Agreement - Telecommunications License

TELECOMMUNICATIONS LICENSE AGREEMENT BETWEEN
FORGED FIBER 37, LLC AND CITY OF APACHE JUNCTION
THIS LICENSE AGREEMENT (“License” or “Agreement”) is made this
day of , 2026 (“Effective Date”) by and between CITY OF APACHE
JUNCTION, an Arizona municipal corporation (“Licensor” or “City”), and FORGED
FIBER 37, LLC, a Delaware limited liability company (“Licensee”), collectively the
“Parties” and individually as a “Party.”
RECITALS
A. Licensee has applied to City for a License for the installation,
placement, operation and maintenance of a Communications Network in, on, under,
upon, along and across Public Highways within City.
B. Licensor desires to grant to Licensee a nonexclusive license to install,
place, operate, maintain, operate, upgrade and repair the Communications
Network in, on, under, upon, along and across Public Highways within City subject
to the requirements of this Agreement.
C. Licensor and Licensee desire to set forth their respective
responsibilities and the manner and terms upon which Licensor will grant this
License to Licensee.
AGREEMENT
NOW, THEREFORE, for and in consideration of the foregoing Recitals, the
amounts hereinafter to be paid by Licensee, and the covenants and agreements
contained herein to be kept and performed by Licensee, and other good and
valuable consideration, Licensor and Licensee agree as follows:
SECTION 1. Definitions. For the purpose of this License, unless the context
otherwise requires, the following terms, phrases, words, and their derivatives have
these meanings. When not inconsistent with the context, words in the present tense
include the future tense, words in the plural include the singular, words in the
singular include the plural, and the masculine shall include the feminine. The word
“shall” is always mandatory and not merely directory. If there is a conflict between
these definitions and those listed in Apache Junction City Code, the definitions in
the code prevail and control.

A. A.J.C.C. means the Apache Junction City Code, as amended from time
to time.
B. A.R.S. means the Arizona Revised Statutes, as amended from time to
time.
C. Affiliate means any Person that now or in the future, directly or
indirectly controts, is controlled with or by, or is under common control with
Licensee.
D. Applicable Laws means all state and federal constitutional provisions,
rules, statutes, ordinances, codes, and regulations, now in force and effect and that
may hereafter be imposed or enacted, including, but not limited to, building, zoning,
and Hazardous Substances, promulgated by the federal, state, and municipal
governments and any regulatory agency having competent jurisdiction over the
actions to be taken by the Parties under this License.
E. Cabinets means above-ground enclosures placed within the Public
Highway for the protection of active and passive equipment for the provision of
service throughout the Communications Network.
F. Chambers means underground enclosures placed within the Public
Highway facilitating access to the active and passive equipment for the provision of
service throughout the Communications Network.
G. City means City of Apache Junction, an Arizona municipal corporation.
H. City Breach Notice means a written notice from City to Licensee setting
forth specific details regarding the nature of an alleged noncompliance or default if
City believes that Licensee has not complied with or is otherwise in default of any
material term of this Agreement.
I. Communications Network means all parts of Licensee’s fiber optic
network under and above-ground within the Use Area, including the fiber optic
cable and its component parts and appurtenances, and the other cables, wires,
components, facilities, Cabinets, ducts, conduits, connectors, Chambers,
manholes, manhole covers, pedestals, splitters, attachments, and other property,
equipment, components, materials, apparatus and appurtenances to the fiber optic
network.

J. Control means, with respect to: (a) a U.S. corporation, the ownership,
directly or indirectly, of fifty percent (50%) or more of the voting power to elect
directors thereof; (b) a non-U.S. corporation, if the voting power to elect directors
thereof is less than fifty percent (50%), the maximum amount allowed by applicable
law; or (c) any other Person, fifty percent (50%) or more ownership interest in said
Person, or the power to direct the management of such Person.
K. Customers means businesses in City that receive Telecommunications
from Licensee through the Communications Network located at least in part in the
ROW.
L. Enforced Delay is defined in Section 19.
M. &xtended City Cure Period means the additional maximum ninety (90)
calendar day period that the Initial City Cure Period shall be extended to permit City
to cure a default or noncompliance if it cannot be cured during the Initial City Cure
Period so long as City initiates reasonable steps to remedy and continuously and
diligently uses all reasonable efforts to cure such default or noncompliance
promptly and notifies Licensee of the steps being taken and the projected date that
they will be completed.
N. Extended Licensee Cure Period means the additional maximum sixty
(60) calendar day period that the initial Licensee Cure Period shall be extended to
permit Licensee to cure a default or noncompliance if it cannot be cured during the
Initial Licensee Cure Period so long as Licensee initiates reasonable steps to
remedy and continuously and diligently uses all reasonable efforts to cure such
default or noncompliance promptly and notifies City of the steps being taken and
the projected date that they will be completed.
O. Gross Revenue means all consideration of any kind or nature, including
without limitation, cash, credits, property, and in-kind contributions (services or
goods) received by Licensee from Customers for wholesale broadband
transmission services that are provided to Customers through network facilities
located at least in part in public ROW; however, Gross Revenues do not include:
4. any revenue not actually received, even if billed, such as bad
debt;
2. refunds, rebates, or discounts made to Customers, or Lessor;

