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HomeMy WebLinkAbout2023-12-12; City Council; Resolution 2023-289RESOLUTION NO. 2023-289 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AUTHORIZING THE CITY MANAGER TO EXECUTE A CONDUIT AND FIBER LICENSE AGREEMENT WITH NETLY FIBER HOLDINGS, LLC WHEREAS, the City Council of the City of Carlsbad, California has determined that it is in the best interests of the city to enter into a Conduit and Fiber License Agreement, or Agreement, with Netly Fiber Holdings, LLC; and WHEREAS, the City Council of the City of Carlsbad has received a presentation on December 12, 2023, concerning the recommendation to execute the Agreement with Netly Fiber Holdings, LLC, hereinafter referred to as "Netly"; and WHEREAS, the City of Carlsbad has established and maintains an underground conduit network primarily dedicated to the traffic signal system within the city; and WHEREAS, Government Code Section 37380 provides the authority for the city to lease or license property that it holds or controls, including conduit, subject to City Council approval; and WHEREAS, Netly is a provider of conduit and fiber networks within the city limits; and WHEREAS, Netly seeks to license the city's existing underground conduit network for the purpose of installing and maintaining fiber optic cables; and WHEREAS, in exchange for the licensed conduit, Netly will install and provide city-dedicated fiber optic cable for the city's use; and WHEREAS, the ability to use the city-dedicated fiber will allow the city to expand its network infrastructure and avoid the construction costs of the city having to install fiber in locations the city is in need of connectivity: and WHEREAS the initial scope of the Agreement includes a section of Rancho Santa Fe Road between the intersections of San Elijo Road and Olivenhain Road, as depicted in Exhibit 'A' to the Agreement; and WHEREAS, The City Planner finds that the adoption this resolution authorizing the Agreement with Netly for construction of fiber optic cables within city right-of-way is exempt from environmental review under the California Environmental Quality Act under CEQA Guidelines section 15303{d) New Construction or Conversion of Small Structures and 15304{f) Minor or Temporary Use of Land, because it can be seen with certainty that the project will have no significant negative impact on the environment. Furthermore, the City Planner, through the process outlined in Carlsbad Municipal Code Section 19.04.060, posted a notice with this determination on November 29, 2023; and WHEREAS, if there are areas where city-owned conduit is available and it is mutually beneficial to both parties to allow Netly to install fiber that the city can use to improve our network, the parties would execute amendments to the Agreement to include the additional licensed conduit and fiber sections; and WHEREAS, the City Manager will have the authority to execute amendments to the Agreement to expand the reach of the licensed conduit and city-dedicated fiber locations, subject to approval as to form by the City Attorney; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1.That the above recitations are true and correct. 2.That the Conduit and Fiber License Agreement (Attachment A) with Netly Fiber Holdings, LLC is hereby approved. 3.That the City Manager or designee is authorized to execute amendments to the agreement on behalf of the city, subject to approval as to form by the City Attorney. 4.That the City Manager or designee is authorized to sign all other documents necessary to finalize, implement and comply with the implementation and execution of Conduit and Fiber License Agreement, subject to approval as to form by the City Attorney. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 15th day of December, 2023, by the following vote, to wit: AYES: NAYS: ABSTAIN: ABSENT: Blackburn, Bhat-Patel, Acosta, Burkholder, Luna. None. None. None. KEITH BLACKBURN, Mayor DocuSign Envelope ID: B79O6B36-07BD-4E3A-AA8C-6B63AE17O334 Attachment A CONDUIT AND FIBER LICENSE AGREEMENT T1::J-!ltCO� AND FIBER LICENSE AGREEMENT ("License Agreement") is effectiveas of this J2"'§ay o ��023 (the "Effective Date"), by and between Netly Fiber Holdings, LLC (hereinafter "NFH"), and the City of Carlsbad, a California charter city (hereinafter "City"). NFH and City are sometimes referred to individually as a "Party" and collectively as the "Parties." Recitals WHEREAS, NFH maintains, controls the use of, or shall construct, install, operate and maintain certain fiber strands located in or near City, as more particularly depicted in Exhibit "A"; WHEREAS, City owns, operates, and controls certain underground duct or conduit including innerducts and manholes located in the City, as more particularly depicted in Exhibit "A"; WHEREAS, City is willing to License City-owned conduits to NFH, subject to the terms and conditions in this License Agreement; WHEREAS, each Party desires to provide the other Party with the use of the referenced City­Dedicated Fiber, City Conduit, Licensed Conduit, Licensed Fibers and/or NFH Fibers, as the case may be, and each as further defined below. NOW, THEREFORE, in consideration of the mutual agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: Article 1. Definitions "Agent" means a party's agent, employee, director, officer, contractor, subcontractor or representative in relation to this License Agreement. "City-Dedicated Fiber" means up to four (4) strands ofNFH-installed fiber as agreed upon by the Parties in Exhibit "A" for servicing City Public Facilities during the term of this License Agreement and any renewal hereof, including NFH Fiber needed to connect City Public Facilities to the City Network. "City Network" means City Conduit, City-Dedicated Fiber, and all City-owned Equipment and all City-owned fixtures related to City Conduit, City-Dedicated Fiber and/or City-owned Equipment. "City Public Facilities" means City-owned public properties (including, without limitation portions of the public right of way occupied by the City Network, the NFH Network and/or any related Equipment) and/or buildings on City-owned properties located within City territorial, jurisdictional and/or proprietary limits, including, but not limited to, municipal office buildings and traffic signals and/or properties or structures owned by public agencies controlled by the City Council of the City of Carlsbad. A comprehensive list of City Public Facilities can be