THE CITY OF NEW YORK
DEPARTMENT OF INFORMATION TECHNOLOGY &
TELECOMMUNICATIONS
FRANCHISE AGREEMENT
FOR THE INSTALLATION, OPERATION, AND MAINTENANCE
OF PUBLIC COMMUNICATIONS STRUCTURES IN THE BOROUGHS OF THE BRONX, BROOKLYN,
MANHATTAN, QUEENS AND STATEN ISLAND
Contract No:
Bill de Blasio, Mayor
Anne Roest, Commissioner
FRANCHISEE: CityBridge, LLC
CONTRACT No.
DATE:
______________________________________________________________________
TABLE OF CONTENTS
Contents Page
BACKGROUND AND AUTHORITY ....................................................................................... 9
FRANCHISE GRANT ........................................................................................................... 10
ARTICLE I. DEFINITIONS .................................................................................................... 10
1.1 Defined Terms .................................................................................... 10
1.2 Other Definitions ............................................................................... 15
1.3 References to Time ............................................................................ 16
1.4 Undefined Terms ................................................................................ 16
ARTICLE II. TERM AND PRECONDITIONS TO EXECUTION ................................................ 16
2.1 Initial Term ........................................................................................ 16
2.2 Extended Term ................................................................................... 17
2.3 Preconditions to Execution, Security Fund Documentation ................. 17
2.4 Effect of Expiration ............................................................................. 18
2.5 Holdover Period ................................................................................. 18
ARTICLE III. GRANT OF FRANCHISE ................................................................................. 19
3.1 Nature and Limitation of Franchise ..................................................... 19
3.2 Ownership of Structures ..................................................................... 19
3.3 Ownership of Intellectual Property ..................................................... 20
3.4 Warranty of Title ................................................................................ 22
3.5 Non-exclusivity .................................................................................. 22
3.6 No Waiver .......................................................................................... 22
3.7 No Release ......................................................................................... 23
3.8 Compliance with the ADA ................................................................... 23
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3.9 Software Escrow Agreement .............................................................. 23
3.10 No Discrimination .............................................................................. 24
3.11 Tariffs ................................................................................................ 24
3.12 Data Rights ........................................................................................ 24
3.13 Franchise Fiber – Definitive MSA ........................................................ 25
ARTICLE IV. CONSIDERATION AND SCOPE OF SERVICES ................................................. 27
4.1 Consideration and General Description of Services ............................. 27
4.2 Permits, Authorizations, Approvals, Consents and Licenses ................ 28
ARTICLE V. ADVERTISING DISPLAYS ................................................................................ 28
5.1 General Requirements ....................................................................... 28
5.2 Location of Advertising; Permitted Advertising Methods .................... 29
5.3 Advertising Siting and Clearance. ........................................................ 29
5.4 [RESERVED] ........................................................................................ 30
5.5 Restrictions ........................................................................................ 30
5.6 Maintenance of Advertising Displays .................................................. 30
5.7 Removal of Advertising ...................................................................... 31
5.8 NYC Program Advertising ................................................................... 31
ARTICLE VI. COMPENSATION AND OTHER PAYMENTS .................................................. 32
6.1 Defined Terms ................................................................................... 33
6.2 Gross Revenues .................................................................................. 33
6.3 Compensation .................................................................................... 34
6.5 Sponsorship ....................................................................................... 36
6.6 City Incurred Cost .............................................................................. 37
6.7 Future Costs ....................................................................................... 37
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6.8 Limitations on Credits or Deductions ................................................... 38
6.9 Interest on Late Payments ................................................................. 39
6.10 Method of Payment ........................................................................... 39
6.11 Continuing Obligation and Holdover ................................................... 39
ARTICLE VII. SECURITY FUND AND MINIMUM EQUITY CONTRIBUTIONS ..................... 39
7.1 Letter of Credit & Additional Security ................................................. 40
7.2 Performance Bond ............................................................................. 41
7.3 Minimum Equity Contributions ........................................................... 42
ARTICLE VIII. EMPLOYMENT AND PURCHASING ............................................................. 42
8.1 Right to Bargain Collectively ............................................................... 42
8.2. Local Opportunities ............................................................................ 42
8.3. Obligation to Use Domestic and Local Contractors and Subcontractors 43
8.4. No Discrimination .............................................................................. 43
8.5 Employment Projections .................................................................... 43
ARTICLE IX. OVERSIGHT ................................................................................................... 43
9.1 Records .............................................................................................. 43
9.2 Right of Inspection ............................................................................. 44
9.3 Compliance with Investigation Clause ................................................. 44
9.4 Confidentiality ................................................................................... 44
9.5 Oversight ........................................................................................... 45
9.6 Regulation by City .............................................................................. 45
ARTICLE X. ASSIGNMENT AND OTHER TRANSFERS; LIMITATIONS ................................. 45
10.1 City Approval Required ...................................................................... 45
10.2 City Action on Transfer ....................................................................... 47
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10.3 Waiver of Transfer Application Requirements .................................... 47
10.4 Subsequent Approvals ........................................................................ 47
10.5 Approval Does Not Constitute Waiver ................................................ 47
10.6 Managing Member ............................................................................. 48
ARTICLE XI. LIABILITY ........................................................................................................ 48
11.1 Definitions ......................................................................................... 48
11.2 Liability and Indemnity ....................................................................... 48
11.3 City Liability ....................................................................................... 49
11.4 Defense of Claim ................................................................................ 49
11.5 Intellectual Property Indemnification .............................................. 49
11.6 No Claims Against Officers, Employees, or Agents ............................... 50
11.7 Limitation on Liability ......................................................................... 50
ARTICLE XII. INSURANCE ................................................................................................. 51
12.1 Types of Insurance ................................................................................. 51
12.2 General Requirements for Insurance Policies ...................................... 53
12.3 Proof of Insurance .............................................................................. 53
12.4 Operations of the Franchisee .............................................................. 54
12.5 Subcontractor Insurance .................................................................... 55
12.6 Disposal ............................................................................................. 55
12.7 Adjusted Insurance Coverage ............................................................. 55
12.8 Other Remedies ................................................................................. 55
ARTICLE XIII. SPECIFIC RIGHTS AND REMEDIES ............................................................... 55
13.1 Not Exclusive ...................................................................................... 55
13.2 Defaults ............................................................................................. 56
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13.3 Termination Defaults ......................................................................... 56
13.4. Expiration and Termination for Reasons Other Than Termination
Default ............................................................................................... 59
13.5 Disposition of System ......................................................................... 59
13.6 Price .................................................................................................. 60
13.7 Procedures for Transfer and Removal after Termination ..................... 60
ARTICLE XIV. SUBSEQUENT ACTION ................................................................................ 61
14.1 Procedure for Subsequent Invalidity ................................................... 61
14.2 Agreement Documents ....................................................................... 62
ARTICLE XV. MISCELLANEOUS ......................................................................................... 62
15.1. Appendices, Exhibits, Schedules ......................................................... 62
15.2 Merger .............................................................................................. 63
15.3 Notices ............................................................................................... 63
15.4 Coordination ...................................................................................... 63
15.5 Publicity ............................................................................................. 64
15.6 General Representations, Warranties and Covenants of the Franchisee64
15.7 Binding Effect ..................................................................................... 66
15.8 Comptroller Rights ............................................................................. 66
15.9 No Waiver; Cumulative Remedies....................................................... 66
15.10 Partial Invalidity ................................................................................. 67
15.11 Survival .............................................................................................. 67
15.12 Headings and Construction ................................................................. 67
15.13 No Subsidy ......................................................................................... 67
15.14 No Agency .......................................................................................... 67
15.15 Governing Law. .................................................................................. 68
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15.16 Survival of Representations and Warranties ....................................... 68
15.17 Claims Under Agreement.................................................................... 68
15.18 Modification ...................................................................................... 68
15.19 Service of Process ............................................................................... 69
15.20 Compliance with Certain City Requirements ....................................... 69
15.21 Compliance with Law, Licenses ........................................................... 69
15.22 Mitigation .......................................................................................... 69
15.23 Unavoidable Delay ............................................................................. 69
15.24 Counterparts ...................................................................................... 70
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ATTACHMENTS
Attachment SRV (Services)
Exhibit 1 Wi-Fi Terms of Service
Exhibit 2 Wi-Fi Privacy Policy
Exhibit 3 Service Level Agreement and Schedule of Liquidated Damages
Exhibit 4 Siting Criteria
Exhibit 5 Structure Designs
Attachment RDR (Resiliency and Disaster Recovery)
APPENDICES
Appendix A . . . . . . . . . . . . Investigation Clause
Appendix B . . . . . . . . . . . . . MacBride Principles
Appendix C. . . . . . . . . . . . . Certification by Broker
Appendix D. . . . . . . . . . . . . Initial Members of Franchisee
Appendix E. . . . . . . . . . . . Permitted Transfers
Appendix F. . . . . . . . . . . . Franchisee Lender Provisions
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This is a PUBLIC COMMUNICATIONS STRUCTURE FRANCHISE AGREEMENT, fully
executed on ________________, between the City Of New York (the “City”) through its
Department of Information Technology and Telecommunications (“DoITT” or the
“Department”) and CityBridge, LLC, with its principal place of business at 100 Park Avenue,
New York, NY 10017 and designated location for service of process at 100 Park Avenue,, New
York, NY (the “Franchisee”) (each a “party” collectively the “parties”).
BACKGROUND AND AUTHORITY
Section 1072(c) of the New York City Charter (the “Charter”) authorizes DoITT to
administer franchises related to telecommunications, which franchises are to be issued and
operated pursuant to the provisions of Chapter 14 of the Charter.
On April 30, 2014, DoITT issued a Request for Proposals for a Franchise to Install
Operate and Maintain Public Communications Structures in the Boroughs of the Bronx,
Brooklyn, Manhattan, Queens and Staten Island (“the RFP”). The RFP was issued pursuant to
and was determined by the New York City Corporation Counsel (pursuant to Section 363.e of
the Charter) to be consistent with, City Council Authorizing Resolution No. 2309 adopted by the
City Council on December 21, 2009 and City Council Authorizing Resolution No. 191 adopted by
the City Council on August 25, 2010 (collectively, “the Authorizing Resolutions”)
The New York City Department of City Planning determined, as evidenced in its letter
dated April 28, 2014, that a franchise consistent with the RFP would not have land use impacts
or implications and that review under Section 197-c of the Charter would not be necessary.
The action being taken hereunder has been reviewed for its potential environmental
impacts and a negative declaration has been issued finding that such proposed action will not
result in any significant adverse environmental impacts, all in accordance with the New York
State Environmental Quality Review Act (“SEQRA”), and the regulations set forth in Title 6 of
the New York Code of Rules and Regulations, Section 617 et seq., the Rules of Procedure for
City Environmental Quality Review (“CEQR”) (Chapter 5 of Title 62 and Chapter 6 of Title 43 of
the Rules of the City of New York).
On December 8, 2014, the New York City Franchise and Concession Review Committee
(“FCRC”) held a public hearing on the Franchisee’s proposal for a franchise to install, operate,
and maintain Public Communications Structures (defined below) on, over, and under the
Inalienable Property of the City, which was a full public proceeding affording due process in
compliance with the requirements of Chapter 14 of the New York City Charter (the “Charter”).
The FCRC, at its duly constituted meeting held on December 10, 2014, voted on and approved
the grant to the Franchisee of a franchise as contemplated by the RFP.
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FRANCHISE GRANT
As further described hereinafter, DoITT hereby grants to CityBridge LLC a non-exclusive
Public Communications Structure franchise for good and valuable consideration, and subject to
the mutual covenants, terms, and conditions, set forth in this Franchise Agreement, including
its attachments, exhibits, and appendices.
ARTICLE I. DEFINITIONS
Whenever used in this Agreement, the terms, phrases, and words listed below, and their
derivatives, have the meanings given below.
1.1 Defined Terms
“Advertising” has the meaning expressed in subsection 5.1.2.
“Advertising Structure” means a PCS on which the Franchisee has the right to display
Advertising.
“Affiliate” or “Affiliated Person” means each Person who falls into one or more of the
following categories: (i) each Person having, directly or indirectly, a Controlling Interest in the
Franchisee; (ii) each Person in which the Franchisee has directly or indirectly, a Controlling
Interest; and (iii) each Person directly or indirectly, controlling, controlled by or under common
Control with the Franchisee; provided that “Affiliated Person” shall in no event mean any
creditor of the Franchisee solely by its status as a creditor and which is not otherwise an
Affiliated Person.
“Agreement” means this agreement, including all attachments, exhibits, and
appendices, as it may be amended from time to time.
“Books and Records” means all information, documents, and databases whatsoever
created or maintained in the performance, or ancillary to the performance, of this Agreement
by, or on behalf of, the Franchisee, in any physical or electronic form whatsoever, including but
not limited to, ledgers, sales journals, charts of accounts, trial balances, invoices,
contracts, accounting records, prepared statements, sales control reports, designs, maps,
drawings, construction schedules, results of performance standard testing and
manuals. Financial records shall be kept and prepared in accordance with GAAP.
“City” means the City of New York, or as appropriate in the case of specific provisions of
this Agreement, any board, bureau, authority, agency, commission, department or any other
entity of the City of New York, or any authorized officer, official, employee or agency.
“City Delays” has the meaning expressed in Section 15.23.1
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“Claim” has the meaning expressed in Section 11.1.
“Commencement Date” has the meaning expressed in Section 2.1.
“Commissioner” means the Commissioner of DoITT or his or her designee.
“Compensation” means that portion of the consideration provided by the Franchisee to
the City in exchange for the franchise grant requiring payment, as detailed in Article VI.
“Comptroller” means the Comptroller of the City of New York or designee.
“Contract Year” means each period from and including the Commencement Date or an
anniversary thereof to and including the day preceding the next anniversary of the
Commencement Date.
“Control” or “Controlling Interest” means, with respect to any Person, possession,
directly or indirectly, of the power to direct, or cause the direction of, the management and
policies of such Person, whether through the ownership of voting securities, by contract or
otherwise. “Control” or “Controlling Interest” with respect to the System or the franchise
granted hereunder means possession, directly or indirectly, of Control over or of a Controlling
Interest in the Person that at the time owns the System or is the Franchisee under this
Agreement.
“Curb” means a raised stone or concrete edging along the side of a roadway (or, where
no such raised edging exists, the similar line of separation between those portions of the
Inalienable Property of the City used primarily for pedestrian and sidewalk uses and those
portions used primarily for vehicular and roadway use).
“Current Affiliate” means, with respect to any Person, an Affiliate of such Person on the
Execution Date.
“Damages” has the meaning expressed in subsection 11.1.
“Default” has the meaning expressed in subsection 13.2.1.
“DoITT” or the “Department” means the Department of Information Technology and
Telecommunications of the City, or designee.
“District” means the Inalienable Property of the City (as defined in this Section 1.1)
located within the Boroughs of Manhattan, Brooklyn, Staten Island, Queens and the Bronx.
“Effective Date” means the one hundred twentieth (120
th
) day after the Art
Commissioner approves the design of the PCS.
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“Exchange Act” means the Securities Exchange Act of 1934, and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder, in each case,
as amended from time to time.
“Execution Date” means the date that the Agreement is fully executed.
“Equipment” means, individually and collectively, all of the materials comprising, or
associated with, any individual PCS, one or more groups of Structures, or the entire System,
including Wi-Fi Equipment and wiring, or cables that connect Structures to the network
interface device of the switched telephone network or similar type conduit or power
source. Fiber is deemed part of the System unless otherwise specified in the Agreement.
“Existing PPTs” means all PPTs installed on the Inalienable Property as of April 30, 2014.
“Existing PPT System” means all of the PPTs operated by a particular Holdover PPT
Operator.
“Existing PPT Replacement Schedule” has the meaning provided in Section 1.2.7 of
Attachment SRV.
“Extended Term” has the meaning expressed in Section 2.2.1.
“FCC” means the Federal Communications Commission.
“FCRC” means the Franchise and Concession Review Committee of the City of New York.
“Fiber” means cable, wire, fiber optic communications cable (or other closed-path
transmission medium that may be used in lieu of cable wire or fiber optic communications
cable for the same purposes), network capacity, and related equipment and facilities, within
the Inalienable Property, which is used by the Franchisee to provide the Services that are being
delivered from the Structures.
“Fiber Licensor” has the meaning expressed in Section 3.13.2.
“Franchisee” means CityBridge, LLC.
“Franchisee Confidential Information” has the meaning expressed in Section 9.4.1.
“Franchise Fee” has the meaning expressed in Section 6.1.
“Good Working Order" has the meaning expressed in Section 5.2.1 of Attachment SRV.
“Gross Revenues” has the meaning expressed in Section 6.1.
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“Historic Districts” means those districts so designated by the Landmarks Preservation
Commission.
“Holdover Period” has the meaning expressed in Section 2.5.1.
“Holdover PPT Operator” means an entity that operates one or more Existing PPTs on
the Inalienable Property as of the Commencement Date.
“Inalienable Property of the City” means the rights of the City in its waterfront, ferries,
wharf property, bridges, land under water, public landings, wharves, docks, streets, avenues,
highways, parks, waters, waterways and all other public places, as set forth in Section 383 of
the New York City Charter.
“Indemnitees” has the meaning expressed in Section 11.1.
“Indemnitors” has the meaning expressed in Section 11.1.
“Initial Term” means the period from the Commencement Date until the earlier of June
24, 2026 or the earlier termination of this Agreement pursuant to the provisions herein.
“Installation Date” means the verifiable date of installation of a new PCS that comports
to all of the requirements and specifications set forth in this Agreement.
“Landmarks” means the Landmarks Preservation Commission of the City or designee.
“Landmark Site” means a property so designated by the Landmarks Preservation
Commission.
“Licensed Software” has the meaning expressed in Section 3.3.1
“Litigation Delay” has the meaning expressed in Section 15.23.1
“Maintenance and Monitoring System” or “MMS” means a computer system with the
capability to monitor all of the Services provided by the System and perform all of the functions
delineated in Part VI of Attachment SRV.
