrAtt Mitt 7.4 Company Duty to Cooperate on Financial Review. In order to facilitate such duties the Company agrees: (a) Upon 30 days prior written request specifying the purpose for such request, to grant the Director of Management Services reasonable access to the books and records of the Company insofar as they relate to any matters covered by this Franchise; to provide the Director of Management Services with such reasonable and necessary reports containing or based on information readily obtainable from the Company's books and records as may be from time to time, requested with respect to the telecommunication services supplied under this Agreement; and to provide the Director of Management Services, upon request not more than every two years, a list of utility related real property owned or leased by the Company within the City. Any such records or reports provided by the Company to the Director of Management Services or his or her designee under a claim that such documents are confidential business records, shall not be disclosed by the City to third parties, unless such documents constitute "public records" within the meaning of the Utah Government Records Access and Management Act, otherwise, such document, shall be kept confidential if proprietary and undisclosed to third parties. (b) At the request of the City's Director of Management Services, to meet a least annually with the Director of Management Services for the purpose of reviewing, implementing, and/or modifying mutually beneficial procedures and methods for the efficient processing of computerized bills rendered by the Company to the City. 7.5 No Waiver or Estoppel. Neither the City nor the Company shall be excused from complying with any of the terms and conditions of this Agreement by any failure of the other, or any of its officers, employees, or agents, upon any one or more occasions to insist upon or to 1 "JRIG r 22 i is PE. 7"s' OF SALT LAKE Trr' RECORDER,s OFfIC ,31 50. STATE, kM. 413 "ALT LW USW seek compliance with any of such terms and conditions. ARTICLE VIII CITY'S RIGHT TO LOWEST CHARGE No charges to the City by the Company for any service or supply shall exceed the lowest charge for similar or identical service or supplies provided by the Company to any other unit of government in the State of Utah. ARTICLE IX CITY RIGHT OF FIRST PURCHASE OF REAL PROPERTY AND WATER RIGHTS 9.1 First Right of Refusal. In the event the Company at any time during the term of this Agreement proposes to sell or dispose of any of its water rights within Salt Lake County or real property located within the City, excluding residential properties acquired through employee relocations, the City shall have the right of first refusal of such water rights or real property, subject to the prior rights of others; provided, however, that such right of first refusal shall not apply to the sale of such water rights or real property as part of a sale by the Company of all or substantially all of its assets or stock. The Company shall, after receipt and acceptance of a bona fide offer to purchase such real property or water rights, subject to the City's right of first purchase, offer such real property or water rights in writing and upon the same terms and conditions and at the same price to the City. 9.2 Time to Exercise Rights. The City shall have thirty (30) calendar days in which to exercise the right of first refusal by giving written notice to the Company of the City's intent to purchase. ORIGINAL JOCUP4 .N,._Y. 23 PROPERTY OF SALT' LAKE RECORDER'S OFFICE 31 30. STATE, RM. 413 1ALTt CIO IOW bait 9.3 Company Right to Sell. Should the City not provide the required written notice, the Company may proceed to sell such property or rights at a price no lower than the price that was offered to the City. In no event shall the Company sell such property or rights at a lesser price without first offering such property or rights to the City at said lesser price in the same manner as described above. 9.4 Exclusion for Transfer to Parent. Subsidiary or Affiliate. It is understood that nothing in this Article shall preclude the Company from transferring real property or water rights to a parent, subsidiary or affiliate. In such event, the City's rights referred to herein above shall not apply. ARTICLE X ANNEXATION OF THE COMPANY PROPERTY Except as provided below, when any real property owned by the Company becomes eligible for voluntary annexation to the City, the Company will petition and undertake whatever action is necessary to annex that property upon request by the City; provided, however, that no condition of such annexation shall impair the Company's ownership or use of its property, and that Company property which is used solely as transmission corridors and which is not both parallel and adjacent to City boundaries need not be annexed into the City. Except as herein