provided to NFH within 30 days of the execution of this License Agreement. "City Conduit" means City owned conduit and innerduct that is intended for use for the installation and use of fiber optic infrastructure, including traffic signal conduit (a map of which is attached as Exhibit "A"), installed in the public rights of way within the jurisdictional limits of the City of Carlsbad, California. DocuSign Envelope ID: B79O6B36-07BD-4E3A-AA8C-6B63AE17O334 "Equipment" means network infrastructure and components including, but not limited to, gateway or edge electronic device, antenna, node, concentrator, bridge, receiver, transmitter, transceiver, router, switch, hub, communications lines, cables, handholes,junction boxes, and other related facilities and software. "Invitee" means the client, customer, invited guest, tenant, subtenant, licensee, assignee and/or sublicensee of a party in relation to the City Conduit and City Public Facilities. "Licensed Conduit" means the portion of the City Network depicted in Exhibit "A." "Licensed Fibers" means fiber optic strands that will be installed by NFH in Licensed Conduit that are owned, operated and maintained by NFH, including the "City-Dedicated Fiber" Licensed to the City under this License Agreement. "NFH Fiber" means all NFH-installed fiber. "NFH Network" means fiber optic facilities installed by NFH within the City Conduit which are capable of providing broadband service delivered to homes and businesses in the City of Carlsbad. Article 2. License 2.1. Subject to the terms and conditions of this License Agreement, except as otherwise set forth in Section 6.7, City hereby Licenses the Licensed Conduit to NFH, without warranty. 2.1.1. NFH expressly acknowledges and agrees to enter on to and use the Licensed Conduit in its "as-is and with all faults" condition. The City makes no representations or warranties whatsoever, whether express or implied, as to the Licensed Conduit's condition or suitability for NFH's use. NFH expressly acknowledges and agrees that neither the City nor its Agents have made, and the City expressly disclaims, any representations or warranties whatsoever, whether express or implied, with respect to the Licensed Conduit's physical, structural or environmental condition, the Licensed Conduit's present or future suhability for NFH's intended use(s) or any other matter related to the Licensed Conduit. This License Agreement shall not be deemed a warranty of title by the City. 2.1.2. NFH expressly represents and warrants to the City that NFH has conducted a reasonably diligent and independent investigation, either for itself or through an Agent selected by NFH, into the Licensed Conduit's condition and suitability for NF H's intended use, and that NFH relies solely on its due diligence for such determination. NFH further expressly represents and warrants to the City that NFH's intended use is the permitted use as defined in this License Agreement. Any testing performed by NFH or its Agents or Invitees shall be subject to the provisions in Section 7.5 (Damage or Alterations to Other Prope1ty). In addition to any other conditions that the City may impose on such testing, NFH shall have the obligation to repair any damage caused by such testing and to restore all affected areas to the condition that existed immediately prior to such testing. 2.1.3. Except as expressly provided otherwise in this License Agreement, this License Agreement shall not limit, alter, or waive the City's absolute right to use the Licensed Conduit, in whole or in part, as infrastructure established and maintained for the City's and the public's benefit. 2.1.4 Subject to the terms and conditions of this License Agreement, the Licensed Conduit includes the right on the part ofNFH to install certain communications vaults along the route of the Licensed Conduit ("NFH Vaults"). Exhibit "A" contains a map depicting the approximate location of the NFH Vaults. NFH shall have the right to use the Licensed Conduit by accessing the same at the end 2 DocuSign Envelope ID: B79O6B36-07BO-4E3A-AA8C-6B63AE17O334 points and the access points specified on Exhibit "A". The Licensed Conduit shall at all times be and remain the personal property of the City. 2.2. This License Agreement grants Licensee only a non-possessory, non-exclusive and revocable license to enter on to and use the Licensed Conduit for the use permitted under this License Agreement. The license shall be revocable only in accordance with the terms and conditions of this License Agreement. NFH and City expressly acknowledge and agree that: (a) the City retains legal possession and control over the Licensed Conduit for the City's municipal functions; (b) except as specifically provided otherwise in this License Agreement, including but limited to section 6.9 herein, the City may enter into any agreement with third parties to use and/or occupy the City Conduit covered by this License Agreement and/or other City Public Facilities; and (c) this License Agreement does not create, and will not be deemed to create, any partnership or joint venture between the City and NFH. 2.3. Subject to the terms and conditions of this License Agreement, except as otherwise set forth in Section 6.7, NFH hereby Licenses City-Dedicated Fibers to City, without warranty, except that NFH shall, to the extent its legally permitted, pass through any and all manufacturer warranties applicable to the City-Dedicated Fibers . Notwithstanding the foregoing, NFH shall not be responsible for: (a) providing or installing any patch panels or other Equipment within any of the existing City vaults ("City Vaults"), or (b) performing any splicing of the City-Dedicated Fiber. The City-Dedicated Fibers shall be and remain the personal property ofNFH, until and unless this License Agreement expires or is earlier terminated, in which case all City-Dedicated Fibers shall be conveyed to the City at no additional cost to the City subject to the conditions in Section l 2.2(i). A)NFH Equipment. Any Equipment that is owned by or otherwise comprises a part of the NFHcommunications network, including any Equipment supplied by NFH at a service site inconnection with (i) providing the Dark Fiber License to the City, or (ii) using the ConduitLicense shall be referred to as the ''NFH Equipment." Tlu·oughout the Term, the NFHEquipment shall remain the property ofNFH and NFH shall be responsible for allmaintenance and repair of the NFH Equipment. Neither City nor any third party acting underCity's authority will relocate, modify, tamper with, attempt to repair or otherwise interferewith the NFH Equipment, except for as otherwise set forth in Articles 11 and 12. B)City Equipment. Any Equipment that is owned by or otherwise comprises a part of the Citycommunications network, including any Equipment supplied by City at a service site inconnection with (i) providing the City Conduit to NFH, (ii) using the Dark Fiber Licenseshall be referred to as the "City Equipment." Throughout the Term, the City Equipment shallremain the property of City and City shall be responsible for all maintenance and repair of theCity Equipment. Neither NFH nor any third party acting under NFH's authority will relocate,modify, tamper with, attempt to repair or otherwise interfere with the City Equipment. 