“Mayor” means the chief executive officer of the City or designee.
“Member(s)” has the meaning expressed in Section 10.1.
“Minimum Annual Guarantee” has the meaning expressed in Section 6.1.
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“MMS Software” means, individually and collectively, all source code and object code
comprising or associated with the Maintenance and Monitoring System.
“Non-Advertising Structure” means a PCS that provides Wi-Fi Services, but does not
include Advertising.
“NYSPSC” means the New York State Public Service Commission or its designee.
“PCS Software” means, individually and collectively, all source code and object code
used by an individual PCS, one or more groups of Structures, or the entire System.
“Permitted Transferee” has the meaning expressed in Section 10.6
“Person” means any natural person or any association, firm, partnership, joint venture,
corporation, or other legally recognized entity, whether for profit or not for profit, but does not
mean the City.
“Public Communications Structure,” “PCS,” or “Structure” means any of the following: (i)
a PPT; (ii) a non-Advertising Structure that provides free Wi-Fi Services; or, (iii) a telephone
installation that was installed or maintained prior to the Commencement Date pursuant to a
now-expired PPT franchise agreement. Upon transfer of ownership to the Franchisee, each PPT
that was installed and or maintained prior to the Commencement Date pursuant to a now-
expired PPT franchise agreement is deemed a PCS.
“Public Pay Telephone” or “PPT” means a telephone installation: (i) from which calls can
be paid for when made by a coin, credit card, prepaid debit card or in any other manner; (ii)
available for use by the public; and (iii) which provides access to a switched telephone network
or similar type conduit for voice or data communications. The term “Public Pay Telephone” or
“PPT” includes any pedestal or telephone bank supporting one or more telephones, PPT
Enclosures, signage and other associated equipment.
“Public Pay Telephone Rules” or “PPT Rules” means Chapter 6 of Title 67 of the Rules of
the City of New York as they may be amended from time to time. Each PCS that provides
telephone service is deemed a Public Pay Telephone under the PPT Rules, and, unless provided
to the contrary, the PPT Rules apply to Structures with the same force and effect as they apply
to PPTs operated under the Public Pay Telephone Franchise, including all provisions setting
forth penalties for failure to comply.
“Public Pay Telephone Enclosure” or “PPT Enclosure” means any associated housing or
enclosure attached to a pedestal, telephone bank, or affixed to a building, and partially or fully
surrounds a PPT.
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"Public Service Advertising" means advertising, the purpose or effect
of which is to
communicate information pertaining to the public health, safety, and welfare of the
citizens of
the City, as determined by DoITT in its sole discretion.
“Security Fund” has the meaning expressed in Article VII.
“Service(s),” “PCS Service(s),” or “Public Communications Structure Service(s)” means,
individually and collectively, all work, goods, and services that the Franchisee is obligated to
provide under this Agreement.
“Software” means, individually and collectively, all source code and object code used by
the Franchisee in performing the Services, including the PCS Software and the MMS Software.
“System” means all of the Structures owned, operated, or maintained by the Franchisee
pursuant to this franchise.
Fiber is deemed part of the System unless otherwise specified in the
Agreement.
“Term” means the term of the Agreement, including the Initial Term and the Extended
Term, if any.
“Termination Default” has the meaning expressed in Section 13.3.1.
“Third Party Claim” has the meaning expressed in Section 11.1.
“Transition Period” has the meaning expressed in Section 3.13(i).
“Unavoidable Delay” has the meaning expressed in Section 15.23.1.
1.2 Other Definitions
1.2.1 The words “section” and “subsection" in the Agreement, an attachment, an
exhibit, or an appendix refer to sections and subsections of, respectively, the Agreement, the
attachment, the exhibit, or the appendix, unless stated otherwise. A reference to
“attachments” or “appendices” means, respectively, the attachments and the appendices to
the Agreement unless provided otherwise. The words “include” and “including” are not terms
of limitation and will be interpreted as “including, but not limited to.” The word “or” means
“and/or” unless the context requires otherwise, the word “all” means “any and all,” and the
words “writing” or “written” mean preserved or presented in retrievable or reproducible
written form, whether electronic (including e-mail, but excluding voice-mail) or hard copy,
unless otherwise stated. The words “commercially reasonable efforts” means undertaking all
available measures that a reasonable person would pursue to satisfy an obligation in good faith.
The words “best practices” means employing the method or technique that has consistently
shown results superior to those achieved with other means, and that is a benchmark in the
industry. Definitions of City, state or federal agencies, offices, departments, department heads,
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or employees include, if applicable, any successor in function or interest. The word “applicable
law,” “law,” or “laws” means all federal, state, or local statutes, rules, codes, regulations, or
judicial or executive orders applicable to the subject matter of the corresponding obligation,
representation, warranty, or acknowledgement, or this Agreement generally.
1.2.2 The words “construct,” "install,” “operate,” and “maintain," individually or
collectively, in any form, combination, or variation, include all construction, installation,
operation, maintenance, repair, upgrading, renovation, removal, relocation, alteration,
replacement or deactivation, as appropriate to perform the Services.
1.3 References to Time
The words “day,” “month,” and “year” mean, respectively, calendar day, calendar
month and calendar year. “Business hours” or “business day” means 9:00 a.m. through 5:00
p.m. Monday through Friday, excluding the following City holidays, unless otherwise agreed to
by the parties: New Year’s Day, Martin Luther King, Jr.’s Birthday, Presidents Day, Memorial
Day, Independence Day, Labor Day, Columbus Day, Election Day, Veterans’ Day, Thanksgiving
Day, and Christmas Day. If one of these days falls on a Saturday, the preceding Friday is a
holiday and if one of these days falls on a Sunday, the following Monday is a holiday. The word
“current” means contemporaneous with the date the obligation arises.
1.4 Undefined Terms
Words not otherwise defined in the Agreement are given their common and ordinary
meaning appropriate to the context in which they appear.
ARTICLE II. TERM AND PRECONDITIONS TO EXECUTION
2.1 Initial Term
The Initial Term of this Agreement and the franchise granted commences on the
Commencement Date, and will expire on June 24, 2026, unless extended by the DoITT pursuant
to Section 2.2, or unless terminated earlier as provided by Section 13.3 or for any other reason
in this Agreement. The Commencement Date will be 12:01 a.m. on the tenth (10) day after the
date on which all of the following conditions have been met:
(i) this Agreement has been registered with the Comptroller as provided in Sections
375 and 93.p. of the City Charter;
(ii) all the documents have been submitted as required by Section 2.3;
(iii) the City’s Vendex review process of the Franchisee has been favorably
completed; and
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(iv) payment has been made to the City of the Security Fund and the FCRC
publication costs as described in Section 371 of the Charter.
For example, if all of the conditions listed above are met on December 1, 2014, the
Commencement Date will be December 11, 2014.
2.2 Extended Term
2.2.1 Provided the Agreement remains in effect immediately prior to its scheduled
expiration on June 24, 2026, the Commissioner, in his or her discretion, may after a request by
the Franchisee pursuant to Section 2.2.2, extend the Agreement for an Extended Term to expire
no later than the day preceding the fifteenth (15
th
) anniversary of the Commencement Date.
2.2.2 If Franchisee wishes to extend the Franchise beyond the Initial Term then
Franchisee must submit a written request to DoITT to extend this Agreement and the Franchise
granted hereunder, as described in the preceding Section 2.2.1, not later than June 24, 2025.
The Franchisee shall thereafter submit to DoITT all information and documentation requested
by DoITT in connection with the evaluation of Franchisee’s request for an extension. Nothing in
this section will be construed to obligate DoITT to thus extend this Agreement or the Franchise.
2.3 Preconditions to Execution, Security Fund Documentation
The following actions are preconditions for execution of the Agreement by the City.
2.3.1 The Franchisee represents that it has submitted to the Mayor’s Office of
Contract Services current and up-to-date questionnaires required with the City’s Vendor
Information Exchange System (“VENDEX”). The VENDEX questionnaires must be fully completed
by the Franchisee and have received a favorable review by the City.
2.3.2 The Franchisee represents that it has submitted to DoITT the following
documents on or before the date of execution of this Agreement by the City:
(i) an insurance certificate that satisfies the requirements set forth in Section
12.3.1;
(ii) certified copies of documentation showing (a) the Franchisee is duly organized,
in good standing, and authorized to do business in New York as a corporation,
partnership, limited liability company or sole proprietorship, and (b) the person
or persons who will execute this Agreement on the Franchisee’s behalf is (or are)
authorized to execute and deliver the Agreement on the Franchisee’s behalf as a
legal, binding and enforceable agreement of the Franchisee;
(iii) an opinion from the Franchisee’s counsel dated as of the date of execution by
the Franchisee in a form to be approved by DoITT;
(iv) document evidencing that the Security Fund required under Article VII has been
created; and
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(v) a certification from the Franchisee confirming that: (A) binding and enforceable
agreements between each individual Member and the Franchisee have been
executed and are in full force and effect, and (B) such agreements contain
commitments (in the aggregate) of not less than $100 million in total of equity
contributions by all Members of the Franchisee as required for the Franchisee to
fulfill its obligations to the City.
In light of changes to the rollout schedule for structures to be installed hereunder,
which changes were requested by the City and agreed to by the Franchisee shorty before
execution of this Agreement, the MSA contemplated by Section 3.13.3 will be provided as
described in Section 3.13.3 rather than delivered as a condition to such execution.
2.4 Effect of Expiration
Upon expiration or termination of this Agreement — and if no new franchise of similar
effect has been granted to the Franchisee under the New York City Charter, any authorizing
resolution or other applicable law in effect when the franchise expires — all rights of the
Franchisee in the franchise will cease with no value allocable to the franchise itself; and the
rights of the City and the Franchisee to the System, or any part, will be determined as provided
in Section13.5.
2.5 Holdover Period
2.5.1 Any period of time during which the Franchisee is performing any of the Services
or is occupying the Inalienable Property with the Structures other than during (i) the Initial
Term or (ii) the Extended Term constitutes a Holdover Period.
2.5.2 Unless specified in a particular clause of this Agreement, terms and conditions
governing Franchisee’s obligations with respect to the Services and its occupation of the
Inalienable Property succeed the termination or expiration of this Agreement during the
Holdover Period.
2.5.3 The Franchisee acknowledges and accepts that DoITT, in its sole discretion, may
require the Franchisee to immediately cease performing any part of the Services or to remove
any one or more Structures or the entire System during any Holdover Period. Continued
occupancy or operation during a Holdover Period subject to the obligations described in this
Section 2.5 shall not be construed as a renewal or other extension of this Agreement or the
Franchise granted pursuant to this Agreement, nor as a limitation on the remedies, if any,
available to the City as a result of such continued operation after the Term, including, but not
limited to, damages and restitution.
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ARTICLE III. GRANT OF FRANCHISE
3.1 Nature and Limitation of Franchise
The City grants the Franchisee, subject to the terms and conditions of this Agreement, a
non-exclusive franchise providing the right and consent to design, install, operate, repair,
maintain, upgrade, remove and replace Public Communications Structures, including
Equipment, on, over and under the Inalienable Property of the City as described in this
Agreement. Exercising this franchise is subject to the obligations in this Agreement and all
applicable laws.
3.2 Ownership of Structures
3.2.1 During the Term all Structures are deemed the property of the Franchisee,
except as provided to the contrary in this Section 3.2.
3.2.2 It is the intention of the parties that to the extent it is within the control of the
parties, each acting reasonably, the Franchisee shall take ownership and, subject to the
provisions of Section 3.2.4, be responsible for the operation and maintenance of all Existing
PPTs as of the Commencement Date, and the parties shall take all reasonable steps within their
respective rights to achieve that end. To the extent that the Franchisee does not have
ownership and control of some or all of the Existing PPTs as of the Commencement Date, the
Franchisee and DoITT shall continue to cooperate reasonably, within their respective rights, to
arrange for ownership and control to be achieved as promptly as practical after the
Commencement Date.
3.2.3 The Franchisee acknowledges that the City neither warrants nor makes any
representations whatsoever concerning any Existing PPT(s) or Existing PPT Enclosure(s) physical
condition, structural integrity, electrical or network connectivity, cost of operations, revenue
projections, or any other consideration.
3.2.4 The Franchisee agrees to take ownership of all Existing PPTs "as is," and
acknowledges that at no time before, during, or after the Term is the City liable or responsible
for the repair, maintenance, operation, or upgrade of any Existing PPT or PCS. The City and the
Franchisee acknowledge that, as of the Commencement Date, some of the Existing PPTs may
fail to meet the standards provided in the PPT Rules. The Franchisee will determine the
operability of each Existing PPT within twenty (20) business days of the later of: (i) the
Commencement Date, or (ii) the date that the Franchisee acquires the Existing PPT. With
respect to each Existing PPT that is inoperable, the Franchisee may file a Notice of No Dial Tone,
and, pursuant to the PPT Rules, is entitled to ninety (90) days to return the PPT to operability.
The Franchisee may provide dial tone service from Existing PPTs by upgrading phones with
cellular technology or it may continue to utilize Verizon through its copper lines or it may use a
combination of copper and cellular, provided the Verizon copper lines provide reliable dial tone
service. If, through no fault of its own and notwithstanding commercially reasonable efforts,
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the Franchisee is unable to make an Existing PPT operable within the ninety (90) day period, the
Franchisee may temporarily remove the payphone instrument within the Existing PPT and may
continue to display Advertising on the Existing PPT for up to an additional ninety (90) days
temporary removal period.
3.2.5 At the end of the Term, disposition of the Structures will be as provided in
Section 13.5 and 13.6.
3.3 Ownership of Intellectual Property
3.3.1 Definitions
“City Products” means any intellectual property, or embodiments thereof, whether
preliminary, final or otherwise, created or developed by (i) the City or (ii) for the City by (a) the
Franchisee (or an Affiliated Person) at the specific request of the City and pursuant to the City’s
written specifications or (b) any other third-party where the Franchisee, Affiliated Person, or
third party has transferred the ownership rights in such intellectual property to the City. With
respect to City Products that are software, City Products includes both the source code and the
object code. An example of a City Product would be a mobile app, created by or for the City,
which provides a mapped list of all PCS locations.
“Documentation” means the complete set of manuals (e.g., user, installation,
instruction and diagnostic manuals) in either hard or electronic copy, that are necessary to
enable the City to properly test, install, operate and enjoy full use of the Licensed Software.
“Licensor” means the entity with the ownership rights to permit the Franchisee and the
City to use the Licensed Software for the business use contemplated by this Agreement.
“Licensed Software” means, individually and collectively, all of the software licensed to
the City by or through the Franchisee under the Agreement. “Licensed Software” includes error
corrections, upgrades, updates, enhancements or new releases required under the license
terms, and any deliverables due under maintenance and support requirements (e.g., patches,
fixes, program temporary fixes, programs, code or data conversion, or custom programming).
“Object Code” means the machine-executable code that can be directly executed by a
computer’s central processing unit(s).
“Source Code” means the programming statements or instructions written or expressed
in any language understandable by a human being skilled in the art, which are translated by a
language compiler to produce executable machine Object Code.
3.3.2 The Franchisee hereby grants to the City a paid-up, royalty-free, worldwide, non-
exclusive, irrevocable license to use the Licensed Software, as necessary for the City to use the
System for its intended purpose during and after the Term. The Franchisee warrants and
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represents that it has the right or will obtain the right to grant the license for the City to use any
third-party Software, for the intended purpose.
3.3.3 The Franchisee is not authorized to include in the System any Licensed Software
without the prior written approval of DoITT’s General Counsel or designee. Prior to the
incorporation of the Licensed Software, the Franchisee shall present the proposed license
agreement or other document setting forth the conditions on the ability of the Franchisee or
the City to make use of the Licensed Software to the DoITT’s General Counsel or designee for
review and approval.
3.3.4 City Ownership of City Products
(i) City Products may be used by the Franchisee for no purpose other than in the
performance of its responsibilities under the Agreement, without the prior
written permission of the City.
(ii) The Franchisee acknowledges that the City may, in its sole discretion, register
copyright, trademark, patent and patent designs in the City Products with the
United States Copyright Office, the United States Patent and Trademark Office,
respectively, or any other entity authorized to grant copyright, trademark or
patent registrations. The Franchisee shall fully cooperate in this effort, and shall
provide all Documentation necessary to accomplish this.
(iii) The Franchisee shall not undertake any action that may prevent the City from at
all times having immediate access to the most current version of the City
Products, such that the City, independent of the Franchisee, may utilize the City
Products in whatever manner it determines appropriate.
(iv) The City hereby grants to Franchisee the non-exclusive and fully paid-up, license
during the Term to use, adapt and modify the City Products in solely for the
purposes of providing the Services. In the event the City Product generates
revenue, the City is entitled to any revenue.
3.3.5 Ownership of Licensed Software
(i) Title and ownership of the Licensed Software is and shall remain with the
Licensor.
(ii) To the extent that the Franchisee is the Licensor, the Franchisee hereby grants to
the City a paid-up, royalty-free, worldwide, non-exclusive, irrevocable license to
use the Licensed Software, as necessary to fully effectuate the purposes of the
Agreement and the business purposes of the City.
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(iii) The Franchisee shall present to the City all agreements that permit the
Franchisee to use and sublicense PCS Software, and the right to future
maintenance, to the City. Franchisee shall continuously maintain, update, and
make available to DoITT a catalog of the PCS Software currently in use.
3.3.6 Nothing precludes either party from otherwise using any general knowledge,
skills, ideas, concepts, know-how, techniques, and experience learned during the performance
of its obligations under the Agreement. For avoidance of doubt, except for the City Products,
all intellectual property, all embodiments thereof, and all technology or software that is
created, conceived, or used by Franchisee or Licensor in connection with the Services or this
Agreement is owned by Franchisee or Licensors.
3.4 Warranty of Title
The Franchisee represents and warrants that all Equipment and Software provided by or
through the Franchisee:
(i) are original to the Franchisee or validly licensed or sublicensed to the Franchisee;
(ii) do not infringe, dilute, misappropriate, or improperly disclose any intellectual
property or proprietary rights of any third party, or otherwise violate any law;
and
(iii) do not constitute defamation or invasion of the right of privacy.