provided, the Company agrees to comply with all terms and conditions imposed upon the annexation by the City that are no more stringent than those generally imposed upon property owners seeking annexation of their land to the City. ORIGINAL DOCUMENT 24 PRICVERTY OF SALT LANI Crry RECORDER'S OFFICE 451 30. STATE, RM. OS ALY LAKE an, moo 44111 ARTICLE XI CONTINUATION OF SERVICE In the event the Company is or becomes the exclusive local exchange company providing basic telephone exchange services within the City, the removal of Network facilities, and the discontinuation of telecommunication services by the Company within the City, shall be subject to applicable regulations and procedures of the Public Service Commission, or any successor regulatory body and, in the event the Utah Public Service Commission or such successor regulatory body no longer regulates local exchange companies providing basic telephone exchange services within the City, such removal of facilities and discontinuation of services shall be subject to the applicable regulations and procedures of any public body (including the City) then regulating such companies. ARTICLE XII TRANSFER OF FRANCHISE Subject to the notification sections below, the Company shall not transfer or assign the Franchise or any rights under this Agreement to another entity, unless the City shall first give its approval in writing, which approval shall be processed in timely manner and shall not be unreasonably withheld; provided however, that the Company may fully assign the Franchise to its corporate parent, affiliate or subsidiary, and also that inclusion of the Franchise as property subject to the liens on the Company's mortgages or other security interests shall not constitute a transfer or assignment. Notwithstanding. the foregoing, the Company may enter into interconnection agreements pursuant to which the facilities of the Company may be used by other entities providing telecommunication services within the City, provided that any such other ORtGN . L 25 PRC OF SALT LAX!! c REcooDEWS of 431 -SO. STATE, RM. 413 Ma LAKE Can In ei a.s n provider has obtained a franchise from the City, and the City is furnished a copy of such interconnection agreement. (1) PSC Approval. When the Company is the subject of a sale, transfer, lease, assignment, sublease or disposed of, in whole or in part, either by forced or involuntary sale, or by ordinary sale, consolidation or otherwise, such that it or its successor entity is obligated to inform or seek the approval of the PSC, the Company or its successor entity shall promptly notify the City of the nature of the transaction and, if applicable, request a transfer of the Franchise to the successor entity. A request for a transfer shall include a certification that the successor entity unequivocally agrees to all of the terms of the original Company's Franchise Agreement. (2) Transfer of Franchise. Upon receipt of a request to transfer a Franchise, the City may send notice approving the transfer of the Franchise to the successor entity. Such approval shall not be unreasonably withheld. If the City has reason to believe that the successor entity may not comply with this Franchise Agreement, it may require an Application for the transfer. (3) If PSC Approval is No Longer Required If the PSC no longer exists, or if its regulations or state law no longer require approval of transactions, then the following evens shall be deemed to be a sale, assignment or other transfer of the Franchise: (i) the sale, assignment or other transfer of all or a majority of the Company's assets to another person; (ii) the sale, assignment or other transfer of capital stock or other equity interests in the Company by one or more of its existing shareholders, or other equity owners so as to create a new controlling interest in the Company; (iii) the issuance of additional ORIGINAL DOCUMENT 26 PROS, OF SALT LAKE itcrcotVar5 OFF. 451.0. STATE; WA, 413 . LT LAKE C111, UTAH 84111 capital stock or other equity interest by the Company so as to create a new controlling interest in such a Company; or (iv) the entry by the Company into an agreement with respect to the management or operation of such Company or its System. ARTICLE XIII ACCEPTANCE BY THE COMPANY OF FRANCHISE; COMPANY DUTY TO APPROVE FRANCHISE AGREEMENT If this Agreement has not been duly executed by the Company prior to the City Council adoption of the corresponding Ordinance, within sixty (60) days after the effective date of the Ordinance adoption by the City Council, the Company shall execute this Agreement and file an unqualified acceptance of the Ordinance in writing with the City Recorder of the City in a form approved by the City Attorney; otherwise, this Agreement and any ordinance adopted relating thereto and all rights granted hereunder shall be null and void. ARTICLE XIV EXTENSION OF CITY LIMITS Upon