2.4. City will have exclusive use of the City-Dedicated Fiber. Article 3. Consideration 3.1. Payment Terms. The Parties acknowledge that no monies shall be exchanged for the consideration of the grant of License in the Licensed Conduit under this License Agreement, which is being licensed in exchange for the City-Dedicated Fiber. 3 DocuSign Envelope ID: B79D6B36-07BD-4E3A-AA8C-6B63AE17D334 Article 4. Term 4. I.Agreement Term and Termination. (a)Commencement. The term of this License Agreement ("Initial Term") shall commence on theEffective Date and shall expire ten (10) years following the Effective Date. (b)Automatic Renewals. Provided that NFH is not in material default under this LicenseAgreement at the end of the Initial Term (or any Renewal Term, as the case may be) and hasthe necessary governmental permits, licenses (including a business license issued by the City),easements, franchise and approvals that may lawfully be required by federal, state or local law,statute regulation or ordinance, the License Agreement shall automatically extend for two (2) additional ten (JO) year periods, (each a "Renewal Term"), unless NFH notifies the City in writing of its election not to extend the License Agreement not less than six (6) months priorto the expiration date of the Initial Term or then-current Renewal Term. Each Renewal Termshall be upon the terms, covenants, and conditions of this License Agreement. The Initial Term,plus any Renewal Term(s) shall be collectively referred to as the "Term." (c)Termination. City may terminate this License Agreement for any material, uncured defaultunder this License Agreement, pursuant to the provisions of Article I 0. Article 5: Permits; Underlying Rights; Relocation 5.1 Underlying Rights. City has obtained certain rights of way for construction and operation of Licensed Conduit (the "Underlying Rights"). This License Agreement is subject to the terms of the Underlying Rights, and subject to the terms under which the right of way and other property interests are owned or held by the grantor of the Underlying Rights, including but not limited to, covenants, conditions, restrictions, easements, reversionary interests, bonds, mortgages and indentures, and other matters, whether or not of record, and to the rights of tenants and licenses in possession. NFH agrees to use the Licensed Conduit only in a manner consistent with the Underlying Rights. NFH agrees not to cause or allow to be caused any default under the Underlying Rights. 5.2 Governmental Approvals, Permits and Consents. NFH at its sole cost and expense, shall obtain and maintain any and all necessary easements, licenses, and building access agreements, as well as all governmental permits, licenses, easements, franchises and approvals that may lawfully be required by federal, state or local law, statute, regulation or ordinance and shall continuously comply with all such laws, statutes, regulations or ordinances as may now or in the future be applicable to its operation or use of Licensed Conduit or Licensed Fiber. NFH acknowledges that the City enters this License Agreement in its proprietary capacity as the owner of City Conduit and nothing in this License Agreement shall: (a) entitle NFH to or exempt NHF from any regulatory approvals properly issued by the City in its regulatory capacity and legally required for NHF's operations; or (b) affect the City's performance of its municipal functions when the City acts in its regulatory capacity. Nothing in this Section 5.2 shall be construed as a limitation to actions against NFH by third party agencies. NFH shall indemnify and hold City harmless for any action taken against City by a third-party agency for any action, or failure to act, on the part ofNFH, its contractors, subcontractors, agents, employees, or assigns. 5.3 Relocations. City may relocate all or any portion of the City Network or any of the facilities used or required in providing NFH with the Licensed Conduit: (I) if a third party with legal authority to do so orders or threatens to order such relocation; (2) in order to comply with applicable laws; (3) to prevent or abate interference with or interruption of the City Network, or an unreasonable risk thereof, due to the 4 DocuSign Envelope ID: B79O6836-07BD-4E3A-AA8C-6863AE17O334 existence of physical conditions; (4) in connection with any road resurfacing, widening, realignment or other similar public works that affect the Licensed Conduit; or (5) if it determines that it is required to do so in its reasonable judgment for reasons other than convenience. City shall provide NFH as much advance notice as possible but shall use reasonable efforts to provide at least sixty (60) calendar days' prior notice of any such relocation, if reasonably feasible. The costs of relocation shall be allocated pro rata by and among NFH, City and other users, if any, based on their proportional use of the affected facilities (i.e., the relative number of strands or conduits dedicated for use by each user, as determined by City). Article 6. Use of Licensed Fiber and Licensed Conduit, Maintenance 6.1 Interference. Pursuant to the rights granted to each of the Parties by this Agreement, the Parties will be sharing use of the City Conduit and associated facilities during the Term. rt is the shared objective of the Parties to minimize, to the extent reasonably feasible, any interference with or interruption in either Party's use of the communications facilities that are the subject of this Agreement. Each of NFH and the City covenants to the other Party that (a) it shall exercise its rights and perform its obligations under this Agreement in a manner that reasonably cooperates with the other Party in good faith in order to accomplish the above stated objective, and (b) it shall not use its respective network or facilities in any way that materially interferes with the other party's use as contemplated by this Agreement. 