3.5 Non-exclusivity
This franchise grant is non-exclusive. The City retains the absolute right to grant to any
other Person a franchise, consent, or right to occupy and use the Inalienable Property of the
City for the installation, operation, or maintenance of facilities including Public Communications
Structures, with or without advertising. To the extent the City grants one or more additional
franchises for Public Communications Structures prior to the City having issued permits for
installation of 4,000 new Advertising Structures as contemplated in Section 1.2 of Attachment
SRV, the Franchisee will be entitled to an equitable reduction in the amount of the Minimum
Annual Guarantee payable under Section 6.3.1 reflecting the fact that the Minimum Annual
Guarantee amount as stated in Section 6.3.1 is based on an assumption that no less than the
4,000 new Advertising Structures contemplated in Section 1.2 of Attachment SRV will be
authorized for installation prior to the grant of additional franchises for PCSs.
3.6 No Waiver
Nothing in this Agreement will be construed as a waiver of any law or of the City's right
to require the Franchisee to secure the appropriate permits or authorizations necessary to
install the Structures to be installed hereunder and perform the Services.
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3.7 No Release
Nothing in this Agreement constitutes a waiver or release of the rights of the City in and
to its Inalienable Property. If all or a portion of the Inalienable Property of the City is eliminated,
discontinued, closed or demapped, then all rights and privileges granted under this Agreement
regarding the affected portion of the Inalienable Property ceases on the effective date of the
elimination, discontinuance, closing or demapping.
3.8 Compliance with the ADA
The Franchisee shall require and ensure that the System comports to the current
requirements of the Americans with Disabilities Act of 1990, 42 U.S.C. 12132 ("ADA"), the
Architectural and Transportation Barriers Compliance Board Guidelines, and any other current
applicable laws relating to accessibility for persons with disabilities. All Structures built after the
Commencement Date shall include a tactile key pad and braille lettering, and be equipped with
volume control equipment and Telecoil compatible technology to enable hearing impaired
persons to access and utilize telecommunication services.
3.9 Software Escrow Agreement
3.9.1 All software created by or licensed to the Franchisee or the City in connection
with the creation, operation or maintenance of the MMS or any replacement of the MMS is
subject to the minimum software escrow requirements of this Section 3.9. This Section 3.9 does
not apply to "off-the-shelf' software or “software as a service” created or maintained by a third-
party other than the Franchisee or an Affiliate.
3.9.2 The Franchisee shall (i) cause the Licensor to enter into, and maintain in full force
and effect a source code escrow agreement with an escrow agent (the "Software Escrow
Agent") and (ii) ensure that all Source Code and Documentation for the Licensed Software shall
be under escrow deposit pursuant to said escrow agreement. The Franchisee shall cause its
software Licensor to provide thirty (30) days prior written notice of a change of the Software
Escrow Agent. The escrow agreement must be in effect within sixty (60) days of the Effective
Date and provide materially the same terms and conditions as set forth below:
(i) The Software Escrow Agent must hold the Source Code for the benefit of the
City;
(ii) All major updates (e.g., new versions and critical patches and fixes) must be
escrowed promptly after issuance; minor updates may be escrowed in batches
no less frequently than monthly;
(iii) The Software Escrow Agent shall verify deposit of the source code and all
updates and so notify the City;
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(iv) The City may require periodic testing by the Software Escrow Agent of all Source
Code held in escrow; and
(v) If the Licensor: (a) becomes insolvent or ceases to exist as a business entity; or
(b) fails to perform its obligations under the license agreement or escrow
agreement, and is unable to cure such failure within ten (10) days of notice
thereof by Franchisee, the City shall have the right to so certify to the Software
Escrow Agent and to direct the Software Escrow Agent to provide the City with a
copy of the Source Code and Documentation for the installed release level of the
MMS software. All Source Code materials granted under this clause shall be
maintained subject to the confidentiality provisions of this Agreement and shall
be used solely for the internal business purposes of the City. Title to any source
code released to the City remains the property of the Licensor.
3.9.3 The Franchisee shall provide to the City all information necessary for the City to
comply with registration requirements of the Software Escrow Agent. The Franchisee shall
adhere to the obligations in any agreement with the Licensor or the Software Escrow Agent as
they relate to the deposit of software in escrow. The escrow agreement shall provide that the
City shall have the opportunity to cure any default of the Franchisee, at the sole cost and
expense of the Franchisee, that jeopardizes the ability of the City to access the escrowed source
code as provided for under this Agreement. The escrow agreement provisions in this Section
3.9 will apply with equal force to any software licensed to the City by the Franchisee or an
Affiliate.
3.10 No Discrimination
The Franchisee shall not discriminate in the provision of Services on the basis of race,
creed, color, national origin, sex, age, disability, perceived disability, marital status, sexual
affectation, or real or perceived sexual orientation.
3.11 Tariffs
Upon the written request of the Commissioner, and at his or her sole discretion, the
Franchisee shall submit to DoITT a list of all tariffs or tariff applications, and all amendments or
modifications that the Franchisee has filed with any federal, state or local regulatory authorities
or other government agencies regarding, associated with, or arising from the Franchisees
performance of the Services. The Franchisee shall submit the list in a form acceptable to the
Commissioner within thirty (30) calendar days of the request. Upon a written request of the
Commissioner and at his or her sole discretion, the Franchisee shall promptly, but in no case
later than thirty (30) calendar days following the request, deliver to DoITT a complete copy,
including all amendments or modifications, of any tariff or tariff applications.
3.12 Data Rights
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3.12.1 The Franchisee retains ownership rights in all data created in the course of
providing the Wi-Fi Services to the extent that such data doesn’t include Personally Identifiable
Information, and subject to the requirements of subsection 4.4.4 of Attachment SRV. The
Franchisee retains no ownership rights in Personally Identifiable Information.
3.12.2 The City retains exclusive title and ownership rights in (i) all non-public
information concerning or embodying the processes, statistics, software, systems, programs,
research, development, strategic plans, or the like with respect to the operations and activities
of the City (ii) all non-public information concerning the City’s infrastructure, public safety, or
other data set that the City has identified as “sensitive” (“City Data”).
3.12.3 The Franchisee shall hold confidential, both during and after the expiration or
termination of this Agreement, all City Data furnished to or used by the Franchisee. The
Franchisee shall not make any City Data available to any person or entity without the prior
written approval of DoITT. The Franchisee shall maintain the confidentiality of City Data by
using a reasonable degree of care, and using at least the same degree of care that the
Franchisee uses to preserve the confidentiality of its own confidential information. The
Franchisee may not—without DoITT’s express written consent—merge City Data with other
data, keep a copy of it, commercially exploit it, or use it for any purpose other than providing
the Services. All City Data will be treated as confidential except to the extent the data is (i)
already known by the Franchisee at the time it is obtained, free from any obligation to keep the
City Data confidential; (ii) is or becomes publicly known through no wrongful act of the
Franchisee; (iii) is rightfully received by the Franchisee from a third party without restriction
(other than an Affiliated Person) and without breach of this Agreement; or (iv) is independently
developed by the Franchisee without using any City Data.
3.12.4 Disclosure of City Data does not violate the confidentiality obligations imposed by
this Section to the extent that City Data must be disclosed pursuant to a court order or as
required by a regulatory agency or other government body of competent jurisdiction. Upon
receipt of a request under this subsection, the Franchisee shall notify the City immediately
upon receipt of such an order or requirement to disclose and use reasonable efforts to resist, or
to assist the City in resisting, such disclosure and, if such disclosure must be made, to obtain a
protective order or comparable assurance that the City Data disclosed will be held in
confidence and not be further disclosed absent the City’s prior written consent.
3.12.5 The Franchisee shall grant the City a perpetual, unhindered, irrevocable right to
use any anonymized aggregated data created in the provision of the Wi-Fi Services. The
ongoing irrevocable right to use such data — created at any time during the Term or any
Holdover Period — is provided in exchange for the franchise granted to the Franchisee under
this Agreement. The City will not have any rights to use Personally Identifiable Information.
3.13 Franchise Fiber – Definitive MSA
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3.13.1 For the purposes of this Section, the terms “System” and “Equipment” are
exclusive of all Fiber except Fiber that was provided by the Franchisee under this Franchise
Agreement. To the extent that Fiber was installed pursuant to another franchise agreement and
provided through Franchisee by a Fiber Licensor, that Fiber does not constitute Equipment, and
is not included in the System. The Franchisee is required to maintain, at all times, an agreement
between the Franchisee and one or more Fiber Licensors that specifies which Fiber is provided
by the Franchisee pursuant to this Agreement and which Fiber is provided through the
Franchisee by a Fiber Licensor (the “Definitive MSA”).
3.13.2 Definitions
“Transition Period” means a period of up to 3 years, at the option of the City,
following termination or expiration of this Agreement, during which time the
Franchisee shall provide the Services set forth below.
“Fiber Licensor” means an Affiliate, Member in its individual capacity, or other
third party that provides the Franchisee with Fiber for the performance of the
Franchisee’s obligations under the Agreement.
3.13.3 Not later than sixty (60) days from the Commencement Date, Franchisee shall
reach agreement with the Fiber Licensor on a Definitive MSA that meets the requirements
below for Fiber that is to be provided by a Fiber Licensor. The Definitive MSA must be reviewed
and approved by DoITT, the approval of which shall not be unreasonably withheld. The
Definitive MSA must include the following provisions:
(i) Upon expiration or termination of this Agreement, the City will have an
irrevocable right to continue to use the Fiber (subject to the same minimum
technical requirements concerning capacity, service levels and maintenance) as
exists between the Franchisee and the Fiber Licensor during the Term of this
Agreement and the Transition Period.
(ii) In the event the City, or a third party acting on the City’s behalf, assumes the
Franchisee’s rights with respect to Fiber, the City or such third party will be
obligated to pay the Fiber Licensor a reasonable market rate of compensation for
the provision of Fiber and those other obligations assumed by the third party to
the Franchisee which the City elects to continue.
(iii) The City and the third party will reasonably cooperate with the Franchisee and
the Fiber Licensor to effect an orderly transition without interruption of service
and to determine an appropriate market rate of compensation.
(iv) If the parties are unable to agree on an appropriate rate of compensation the
parties shall submit the matter to a single arbitrator assigned by the American
Arbitration Association (“AAA”) who shall act in accordance with the rules of the
AAA to determine a fair market compensation. (In connection with any such
arbitration the City shall not assert that the compensation paid by Franchisee to
a Member party reflects a market rate of compensation nor shall such rate of
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compensation be disclosed to or taken into account by the Arbitrator.) The cost
of any such arbitration shall be shared equally by the parties, unless the
arbitrator determines that an alternative allocation is more appropriate.
(v) It is the intent of the parties that the City be a third party beneficiary to the
Definitive MSA.
(vi) The term of the Definitive MSA shall be for the Initial Term, the Extended Term
(if any), Transition Period, and any Holdover Period.
(vii) The indemnification requirements set forth in Sections 11.4 and 11.5.
(viii) The limitation of liability requirements set forth in Section 11.7.
(ix) The insurance requirements set forth in Article XII.
3.13.4 The services to be provided pursuant to the Definitive MSA may be further
modified as necessary to be consistent with the obligations under this Agreement. Nothing
herein shall preclude Franchisee from requesting City approval of more than one Definitive
MSA or to request approval of changes to any Definitive MSA previously approved.
ARTICLE IV. CONSIDERATION AND SCOPE OF SERVICES
4.1 Consideration and General Description of Services
4.1.1 In exchange for the City’s granting of a non-exclusive franchise to Franchisee
pursuant to Section 3.1, the Franchisee shall fulfill all of its obligations under the Agreement,
including payment to the City of all Compensation and satisfactory performance of the Services
identified below, as more fully described in Attachment SRV. This Section 4.1.1 is intended to
provide a summary of the Franchisee’s obligations and is not intended to modify or supersede
the scope of the Public Communications Structure Services described in Attachment SRV.
(i) Assume ownership of all Existing PPT Systems.
(ii) Design, install, operate, and maintain the System, including the replacement of
Existing PPTs with New Structures.
(iii) Provide free or pay telephone service.
(iv) Provide free public Wi-Fi.
4.1.2 The provision of all of the Services, individually and collectively, will be provided
at the sole expense of the Franchisee. Unless a provision of this Agreement specifies to the
contrary, the Franchisee is liable and responsible for payment of any costs incurred in order to
perform any of the Services, including administrative costs, ancillary costs, permit fees, costs to
repair City sidewalks or other property, electrical costs, telecommunications costs, licensing
fees, costs to install, maintain, operate, or upgrade the Structures (including costs to purchase
and replace Existing PPTs), taxes, or any other charge, fee, expense, or cost whatsoever arising
out of the Franchisee’s performance of its obligations under this Agreement. The Franchisee is
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not entitled to reimbursement or a credit against the Compensation owed for any outlay of
costs made by the Franchisee under this Agreement. However, if the Franchisee becomes liable
for the New York City Commercial Rent Tax attributable to the Structures, it may deduct the full
amount of such taxes that it pays from any payment owed to the City pursuant to Section 6.3.
4.2 Permits, Authorizations, Approvals, Consents and Licenses
4.2.1 Before installing any Structure, the Franchisee must obtain all necessary permits,
authorizations, approvals, consents, licenses, and certifications required for each Structure,
including, but not limited to: (i) those required under law related to materials and construction
and all applicable sections of the building, plumbing and electrical codes of the City; (ii) all
permits, authorizations, approvals, consents, licenses and certifications required by the City’s
Department of Transportation, Landmarks and the Public Design Commission, and any other
agency of the City with jurisdiction over the property on which the Structure is located; (iii) any
permits, authorizations, approvals, consents, licenses, and certifications required by law,
including under Section 6-35 of Title 67 of the Rules of the City of New York, under Section 23-
402 of the City Administrative Code, and under Section II(C) of the RFP; and (iv) any necessary
permits, authorizations, approvals, consents, licenses and certifications from Persons to use
easements, poles, conduits or other private property that the Franchisee seeks to use in
connection with the provision of the Services. The Franchisee acknowledges that the City, in
exercising its rights and obligations under the Agreement, will act consistent with any
memoranda of understanding entered into between DoITT and the Borough Presidents. Where
work to be done pursuant to this Agreement requires work to be performed by an electrician,
the Franchisee shall employ and utilize only licensed electricians.
4.2.2 The Franchisee agrees that fees it pays to obtain any permits, consents, licenses,
or any other forms of approval or authorization are not in any manner a tax, or compensation
for this franchise in lieu of the Compensation.
4.2.3 The Franchisee acknowledges and accepts that the City has the sole discretion in
the management of its rights-of-way to approve or deny any request by the Franchisee, or
other Person, for a permit to install a Structure in a particular location.
ARTICLE V. ADVERTISING DISPLAYS
5.1 General Requirements
5.1.1 In consideration of the Franchisee's performance of the Services, and payment
by the Franchisee of the Compensation, the City hereby grants to the Franchisee the right
throughout the Term to display Advertising, and to lease space for the display of Advertising on
the Structures that are the subject of this Agreement, provided that Advertising displays will
only be permitted on Structures that offer public pay telephone service (or are in the transition
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period contemplated in Section 3.2.4) and that are located in commercial or manufacturing
zoning districts (defined as zoning districts where commercial or manufacturing uses are
permitted as of right), and provided also that the authority to display Advertising on Structures
is subject to the terms, conditions and limitations on advertising rights as are described in this
Agreement. The Franchisee shall provide the information and certifications required by
Section J.(8)(i),(ii)and (iii) of City Council Resolution 2309 of 2009.
5.1.2 The term “Advertising” means any printed matter or electronic display including
words, pictures, photographs, symbols, graphics or visual images, in connection with the
promotion or solicitation of sale or use of a product or service or not-for-profit, public service
or governmental messages, other than information required to be posted on a PCS in
accordance with this Agreement or applicable law.
5.2 Location of Advertising; Permitted Advertising Methods
5.2.1 Non-digital and Static digital Advertising. Printed poster Advertising (with
backlighting at the Franchisee’s option) and static digital Advertising are permitted on all
Structures where Advertising is permitted as described in Section 5.1.1, provided however that
digital Advertising and backlit poster advertising may not be used within an historic district or
adjacent to a site that Landmarks has designated a “landmark site” except with the prior
approval of Landmarks by rule or on an individual basis. Static digital Advertising for purposes
of this agreement is defined as Advertising in which a series of fixed digital images are displayed
electronically, and each fixed image must be displayed for a minimum of fifteen (15) seconds
and fade in and fade out no faster than one (1) second, except as may be authorized by the NYC
Department of City Planning. For the avoidance of doubt, the references to commercial and
manufacturing zoning districts in Section 5.1.1 include commercial overlay districts adjacent to
residential zoning districts. In the case of any ambiguity regarding which zoning district a
Structure is in, the Structure is deemed to be in the zoning district that includes the property
closest to the Structure that is not Inalienable Property.
5.2.2 Slow motion digital. The electronic display of advertising images that include
motion at slow speeds may be permitted but only in high density commercial districts, and only
with the prior written approval of the Commissioner, in his or her sole discretion.
5.2.3 Other media and new technologies. Requests to display “zippers,” scrolling
poster ads, innovative advertising and electronic advertising media not expressly covered in this
Agreement will be evaluated on a case-by-case basis and will be subject to the zoning
regulations applicable to the property adjacent to the site.
5.2.4 Audio advertising is not permitted in connection with advertising displays.
However, an audio component used in connection with telecommunications services may be
permitted in the sole discretion of the Department.
5.3 Advertising Siting and Clearance.
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5.3.1 Advertising on Public Communications Structures is not permitted:
(i) on Building-line Structures as defined by PPT Rules;
(ii) within Historic Districts or adjacent to a landmark site unless the
Advertising complies with the rules and other requirements of the
Landmarks Preservation Commission.
5.3.2 Advertising Display Panels
(i) Advertising on display panels on Structures may not exceed 1,539 square
inches;
(ii) Advertising on Existing PPTS, prior to their replacement with a Structure,
shall be permitted pursuant to the old Franchise;
(iii) Each PCS may have no more than 2 advertising panels.