the annexation of any territory to the City, all rights hereby granted, and the Franchise, shall extend to the territory so annexed to the extent the City has authority. All facilities owned, maintained, or operated by the Company located within, under, or over streets of the territory so annexed shall thereafter be subject to all terms hereof. ARTICLE XV EARLY TERMINATION OR REVOCATION OF FRANCHISE 15.1 Grounds for Termination. The City may terminate or revoke this Agreement and all rights and privileges herein provided for any of the following reasons: 27 � .fZIGi .AL � ✓Ctily :N PROPERTY + F SALT LAKE crRECORDER'S c a $5130, StAi ,1A 41 A1T tAP C IT, WAN NMI (a) The Company fails to make timely payments of the Franchise Fee as required under Article II of this Agreement and does not correct such failure within twenty (20) business days after receipt of written notice by the City of such failure; (b) The Company, by act or omission, materially violates a term or condition herein set forth within the Company's control, and with respect to which redress is not otherwise herein provided. In such event, the City, acting by or through its City Council, may after public hearing, determine that such failure is of a material nature; and thereupon, after written notice given Company of such determination, Company shall, within thirty (30) days of such notice, commence efforts to remedy the conditions identified in the notice, and will have six (6) months from the date it receives notice to remedy the conditions. After the expiration of such six (6) months period and failure to correct such conditions, the City may declare the Franchise forfeited and this Agreement terminated, and thereupon the Company shall have no further rights or authority hereunder; provided, however, that any such declaration of forfeiture and termination shall be subject to judicial review as provided by law, and provided further that in the event such failure is of such nature that it cannot be reasonably corrected within the six (6) month period above, the City shall provide additional time for the reasonable correction of such alleged failure; (c) The Company becomes insolvent, unable or unwilling to pay its debts, is adjudged bankrupt, or all or part of its facilities should be sold under an instrument to secure a debt and is not redeemed by the Company within sixty (60) days; or (d) In furtherance of the Company policy or through acts or omissions done within the scope and course of employment, a member of the Board of Directors or an officer of the Company knowingly engages in conduct or makes a material misrepresentation with or to the ORIGNAL 28 PROMM OF SALT LAKE of RCORDERI OFFICE 451 SO. STATE,. IRA , 413 1 T LAO Q'"'1►. !hill 04T71 City, that is fraudulent or in violation of a felony criminal statute of the State of Utah. 15.2 Reserved Rights. Nothing contained herein shall be deemed to preclude the Company from pursuing any legal or equitable rights or remedies it may have to challenge the action of the City. ARTICLE XVI COMPANY INDEMNIFICATION 16.1 No City Liability. Except as otherwise specifically provided herein, the City shall in no way be liable or responsible for any loss or damage to property or any injury to, or death, of any person that may occur in the construction, operation or maintenance by the Company of its lines and appurtenances hereunder. 16.2 Company Indemnification of City. The Company shall indemnify, defend and hold the City harmless from and against claims, demands, liens and all liability or damage of whatsoever kind on account of or arising from the exercise by the Company of the related rights, or from the operations of the Company within the City, and shall pay the reasonable costs of defense, including reasonable attorneys' fees. Said indemnification shall include but not be limited to the Company's negligent acts or omissions pursuant to its use of the rights and privileges of this Agreement, including construction, operation and maintenance of telecommunication lines and appurtenances whether or not any such use, act or omission complained of is authorized, allowed or prohibited by this Agreement. 