6.2 Maintenance. NFH shall bear all costs associated with its use of the Licensed Conduit, including without limitation the cost of installation, connection, and maintenance of fiber optic cable facilities and equipment. Such installation, maintenance, and repairs shall be performed in a good and workmanlike manner, in accordance with this License Agreement, and with applicable, manufacturer's specifications, applicable industry standards, and laws and regulations of any federal, state or local government entities , including without limitation OSHA standards, or any agency or instrumentality thereof, having competent jurisdiction over NFH or the Licensed Conduit including applicable General Orders of the Public Utilities Commission of State of California and any supplements thereto and revisions thereof. NFH shall permanently identify, by tags or other suitable means, all of its cables and other equipment that are placed by or on behalf of NFH in or near the Licensed Conduit. 6.3 Damage to Facilities. (a)Each Party agrees to take all necessary and commercially reasonable precautions to avoid damaging the other Party's facilities, and those of third parties. (b)Any damage to the facilities caused by NFH or its agents shall be repaired by NFH, at NFH'ssole cost, within a reasonable time period. Provided that nothing contained herein shall be deemedto relicense or limit claims that NFH may have against any third party arising from or related to such damage to facilities. (c)If NFH damages City facilities or facilities owned by third parties within the City Network,NFH shall immediately notify City and, if the damaged facility is owned by a third party, takereasonable efforts to notify the owner of the damaged facility. If required by City, NFH shall affectrepairs to the damaged facilities within a reasonable time period, based on the nature of the damage conditions at the site. (d)In the event of damages described in sub-paragraphs 6.3 (b) and (c), above, City may elect tohire a third-party contractor to effect repairs to any damaged facility ifNFH does not commence repairs within a reasonable time period, and present an invoice to NFH for any actual costs incurredin connection with the damaged facilities, including, but not limited to, staff time costs, trafficcontrol, police services, notification of third parties, and consultant and contractor costs. 5 DocuSign Envelope ID: B79O6B36-07BD-4E3A-AABC-6B63AE17O334 (e)For the pw-poses of this Section 6.3, a "reasonable time period" shall mean that a crew must bemobilized at the repair site within twenty-four (24) hours of the first interruption of services andwork diligently and continuously until any outage is resolved. (t)For clarity, if any damage occurs to the facilities, regardless of cause, and such damagenegatively affects including interrupts NFH's services to end users, NFH shall have the right to promptly repair such facilities, subject to this terms of this Agreement, and the parties shall workin good faith within a time period reasonable to both parties to account for ultimate responsibilityfor the costs to repair such damages. 6.4 No Sub-License. NFH may not sublicense any conduit without the prior express written consent of City, which may be withheld for any or no reason. Nothing herein prevents NFH from providing NFH Fiber to a third party. In addition, and notwithstanding anything herein to the contrary but subject to the limitations on sublicenses in this Section, provided that NFH's use of the Licensed Conduit does not interfere with the City's use of the City-Dedicated Fiber, NFH may use the Licensed Conduit for any lawful purpose. 6.5 No Liens. NFH shall keep the City Network, including the Licensed Conduit (collectively "City Interests") free and clear from any and all liens, claims, and demands for work performed, materials furnished, or operations conducted on or within said City Interests. NFH will infonn all contractors and material suppliers that provide any work, service, equipment or material to NFH in connection with the City Interests that the City Interests is public property not subject to any mechanics' liens or stop notices. If any NFH contractor or material supplier files any lien or similar encumbrance that attaches to any City Interests, NFH shall promptly (but in no case later than 30 days after discovery) cause such lien or encumbrance to be relicensed. IfNFH does not cause such lien or encumbrance to be relicensed within the 30-day period, the City will have the right, but not the ebligation, to cause such lien or encumbrance to berelicensed in any manner the City deems proper, which includes without limitation payment to thelienholder, with or without notice to NFH. NFH shall reimburse the City for all costs and expenses incurred to cause such lien or encumbrance to be relicensed (which includes without limitation reasonable attorneys' fees) within 30 days after NFH receives a written demand from the City together with reasonabledocumentation to support such costs and expenses. 6.6 Right of Inspection. Upon prior written notice to NFH, the City shall have the right to inspect the Licensed Conduit, and City-Dedicated Fibers, and the NFH Network installed in the Licensed Conduit during the Term. 6.7 Acceptance of Licensed Conduit or City-Dedicated Fiber. Prior to accepting the Licensed Conduit or City-Dedicated Fiber, as applicable, the Receiving Party may make a reasonable inspection to verify (i) that the conduit or fiber has been installed and functions properly for its intended use; and (ii) that the conduit or fiber is in good condition and meets all applicable industry standards. The Receiving Party shall complete such inspection within thirty (30) days of execution of this Agreement or any amendment (the "Inspection Period"). If the inspection requires access to restricted areas within City Public Facilities, including, without limitation, public safety buildings, then: (a) the City will reasonably cooperate with NHF's request for access; (b) the City shall have the right to escort NHF's personnel and supervise the work at all times; (c) the City shall have the right to impose reasonable conditions on access, which may