5.4 [RESERVED]
5.5 Restrictions
5.5.1 The Franchisee shall not sell or place Advertising that is false or misleading;
promotes unlawful conduct or illegal goods, services or activities; or, is otherwise unlawful or
obscene, as determined by the City, including advertising tobacco products or trademarks and
advertising that constitute a public display of offensive sexual material in violation of Penal Law
245.11.
5.5.2 Tobacco advertising and electronic cigarette advertising are not permitted. The
term “electronic cigarette” is defined for this purpose as set forth in Section 17-502 of the
Administrative Code of the City of New York. Alcohol advertising within two hundred feet of a
building used exclusively as school, day care center, or house of worship is not permitted. The
200 feet shall be measured in straight lines from the center of the nearest entrance of the
school, day care center or house of worship to the nearest outer edge of the PCS.
5.6 Maintenance of Advertising Displays
5.6.1 The Franchisee shall maintain all advertising display panels in a clean and
attractive condition at all times and is responsible for the cost of any power consumption used,
electrical and network connectivity, and all other costs arising from the display of Advertising.
5.6.2 The Franchisee shall require and ensure that all Advertising display panels are
safe, secure and sturdy throughout the Term. If the Franchisee becomes aware, or is informed
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by the City, that a panel is unsafe, insecure, not sturdy, or otherwise poses a threat to public
safety, the Franchisee shall repair or remove or otherwise secure the panel promptly and in any
event within four hours of notification.
5.7 Removal of Advertising
5.7.1 Within forty-eight (48) hours of receipt of written notice (which may be provided
by email) that Advertising on a PCS is either unauthorized, prohibited, or otherwise fails to
comply with any requirement of the Agreement, as determined by the City, the Franchisee
must remove the Advertising or cure the failure. If the Franchisee fails to remove the
Advertising or otherwise cure the failure, the City may, at the Franchisee’s expense, perform
any efforts it determines appropriate to remove the advertising or otherwise cure the failure.
The Franchisee must reimburse the City for all costs or damages incurred by the City,
including repair and restoration costs arising
out of the performance of the work, no later than
thirty (30) days after the City cures the Franchisee’s failure.
5.7.2 Any action by DoITT under this subsection will be in addition to and cumulative
of all rights and remedies set forth in Article XIII and all other rights or remedies, expressed or
implied, available to the City at law or in equity.
5.8 NYC Program Advertising
5.8.1 NYC Program Advertising (NYCPA) as described in this Agreement will be
administered on behalf of the City by NYC & Company or such other entity or agency as
the City may from time to time direct (the NYCPA Manager). In each year of the Term,
Franchisee shall provide advertising space to the NYCPA Manager for NYC Program Advertising
(NYCPA) at no cost
to the City or the NYCPA Manager consisting of 5% of the total value of
the advertising space on the Structures then available to Franchisee under this Agreement. At
the NYCPA Manager’s option, such space provided to the NYCPA Manager shall be comprised
of an agreed-upon set of particular panels at agreed-upon locations. Alternatively, if
agreeable to the NYCPA Manager, some or all of the NYCPA Advertising space may be
allocated on a time-based fractional basis such that certain panels are used by the NYCPA
Manager for NCCPA Advertising at certain times or during certain periods rather than set aside
entirely for NYCPA Advertising. In either case, if at any time the NYCPA Manager and the
Franchisee cannot agree on an allocation that equals such 5% of value, then the NYCPA
Manager and the Franchisee shall each provide a proposed allocation to an arbitrator assigned
by the American Arbitration Association (“AAA”), who shall select (using the procedures of the
AAA) one of the two proposals submitted, whichever is determined by the arbitrator to better
reflect the required 5% of the total value advertising space on the structures, in which case the
arbitrator’s selection shall be treated as compliant with the 5% requirement. The cost of any
such arbitration shall be shared equally by the Franchisee and the City. NYCPA Advertising
shall mean, for purposes of this Agreement, advertisements reasonably determined by the
NYCPA Manager to be within its corporate or charter purpose, including but not limited to
commercial advertisements, advertisements promoting New York City, and public service
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advertisements, but NYCPA shall not include “spot market advertising”. For purposes of the
preceding sentence “spot market advertising shall mean advertising sold by the NYCPA
Manager to commercial advertisers (whether for cash, trade or barter) in a manner unrelated
to any broader sponsorship or partnership arrangement between such advertiser and either
the NYCPA Manager or the City and unrelated to any event, sponsorship or support efforts, or
intergovernmental agreement, of the NYCPA Manager or the City (for this purpose,
“intergovernmental agreements” shall mean agreements between the City and/or the NYCPA
Manager and other governmental or quasi-governmental entities).
5.8.2 The administration of NYCPA, including posting, planning, installation,
maintenance, removal
and reporting shall be performed by Franchisee at no cost to the City
or the NYCPA Manager (except
that Advertising posters shall be provided to or at the
direction of Franchisee), shall be implemented in accordance with the same standards and
best practices
and utilization of the same materials and methods as used by Franchisee for
displays of its
paying commercial clients, which shall include, at a minimum: sufficient lead
time for planning,
a copy change every four weeks (or equivalent industry standard for digital
displays), location lists with spotted maps provided to the NYCPA Manager and
DoITT two
weeks prior to the posting date of any campaign, a completion report including at least
six
quality photographs of distinct panels for every campaign and an affidavit certifying the date
that materials were received and posted provided to the NYCPA Manager and DoITT within 6
weeks of the
posting completion. In programming the NYCPA, the NYCPA Manager shall
provide Franchisee with a monthly inventory of the NYCPA locations and the advertising
campaign requested at
each location.
5.8.3 For the purposes of this Section 5 . 8, an exclusive advertising
campaign shall
be any campaign whereby Franchisee agrees to limit its rights to enter into
advertising
agreements with entities that compete with a particular advertiser.
If
the Franchisee
wishes
to enter into an exclusive advertising campaign, and the City controls NYCPA Advertising
in a geographic area which would be valuable to the Franchisee and the particular
advertiser for use in such exclusive advertising campaign, then Franchisee may
propose to the NYCPA Manager that the NYCPA Manager honor the terms of
exclusivity for the NYCPA, or in the alternative to cooperate in good faith with
Franchisee to address any potential issues that may
arise out of an accommodation by the
NYCPA Manager of such exclusivity arrangement, including, for example, consideration of
an in-kind exchange of panel locations on a one for one basis to
accommodate a specified
geographic exclusivity. For the avoidance of doubt, NYCPA has no obligation beyond such
good faith cooperation to accommodate any such exclusivity commitment sought by
Franchisee, and Franchisee is expressly prohibited from entering into any agreement with an
advertiser that places restrictions on NYCPA Manager’s use of the NYCPA. The notice to the
NYCPA manager described in this paragraph shall contain information as to
the schedule,
duration, geographic reach and number of panels involved in the proposed
exclusive
advertising campaign.
ARTICLE VI. COMPENSATION AND OTHER PAYMENTS
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6.1 Defined Terms
Whenever used in this Agreement, the terms, phrases, and words listed below, and their
derivatives, have the meanings given below.
“Franchise Fee” means the amount of annual compensation paid to the City in exchange
for the franchise, calculated in accordance with Section 6.3.1.
"Gross Revenues" means the sum of all revenues paid or obligated to be paid to the
Franchisee, its subsidiaries, affiliates or third parties as a result of the installation, operation,
maintenance or removal (temporary or otherwise) of the Public Communications Structures
and Existing PPTs, including for the display of advertising, the provision of communications
services, sponsorship, and the like.
"Minimum Annual Guarantee” or “MAG” means, for each year during which the
Franchisee performs the Services (including during any Extended Term or Holdover Period), the
amount set forth in Section 6.3.1, subject to any adjustment under Section 6.3.3.
6.2 Gross Revenues
6.2.1 [RESERVED]
6.2.2 Gross Revenues will be calculated on the basis of the total amounts of revenue
from whatever source derived, (net of bad debts)
but
without any other deduction
whatsoever for commissions, fees, brokerage, labor charges or other
expenses or costs, as
determined in accordance with generally accepted accounting principles,
on an accrual basis,
paid or obligated to be paid, directly or indirectly, to the Franchisee, its subsidiaries,
affiliates, or any parties directly or indirectly retained by the Franchisee to
generate
revenue (not including amounts paid or obligated to be paid to third parties by or on behalf
of the Franchisee or any subsidiary or affiliate of the Franchisee).
6.2.3 Gross Revenues includes the fair market value of any non-monetary
consideration (in kind) in the form of materials, services or other benefits, tangible or
intangible, or in the nature of barter the Franchisee may receive.
6.2.4 In the event that the Franchisee provides any advertising space pursuant to
any transaction which is not an arm's-length or free-standing transaction (because,
for
example the transacting Persons share some common ownership, or one party is controlled by
the other party or the transaction involves the Franchisee's including or grouping advertising
on
the Public Communications Structures with other assets in the Franchisee's inventory (in
New York City or elsewhere), the amount to be included in Gross Revenues will be no less than
the then-current Rate Card value as defined below in this Section 6.2.4 .
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(i) In the event that Franchisee sells Advertisements bundled with any other goods
or services offered by or for Franchisee, Franchisee shall not: (1) sell the
Advertisements at a higher discount than any good or service in such bundle or
(2) act or fail to act in any way that results in Advertisements being sold in a
manner to reduce the amounts payable to the City hereunder or to increase the
amounts allocable to Franchisee’s other goods or services.
(ii) No later than thirty (30) days after the Commencement Date, the Franchisee
shall submit to DoITT a Rate Card reflecting a set of values corresponding to the
purchase of advertising space on the Structures. Each rate on the Rate Card must
reflect a rate not less than the average amount actually charged by the
Franchisee during the twelve (12) months preceding the Commencement Date.
The Rate Card may include different rates for different types of advertising
space, different locations, different size purchases (for example, different rates
that reflect volume discounts), provided that in each case the listed rate reflects
the Franchisee’s average prevailing rate for arm’s length, free-standing
transactions in the previous year as described in the preceding sentence.
(iii) No more than thirty (30) days after each anniversary of the Commencement
Date, the Franchisee shall submit to DoITT an updated Rate Card, based upon
the rates actually charged in the preceding year.
6.2.5 Gross Revenues do not include (i) collection of any sales taxes or similar taxes
which the Franchisee is obligated by law to collect on behalf of and remit to a government
entity or (ii) revenues generated as a result of charges for print production and other Creative
Services provided by the Franchisee. Creative Services means services provided to advertisers
by Franchisee with the creation of advertising copy for display on a PCS pursuant to a separate
agreement. The Franchisee may not offer a discount on the Advertising to advertisers
purchasing Creative Services, subject to Section 6.2.4(i). Gross Revenues shall be reduced by
the amount of any payment made by the Franchisee to a Special Assessment District (“SAD”)
association (in connection with the location of Existing PPTs or Structures on sidewalks in the
applicable SAD) that had previously been receiving payment from holders of now expired PPT
franchises.
6.2.6 The Franchisee shall not divert or re-characterize revenue that would
otherwise have been considered Gross Revenues for purposes
of this Agreement. Violation of
this provision constitutes a material breach of the Agreement.
6.3 Compensation
6.3.1 The Franchisee shall pay to the City a Franchise Fee, with respect to each
Contract Year, in an amount equal to the greater of (i) fifty percent (50%) of Gross Revenues for
that Contract Year or (ii) the Minimum Annual Guarantee payment, as detailed in the table
below. In Contract Year Eight, the Percentage of Gross Revenue payable to the City shall
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increase to fifty-five (55%) percent for Gross Revenues derived by Franchisee from the display
of Advertising on the PCS, but shall remain at fifty (50%) percent for all other Gross Revenues.
In the event that the Agreement expires or is terminated by reason other than a Termination
Default, before the completion of a Contract Year, the Franchisee shall pay to the City a pro-
rated amount of the Minimum Annual Guarantee (based on the number of days in the Contract
Year prior to such expiration or termination divided by 365). If within any Contract Year
Franchisee makes payment to DoITT to satisfy any permitting fee relating to the installation of a
Structure, such payment will be credited as payment towards the Minimum Annual Guarantee.
Contract Year
Minimum Annual
Guarantee
Percentage of Gross
Revenue Advertising
Percentage of Gross Revenue
– Non Advertising
Contract Year 1
$20,000,000
Fifty (50%) Percent
Fifty (50%) Percent
Contract Year 2
$22,500,000
Fifty (50%) Percent
Fifty (50%) Percent
Contract Year 3
$25,000,000
Fifty (50%) Percent
Fifty (50%) Percent
Contract Year 4
$27,500,000
Fifty (50%) Percent
Fifty (50%) Percent
Contract Year 5
$42,000,000
Fifty (50%) Percent
Fifty (50%) Percent
Contract Year 6
$47,000,000
Fifty (50%) Percent
Fifty (50%) Percent
Contract Year 7
$51,500,000
Fifty (50%) Percent
Fifty (50%) Percent
Contract Year 8
$57,983,000
Fifty-Five (55%) Percent
Fifty (50%) Percent
Contract Year 9
$59,722,000
Fifty-Five (55%) Percent
Fifty (50%) Percent
Contract Year 10
$61,514,000
Fifty-Five (55%) Percent
Fifty (50%) Percent
Contract Year 11
$63,291,000
Fifty-Five (55%) Percent
Fifty (50%) Percent
Contract Year 12
$65,119,000
Fifty-Five (55%) Percent
Fifty (50%) Percent
Contract Year 13
$67,001,000
Fifty-Five (55%) Percent
Fifty (50%) Percent
Contract Year 14
$68,938,000
Fifty-Five (55%) Percent
Fifty (50%) Percent
Contract Year 15
$70,932,000
Fifty-Five (55%) Percent
Fifty (50%) Percent
In no event will the dollar figure in the first column of the above table for any Contract
Year commencing after January 1, 2016 be less than the amount which equals $20,000,000
(Twenty Million Dollars) multiplied by a fraction the numerator of which is the CPI in effect on
the first day of the Contract Year and the denominator of which is the CPI that was in effect on
the Commencement Date. The CPI for this purpose shall mean the Consumer Price Index (All
Urban Consumers, All Items, New York-Northern New Jersey-Long Island, NY-NJ-CT-PA, 1982-
84=100)
6.3.2 [RESERVED]
6.3.3 If in DoITT’s good faith determination, or as a consequence of the removal of
Advertising Structures pursuant to Section 3.7, the Franchisee’s total number of advertising
installations falls below 4,000 at any time during the Term, and the reason the total number
falls below 4,000 is not the fault of Franchisee, and the percentage of Gross Revenues due to
the City falls below the Minimum Annual Guarantee payment for that Contract Year then, if the
failure is a consequence of City Delay or Litigation Delay (as defined in Section 15.23.1), the
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Minimum Annual Guarantee will be reduced by a percentage commensurate with the number
of advertising installations short of the 4,000 number and the percentage of the year that the
advertising installation number fell short of 4,000.
6.4 Payment
6.4.1 On or before the 17th day of each calendar month, the Franchisee shall pay to
the City one twelfth (1/12) of the Minimum Annual Guarantee accrued in previous month. The
first payment will be made forty-seven (47) days after the Commencement Date and
subsequent payments will be made on the seventeenth (17
th
) day of each month. With each
payment, Franchisee shall submit a report, in a format acceptable to the Department, showing
Gross Revenues accrued that month. The report must include, at a minimum, a comprehensive
itemized list of all Gross Revenues received and any other information reasonably required by
the City.
6.4.2 Twice annually, the Franchisee shall provide a report (the “True-Up Report”)
showing total Gross Revenues generated during the first six months of the current Contract
Year and for the full twelve months of the recently completed Contract Year. The report must
be in a format reasonably acceptable to DoITT. The Franchisee shall simultaneously submit a
payment for any amount owed reflecting a true-up of the full amount payable to the City under
Section 6.3.1 above based on the information reflected in the true-up report.
(i) The Franchisee shall submit the first true-up report no more than thirty (30) days
following the date falling six months after the commencement of the current
Contract Year; and shall submit the second true-up report no more than thirty
(30) days following the end of the previous Contract Year.
(ii) In the event the year’s second True-Up Report shows that the City has been
overpaid (i.e. – the City has received more than the greater of (i) the percentage
of Gross Revenues set forth in Section 6.3.1 for that Contract Year or (ii) the
Minimum Annual Guarantee payment), the Franchisee shall be entitled to a
credit in the amount of such overpayment against the next Franchise Fee
payment or payments due.
6.5 Sponsorship
6.5.1 Subject to the Commissioner’s approval, the Franchisee may enter into an
agreement (a “Sponsorship Agreement”) with an entity whereby the entity (a “Sponsor”) will be
given sponsorship recognition or similar recognition as a provider of key support of one or more
of the Services.
6.5.2 Prior to entering into a Sponsorship Agreement, the Franchisee must receive the
express written permission of DoITT. The Franchisee shall present to DoITT a proposal that
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includes the proposed details of the sponsorship, including designs of any proposed
sponsorship logo(s), and the draft sponsorship agreement. DoITT may, in its discretion,
approve, deny, or in lieu of denial propose changes to the Sponsorship Agreement or other
proposed details that would be sufficient to grant DoITT’s approval.
6.5.3 The Franchisee’s obligations under this Agreement, including this Section, are
not affected by the performance or non-performance of the Franchisee’s obligations under the
Sponsorship Agreement.
6.5.4 Gross Revenues includes all payments that the Sponsor agrees to pay in
connection with the System, including in exchange for recognition and/or acknowledgement of
the Sponsor’s role.
6.5.5 More than one Sponsor and Sponsorship Agreement may be requested by the
Franchisee and permitted by DoITT, in its discretion, subject to the provisions of this Section 6.5
being applicable to each.