16.3 Notice of Indemnification. The City shall (a) give prompt written notice to the Company of any claim, demand or lien with respect to which the City seeks indemnification hereunder and (b) unless in the City's judgment a conflict of interest may exist between the City )R1G L OOCUtvi N T 29 b 4Y Of SALT LAKE 451�o,$" ,Mt41W -?,AtT LAKE c'f1L vivo km and the Company with respect to such claim, demand or lien, permit the Company to assume the defense of such claim, demand, or lien with counsel satisfactory to City. If such defense is not assumed by the Company, the Company shall not be subject to any liability for any settlement made without its consent. Notwithstanding any provision hereof to the contrary, the Company shall not be obligated to indemnify, defend or hold the City harmless to the extent any claim, demand or lien arises out of or in connection with any negligent act or failure to act of the City or any of its officers or employees. ARTICLE XVII REMEDIES 17.1 Duty to Perform. The Company and the City agree to take all reasonable and necessary actions to assure that the terms of this Agreement are performed and neither will take any action for the purpose of securing modification of this Agreement before either the Public Service Commission or any court of competent jurisdiction; provided, however, that neither shall be precluded from taking any action it deems necessary to resolve differences in interpretation of this Agreement. 17.2 Remedies at Law. In the event the Company or the City fails to fulfill any of their respective obligations under this Agreement, the City, or the Company, whichever the case may be, will have a breach of contract claim and remedy against the other in addition to any other remedy provided by law, provided that no remedy that would have the effect of amending the specific provisions of this Agreement shall become effective without such action that would be necessary to formally amend the Agreement. ORIGINAL DOCUMENT 30 nCPERTY OF SALT LANE 'rrrl RECORDER'S °FRCS 15130. SLAT , 4I r iA.t.T LAKE C'T' , ri'M�111i�111 _. . ARTICLE XVIII NOTICES 18.1 City Designee and Address. Unless otherwise specified herein, all notices from the Company to the City pursuant to or concerning this Agreement shall be delivered to the Mayor of the City and the City Attorney at 451 South State Street, Room 505, Salt Lake City, Utah 84111. 18.2 Company Designee and Address. The Company shall maintain in the City throughout the term of this Agreement an address for services of notices by mail, and an office and telephone number for the conduct of matters relating to the Agreement and the Franchise during normal business hours. Unless otherwise specified herein, all notices from the City to the Company pursuant to or concerning this Agreement or the Franchise shall be delivered to (a) MClmetro Access Transmission Services, Inc., Vice-president, Metro Affairs (0430/642), 2250 Lakeside Blvd., Richardson, Tx., 75082, with a copy to MClmetro Access Transmission Services, Inc., Director, Law and Public Policy (0599/107) 2400 North Glenville Dr., Richardson, Tx., 75082 and (b) such other offices as the Company may designate by written notice to the City. ARTICLE XIX CHANGING CONDITIONS 19.1 Meet to Confer. The Company and the City recognize that many aspects of the telecommunications business are currently the subject of discussion, examination and inquiry by different segments of the industry and affected regulatory authorities and that these activities may ultimately result in fundamental changes in the way the Company conducts its business. In 31 ORIGINAL DOCUMENT OF SALT [Ala rne REco C 4St SO. STATE *A, 411 SALT LA Qr, (fl* t$41 1 recognition of the present state of uncertainty respecting these matters, the Company and the City each agree, on request of the other during the term of this Agreement, to meet with the other and discuss in good faith whether it would be appropriate, in view of developments of the kind referred to above during the term of this Agreement, to amend this Agreement or enter into separate, mutually satisfactory arrangements to effect a proper accommodation of any such developments. 19.2 Duty to Offer City Favorable Terms. Should the Company, prior to the year 2006, accept or enter into a franchise for telecommunication service with any other Utah city of the first or second class, or county, that contains terms, conditions or provisions materially different from those of this Agreement, the Company shall offer the City such different terms, conditions, or provisions, which may be accepted by the City and become effective and binding upon the parties once submitted to and approved by the Mayor and the City Council. ARTICLE XX AMENDMENT 20.1 Duty to Negotiate. At any time during the term of this Agreement, the City through the Mayor, or the Company may propose amendments to this Agreement by giving thirty (30) days written notice to the other of the proposed amendment(s) desired, and both parties thereafter, through their designated representatives, will, within a reasonable time, negotiate in good faith in an effort to agree upon mutually satisfactory amendment(s). 20.2 Amendment Approval Required. No amendment or amendments to this Agreement shall be effective until mutually agreed upon by the City and the Company and an ordinance or resolution approving such amendments is approved by the City Council. RIGNAL DOCt (.j 32 <R RtY OF SALT L AI I F RECORDNICIFFPCS 30. 