include, without limitation, background checks for non-City personnel; and (d) the Inspection Period shall be extended as needed to coordinate and accomplish access to such restricted areas within City Public Facilities. In the event that the Receiving Party does not notify the Granting Party in writing of any objections to the facility within the Inspection Period, the Facility shall be deemed accepted for all purposes hereof (the "Acceptance"). The Parties may extend the Inspection Period through written agreement. NFH 6 DocuSign Envelope ID: B79D6B36-07BD-4E3A-AA8C-6B63AE17D334 acknowledges that any Acceptance by the City shall not be in lieu of any pennitting inspections and sign­offs that may be required under applicable laws. 6.8 Additional Access Points. NFH shall have the right, at any time and from time to time during the Term, to establish additional break-out points along the route of the City Conduit at which NFH can access its cables located within the City Conduit, subject to Section 5.2. This right includes the right to install any one or more additional NFH-owned vaults at said break-out points, and to establish intersection points (using wye splitters or other similar means) at which NFH may interconnect the City Conduit with other communications conduit owned, operated, or used by NFH so that NFH may splice other fiber strands into any one or more of the NFH cables located within the City Conduit. NFH shall provide the City with reasonable advance notice ofNFH's desire to establish a new break-out point. The Parties shall cooperate in good faith to agree upon a location, as well as a design and implementation schedule for NFH's new break-out point and vault, that is acceptable to both Parties with the objective of reasonably minimizing any disruption to the City's use of the City-Dedicated Fibers. 6.9 Use Restriction. The City-Dedicated Fiber provided to the City pursuant to this Agreement is for the sole benefit of the City. The City covenants to NFH that the City shall not grant to any third party the right to use any of the dark fiber strands, contained within the City-Dedicated Fiber, regardless of whether such grant were to take the form of a license, sublicense, License, sublicense, joint use undertaking, shared use agreement, services swap, or any other fonn. Nor shall the City use any one or more of the fiber strands contained as part of the City-Dedicated Fiber for commercial purposes that are competitive with NFH's business (e.g., use the fibers to sell Internet access services, point-to-point data transport services, VoIP services, etc., to third parties within NFH's service area). The City understands and agrees that the use restrictions set forth in this Section are material to NFH; but for the City's agreement to comply with the provisions of this Section, NFH would not have entered into this Agreement. Article 7: Limitation of Liability and Indemnity 7.1 Limitation of Liability. Notwithstanding any provision of this License Agreement to the contrary, neither Party shall be liable to the other Party for any special, incidental, indirect, punitive, or consequential costs, liabilities or damages, whether foreseeable or not, arising out of, or in connection with, such Party's performance of its obligations or its failure to perform under this License Agreement. 7.2 Indemnification. Except to the extent of the other Party's negligence or willful misconduct, each Party shall indemnify, defend, release, and hold harmless the other Party, its affiliates, officials (elected and appointed), officers, directors, members, employees, managers, agents, representatives, and contractors (collectively, "lndemnitees") from and against any third-party action, claim, suit, judgment, damage, demand, loss or penalty, and any cost or expense associated therewith (including but not limited to reasonable attorneys' fees, expert fees and costs)(collectively, "Claims") imposed upon such lndemnitee(s) by reason of damage to real or tangible personal property or for bodily injury, including death, as a result of any willful misconduct or neg I igent act or omission on the part of the indemnifying Party in connection with the performance of this Agreement. In addition to the foregoing, NFH shall indemnify, defend, release, and hold harmless City and its Indemnitees from and against any third-party claims brought against NFH in connection with NFH's (or its end users') unlawful use of the Licensed Conduit. 7.3 Indemnification Process. If a Party ("Indemnifying Party") is required to indemnity the other Party ("Indemnified Party") pursuant to Section 7.2, the Indemnified Party shall promptly notify the [ndemnifying Party. The Indemnifying Party will be permitted to assume primary control of the defense of the action with counsel of the Indemnifying Party's choice. The Indemnified Party will cooperate in the defense of the action as requested by the Indemnifying Party. The Indemnifying Party will assume the cost of the defense 7 DocuSign Envelope ID: B79O6B36-07BD-4E3A-AA8C-6B63AE17O334 on behalf of the Indemnified Party and its Tndemnitees ( other than the expense of the Indemnified Patty's counsel pursuant to the immediately preceding sentence) and will pay all expenses and satisfy all judgments which may be incurred or rendered against the Indemnified Party of its Tndemnitees in connection therewith, provided that without the lndemnified Party's written consent, the Indemnifying Party shall not enter into or acquiesce to any settlement containing any admission of or stipulation to any guilt, fault, or wrongdoing on the part of the Indemnified Party, which would other adversely affect the Indemnified Party, or which results in less than a full releases of all claims. 