6.6 City Incurred Cost
The City shall provide five (5) business days’ notice of its intention to perform any work
that is the responsibility of the Franchisee and Franchisee shall have such five (5) business days
to perform such work, or, in an emergency, such shorter notice as the City may deem
reasonable under the circumstances. In the event such work is not performed by the
Franchisee, the City shall have the option to perform such work and the Franchisee shall
reimburse the City for all costs and expenses incurred by the City in the course of the City
performing any work that should have been performed by the Franchisee. Payment under
this Section is due thirty (30) days after receipt of an invoice from
the City setting forth the
amount to be reimbursed.
6.7 Future Costs
In the event of a Default by the Franchisee, the Franchisee shall pay to the City or
to third parties, at the direction of DoITT, an amount equal to the reasonable costs and
expenses which the City incurs for
the services of third parties (including attorneys and other
consultants) in
connection with enforcement of remedies including termination for cause.
Before any reimbursable work is performed, the City will advise the Franchisee that the City
will
be incurring the services of third parties pursuant to the preceding sentence. However,
in the
event the City terminates this Agreement or brings an action for other enforcement
of this
Agreement against the Franchisee, or the Franchisee brings an action against the
City, and the Franchisee finally prevails, then the Franchisee shall have no obligation to
reimburse the City or pay any sums directly to third parties, at the direction of the City,
pursuant to this Section with
respect to such termination or enforcement. In the event the
Franchisee contests the charges, it
shall pay any uncontested amounts. DoITT shall review
the contested charges and
the services rendered and shall reasonably determine whether such
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charges are reasonable for the
services rendered. In addition to the foregoing, the Franchisee
shall pay to the City or to third
parties, at the direction of DoITT, an amount equal to the
reasonable costs and
expenses which the City incurs for the services of third parties
(including, but not limited to,
attorneys and other consultants) in connection with any
renewal or transfer, amendment or other
modification of this Agreement or the franchise to
be made at the request of the Franchisee.
Before any reimbursable work is performed, the
City will advise the Franchisee that the City will
be incurring the services of third parties
pursuant to the preceding sentence. The Franchisee
expressly agrees that the payments made
pursuant to this Section are in addition to and not
in lieu of, and shall not be offset against,
the compensation to be paid to the City by the Franchisee pursuant to any other provision
of this Article.
6.8 Limitations on Credits or Deductions
6.8.1 The Franchisee acknowledges and agrees that:
(i) the Compensation and Services provided under this Agreement, as well as
costs and expenses incurred by the Franchisee in performing its obligations
under the Agreement, do not constitute a tax and must be provided in addition
to all taxes, fines, fees, or other charges of all kind levied by any governmental
entity, all of
which remain separate and distinct obligations of the Franchisee;
(ii) Franchisee knowingly and intentionally relinquishes and waives its rights and
the rights of any Affiliated Person to a deduction or other credit pursuant to
Section 626 of the New York State Real Property Tax Law and any successor or
amendment thereto, and to any subsequent law, rule, regulation, or order
which would purport to permit any of the acts prohibited by this Section 6.8,
and shall not cooperate with, encourage or otherwise support any attempt by
an Affiliated Person to make any such deduction or other credit;
(iii) except as expressly permitted under this Agreement, the Franchisee shall not
claim a deduction or credit for any part of the Compensation or Services
provided under this Agreement, or the costs and expenses incurred by the
Franchisee in performing its obligations under the Agreement, against any
taxes, fines, fees, or other charges of any kind levied by any governmental
entity (other than income taxes);
(iv) except as expressly permitted by this Agreement, the Franchisee shall not
apply taxes, fines, fees, or other charges of any kind levied by any governmental
entity as a deduction or credit against the Compensation or Services that the
Franchisee is obligated to provide under this Agreement.
6.8.2 The Franchisee shall not cooperate with, encourage, or otherwise support any
attempt by an Affiliated Person to undertake, for the benefit of the Franchisee, an Affiliated
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Person, or a third party, any action that the Franchisee is prohibited from undertaking itself
under Section 6.8.1.
6.8.3 Nothing in this Agreement is intended to prevent the Franchisee from
treating the Compensation or costs incurred in connection with providing the Services as
an ordinary
expense of doing business for the purposes of its City, state, or federal tax
liabilities.
6.9 Interest on Late Payments
If any payment required by this Agreement is not timely received by the City as required
by the Agreement, the Franchisee shall pay interest on the amount due commencing on the
due date until payment is received at an annual rate per year equal to the rate for delinquent
payment of water charges in effect as of the Execution Date.
6.10 Method of Payment
Except as provided elsewhere in this Agreement, the Franchisee shall direct all
payments to the City under this Agreement by check or wire (if approved by DoITT), payable to
“The New York City Department of Information Technology and Telecommunications,”
addressed to: Director of Franchise Audit and Revenue, Department of Information Technology
and Telecommunications, 2 MetroTech Center, 4
th
Floor, Brooklyn, NY 11201, or as otherwise
directed by DOITT.
6.11 Continuing Obligation and Holdover
6.11.1 If the Franchisee continues to operate all or any part of the System, including
placing Advertising, and the collection of revenue related to the Franchise or System, after the
expiration or termination of this Agreement, then the Franchisee shall continue to comply with
all provisions of this Agreement as if the Agreement was still in force and effect, including
providing Compensation to the City as required under the Agreement and the maintenance of
the Security Fund throughout the Holdover Period.
6.11.2 The Franchisee acknowledges and agrees that the parties do not intend that
continued operation by the Franchisee during any Holdover Period will constitute a renewal or
other extension of this Agreement—even if the Franchisee performs otherwise in compliance
with this Agreement.
6.11.3 If the Franchisee fails to perform as required under this Agreement during any
Holdover Period, the Franchisee acknowledges and accepts that the City may exercise any of
the City’s rights and remedies under Article XIII, as it would during the Term.
ARTICLE VII. SECURITY FUND AND MINIMUM EQUITY CONTRIBUTIONS
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7.1 Letter of Credit & Additional Security
7.1.1 No later than five (5) business days after the Execution Date, Franchisee shall
provide to the City an irrevocable letter of credit in favor of the City in the initial amount of
$20,000,000. Such letter of credit shall provide for scheduled increases or, no later than 20
days prior to the end of the applicable Contract Year, shall be supplemented or replaced by
additional letters of credit such that the aggregate face amount of such letter(s) of credit shall
equal the required amounts, increasing as indicated in the table below. Each such letter of
credit or letters of credit must include cancellation and renewal provisions compliant with
Section 7.1.4 below. If Franchisee fails to deliver the letter of credit as required, City may deem
Franchisee to be in default in the performance of its obligations hereunder. The letter of credit
must provide that payment of its entire face amount, or any portion thereof, will be made to
City upon presentation of a written demand to the bank by the City. In addition, no later than
20 days prior to the commencement of each Contract Year beginning with the seventh Contract
Year, the Franchisee shall provide the City with the Additional Security indicated in the table
below. The Additional Security will be in the form of a Letter of Credit, a surety bond or cash
deposited with a third party escrow agent selected by Franchisee and reasonably acceptable to
the City, the selection among the letter of credit, bond, or cash format for the Additional
Security shall be at the discretion of Franchisee. Franchisee will provide the Additional Security
for the upcoming Contract Year no later than twenty (20) days before the end of each Contract
Year.
Contract Year
Letter of Credit
Additional Security
Contract Year 1
$20,000,000
N/A
Contract Year 2
$22,500,000
N/A
Contract Year 3
$25,000,000
N/A
Contract Year 4
$25,000,000
N/A
Contract Year 5
$25,000,000
N/A
Contract Year 6
$25,000,000
N/A
Contract Year 7
$25,000,000
$750,000
Contract Year 8
$25,000,000
$3,992,000
Contract Year 9
$25,000,000
$4,861,000
Contract Year 10
$25,000,000
$5,757,000
Contract Year 11
$25,000,000
$6,646,000
Contract Year 12
$25,000,000
$7,560,000
Contract Year 13
$25,000,000
$8,501,000
Contract Year 14
$25,000,000
$9,469,000
Contract Year 15
$25,000,000
$10,466,000
7.1.2 The letter of credit must be issued by a financial institution with a long term credit
rating of not less than “A2” by Moody’s and “A” by S&P or a short term credit rating of not less
than “P-1” by Moody’s and “A-1” by S&P and be in form and substance reasonably acceptable
to the City.
7.1.3 The letter of credit and the Additional Security described in Section 7.1.1 above
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(together the “Security Fund”) will constitute a security deposit guaranteeing faithful
performance by Franchisee of the material terms, covenants, and conditions of this Agreement,
including all monetary obligations set forth in such terms. The City may make a demand under
Security Fund for all portions of the Security Fund to compensate the City for any loss or
damage (in each case, as reasonably documented by the City) that they may have incurred by
reason of Franchisee's material default or material breach of this Agreement; provided,
however, that the City will present its written demand to a bank for payment under a Security
Fund only after the City first has made its demand for payment directly to Franchisee, and five
full Business Days have elapsed without Franchisee having made payment to the City. Should
the City terminate this Agreement due to a breach by Franchisee, the City shall have the right to
draw from the Security Fund those amounts necessary to pay any fees or other financial
obligations under the Agreement and perform the services described in this Agreement until
such time as the City arranges for another contractor and the agreement between the City and
that contractor becomes effective. The City need not terminate this Agreement in order to
receive compensation for its damages. If any portion of the Security Fund is so used or applied
by the City (other than in connection with a termination of this Agreement), Franchisee, within
ten (10) business days after written demand by City, shall reinstate the Security Fund to its
original amount; Franchisee’s failure to do so will be a material breach of this Agreement. In
the event this Agreement is terminated pursuant to Section 13.4.2, the City agrees to return the
Security Fund upon the request of Franchisee (except that in the event of a Holdover Period,
the City shall not be required to return the Security Fund until the Holdover Period ends).
7.1.4 Any letter of credit that is to constitute all or part of Security Fund required
hereunder must provide that it will not be cancelled, and will not expire without renewal,
except after at least thirty (30) days' notice to the City of the impending cancellation, or
expiration without renewal, of such letter of credit. Any failure to replace or renew a Security
Fund letter of credit by a date which is thirty (30) days prior to the impending cancellation or
expiration of such a letter of credit will constitute Default under this Agreement, which the City
may cure by (i) drawing on the Security Fund and itself holding the proceeds as a replacement
Security Fund (with all rights to draw on the proceeds for Security Fund purposes as provided
under this Agreement) until such time as the Company completes the required letter of credit
replacement or renewal, or (ii) exercising any other lawful remedy or remedies. Interest earned
on proceeds held by the City as a replacement Security Fund will be retained by the City.
7.2 Performance Bond
7.2.1 Effective upon the Commencement Date of the Franchise Agreement, Franchisee
will deliver a Performance and Payment Bond, in a form approved by DoITT, in the penal sum of
$75,000,000 for the construction and installation of the Public Communication Structures.
7.2.2 Performance Bond Reduction. The penal sum of $75,000,000 for the
Performance Bond may be reduced to $60,000,000 at such time as a sufficient number of
Structures have been constructed and installed as contemplated in Section 1.2.3 of Attachment
SRV, such that no more than 2,000 Structures remain to be installed in order to complete the
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full set of schedules described in Section 1.2.3 of Attachment SRV. The penal sum of the
Performance Bond may be further reduced to $45,000,000 at such time as a sufficient number
of Structures have been constructed and installed as contemplated in Section 1.2.3 of
Attachment SRV, such that no more than 1,500 Structures remain to be installed in order to
complete the full set of schedules described in Section 1.2.3 of Attachment SRV. The penal sum
of the Performance Bond may be further reduced to $30,000,000 at such time as a sufficient
number of Structures have been constructed and installed as contemplated in Section 1.2.3 of
Attachment SRV, such that no more than 1,000 Structures remain to be installed in order to
complete the full set of schedules described in Section 1.2.3 of Attachment SRV. The penal sum
of the Performance Bond may be further reduced to $15,000,000 at such time as a sufficient
number of Structures have been constructed and installed as contemplated in Section 1.2.3 of
Attachment SRV, such that no more than 500 Structures remain to be installed in order to
complete the full set of schedules described in Section 1.2.3 of Attachment SRV. For purposes
of implementing the reductions contemplated in this Section 7.2.2, at such time as a reduction
is permitted, the City shall at Franchisee’s request issue a letter to the Surety confirming the
new, reduced penal sum of the bond amount may be affected.
7.3 Minimum Equity Contributions
The Franchisee shall maintain the minimum commitment of total equity contributions
by Members of the Franchisee as described in Section 2.3.2(vi) until the Franchisee has
completed installation of the quantity of Structures set forth in Section 1.2.3(vi) of Attachment
SRV, provided, however, such total minimum equity commitment requirement shall be reduced
by such amount as has already been funded to the Franchisee by one or more Members.
ARTICLE VIII. EMPLOYMENT AND PURCHASING
8.1 Right to Bargain Collectively
The Franchisee shall recognize the right of its employees to bargain collectively through
representatives of their own choosing in accordance with applicable law. The Franchisee shall
recognize and deal with the representatives duly designated or selected by the majority of its
employees for collective bargaining regarding rates of pay, wages, hours of employment or any
other terms, conditions or privileges of employment. The Franchisee shall not dominate,
interfere with, participate in the management or control of, or give financial support to any
union or association of its employees.
8.2. Local Opportunities
The Franchisee shall use commercially reasonable efforts to recruit, educate, train and
employ residents of the City, for opportunities created by the construction, installation,
operation, management, administration, marketing, and maintenance of the System.
Recruitment activities will include provisions for coordinating with the City’s workforce
development and training programs (such as the Per Scholas and Red Hook Initiatives), and
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posting employment and training opportunities at appropriate City agencies responsible for
encouraging employment of City residents. The Franchisee shall ensure the promotion of equal
employment opportunity for all qualified persons employed by, or seeking employment with,
the Franchisee.
8.3. Obligation to Use Domestic and Local Contractors and Subcontractors
The Franchisee certifies that at least 80 percent of the overall costs incurred by the
Franchisee for the labor and materials involved in the manufacture, including without
limitation, assembly, of the Structures will be within the United States and that at least 50
percent of the overall costs incurred by the Franchisee for the labor and materials involved in
the manufacture, including without limitation, assembly of the Structures will be within the City
of New York.
8.4. No Discrimination
8.4.1 The Franchisee shall not: (i) refuse to hire, train, or employ; or (ii) bar, layoff,
discharge, modify compensation or hours, promote, demote, transfer, or take any other
employment action based to any extent on an individual’s race, creed, color, national origin,
religion, gender or gender identity, age, disability, perceived disability, marital status, military
status, sexual affectation, or real or perceived affectional preference, or sexual orientation.
8.4.2 The Franchisee shall comply with all federal, state and local labor and
employment laws.
8.5 Employment Projections
The Franchisee currently expects that the Franchise will create an estimated 100-150
direct jobs through the platforms development, manufacturing, installation, maintenance, data
analytics, and application development, plus an estimated 650 additional support jobs. The
Franchisee will submit to DoITT and the FCRC by the thirtieth of January of each year during the
term of this Agreement and any renewals, a report documenting its progress on the job
creation described in this section.
ARTICLE IX. OVERSIGHT
9.1 Records
9.1.1 Throughout the Term, and for a minimum of six (6) years after Franchisee ceases
to provide any of the Services, the Franchisee shall maintain complete and accurate Books and
Records of the business, ownership, and operations of the Franchisee regarding the System to
allow the DoITT or the Comptroller to determine whether the Franchisee is in compliance with
the Agreement.
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9.1.2 If DoITT or the Comptroller determines that the Franchisee is not in compliance
with Section 9.1.1, the Franchisee shall alter the manner in which the Books and Records and
the accounting and commission reporting system is organized and maintained as directed by
the City in order to comply. All financial books and Books and Records must be maintained in
accordance with generally accepted accounting principles either in electronic or paper format,
or both. The Franchisee shall also maintain and provide any additional Books and Records as
the Comptroller or DoITT determine necessary to ensure proper accounting of all payments due
the City. At all times the Franchise shall maintain its Books and Records regarding advertising-
based revenues in a manner which allows DoITT and the Comptroller to evaluate compliance
with Section 6.2 above.
9.2 Right of Inspection
9.2.1 DoITT or the Comptroller may, upon written demand with reasonable notice to
the Franchisee, inspect, examine, or audit during normal business hours, at the Franchisee’s
New York City office, all documents, records, computer systems or other information in the
Franchisee’s possession related to or affecting the Franchisee's obligations under this
Agreement and to interview staff that perform functions related to these records. If access to
computer systems, related documents and records, and related staff cannot be provided in
New York City then Franchisee will provide access elsewhere and provide transportation and
accommodations for a minimum of two auditors.
9.2.2 Access by DoITT or the Comptroller to any of the documents in Section 9.1 shall
not be denied by the Franchisee on the grounds that such documents are alleged by the
Franchisee to contain confidential, proprietary or privileged information, provided that the
requirement shall not be deemed to constitute a waiver of the Franchisee’s right to assert that
confidential, proprietary or privileged information contained in such documents should not be
disclosed to a third party pursuant to Section 9.4.1.
9.3 Compliance with Investigation Clause
The Franchisee acknowledges, accepts, and shall comply with, the Investigation Clause,
attached as Appendix A.
9.4 Confidentiality
9.4.1 To the extent permissible under applicable law, the City shall protect from
disclosure any documents or information that is both (i) labeled by the Franchisee as a trade
secret or otherwise confidential (“Franchisee Confidential Information”) and (ii) identified with
specificity in a written communication to the Assistant Commissioner for Franchises. Labeling
and written notification are the responsibility of the Franchisee.
9.4.2 If the City is requested to disclose Franchisee Confidential Information pursuant
to law, the City shall undertake commercially reasonable efforts to provide the Franchisee with
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prompt written notice. If a protective order or other remedy is not obtained, the City shall
furnish the Franchisee Confidential Information only to the extent legally required, and will
exercise commercially reasonable efforts to obtain assurances that confidential treatment will
be accorded the Franchisee Confidential Information.
9.4.3 Information that, at the time of disclosure, (i) was available publicly and not
disclosed in breach of this Agreement, (ii) was available publicly without a breach of an
obligation of confidentiality by a third party, or (iii) was learned from a third party not under an
obligation of confidentiality, is not Franchisee Confidential Information for the purposes of this
Agreement.