41 's„ ARTICLE XXI SEVERABILITY 21.1 Conditions. If any section, sentence, paragraph, term or provision of this Agreement or the Ordinance is for any reason determined to be or rendered illegal, invalid, or superseded by other lawful authority including any state or federal, legislative, regulatory or administrative authority having jurisdiction thereof or determined to be unconstitutional, illegal or invalid by any court of competent jurisdiction, such portion shall be deemed a separate, distinct, and independent provision and such determination shall have no effect on the validity of any other section, sentence, paragraph, term or provision hereof or thereof, all of which will remain in full force and effect for the term of this Agreement and the Ordinance or any renewal or renewals thereof, except for Article II hereof. 21,2 Fee Article Non -Severable. Article II hereof is essential to the adoption of this Agreement and should it be challenged by the Company, or determined to be illegal, invalid, unconstitutional or superseded, in whole or in part, the entire Agreement and the Franchise shall be voided and terminated, subject to the following provisions of this Article. In the event of a judicial, regulatory or administrative determination that Article II is illegal, invalid, unconstitutional or superseded, such termination shall be effective as of the date of a final appealable order, unless otherwise agreed upon by the City and the Company. In the event of any legislative action that renders Article II unconstitutional, illegal, invalid or superseded, such termination shall be effective as of the effective date of such legislative action. 21.3 Waiver of Non-Severability. Notwithstanding the foregoing, if City stipulates in writing to judicial, administrative or regulatory action that seeks a determination that Article II is 33 ORIGINS. DOCUmE' NCREZY OF SALE' LA , 431 30. 9TAy 1411 -` T 3AK!CrrY, iirA1? invalid, illegal, superseded or unconstitutional, then a determination that Article II is invalid, illegal, unconstitutional or superseded shall have no effect on the validity or effectiveness of any other section, sentence, paragraph term or provision of this Agreement, which shall remain in full force and effect. 21.4 Lease Terms Upon Termination. In the event this Agreement is terminated pursuant to paragraph 21.2 hereof, the City grants to the Company a lease according to the same terms and conditions as set forth in this Agreement. Accordingly, the Company shall pay, as fair market rental value, the same amounts, at the same times, required for the payment of the Franchise Fee pursuant to Article II hereof and be bound by all other terms and conditions contained herein; provided, however, that in no event will the Company be obligated to pay a higher percentage of Gross Revenues than is paid by other similarly situated franchisees serving within the City. 21.5 Parity among providers. Notwithstanding anything in Article XXI herein to the contrary, the City and Company mutually agree that Company will at all times be treated with equal parity regarding fees assessed and charged and all other franchise rights and privileges conferred to telecommunication service providers in the City. Specifically, City agrees that Company and any ILEC (including without limitation, U.S. West, its successors or assigns), CLEC or other provider shall be subject to the same conditions and in no event shall Company be required to pay any greater compensation, monetary or non -monetary, then other providers doing business in the City. WITNESS WHEREOF, this Franchise Agreement is executed in duplicate originals as of the day and year first above written. QMCINAL DOCUMENT 34 PROPERTY OF SALT LA XECORDEWSOFFICE S1SO. JrATIt, Iti44,41j LT LAKECM, lfrA1 )41?1 RECORDED AUG 1 2 1997 CITY RECORDER st and Countersign: ief Deputy City Record ATTEST: Jx? „46.4 M7 RY STEIL;MAN Title: ASSISTANT SECRETARY SALT LAKE CITY CORPORATION MAYOR MCIMETRO ACCESS TRANSMISSION SERVICES, INC. B Its YiC- Aessi D4tJT APPROVED AS TO FQ,:z,i Salt Lake City A//tloim,;, s 7M ry 7r (?� OL-.4.4Y1 ICiNAL . li.) P'ROPETFY Of SALT , to 35 RECCROCR'SOffai 4S1 .5TAT RM. Al S -WI LAKE C"rry, IMAM ta44I I STATE OF UTMI ) :SS County of S e ) On theoZ, day of , 1997, personally appeared before me 1f'?/)r7.,i/ t'l;rrs/.-, and 57�U,m,9 / J , '4ho, being by me duly sworn did say that they are the Vice President and _ Assistant Secretary of MClmetro Access Transmission Services, Inc., a Delaware corporation, and that the foregoing instrument was signed in behalf of said corporation and said persons acknowledged to me that said corporation executed the same. rotmry Public, State of Texas PA, Cuulnussion Expires 10.23-00 My Commission Expires: 2 -a3--v2) `OTARY PUBLIC, residing inJ /Lfh County, State of Texas \\Novell c-c\data\ATTORNEY\BC6753\DOCS\mcimetro franchise agr. - clean - july 29, 1997.doc ORIGINAL DOCUME PE TY OF SA! T UVCE 36 RECORDER'S OFFICi 31 SO. STATE, RA4. 413 AI.T LAKE C1TY, U AH $4111