7.4 Survival. The provisions of this Article 7 shall survive the expiration or earlier termination of this Agreement for a period of two (2) years. Article 8: Insurance 8.1 Insurance. During the Term of the Agreement, and if extended, NFH shall maintain in force all insurance as follows: (a)Not less than $2,000,000 combined single limit liability insurance, on an occurrence basis, forpersonal injury and property damage, including, without limitation, injury or damage arising fromthe operation of vehicles or equipment and liability for completed operations, and if a generalaggregate limit applies, the general aggregate limit shall be twice the required occurrence limit; (b)Workers' compensation insurance in amounts required by applicable law and employers'liability insurance with a limit of at least $1,000,000 per occurrence per accident for bodily injuryor disease. Such insurance shall include an insurer's Waiver of Subrogation in favor of the City; (c)Automobile liability insurance covering death or injury to any person or persons, or damage toproperty arising from the operation of vehicles or equipment, with limits of not less than $2,000,000per occurrence; and (d)Any other insurance coverages specifically required of such Party pursuant to City's right-of­way agreements and, or encroachment permits. Article 9: Notices 9.1 Notices. All notices required to be given hereunder shall be in writing and shall be deemed to be properly served on the same day if delivered personally to the other Party, or on the date three (3) days after being sent by registered or certified mail, postage and charges prepaid, return receipt requested, or the on next business day if sent by a nationally recognized overnight courier, to the Party as set forth below or such other address as a Party may have directed in writing to the other party prior to the mailing of any such notice. To NFH: Netly Fiber Holdings, LLC 121 W Trade St, STE 1275 Charlotte, NC 28202 Attn: Legal 8 To City of Carlsbad: Information Technology Dept. 1635 Faraday Ave. Carlsbad, CA 92008 Attn: Maria Callander With copy to: Office of the City Attorney 1200 Carlsbad Village Drive Carlsbad, CA 92008 DocuSign Envelope ID: B79D6B36-07BD-4E3A-AA8C-6B63AE17D334 Article 10: Default 10.1 Defined. A "Default" shall be deemed to have occurred under this License Agreement if a Party materially breaches the License Agreement and fails to cure such material breach within thirty (30) days after notice specifying such material breach, provided that if the material breach is of a nature that it cannot be cured within thirty (30) days, a Default shall not have occurred so long as the materially breaching Party has notified the non-defaulting Party and commenced to cure within said time period, and thereafter diligently pursues such cure to completion. 10.2 Remedies. Upon the failure of a Pa1ty to timely cure any Default after notice thereof from the other Party and expiration of the above cure periods, then the non-defaulting Party may, subject to the terms of Article 7 (Limitation of Liability) pursue all remedies provided for in this License Agreement and/or any legal remedies it may have under applicable law or principles of equity relating to such Default. I 0.3 City Remedies. In addition to the remedies set forth in Section 10.2, if NFH fails to cure any Default within the cure periods described in Section I 0.1 above, City may, in addition to any other remedies that it may have under this License Agreement or by law and equity, in its sole discretion, take the following actions upon sixty (60) calendar days' notice if the Default is not cured within such (provided that if the breach is of a nature that it cannot be cured within sixty (60) days), a Default shall not have occurred so long as the breaching Party has notified the non-defaulting Party and commenced to cure within said time period, and thereafter diligently pursues such cure to completion: (a)Disconnect the Licensed Fiber from any end point/tenninating point or connecting point;and/or(b)Terminate this License Agreement. Article 11: Abandonment 1 1.1 Abandonment. Should NFH, for any reason, abandon all or part of its use of the NFH Network installed in Licensed Conduit pursuant to this License Agreement, then the below provisions shall apply. "Abandon" shall be defined for the purposes of this License Agreement as failure to use the NFH Network in the Licensed Conduit for more than two (2) years, or at such time that written notice of abandonment by NFH is provided by NFH. Provided, however, to the extent that such non-use is due in whole or substantial part to circumstances beyond NFH's control, including without limitation, acts or omissions of the City or its employees or agents, this provision shall not apply. (a)If City rejects all or a portion of the proposed transfer of abandoned NFH Network facilitiesfrom NFH, then NFH shall remove, at NFH's sole expense, any facilities it proposed to abandonwhich were rejected by City within ninety (90) days of City's rejection. If the NFH fails to soremove the abandoned rejected facilities, then City may remove them at NFH's expense, whichshall be paid within thirty (30) days of receipt of the invoice. (b)At the time of any accepted abandonment, NFH shall have no further rights with respect to theabandoned facilities. At such time, City shall have the authority to remove, reuse, or resell theabandoned facilities. 9 DocuSign Envelope ID: B79D6836-078D-4E3A-AA8C-6863AE17D334 Article 12: Termination 12.1 Licensed Fibers, Licensed Conduit, and City-Dedicated Fibers. At the termination of this License Agreement, all rights ofNFH to use the Licensed Conduit, and all rights of City to use the City-Dedicated Fiber, or any parts thereof, respectively, shall cease. All rights to the use of, in the case of the Licensed Conduit, shall revert to City, and in the case of City-Dedicated Fiber, shall revert to NFH, without reimbursement of fees or other sums, costs, fees, or expenses previously made. From and after such time, NFH shall have no further rights or obligations hereunder with respect to the Licensed Conduit, and City shall have no further rights or obligations hereunder with respect to the City-Dedicated Fiber, unless such rights or obligations are specifically provided herein to survive the Term. NFH shall be liable to City for any loss, damages or liability of City resulting from NFH's failure to vacate upon the termination of this License. IfNFH fails to surrender the Licensed Conduit or any part thereof upon the termination of the License Agreement despite City's demand to do so, NFH shall indemnify, defend, protect and hold City harmless from all claims, losses, costs, expenses, damages and liabilities, including attorneys' fees, City incurs as a result ofNFH's failure to surrender. 