9.4.4 Notwithstanding the obligations in this section or any other provision of this
agreement, the Franchisee acknowledges and accepts that the city of New York does not have
any financial liability to the Franchisee for disclosure of Franchisee confidential information.
The Franchisee hereby waives any right to recovery of pecuniary damages for breach by the city
of its obligations under this section.
9.5 Oversight
9.5.1 At its discretion, DoITT may oversee, regulate, and inspect the installation,
maintenance, operation and upgrade of the System, or delegate its rights under this section to
a third party.
9.5.2 The Franchisee shall establish and maintain managerial and operational records,
standards, procedures, controls, and reports as requested by the City that establish, to the
satisfaction of the City, that the Franchisee is performing in accordance with the requirements
of the Agreement.
9.5.3 The Franchisee may use functionality in the MMS to meet the requirements of
this section, but technical failure of the MMS does not relieve the Franchisee of its obligations
under this section.
9.6 Regulation by City
To the full extent permitted by applicable law either now or in the future, the City
reserves the right to adopt or issue rules, regulations, orders, or other directives governing the
System(s) and Services that the City determines necessary or appropriate in the lawful exercise
of its powers under the New York City Charter. The Franchisee acknowledges and accepts, and
shall comply with all rules, regulations, orders, or other directives.
ARTICLE X. ASSIGNMENT AND OTHER TRANSFERS; LIMITATIONS
10.1 City Approval Required
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10.1.1 Appendix D hereof sets forth, as of the date of execution of this Agreement (the
“Execution Date”), a listing of each of the members of the Franchisee (“Members”), including,
with respect to each such initial Member, the number of units of membership interest in the
Franchisee held by such initial Member. Subject to the provisions of this Article X, each of the
following transactions shall be subject to the prior approval of the City, provided that the City
may not be arbitrary and capricious in denying or conditioning any request for such approval or
in the timing of its decision with respect to any request for such approval: (i) any sale,
assignment or transfer of the Franchisee’s interest in the System, the franchise granted
hereunder or the Franchisee’s rights and obligations under this Agreement (other than
assignments of rights and delegations of obligations expressly permitted hereunder), (ii) any
transaction (or series of related transactions) which would result in the beneficial ownership
(within the meaning of Section 13(d)(3) of the Exchange Act) of more than forty percent (40%)
of the outstanding voting or non-voting membership interests of the Franchisee being held by
any single Person or group of Affiliated Persons, (iii) any transaction (or series of related
transactions) which would result in any of the initial Members listed on Appendix D owning less
than fifty percent (50%) of the outstanding membership interests of the Franchisee held by
such initial Member on the Execution Date, (iv) any transaction (or series of related
transactions) which would result in the transfer of all or substantially all of the System assets to
Persons other than the initial Members listed on Appendix D, or (v) any transaction (or series of
related transactions) which would result in the acquisition of Control of the Franchisee, the
System or the franchise granted hereunder or of a Controlling Interest in the Franchisee, the
System or the franchise granted hereunder by any Person or group of Affiliated Persons;
provided, however, that the requirements of this Section 10.1 will not be applicable with
respect to any “Permitted Transfers” (as defined in Appendix E attached hereto and made a
part hereof). The transactions described in clauses (i) through (v) of this Section 10.1.1 are
herein referred to as “Covered Transactions”.
10.1.2 Application to the City for any approval required hereunder must be made at
least forty-five (45) calendar days prior to the proposed effective date of the applicable Covered
Transaction. Such application must be in writing and must contain a reasonably detailed
description of all of the material terms of the Covered Transaction that are relevant to the City,
including reasonably detailed information with respect to the ownership and control of the
applicable transferee and the relevant financial, technical, and other qualifications of the
transferee, including, without limitation, the following information:
(i) any reports being provided to the shareholders of, or other investors in,
the applicable transferor any filings with the Securities and Exchange Commission, in
each case, that pertain to the Covered Transaction;
(ii) a description of any changes in ownership of voting or non-voting equity
interests of Members in the Franchisee (or of investors in the Members, to the extent
relevant) that relate to such Covered Transaction;
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(iii) other information that is necessary to provide an accurate understanding
of the financial position of the Franchisee and the System before and after the Covered
Transaction;
(iv) information regarding any potential impact of the Covered Transaction on the
Services; and
(v) any material contracts that relate to the Covered Transaction as it affects the
City and, upon reasonable request by the City, all material documents and other
information related or referred to therein and which are necessary to understand the
proposed Covered Transaction;
provided, however, that if the Franchisee believes that the requested information is
confidential and proprietary, then the Franchisee may withhold such information if it provides
the following documentation to the City: (a) specific identification of the nature of the
information; (b) a statement attesting to the reason(s) the Franchisee believes the information
is confidential; and (c) a statement that the documents are available at the Franchisee’s
designated offices for inspection by the City. Any such information so withheld shall be made
available at the Franchisee’s designated offices for inspection by the City.
10.2 City Action on Transfer
To the extent not prohibited by federal law, the City may, with respect to any Covered
Transaction: (i) grant its approval thereof on an unconditional basis; (ii) grant its approval
thereof subject to conditions; or (iii) deny its approval of the Covered Transaction, provided
that the City may not be arbitrary and capricious in denying or conditioning any request for
such approval or in the timing of its decision with respect to any request for such approval.
10.3 Waiver of Transfer Application Requirements
To the extent consistent with federal law, the City may waive in writing any requirement
that information be submitted, as part of the transfer application covered by Section 10.1.2,
without thereby waiving any rights the City may have to request such information after the
application is filed.
10.4 Subsequent Approvals
The City’s approval of a Covered Transaction described in Section 10.1.1 in one instance
will not render unnecessary approval of any subsequent transaction.
10.5 Approval Does Not Constitute Waiver
Approval by the City of a transfer described in Section 10.1 will not constitute a waiver
or release of any of the rights of the City under this Agreement, whether arising before or after
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the date of the transfer, except that such transfer will be deemed to have been permitted for
all purposes of this Agreement and, upon full assumption of the terms of this Agreement by an
approved transferee, the transferor shall be fully released from any obligations accruing after
the date of such assumption.
10.6 Managing Member
Titan Outdoor LLC (“Titan”) will be the managing member of CityBridge LLC (“Managing
Member”). Titan shall not reduce its ownership interest below 20% nor relinquish or diminish
its role as Managing Member at any time before the 4th anniversary of the effective date
without prior written approval of DoITT. DoITT will not unreasonably withhold or condition
approval if Titan would be replaced by a company of comparable expertise and financial
wherewithal.
ARTICLE XI. LIABILITY
11.1 Definitions
“Claim” means any claim other than a Third Party Claim.
“Damages” means all losses, liabilities, costs, expenses, damages, including attorneys'
fees and disbursements, whether imposed, finally awarded, or negotiated.
“Indemnitees” the City, its agencies, departments, offices, affiliated municipal entities,
officers, agents and employees.
“Indemnitors” means the Franchisee and its subsidiaries.
“Third Party Claims” occur if any third party makes any claim or brings any action, suit,
or proceeding against any Indemnitee.
11.2 Liability and Indemnity
11.2.1 The Indemnitors assume all risks of (i) damage or injury to property or persons
used or employed on or in connection with providing the Services; and (ii) damage or injury to
any persons or property wherever located resulting from any action, failure to act, or operation
under this Agreement. The Indemnitors shall indemnify and hold Indemnitees harmless for any
Damages, to which it may be subject arising from or related to any Claim or Third Party Claim.
11.2.2 The liability and indemnity obligation of the Franchisee under Section 11.2.1 do
not apply to any Damages to the extent caused by willful misconduct or gross negligence on the
part of the City.
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11.2.3 If the facts or law relating to any Damages preclude the City from being
completely indemnified by the Franchisee, the Franchisee shall indemnify the City to the fullest
extent permitted by law, subject to any limitation set forth in this Agreement.
11.2.4 Indemnification pursuant to Article 11 is independent of the Franchisee's
obligations to obtain insurance as provided under this agreement.
11.3 City Liability
11.3.1 The Indemnitees are not liable to the Franchisee or any Affiliated Person for any
Damages from Third Party Claims except direct Damages caused by the gross negligence or
willful misconduct of an Indemnitee.
11.3.2 The Indemnitees have no liability to the Franchisee or any Affiliated Person for
any Damages related to or arising from the design, installation, operation, maintenance,
removal or upgrade of any part of the System by or on behalf of the Franchisee or the City,
including in connection with any emergency, public work, public improvement, alteration of any
municipal structure, any change in the grade or line of any Inalienable Property of the City, or
the elimination, discontinuation, closing or demapping of any Inalienable Property of the City,
except as set forth in Section 11.3.1.
11.4 Defense of Claim
11.4.1 The Indemnitors shall defend the Indemnitees against all Claims and Third Party
Claims arising out of or relating to the risks, damages, and injuries described in Section 11.2.1.
11.4.2 The Indemnitors (through their insurance carrier(s) if appropriate) are
responsible for any professionals’ fees and expenses, including reasonable attorneys’ fees and
disbursements.
11.5 Intellectual Property Indemnification
11.5.1 The Franchisee shall defend, indemnify, and hold the City harmless from and
against all Damages, to which it may be subject arising from or related to any Third Party
Claim that any product, material, or work provided or used by the Franchisee in the provision of
any of the Services, including any designs, drawings, reports, or Software infringes, dilutes,
misappropriates, improperly discloses, or otherwise violates the copyright, patent, trademark,
service mark, trade dress, rights of publicity, moral rights, trade secret, or any other
intellectual property or proprietary right of any third party.
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11.5.2 The Franchisee is not obligated to indemnify the City for Damages solely to the
extent the Damages are based upon the failure of the City to comply with the terms of any
license to which the DoITT General Counsel and the Assistant Commissioner for Franchises have
been advised infringe upon a third party’s rights.
11.5.3 The Franchisee shall not negotiate any settlement that prevents the City or the
Franchisee from continuing to use the Design, the Preliminary Plans and Specifications (to the
extent incorporated in the Plans and Specifications), the Structures, or the Software without
the City's prior written consent, which consent shall not be unreasonably withheld or delayed.
11.5.4 If the City's use of the Design, the Preliminary Plans and Specifications (to the
extent incorporated in the Plans and Specifications), the Structures, or Software under this
Agreement becomes the subject of an infringement Claim; or in the Franchisee's opinion may
become the subject of an infringement Claim, then the Franchisee shall, at its expense and at its
option:
(i) procure the right for the City to continue using the potentially infringing
materials;
(ii) modify the portion(s) of the Plans and Specifications, the Preliminary Plans and
Specifications (to the extent incorporated in the Plans and Specifications), the
Structures, or Software so that it is no longer includes the potentially infringing
materials; or
(iii) replace the potentially infringing materials with non-infringing materials or
Software, but only if the modification or replacement does not materially change
the design of the affected Structures or lessen the provision or quality of the
Services.
11.6 No Claims Against Officers, Employees, or Agents
The Franchisee waives and shall not make any claim against any officer or employee of
the City or an agent of the City, in their individual capacity, arising from or relating to any act
performed or omitted in the lawful performance of this Agreement.
11.7 Limitation on Liability
11.7.1 Except with respect to the Franchisee’s obligations to indemnify the City under
Section 11.2 and warranties on non-infringement under Section 3.4(ii), and costs associated
with unauthorized disclosure by the Franchisee of Personal Protected Information, neither the
City nor the Franchisee are liable to the other for indirect, incidental, special, exemplary,
punitive, or consequential damages, damages for loss of goodwill or profits, loss or destruction
or inaccuracy of data, or other business loss, arising out of or resulting from performing their
respective obligations under the Agreement, whether liability is under contract, tort, strict
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liability, or other legal or equitable theory, even if previously advised of the possibility of such
damages.
11.7.2 In the event of a lawful termination or cancellation of the Agreement, the City
will not be liable for damages, loss of profits, expenses, specific performance or remuneration
for future performance of any kind provided, however, that such limitation shall not be
applicable in the event it is finally determined by a Court of competent jurisdiction (after all
appeals have been exhausted or the period for any applicable appeal right has lapsed) that the
City’s termination or cancellation of the Agreement was not authorized or proper.
11.7.3 Neither party’s liability for damages — other than tort liability, breach of
contract, or infringement of a third-party’s intellectual property —under any theory of liability
or form of action including negligence will not exceed ten million dollars ($10,000,000).
ARTICLE XII. INSURANCE
12.1 Types of Insurance
12.1.1 The Franchisee shall maintain one or more primary liability insurance policies
that satisfy the requirements of this Section throughout the Term, any Holdover Period, and
any time during which the Franchisee owns or maintains a PCS, or any part thereof, on, over, or
under the Inalienable Property of the City. The Franchisee shall effect and maintain the
following insurance.
12.1.2 The insurance policy(ies) must protect the City and the Franchisee from claims
for property damage or bodily injury, including death, which may arise or relate to the Services.
Coverage under this policy must be "occurrence" based rather than "claims- made," and will
include, without limitation, the following types of coverage: premises operations, products and
completed operations, contractual liability (including the tort liability of another assumed in a
contract), broad form property damage, medical payments, independent contractors, personal
injury (contractual exclusion deleted), cross liability, explosion, collapse and underground
property, and incidental malpractice.
12.1.3 If the insurance policy contains an aggregate limit, it shall apply separately to this
project, with coverage as broad as ISO Forms CG 0001 (1196 ed.).
12.1.4 The Commercial General Liability Insurance policy provided shall contain each of
the following endorsements:
(i) The Franchisee as “Named Insured.”
(ii) Commercial General Liability Insurance shall be in the amount of ten million
dollars ($10,000,000) aggregate and ten million dollars ($10,000,000 per
occurrence).;
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(iii) The City of New York, its officials, employees and agents as “Additional Insured”,
with coverage at least as broad as the most recently issued ISO Form CG 2026.
(iv) The condition of the policy titled “Duties in the Event of Occurrence, Claim or
Suit” is amended per the following: to the extent that knowledge of an
"occurrence", "claim", or "suit" is relevant to the City of New York as Additional
Insured under this policy, knowledge by an agent, servant, official, or employee
of the City of New York will not be considered knowledge on the part of the City
of New York of the ''occurrence", "claim", or "suit" unless the City receives notice
as provided below.
(v) Any notice, demand or other writing by or on behalf of the Named Insured to the
insurance company is deemed to be a notice, demand, or other writing on behalf
of the City as Additional Insured. Any response by the Insurance Company to the
notice, demand or other writing will be addressed to Named Insured and to the
City at the following addresses: Insurance Unit, NYC Comptroller's Office, 1
Centre Street Room 1222, New York, N.Y. 10007; and Insurance Claims Specialist,
Affirmative Litigation Division, New York City Law Department, 100 Church
Street, New York, NY 10007.
12.1.5 The limit of coverage under this policy applicable to the City as Additional
Insured is equal to the limit of coverage applicable to the Named Insured.
12.1.6 The Franchisee shall maintain, and require that each subcontractor maintains,
Workers Compensation Insurance and Disability Benefits Insurance under the Laws of the State
of New York for all employees providing services under this Agreement.
12.1.7 The Franchisee shall maintain, and require that each subcontractor maintains,
employer’s liability insurance affording compensation due to bodily injury by accident or
disease sustained by any employee arising out of and in the course of employment under this
Agreement.
12.1.8 The Franchisee shall maintain a comprehensive business automobile liability
policy for liability arising out of or relating to any automobile including owned, non-owned,
leased, and hired automobiles to be used in connection with this Agreement (ISO Form
CAOOOl, ed. 6/92, code 1 "any auto"). Automobile liability insurance shall be in the amount of
two million dollars ($2,000,000) aggregate and one million dollars ($1,000,000 per occurrence).
12.1.9 The Franchisee shall maintain a professional liability insurance policy covering
breach of professional duty, including actual or alleged negligent acts, errors or omissions
committed by the Franchisee, its agents or employees, arising out of the performance of
professional services rendered to or for the City. The policy shall provide coverage for bodily
injury, property damage and personal injury arising directly from any negligent act, error or
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omission of the Franchisee in rendering professional services. If the professional liability
insurance policy is written on a claims-made basis, such policy shall provide that the policy
retroactive date coincides with or precedes the Franchisee's initial services under this
Agreement and shall continue until the expiration or termination of the Agreement. The policy
must contain no less than a two-year extended reporting period for acts or omissions that
occurred but were not reported during the policy period.
12.1.10 All insurers waive their rights of subrogation against the City, its officials,
employees and agents.
12.1.11 The required insurance to be carried is not limited by any limitations expressed
in the indemnification language in this Agreement or any limitation placed on indemnity in this
Agreement as a matter of law.
12.2 General Requirements for Insurance Policies
12.2.1 The Franchisee shall maintain an insurance policy, only with companies that may
lawfully issue the required policy and have an A.M. Best rating of at least A- VII or a Standard
and Poor's rating of at least AA.
12.2.2. The Franchisee is solely responsible for the payment of all premiums for all
required policies and all deductibles and self-insured retentions to which such policies are
subject, whether or not the City is an insured under the policy. Any self-insured retention must
be reasonable and is subject to approval by the City.
12.2.3 The City's limits of coverage for all types of insurance required pursuant to
Schedule E attached hereto shall be the greater of (i) the minimum limits set forth in the
schedule or (ii) the limits provided to the Franchisee as Named Insured under all primary,
excess and umbrella policies of that type of coverage.
12.2.4 All policies shall be endorsed to provide that the policy may not be cancelled,
terminated, modified or changed unless thirty (30) days prior written notice is sent by the
Insurance Company to the Named Insured (or First Named Insured, as appropriate) and DoITT
at the address in Section 15.3.
12.2.5 Within 15 days of receipt by the City of any notice as described in Section 12.2.4,
the Franchisee shall obtain and furnish to DoITT, with a copy to the Comptroller, replacement
insurance policies in a form acceptable to DoITT and the Comptroller with evidence
demonstrating that the premiums for such insurance have been paid.