3. revenue received from the sale of Telecommunication Services
for resale in which the purchaser is required to collect and remit
similar fees from the purchaser’s customer;
4. revenue derived from the provision of Telecommunication
Services to Customers where none of the Communications
Network used to provide such Telecommunication Services are
located in the ROW;
5. any forgone revenue from Licensee’s provision of
Telecommunication Services to Customers at no charge if
required by state law;
6. any revenue derived from advertising;
7. any revenue’ derived from services other than
Telecommunication Services, including without limitation, any
revenue derived from rental of modems or other equipment used
to provide or facilitate the provision of the Telecommunication
Services;
8. any revenue derived from referral or marketing agreements with
third party providers of online services which Licensee may
make available to Customers;
9. any tax of general applicability imposed upon Licensee or its
Customers by Lessor or by any state, federal, or any other
governmental entity, and required to be collected by Licensee
and remitted to the taxing entity (including but not limited to
sales and use tax, gross receipts tax, excise tax, utility users tax,
public service tax, communications taxes, and fees not imposed
by this Agreement); and
10. sales of capital assets or sales of surplus equipment owned by
Licensee.
P. Hazardous Substances means any hazardous substances, waste or
materials, or any substance now or hereafter subject to regulation under the
Comprehensive Environmental Response Compensation and Liability Act, 42
U.S.C. § 9601, et seq., the Arizona Hazardous Waste Management Act, A.R.S. § 49-
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901, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et
seq., or the Toxic Substances Control Act, 15 U.S.C. § 2601, et seq., as each may
be amended from time to time, or any other federal, state, county, or local law
pertaining to hazardous substances, waste or toxic substances and their reporting
requirements.
Q. Home means a residential single-family dwelling, or a residential single
dwelling unit located within a Multiple Dwelling Unit, located within the Use Area.
R. Initial City Cure Period means the thirty (30) calendar day period City
has to respond to a Licensee Breach Notice after its receipt.
Ss. Initial Licensee Cure Period means the fifteen (15) calendar day period
Licensee has to respond to a City Breach Notice after its receipt.
T. License Fee means the fee Licensee shall pay to Licensor to
compensate Licensor for Licensee’s use and occupancy of the ROW pursuant to
this Agreement.
U. Licensee Breach Notice means a written notice from Licensee to City
setting forth specific details regarding the nature of an alleged noncompliance or
default if Licensee believes that City has not complied with or is otherwise in default
of any material term of this Agreement.
Vv. Licensee Cure Period means the Initial Licensee Cure Period and the
Extended Licensee Cure Period.
W. Licensee Payments means the Application Fee and the License Fee, as
defined in Section 4.
X. Multichannel Video Service means multiple channels of video
programming where some or all of the video programming is generally considered
comparable to programming provided by a television broadcast station or by a
direct to home satellite service and includes:
1. A “cable system,” as such term is defined in Title VI of the
Federal Communications Act of 1934, providing service within City.

2. An “open video system,” as such term is defined in Title VI of the
Federal Communications Act of 1934 and implementing regulations,
providing service within City.
3. Any other system providing Multichannel Video Service within
City, where such service is transmitted in whole or in part via wires or
lines that are in or cross any Public Highways, public streets or public
utility easements within City. The preceding sentence shall apply
whether the provider owns, leases or otherwise obtains the right to use
such wires or lines, including wires or lines of a telecommunications
provider used pursuant to tariff or otherwise for such purpose.
4. Any other system providing Multichannel Video Service within
City where a license or similar permission or approval from City is
required under Applicable Laws.
Y. Multipie Dwelling Unit means an apartment building or other building
containing more than four dwelling units located within the Use Area.
z. Person means an individual, corporation, limited liability company,
partnership, joint venture, association, firm, joint stock company, trust,
unincorporated association or other legal entity.
AA. Premises means a Home, Multiple Dwelling Unit, office or other
building located within the Use Area.
BB. Proprietary information means all information regarding the
Communications System, including plans, drawings, designs, conceptual
renderings, cost information, specifications, photographs, reports, manuals, and
other documents. Proprietary Information shall include, but not be limited to, any
customer lists, financial information, technical information, or other information
clearly identified as confidential pertaining to the services provided by Licensee to
its customers.
CC. Public Highways means all roads, streets and alleys and all other
dedicated public rights-of-way and public utility easements of this state or a
political subdivision, as that term is defined in A.R.S. § 9-581.
DD. ROW and Rights-of-Way means any land which by deed, conveyance,
agreement, easement, dedication, usage, zoning condition, process of law or other
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means is reserved for or otherwise dedicated to the general public for street,
highway, alley, public utility, pedestrian walkway and other public purpose.
EE. Telecommunications means the transmission, between or among
points specified by the user, of information of the user’s choosing, without change
in the form or content of the information as sent and received. The term does not
include commercial mobile radio services or cable services as defined by A.R.S. §
9-581.
FF. Telecommunications Services means the offering of
telecommunications for a fee directly to the public, or to such users as to be
effectively available directly to the public, regardless of the facilities used.
GG. Use Area means those portions of the Public Highways that Licensor
authorizes Licensee to occupy with the Communications Network. The Use Area is
limited to the public street, all ROWs, and any federally patented easements whose
fee simple title is vested in Licensor and may decrease, increase, and otherwise
change over time due to abandonments, dedications, annexations,
extinguishments, and other legal means. The Use Area is set forth in the map in
Exhibit A with a continuing map disclosure requirement as required under Section
2.3.
SECTION 2. Permission to Use ROW. Licensor hereby grants to Licensee a
nonexclusive revocable license to use the Use Areas as follows:
2.1. Permitted Uses. Licensee shall use the Use Area to erect, construct,
repair, maintain, replace, operate, lease, install, remove, reconstruct, and upgrade
the Communications Network in, on, under, upon, along and across the Public
Highways within the Use Area, and to make the Communications Network available
within the Use Area for the purpose of providing wholesale broadband transmission
services, subject to the applicable provisions of this License, Apache Junction City
Code, and any future amendments, together with all Applicable Laws.
2.2 Design. Licensee shall have the right, subject to Licensor approval of
the applicable permits, which approval shall not be unreasonably withheld,
delayed, or conditioned, to determine the final engineering design including but not
limited to depth, width, and height, of all equipment and other parts of the
Communications Network, provided the proposed design and construction is
consistent with the Apache Junction Engineering Design Standards (A.J.C.C., Vol
ll, Chapter 10).