12.2 Title. (a)City Network. Tt is understood and agreed that City shall maintain legal title to the entire CityConduit, including all ancillary facilities and related fixtures necessary to maintain service to CityPublic Facilities, subject to this License Agreement. (b) NFH-lnstalled Facilities. Except as provided in paragraph 12.2(a) above, title to all NFH Fiber, the City Dedicated Fiber, and ancillary facilities and related fixtures including Equipment installed by NFH under this License Agreement ("NFH-Installed Facilities") shall remain with NFH and its successors, heirs and assigns throughout the term of this License Agreement and any extension thereof. (i.) lfNFH voluntarily terminates for convenience the License Agreement, City will, at its option, accept title to City-Dedicated Fiber. In the event that the City chooses to accept title, it will accept title to the City-Dedicated Fiber in their as-is condition without any warranties and without any warranties and without the need for any further actions from either party; provided, however, that City may perform a pre­notice inspection and NFH agrees to perform any maintenance or repairs that reasonably should have been performed by NFH in compliance with its maintenance and repair obligations under Sections 6.2 and 6.3, and further, that NFH agrees to execute any mutually agreeable additional documents that may be reasonably necessary to effectuate the transfer of ownership of any City-Dedicated Fiber within the City Network to the City. Alternatively, at City's option, the Parties may seek to negotiate a transaction for third-party purchase of the City­Dedicated Fiber. 12.3. Termination. Upon termination of this License Agreement, the Parties agree that the following steps will be taken: (a)If the termination occurs after service has begun to customers, the Parties will undertake atransition as contemplated by Section 12.4. (b)Upon termination of this License Agreement, (i) NFH shall not remove any Licensed Conduit,ancillary facilities, or related fixtures without the express written approval of City, which the Cityshall not unreasonably withhold, condition or delay. Any removal of the Licensed Fiber, portions10 DocuSign Envelope ID: 879O6836-078O-4E3A-AA8C-6863AE17O334 of the NFH Network or NFH's facilities or equipment from City right of way shall be at NFH's own cost; and (ii) City shall not remove any Licensed Conduit, ancillary facilities, or related fixtures without the written approval of NFH, which NFH shall not unreasonably withhold, condition or delay. (c)To the extent that NFH wishes to leave the NFH Network or any equipment or property in Citylocations or right-of-way at the time of termination, it will cooperate with City in doing so inaccordance with Article 11. (d)Unless a transition occurs pursuant to Section 12.4, then at the time of termination, services forany customers within the City of Carlsbad will be terminated, but in no case will such services beterminated on less than ninety (90) days' notice, unless a shorter time is permitted by law,regulation, or agreement, including but not limited to any applicable mass migration requirements. (e)Upon termination of the License Agreement, if all or any portion of the NFH Network is to bededicated to City under the terms of this License Agreement, NFH agrees to execute any mutuallyagreeable additional documents that may be reasonably necessary to effectuate the transfer ofownership any NFH Network to the City. 12.4. Continued Use. Prior to termination of this License Agreement by NFH after service begins to customers, ifNFl-1 does not intend to operate the NFH Network within the City thereafter, the Parties will seek in good faith to negotiate a commercially reasonable operating agreement for the continued use of the existing NFH Network, which could involve operation of the NFH Network by a third party or, at City's option, by City, subject to fair and adequate compensation to NFH for such operation. Article 13: Representations, Warranties and Acknowledgements 13. I Each Party represents and warrants that: (a)It has the full right and authority to enter into, execute, deliver and perform its obligations under this License Agreement; and (b)This License Agreement constitutes a legal, valid and binding obligation enforceable againstsuch Party in accordance with its terms, subject to bankruptcy, insolvency, creditors' rights andgeneral equitable principles. 13.2 CITY DISCLAIMER OF WARRANTY. EXCEPT AS MAY OTHERWISE BE STATED fN THIS AGREEMENT, THE CITY MAKES NO WARRANTY OF ANY KIND WHATSOEVER EXCEPT FOR THE EXPRESS REPRESENTATIONS SET FORTH HEREIN OR fN THE ATTACHED EXHlBIT(S) CONCERNING THE LICENSED CONDUIT. ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY DISCLAJMED BY THE GRANTING PARTY AND ARE EXCLUDED FROM THIS AGREEMENT. 13.3 NFH DISCLAIMER OF WARRANTY. EXCEPT AS MAY OTHERWISE BE STATED IN nus AGREEMENT, NFH MAKES NO WARRANTY OF ANY KIND WHATSOEVER EXCEPT FOR THE EXPRESS REPRESENTATIONS SET FORTH HEREIN OR fN THE ATTACHED EXHIBIT(S) CONCERNING THE LICENSED FIBER. ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY DISCLAIMED BY THE GRANTING PARTY AND ARE EXCLUDED FROM THIS AGREEMENT. 11 DocuSign Envelope ID: B79D6B36-07BD-4E3A-AA8C-6B63AE17D334 Article 14: Force Majeure 14.1. Force Majeure. Either Party hereto shall be excused from performing any obligation required of it by the terms of this License Agreement, except as to the payment of money, to the extent and for so long that such performance is prevented by acts of God, floods, storms, earthquakes, pandemics, fires, labor disputes, acts of war, restraint of trade or state or federal government, and inability to obtain supplies, manpower or transportation or by any similar cause or causes beyond the Party's reasonable control, provided that such Party gives prompt written notice of the delay and its cause to the other Party. Article 15: Prevailing Wages 15.1 Prevailing Wages. NFH acknowledges that City has made no representation, express or implied, to NFH or any person associated with NFH regarding whether or not laborers employed relative to the construction of the improvements to be constructed pursuant to this License Agreement must be paid the prevailing per diem wage rate for their labor classification, as determined by the State of California, pursuant to Labor Code Section 1720 et seq. ("Prevailing Wage Laws"). NFH agrees with City that NFH shall assume any and all responsibility and be solely responsible for determining whether or not laborers employed relative to the construction undertaken pursuant to this License Agreement must be paid the prevailing per diem wage rate pursuant to the Prevailing Wage Laws or other applicable law. 15.2 NFH, on behalf of itself, its successors, and assigns, waives and relicenses City from any right of action that may be available to any of them pursuant to Labor Code Section 1781 or any similar law. Relative to the waiver and relicense set forth in this Section 15.2, NFH acknowledges the protections of Civil Code Section 1542, which reads as follows: A general relicense does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the relicense and that, if known by him or her, would have materially affected his or her settlement with the debtor or relicensed party. By signing below, NFH knowingly and voluntarily waives the provisions of Civil Code Section 1542 or any similar law solely in connection with the waivers and relicenses contained in this Section. 