12.3 Proof of Insurance
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12.3.1 The Franchisee must, for each policy required under this Agreement, file a
Certificate of Insurance with DoITT, accompanied by a duly executed “Certification by Broker”
in the form attached as Appendix C.
12.3.2 The Franchisee shall provide the City with a copy of any policy required by this
Article XII upon demand by the DoITT or the New York City Law Department.
12.4 Operations of the Franchisee
12.4.1 Acceptance by DoITT of a certificate does not excuse the Franchisee from
securing a policy consistent with all provisions of this Article XII or of any liability arising from its
failure to do so.
12.4.2 The Franchisee shall provide continuous insurance coverage in the manner,
form, and limits required by this Agreement and may only perform Services during the effective
period of all required coverage.
12.4.3 If any required insurance policies lapse, are revoked, suspended or otherwise
terminated, for whatever cause, the Franchisee shall immediately stop all Services, and shall
not recommence Services until authorized in writing to do so by DoITT. However, if any of the
Services are being provided by a subcontractor that maintains insurance satisfactory to the City
that names the City as additional insured, then the Franchisee, acting by its subcontractor, may
continue to provide such Services as directed by DoITT.
12.4.4 The Franchisee shall provide written notification of any loss, damage, injury, or
accident, and any claim or suit arising under this Agreement from the operations of the
Franchisee or its subcontractors to the appropriate insurance carriers promptly, but not later
than 20 days after the event. The Franchisee's notice to the commercial general liability
insurance carrier must expressly specify that "this notice is being given on behalf of the City of
New York as Additional Insured as well as the Franchisee as Named Insured." The Franchisee's
notice to the insurance carrier must contain the following information: the name of the
Franchisee, the number of the policy, the date of the occurrence, the location (street address
and borough) of the occurrence, and, to the extent known to the Franchisee, the identity of the
persons or things injured, damaged or lost.
12.4.5 The Franchisee shall provide copies of any notices sent to an insurance carrier to
the Comptroller and the DoITT. Notice to the Comptroller will be sent to the Insurance Unit,
NYC Comptroller's Office, 1 Centre Street - Room 1222, New York, New York 10007. Notice to
DoITT shall be sent to the address in Section 15.3.
12.4.6 If the Franchisee fails to provide any of the foregoing notices to any appropriate
insurance carrier(s) in a timely and complete manner, the Franchisee shall indemnify the City
for all losses, judgments, settlements and expenses, including reasonable attorneys' fees,
arising from an insurer's disclaimer of coverage citing late notice by or on behalf of the City.
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12.5 Subcontractor Insurance
The Franchisee shall require and ensure that each subcontractor maintain insurance
that includes the City as Additional Insured under all policies covering Services performed by
such subcontractor under this Agreement. The City's coverage as Additional Insured shall
include the City's officials, employees and agents and be at least as broad as that provided to
the Franchisee. The foregoing requirements shall not apply to insurance provided pursuant to
Sections 12.1.6, 12.1.7, and 12.1.9.
12.6 Disposal
If under this Agreement the Franchisee is involved in the disposal of hazardous
materials, the Franchisee shall dispose of the materials only at sites where the disposal site
operator maintains Pollution Legal Liability Insurance for at least $2,000,000 for losses arising
from the disposal site.
12.7 Adjusted Insurance Coverage
The Franchisee shall adjust the minimum coverage of the liability insurance policy or
policies required in this Article within three months of receiving written notice from the City
that the City has reasonably determined that additional amounts or types of insurance are
being commonly carried regarding systems of a size and nature similar to the System or other
circumstances have arisen which make it reasonably prudent to obtain such additional amounts
or types of insurance. The notice shall specify in reasonable detail why the City is requiring the
additional amounts or types of insurance.
12.8 Other Remedies
The Franchisee’s obligation to maintain insurance coverage in the minimum amounts
does not relieve the Franchisee or subcontractors of any liability under this Agreement. The
Franchisee acknowledges and accepts that the City is not precluded from exercising any other
right or taking any actions available to the City pursuant to the Agreement or law.
ARTICLE XIII. SPECIFIC RIGHTS AND REMEDIES
13.1 Not Exclusive
The Franchisee acknowledges and accepts that the City has the specific rights and
remedies set forth in this Article XIII, and that these rights and remedies are in addition to and,
not in lieu of any other rights or remedies, existing or implied, now or hereafter available to the
City pursuant to the Agreement or law in order to enforce the provisions of this Agreement.
The Franchisee acknowledges and accepts that the rights and remedies are not exclusive, but
every right and remedy may be exercised as determined appropriate by the City. Exercising or
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waiving one or more rights or remedies does not constitute a waiver of the right to exercise at
the same time or thereafter any other right or remedy. Delay or omission will not be construed
as a waiver or acquiescence to any default.
13.2 Defaults
13.2.1 Any failure by the Franchisee to perform any of its obligations in accordance with
the requirements of the Agreement constitutes a breach. Any breach that is not cured within
the cure period specified corresponding to the breached obligation constitutes a "Default."
13.2.2 Subject to the provisions of Section 13.2.5, if no cure period is specified, the cure
period is deemed to be ten (10) business days after notification by the City of the breach.
13.2.3 If the Franchisee is in Default, then the City may at its discretion and without
further notice or an opportunity to be heard:
(i) undertake withdrawal from the Security Fund;
(ii) exercise the City’s rights under the Performance Bond to the extent applicable
(iii) pursue any rights the City may have against the Franchisee;
(iv) assert a claim for money damages from the Franchisee as compensation for the
Default (except to the extent that the City is entitled to—and has recovered—
Liquidated Damages);
(v) seek to restrain by injunction the continuation of the Default.
13.2.4 The Franchisee acknowledges and accepts that its failure to pay a finally
adjudicated violation arising out of or related to the Services is deemed a breach of this
Agreement. The cure period applicable to a breach under this subsection is fifteen (15) days
after notification by the City that it is in breach of this subsection.
13.2.5 Notwithstanding anything in this Agreement to the contrary, no Default shall
exist if a breach or Default is curable, and a cure period is provided therefor in this Section 13 or
otherwise, but work to be performed, acts to be done, or conditions to be removed to effect
such cure cannot, by their nature, reasonably be performed, done or removed within the cure
period provided, so long as the (i) the Franchisee is undertaking continuous diligent efforts to
cure the breach, and (ii) the Franchisee’s efforts commenced prior to the cure period expiring.
13.3 Termination Defaults
13.3.1. “Termination Default” means any failure by the Franchisee to comply with the
material terms and conditions of this Agreement, including the failures identified below:
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(i) A material failure to comply with the Franchisee's obligations to install Structures
under this Agreement (including the specified timeframes).
(ii) A material failure to comply with the Franchisee's obligations to maintain the
PCS as described in this Agreement.
(iii) Persistent or repeated failures to timely perform the Franchisee's obligations
under this Agreement, including timely payment of Compensation that are not
being disputed by the Franchisee in good faith.
(iv) Failure to maintain the Security Fund under Article 7, and such failure continues
for ten business days after notice.
(v) If, in connection with this Agreement, the Franchisee (a) intentionally or
recklessly makes a material false entry in the Records of the Franchisee or
intentionally or recklessly makes a material false statement in the reports or
other filings submitted to the City, or (b) makes multiple false entries that are
material in the aggregate in the Records of the Franchisee or multiple false
statements that are material in the aggregate in the reports or other filings
submitted by or on behalf of the Franchisee to the City.
(vi) If the Franchisee fails to maintain insurance coverage or otherwise materially
breaches Article XII and such failure continues for ten business days after notice
from the City to the Franchisee.
(vii) If the Franchisee engages in a course of conduct intentionally designed to
practice fraud or deceit upon the City.
(viii) If the Franchisee, intentionally or as a result of gross negligence, engages or has
engaged in any material misrepresentation to the City, either oral or written, in
connection with the award of this franchise or the negotiation of this Agreement
(or any amendment or modification of this Agreement) or in connection with any
representation or warranty contained herein.
(ix) The occurrence of any event relating to the financial status of the Franchisee
which is reasonably likely to lead to the foreclosure or other similar judicial or
non-judicial sale of all or any material part of the System, and the Franchisee fails
to demonstrate to the reasonable satisfaction of DoITT within 20 business days
after notice from the City to the Franchisee that such event will not lead to such
foreclosure or other judicial or non-judicial sale. Such an event may include,
without limitation: (a) uncured default extending beyond any time permitted to
cure such default under any loan or any financing arrangement material to the
System or the obligations of the Franchisee under this Agreement; (b) uncured
default extending beyond any time permitted to cure such default under any
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contract material to the System or the obligations of the Franchisee under this
Agreement; or (c) uncured default extending beyond any time permitted to cure
such default under any lease or mortgage covering all or any material part of the
System.
(x) If the Franchisee makes an unauthorized assignment or other transfer of interest
or control of the Franchisee or the System (including an assignment for the
benefit of creditors).
(xi) If the Franchisee becomes insolvent, or petitions or applies to any tribunal for, or
consent to, the appointment of, or taking possession by, a receiver, custodian,
liquidator or trustee or similar official for it or any substantial part of its property
or assets, including all or any part of the System.
(xii) If a writ or warranty of attachment, execution, distraint, levy, possession or any
similar process is issued by any tribunal against any material part of the
Franchisee's property or assets.
(xiii) If any creditor of the Franchisee petitions or applies to any tribunal for the
appointment of, or taking possession by, a trustee, receiver, custodian,
liquidator or similar official for the Franchisee or of any material parts of the
property or assets of the Franchisee, and a final order, judgment or decree is
entered appointing a trustee, receiver, custodian, liquidator or similar official, or
approving the petition in any such proceedings which is unstayed for sixty (60)
days (the sixty (60) day period will not apply if, as a result of the final order,
judgment, or decree the Franchisee will be unable to perform its obligations
under this Agreement.
(xiv) A final order, judgment or decree is entered in any proceedings against the
Franchisee decreeing the voluntary or involuntary dissolution of the Franchisee.
13.3.2 The Franchisee acknowledges that, subject to Section 1.4.1 of Attachment SRV, a
Termination Default may exist under one or more provisions of the preceding Section 13.3.1
even if the defaults individually were the subject of liquidated damages and liquidated damages
have been paid or were subsequently remediated by recourse to the Security Fund or by
payment in satisfaction of a violation of the PPT Rules.
13.3.3 The City shall give the Franchisee reasonable notice of any events or
circumstances that the City believes may give rise to a Termination Default under Section 13.3.1
should the events or circumstances continued.
13.3.4 If a Termination Default occurs, DoITT may at its option (in addition to any other
remedy which the City may have under the Agreement), notify the Franchisee that the
Agreement and the Franchise will terminate on the date specified in the notice (which date will
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be no fewer than ten (10) days following the date of receipt of the notice), and the Agreement
will be deemed expired on that date.
13.4. Expiration and Termination for Reasons Other Than Termination Default
13.4.1 If a condemnation occurs by a public authority, other than the City, or sale or
dedication under threat or in lieu of condemnation, of all or substantially all of the System, the
effect of which would materially frustrate or impede the ability of the Franchisee to carry out
its obligations and the purposes of this Agreement — and the Franchisee fails to demonstrate
to the reasonable satisfaction of DoITT within twenty (20) business days the Franchisee’s ability
to provide the Services would not be materially frustrated or impeded — then DoITT or
Franchisee may, at its option, terminate this Agreement by notice within sixty (60) days after
the expiration of said twenty (20) business day notice period.
13.4.2 If an employee or agent of the Franchisee is convicted (where such conviction is
a final, non-appealable judgment) of any criminal offense, including without limitation bribery
or fraud, arising out of or in connection with: (i) this Agreement, (ii) the award of the franchise
granted under this Agreement, (iii) any act to be taken under this Agreement by the City, its
officers, employees or agents, or (iv) the business activities and services to be undertaken or
provided by the Franchisee under this Agreement, and the conviction is a final, non-appealable
judgment or the time to appeal the judgment has passed, the Franchisee must terminate its
relationship with the employee, or agent or suspend its relationship pending final resolution of
the matter. If Franchisee does not terminate or suspend its relationship with the employee or
agent within five (5) days of final resolution of the matter, DoITT may, at its option, to the
extent permitted by law, terminate this Agreement immediately by notice as set forth in
Section 15.3.
13.4.3 If the Franchisee is convicted in connection with any alleged criminal offense,
including without limitation bribery or fraud, arising out of or in connection with: (i) this
Agreement, (ii) the award of the franchise granted under this Agreement, (iii) any act to be
taken under this Agreement by the City, its officers, employees or agents, or (iv) the business
activities and services to be undertaken or provided by the Franchisee under this Agreement,
then the City may, at its option, to the extent permitted by law, terminate this Agreement
immediately by notice as set forth in Section 13.3.4.
13.4.4 Expiration. This Agreement, if not previously terminated pursuant to the terms of
the Agreement, shall expire at the end of the scheduled Term.
13.5 Disposition of System
13.5.1 At the expiration or termination of this Agreement, the Franchisee shall remove
all Structures from the Inalienable Property of the City, in accordance with Section 13.7
13.5.2 Notwithstanding the foregoing, at the expiration or termination of this
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Agreement, the Franchisee, at the City’s election, shall sell to the City or to the City’s designee
any and all portions of the System including all associated Equipment necessary for the proper
functioning of such portion(s) of the System.
13.5.3 Disposition of Fiber
At the expiration or termination of this Agreement, the disposition of the Fiber shall be
in accordance with Section 3.13 of this Agreement.
13.6 Price
13.6.1 The price to be paid to the Franchisee upon an acquisition pursuant to Section
13.5 shall be the fair value), with no value allocable to the franchise itself, which price shall be
the fair value as provided in Section 363(h)(5) of the City Charter, as may be amended, or under
any successor provision. Notwithstanding the preceding, in the case of a termination after a
Termination Default, the last paragraph of Section II. A. 5 of the RFP shall apply.
13.6.2 The date of valuation for purposes of Section 13.5 shall be the date of expiration
or termination of the Agreement. For the purpose of such valuation, the parties shall select a
mutually agreeable independent appraiser to compute the purchase price in accordance with
industry practice and standards. If the parties cannot agree on an appraiser in ten (10) days,
the parties will seek an appraiser from the American Arbitration Association. The appraiser
shall be instructed to make the appraisal as expeditiously as possible, but in no more than sixty
(60) days and shall submit to both parties a written appraisal. The appraiser shall be afforded
access to the Franchisee’s Books and Records, as necessary to make the appraisal. The parties
shall share equally the costs and expenses of the appraiser.
13.6.3 The City will notify the Franchisee, within thirty (30) days after receipt of the
appraisal, of electing its rights pursuant to Section 13.5. If the City elects to make the purchase
pursuant under Section 13.5, such purchase shall occur within a reasonable time.
13.7 Procedures for Transfer and Removal after Termination
13.7.1 DoITT may waive its rights under Section 13.5.2 for any one or more of the Public
Communications Structures and require that the Franchisee, at its own cost and expense,
remove any or all of the Structures on, over, or under the Inalienable Property and replace the
sidewalk flags and curbs with the same materials as the adjacent flags and curbs and in
compliance with the New York City Administrative Code, within 180 days of expiration of this
Agreement, subject to extension by mutual agreement of the Franchisee and the City. DoITT
shall notify the Franchisee of its intention to exercise its rights pursuant to this Section at least
sixty (60) days prior to expiration.
13.7.2 The Franchisee shall cooperate with the City to effectuate an orderly transfer to
the City (or the City's designee) of all records, contracts, leases, licenses, permits, rights-of-way,
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and all other materials and information reasonably necessary to maintain and operate the
System, to the extent it is transferred (“Post-Term System") pursuant to Section 13.5.2.
13.7.3 If, pursuant to Section 13.5, DoITT requires the Franchisee to remove any or all
of the Structures, the following procedures apply:
(i) the Franchisee shall restore all Inalienable Property of the City and any other
property affected by the actions of the Franchisee under this Agreement to like new
condition, including replacement of the sidewalk flags and curbs with the same
materials as the adjacent flags, and in compliance with the New York City
Administrative Code, and shall have received all applicable approvals from DoITT and
any other applicable City approvals;
(ii) the City may inspect the Inalienable Property after removal and the Franchisee is
liable to the City for the cost of restoring the Inalienable Property of the City and
other affected property; and
(iii) the Security Fund, liability insurance and indemnity provisions of this Agreement,
and the Performance Bond if applicable, shall remain in full force and effect during
the entire period of removal of all or any of the Structures and/or restoration and
associated repair of all Inalienable Property of the City or Other Affected Property,
and for no fewer than 120 days thereafter, or for such longer periods as set forth in
this Agreement.
13.7.4 If, in the reasonable judgment of DoITT, the Franchisee fails to commence
removal or if the Franchisee fails to substantially complete removal of the Structures, including
all associated repair and restoration of the Inalienable Property of the City or any other
property in accordance with the time frames set forth in this 13.7, DoITT may, at its sole
discretion authorize removal of any part of the System by the City, or a third party, at the
Franchisee's cost and expense.
13.7.5 None of the declaration, connection, use, transfer or other actions by the City or
DoITT under Article 13 constitutes a condemnation by the City or a sale or dedication under
threat or in lieu of condemnation.
13.7.6 The City is not required to assume any of the obligations of collective bargaining
agreements or any other employment contracts held by the Franchisee or any other obligations
of the Franchisee or its officers, employees, or agents, including, without limitation, any
pension or other retirement, or any insurance obligations; and the City may lease, sell, operate,
or otherwise dispose of all or any part of the System in any manner.
ARTICLE XIV. SUBSEQUENT ACTION
14.1 Procedure for Subsequent Invalidity
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14.1.1 If any court, agency, commission, legislative body, or other authority of
competent jurisdiction because of a change in law or otherwise:
(i) declares this Agreement invalid, in whole or in part, or
(ii) requires the City or the Franchisee to: (a) perform an act inconsistent with any
provision of this Agreement or (b) cease performing any act required by this
Agreement, then the Franchisee or the City, as the case may be, shall promptly
notify the other party in writing.