16.1 Miscellaneous Provisions. Article 16: General (a)No Waiver. No waiver of any right, term or condition of this Agreement by either Partyshall be deemed to imply or constitute a further waiver of the same right, term, or condition or ofany other right, term or condition of this Agreement, whether of a similar nature or otherwise. (b)Severability. If any provision of this License Agreement, in whole or in part, shall bedetermined to be illegal, invalid or unenforceable, then it is the intention of the Parties hereto thatthe remainder of this License Agreement shall not be affected unless, in the reasonable writtendetermination of both Parties, such provision is material and essential to the purpose of this LicenseAgreement, in which event both Parties shall have the right to terminate this License Agreement ina writing signed by the duly authorized representatives of both Parties. (c)Assignability. Neither Party shall assign (in whole or in part) this License Agreement toany other entity or party without the express written consent of the other Party, which may not beunreasonably withheld, conditioned or delayed; provided, however, that either Party may, withoutobtaining the consent of the other Party, assign its interest in and to this Agreement to: (i) any entity 12 DocuSign Envelope ID: B79D6B36-07BD-4E3A-AA8C-6B63AE17O334 acquiring such Party, whether through merger or through purchase of substantially all the assets of said Party; or (ii) an affiliate of such Party. Any attempted assignment in violation of this provision shall be void. (d)Supplements and Amendments. From time to time, the Parties may execute one or moresupplements to this License Agreement, each containing additional terms and conditions applicableto the Licensed Conduit or Licensed Fibers (each a "Supplement"). Upon execution by the Partieseach Supplement shall be incorporated into and subject to the terms and conditions set forth in thisLicense Agreement. This License Agreement shall not be amended or modified, except by aninstrument in writing, signed by the duly authorized representatives of both Parties hereto. (e)Headings. The provision headings used in this License Agreement are intended forreference purposes only, and are not to be given any substantive effect upon the terms of thisLicense Agreement. (t)No Third Party Beneficiary. Nothing contained in this License Agreement shall beconsidered or construed as conferring any right or benefit on a person not a party to this LicenseAgreement and neither this License Agreement nor the performance hereunder shall be deemed tohave created a joint venture or partnership between the Parties. (g)Taxes. NFH agrees that it will be solely responsible for the payment of any and allapplicable taxes, fees and assessments levied on its ownership, use and maintenance of the NFHNetwork, Licensed Conduit, and License Fiber related to this License Agreement. Pursuant toSection 107.6 of the California Revenue and Taxation Code, City hereby advises, and NFHrecognizes and understands, that NFH's use of the City's rights-of-way, the Licensed Conduit, and/or other non-rights-of-way City property and facilities may create a possessory interest subject toreal property taxation and that NFH may be subject to, and responsible for, the payment of realproperty taxes levied on such interest. NFH will co-operate with the San Diego County Assessorin providing any information necessary for the San Diego County Assessor to make a property taxdetermination. Additionally, NFH will indemnify, protect, defend and hold harmless City'sIndemnified Parties from and against any and all claims, arising out of, involving, or in connectionwith the payment of real property taxes for any possessory interest created by this LicenseAgreement. (h)Governing Law. This License Agreement shall be governed by the laws of the State ofCalifornia, without regard to choice of law principles. Any action at law or in equity brought byeither of the Parties for the purpose of enforcing a right or rights provided for by this LicenseAgreement will be tried in a court of competent jurisdiction in the County of San Diego, State ofCalifornia, and the Parties waive all provisions of law providing for a change of venue in theseproceedings to any other county. (i)Entirety. This License Agreement states the entire agreement between the Parties withrespect to the subject matter hereof and supersedes all prior agreements and understandings,whether oral or written, between the Parties with respect to the subject matter thereof. 0)Counterparts. This License Agreement may be executed in any number of counterparts,and each such counterpart hereof shall be deemed to be an original, and all of which together shallconstitute one and the same instrument. [Signatures on following page] 13 DocuSign Envelope ID: B7906B36-07B0-4E3A-AA8C-6B63AE17D334 I WIT ESS WHEREOF, the Parties have caused this A eem t to be executed as of the Effective Date. etly Fiber Holdings, LLC By: _____ ��------ Printed name: ___ A_J_· a_y_G_h_a_n_e_ka_r ___ _ Title: co-CEo& Managing Partner -------------- Date: ____ 1_1_1_2_71_2_0_2_3 _______ APPROVED AS TO FORM: CINDIE K. McMAHON, City Attorney BY: bi� �� ------------Deputy City Attorney 14 By:-------------­ Printed name: .Sc.o\t C,bad.w ,c..k. Title: W by t\o.V'ldf!)C--(' Date: (�ez� ATTEST: ��w City C erk Legend New Vault New NFH Conduit Existing City Conduit Exhibit A - Rancho Santa Fe Rd. NFH to build conduit to complete segment. City fiber to continue through new NFH conduit. NFH to place new 2' x 3' underground vaults adjacent to existing City vaults at each signaled intersection (9 total). NFH will install splice cases for demarcation for splicing of city fiber. NFH and City to coordinate splicing at demarcation upon completion of fiber installation. DocuSign Envelope ID: B79D6B36-07BD-4E3A-AA8C-6B63AE17D334