14.1.2 Upon the occurrence of any event described in Section 14.1.1, the Franchisee
and the City shall continue to comply with all provisions of this Agreement, including the
affected provision, until the validity of the declaration or requirement is finally adjudicated or a
court orders the Franchisee or the City to comply with the declaration or order, provided that
either party may comply with any court order not stayed during the pendency of any appeal
leading to final adjudication.
14.2 Agreement Documents
The Agreement is comprised of the following documents:
(i) This document, titled “Franchise Agreement.”
(ii) Attachments: (1) Services, and (2) Resiliency and Disaster Recovery.
(iii) Exhibits: (1) Wi-Fi Terms of Service, (2) Wi-Fi Privacy Policy, (3) Service Level
Agreement and Schedule of Liquidated Damages, (4) Siting Criteria, and (5)
Structure Designs.
(iv) Appendices: (1) Investigation Clause, (2) MacBride Principles, (3) Certification by
Broker, (4) Initial Members of Franchisee, (5) Permitted Transfers, and (6)
Franchisee Lender Provisions
ARTICLE XV. MISCELLANEOUS
15.1. Appendices, Exhibits, Schedules
The Attachments, Appendices, Exhibits, and Schedules referenced in Section 14.2 are,
unless otherwise specified, a part of this Agreement. The procedures to approve any
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subsequent amendment or modification to the Appendices, Exhibits and Schedules are the
same as those applicable to any amendment or modification.
15.2 Merger
15.2.1 This Agreement and attachments, appendices, and exhibits contain the entire
agreement of the parties with respect to the subject matter of this Agreement, and supersede
all prior negotiations, agreements and understandings with respect thereto. This Agreement
may only be amended by a written document duly executed by all parties.
15.2.2 Any assumptions, exceptions or terms and conditions in the Franchisee’s
proposal documents that are not included in this document entitled “Agreement” are deemed
inconsistent with the Agreement.
15.3 Notices
Unless otherwise expressly provided in this Agreement, every notice, order, petition,
document, or other direction or communication to be served upon the City or the Franchisee
will be in writing and sent by registered or certified mail, return receipt requested or by first
class mail. The Franchisee will designate, by letter delivered to the City simultaneous with the
Franchisee’s execution of this Agreement, the address where it will receive these
communications. Franchisee may from time to time designate other locations. Franchisee will
send communications to the individual, agency or department designated in this Agreement,
unless it is to “the City,” in which case the communication will be sent to the Commissioner of
DoITT at 255 Greenwich Street, 9th Floor, New York 10007. Franchisee will also send a required
copy of each communication to Corporation Counsel, New York City Law Department, 100
Church Street, New York, New York 10007, Attn: Chief, Economic Development Division. Except
as otherwise provided, mailing the notice, direction, or order is equivalent to direct personal
notice deemed to be given when mailed. Any notice the Commissioner must give to the
Franchisee pursuant to Section 13.2 for which a cure period is ten (10) days or fewer must be
served by personal delivery, overnight mail service or facsimile transmission.
15.4 Coordination
The Franchisee and DoITT acknowledge and accept that this Agreement creates a
relationship that requires extensive and ongoing long-term coordination between the parties.
No later than ten (10) business days after the Commencement Date, DoITT and the Franchisee
will each designate a project manager, as the individual responsible for coordinating with the
other party regarding all matters that may arise during the Term relating to the permitting,
installation, maintenance, and operation of the System. During the Term all notices must be
sent to the Franchisee, other than a notice pursuant to Section 14.3, the notice will be sufficient
if sent to the above designated individual or his or her representative by e-mail, facsimile, hand
delivery, or mail, or to the extent oral notice is specifically permitted in this Agreement,
communicated by telephone. Oral notice is only effective if (a) given to the person identified in
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this Section 14.3 or a designee of the person whose designation is notified to the other party in
writing and (b) followed reasonably promptly by written notice, which may be given by e-mail.
15.5 Publicity
DoITT’s prior written approval is required before the Franchisee or its employees,
servants, agents or independent contractors may, either during or after completion or
termination of this Agreement, make any statement to the press or issue any material for
publication through any media bearing on the work performed under this Agreement, provided
however that Franchisee (and its employees, servants, agents or independent contractors) may
engage, without DoITT’s prior approval, in routine interactions with the press regarding ongoing
operation of the System (ongoing operation of the System for these purposes does not include
the rollout of new services or applications, significant service issues that may arise, and similar
non-routine matters). If the Franchisee publishes a work dealing with any aspect of
performance under this Agreement, or of the results and accomplishments attained in such
performance, DoITT will have a royalty-free, non-exclusive and irrevocable license to
reproduce, publish, or otherwise use and to authorize others to use the publication, or, in the
event that only a portion of the publication deals with an aspect of performance under this
Agreement, that portion of the publication.
15.6 General Representations, Warranties and Covenants of the Franchisee
15.6.1 The Franchisee makes the represents that:
(i) The Franchisee is a validly existing entity in good standing under the laws of
Delaware, and is duly authorized to do business in the State of New York and in
the City.
(ii) Appendix D sets forth a complete and accurate description of the organizational
and ownership structure of the Franchisee and a complete and accurate list of all
Persons who hold, directly or indirectly, an interest in the Franchisee of ten
percent (10%) or greater.
(iii) The Franchisee has all requisite power and authority to own or lease its
properties and assets, to conduct its business as currently conducted and to
execute, deliver and perform this Agreement and all other agreements entered
into or delivered with or as contemplated here.
(iv) The execution, delivery and performance of this Agreement is validly authorized
by all necessary action by the Franchisee and the certified copies of
authorizations for the execution and delivery of this Agreement provided to the
City pursuant to Section 2.3.2 are true and correct.
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(v) This Agreement and all other agreements entered into in connection with the
transactions contemplated here have been duly executed and delivered by the
Franchisee and constitutes (or upon execution and delivery will constitute) the
binding obligations of the Franchisee, and is enforceable (or upon execution and
delivery will be enforceable).
(vi) The Franchisee has obtained the authority to authorize, execute, and deliver this
Agreement and to consummate the transactions contemplated here and no
other proceedings or other actions are necessary by the Franchisee to authorize
the execution and delivery of this Agreement and the consummation of the
transactions contemplated here.
(vii) Neither the execution and delivery of this Agreement by the Franchisee nor the
performance of its obligations contemplated will:
(a) conflict with, materially breach, or constitute a material default under (1)
any governing document of the Franchisee, or to the Franchisee’s
knowledge, any agreement among any Affiliated Persons or (2) any
statute, regulation, agreement, judgment, decree, court or administrative
order or process or any commitment to which the Franchisee is a party or
by which it (or its properties or assets) is subject or bound;
(b) create, or give any Person the right to create, any material lien, charge,
encumbrance, or security interest on the property and assets of the
Franchisee; or
(c) terminate, modify, accelerate, or give any Person the right to terminate,
modify or accelerate, any provision or term of any contract, arrangement,
agreement, license agreement or commitments, except to the extent
there would be no adverse impact on the financial assets and liabilities of
the Franchisee or the System.
(viii) The Franchisee paid all material franchise, permit, or other fees and charges to
the City which became due prior to this Agreement under any franchise, permit,
or other agreement.
(ix) No Franchisee, or employee or agent of the Franchisee, has committed or been
convicted (where such conviction is a final, non-appealable judgment or the time
to appeal such judgment has passed) of any criminal offense, including without
limitation bribery or fraud, arising out of or in connection with (a) this
Agreement, (b) the award of the franchise granted pursuant to this Agreement,
or (c) any act to be taken under this Agreement by the City, its officers,
employees or agents, or (d) the business activities and services to be undertaken
or provided under this Agreement.
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15.6.2 The Franchisee shall promptly terminate its relationship with any employee
or agent of the Franchisee, who is convicted (where the conviction is a final, non-appealable
judgment or the time to appeal the judgment has passed) of any criminal offense, including
without limitation bribery or fraud, arising out of or in connection with: (i) this Agreement, (ii)
the award of the franchise granted under this Agreement, (iii) any act to be taken under this
Agreement by the City, its officers, employees or agents, or (iv) the business activities and
services to be undertaken or provided by the Franchisee under this Agreement.
15.6.3 The Franchisee affirms it is not in arrears to The City of New York upon any debt,
contract or taxes and that it is not a defaulter, as a surety or otherwise, upon any obligation to
The City of New York, and has not been declared not responsible, or disqualified, by any agency
of The City of New York, nor is there any proceeding pending relating to the responsibility or
qualification of the Franchisee to receive a franchise or other public contracts.
15.6.4 No material misrepresentation has been made, either oral or written,
intentionally or negligently, by or on behalf of the Franchisee in this Agreement, in connection
with any submission to DOITT or the Commissioner, in connection with the negotiation of this
Agreement.
15.7 Binding Effect
This Agreement binds and benefits both parties and their successors and permitted
transferees and assigns. All of this Agreement applies to the City and the Franchisee and their
successors, transferees and assigns.
15.8 Comptroller Rights
Nothing in this Agreement can diminish compromise or abridge the powers, duties, and
obligations of the Comptroller under the New York City Charter.
15.9 No Waiver; Cumulative Remedies
15.9.1 Neither party waives any right by failing to exercise that right. The rights and
remedies in this Agreement are cumulative and not exclusive of any remedies provided by law,
and nothing in this Agreement impairs the rights of the City or the Franchisee under applicable
law, subject in each case to the terms and conditions of this Agreement.
15.9.2 A waiver of any right or remedy by the City or the Franchisee at any one time will
not affect the exercise of that right or remedy or any other right or other remedy by the City or
the Franchisee at any other time.
15.9.3 For any waiver of the City or the Franchisee to be effective, it must be in writing.
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15.10 Partial Invalidity
15.10.1 The clauses and provisions of this Agreement are severable. If any clause or
provision is declared invalid, in whole or in part, by any court, agency, commission, legislative
body, or other authority of competent jurisdiction, that provision is deemed a separate,
distinct, and independent portion, and the declaration will not affect the validity of the
remaining portions, which other portions continue in full force and effect, but only if the
material obligations of the parties regarding advertising, Compensation, and the Services
remain valid.
15.10.2 If any material obligation of the parties regarding Advertising, Compensation, or
the Services is declared invalid, in whole or in part, and the declaration is not stayed within
thirty (30) days by a court pending resolution of a legal challenge or appeal, the adversely
affected party shall notify the other party in writing of the declaration of invalidity and the
effect of the declaration of invalidity and the parties shall enter into good faith negotiations to
modify this Agreement to compensate for the declaration of invalidity, provided. Any
modifications will be subject to the appropriate City approvals and authorizations and
compliance with all City procedures and processes. If the parties cannot come to an agreement
modifying this Agreement within 120 days of such notice (which 120-day period will be tolled
during any stay contemplated above), then this Agreement terminates with such consequences
as would ensue if it had been terminated by the City pursuant to subsection 13.4.4.
15.11 Survival
Any provision which naturally survives the termination or expiration of this Agreement
does so.
15.12 Headings and Construction
15.12.1 The headings in this Agreement are for reference only, do not form a part of this
Agreement, and do not affect the construction or interpretation. Any reference by number is
deemed to include both the singular and the plural, as the context may require.
15.12.2 Each party has participated in negotiating and drafting this Agreement. If an
ambiguity or a question of intent or interpretation arises, this Agreement will be construed as if
the parties had drafted it jointly, as opposed to being construed against a party because it was
responsible for drafting one or more provisions of this Agreement.
15.13 No Subsidy
No public subsidy is provided to the Franchisee under this Agreement.
15.14 No Agency
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The Franchisee will conduct the work to be performed under this Agreement as an
independent contractor and not as an agent of the City.
15.15 Governing Law.
The Agreement is deemed executed in the City of New York, State of New York and will
be governed, including validity, interpretation and effect and construed in accordance with the
laws of the State of New York, as applicable to contracts entered into and to be performed
entirely within the State.
15.16 Survival of Representations and Warranties
All representations and warranties in this Agreement will survive the Term.
15.17 Claims Under Agreement
15.17.1 The Franchisee acknowledges and accepts that, except to the extent
inconsistent with law, all claims asserted by or against the City arising under or related to this
Agreement will be heard and determined either in a court of the United States located in New
York City (“Federal Court”) or in a court of the State of New York located in the City and County
of New York (“New York State Court”).
15.17.2 If the City initiates any action against the Franchisee in Federal Court or in New
York State Court, service of process may be made on the Franchisee as provided in Section
15.19.
15.17.3 With respect to any action between the City and the Franchisee in New York
State Court, the Franchisee expressly waives and relinquishes any rights it might otherwise have
(i) to move or dismiss on grounds of forum non conveniens; (ii) to remove to Federal Court
outside of the City of New York; and (iii) to move for a change of venue to a court of the State
of New York outside New York County.
15.17.4 With respect to any action between the City and the Franchisee in Federal
Court, the Franchisee expressly waives and relinquishes any right it might otherwise have to
move to transfer the action to a United States Court outside the City of New York.
15.17.5 If the Franchisee commences any action against the City in a court located other
than in the City and State of New York, then, upon request of the City, the Franchisee will either
consent to transferring the action to a court of competent jurisdiction located in the City and
State of New York or, if the court where the action is initially brought will not or cannot transfer
the action, the Franchisee shall consent to dismiss such action without prejudice and may
reinstitute the action in a court of competent jurisdiction in the City of New York.
15.18 Modification
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Except as otherwise provided in this Agreement, any Appendix, Exhibit or Schedule to
this Agreement or applicable law, no provision of this Agreement nor any Appendix, Exhibit or
Schedule to this Agreement will be amended or otherwise modified, except by a written
instrument, duly executed by the City and the Franchisee, and, approved as required by
applicable law.
15.19 Service of Process
If the City initiates any action against the Franchisee in Federal Court or in New York
State Court, service of process may be made on the Franchisee either in person, wherever such
Franchisee may be found, or by registered mail addressed to the Franchisee at the address set
forth in this Agreement.
15.20 Compliance with Certain City Requirements
The Franchisee acknowledges, accepts, and shall comply with the City's "MacBride
Principles" and the “Investigation Clause,” which are attached as Appendix B and Appendix A,
respectively.
15.21 Compliance with Law, Licenses
15.21.1 The Franchisee shall comply with all laws and City policies.
15.21.2 The Franchisee at its sole cost and expense shall obtain and shall comply with all
requirements of any licenses and permits necessary for the provision of the Services from any
governmental body having jurisdiction over the Franchisee regarding the Services.
15.22 Mitigation
If a breach of this Agreement occurs by any of the parties, the non-breaching party will
act in good faith and exercise commercially reasonable efforts to mitigate any damages or
losses that result from the breach. Notwithstanding the foregoing, nothing in this Section 15.22
shall limit the parties' right to indemnification under Article XI.
15.23 Unavoidable Delay
15.23.1 "Unavoidable Delay" means a delay in the performance of any obligation under
this Agreement resulting from a strike; war or act of war (whether an actual declaration of war
is made or not); terrorism; insurrection; riot; injunction; litigation arising from a challenge (by
an entity other than the Franchisee or its Affiliates) to the City’s authority to enter into this
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agreement, to grant the franchise granted hereunder or to take any governmental action
necessary to allow Franchisee to perform its obligations under the Agreement (“Litigation
Delay”), fire, flood, similar severe weather related event, or similar act of providence; delay in a
decision by a City agency or office (“City Delay” as described in subsection 15.23.4); third party
utility power outage; or other similar causes or events to the extent that such causes or events
are beyond the control of the party claiming an Unavoidable Delay.
15.23.2 As a condition of claiming, and continuing to claim, that one or more of its
obligations under the Agreement are delayed under this Section, the claiming party must in
each case demonstrate that it has taken and continues to take all reasonable actions to avoid or
mitigate the delay.
15.23.3 The party claiming an Unavoidable Delay must notify the non-claiming party in
writing of the occurrence of the events giving rise to the delay within five (5) business days, or if
not reasonably practicable, as soon thereafter as reasonably practicable, of the date upon
which the party claiming an Unavoidable Delay learns or should have learned of its occurrence.
15.23.4 A delay in a decision by a City office or agency, the approval of which is a
condition to an occurrence, does not constitute a City Delay unless the delay is beyond the
normal period in which the agency or office generally acts with respect to the type of decision
being sought and only if the Franchisee has taken and continues to take all reasonable steps to
pursue such decision (and in any event the period of Unavoidable Delay ends with the City
agency’s or office’s final decision). In any event, City Delay shall include the City’s delay in
repealing Section 6-06(c) and 6-06(d) of the PPT Rules beyond the Effective Date.
15.23.5 Financial incapacity of the Franchisee or its Affiliates does not constitute an
Unavoidable Delay.
15.23.6 This Section applies to all of Franchisee’s performance obligations under the
Agreement. Notwithstanding the foregoing, an Unavoidable Delay does not excuse the
Franchisee’s payment obligation including the obligation to pay the Minimum Annual
Guarantee, except with respect to City Delays and Litigation Delays to the extent provided in
subsection 6.3.3.
15.24 Counterparts
This Agreement may be executed in one or more counterparts which, when taken
together, constitute one and the same.
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IN WITNESS WHEREOF, the party of the first part, by its Department of Information
Technology and Telecommunications and its Deputy Mayor, duly authorized by the Charter of
the City of New York, has caused the corporate name of the City to be hereunto signed and the
corporate seal of said City to be hereunto affixed and the party of the second part, by it officers
thereunto duly authorized, has caused its name to be hereunto signed and its seal to be
hereunto affixed as of the date and year first above written.
CITY OF NEW YORK
DEPARTMENT OF INFORMATION
TECHNOLOGY AND
TELECOMMUNICATIONS
255 Greenwich St.
New York, NY 10007
____________________________________
Anne Roest, Commissioner Date
CITY OF NEW YORK
____________________________________
Deputy Mayor Date
CITYBRIDGE, LLC
100 Park Avenue, 6th Floor
New York, NY 10017
____________________________________
[NAME], [TITLE] Date
(Seal)
Attest: ________________________
(Seal)
Attest: ________________________
Approved as to form and
certified as to legal authority:
________________________
Acting Corporation Counsel
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