2.3. Mapping. Licensee shall maintain as-built drawings of its Facilities and
furnish a copy both electronically in an ESRI- compatible mapping format (or in a
mapping format compatible with the current Licensor electronic mapping format as
specified by the Licensor) and in hard copy form on an annual basis or upon
reasonable request by the Licensor. Licensee shall create and maintain maps of
any of its Communications Network routes, Use Areas, New Use Areas, and any
above ground equipment located in the ROW and precise and verifiable horizontal
and vertical location information and will make this information available to the
Licensor. Licensee will also provide surface-location marking of any of the Facilities
that are located underground within ten (10) business days of installation. The
information provided by Licensee under this Section 2.3 will be accurate to the best
of Licensee’s knowledge. Licensee shall make every reasonable effort to provide
accurate and useful information. Licensee shail be permitted to remove any
information from the drawings provided hereunder that is not required for
Licensor’s purposes or is otherwise confidential to Licensee.
2.3.1. If complete updates are not provided in a compatible format,
Licensee shall pay the actual, reasonable costs Licensor incurs to update the
Licensor’s electronic mapping format due to the location or relocation of the
Facilities.
2.3.2. In the event Licensee fails to supply records in Licensor
specified format and there is a cost to Licensor in converting Licensee provided
files, Licensee will be responsible for the conversion costs and will pay such costs
within thirty (30) calendar days of the date of the bill from Licensor invoicing the
amount due.
2.3.3. The files and drawings provided by Licensee to Licensor shall be
considered confidential and subject to the restrictions in Section 7 below and
disclosed as a public record only to the extent required by A.R.S. § 39-121, et seq.
2.4 Prohibited Uses.
2.4.1. Licensee shalt not use the Communications Network as a
Multichannel Video System.
2.4.2. One-way transmissions by anyone directly to Customers or any
other type of video programming or other programming or one-way transmissions,

any one or more of which are subject to a uniform video service license, are
prohibited.
2.5 Privileges Subordinate. Any privilege claimed under this License by
Licensee in any Public Highway shall be subordinate to any prior or subsequent
occupancy or use by City and shall be subordinate to any prior lawful occupancy or
use by any other entity, and shall be subordinate to any prior easements.
2.6 Reserved Right. There is hereby reserved to City every right and power
which is required to be reserved or provided by any ordinance, the A.J.C.C., and
Licensee, by its acceptance of this License, agrees to be bound thereby and to
comply with any action or requirements of City in its exercise of all existing and
future rights or powers enacted or established and exercised in its sole discretion.
Neither the granting of any License nor any provision hereof shall constitute a
waiver or bar to the exercise of any governmental right or power of City.
Notwithstanding anything in this Agreement to the contrary, Licensor specifically
reserves to itself and excludes from this Agreement a non-exclusive delegable right
over the entire Use Areas for al! manner of real and personal improvements and for
streets, sidewalks, trails, landscaping, utilities and every other land use of every
description.
2.7 Ownership of Communications Network. Except as otherwise set forth
in this License, the Communications Network and all of its parts and components
which are installed and constructed by Licensee in the License Area shall at all
times be and remain the property of Licensee.
2.8 Compliance with Laws. Licensee shall comply with Applicable Laws to
engage in business activities associated with use of the Public Highways; provided,
however, no Applicable Laws shall enlarge or modify any of the rights or duties
granted by this License without a written amendment to this License.
2.9 Application; Permitting Process. City will comply with all Applicable
Laws and act in accordance with Its standard procedures in reviewing and
processing all applications for permits submitted under this License. If Licensee
desires greater control over the speed of the permitting process, then Licensee
may, by separate agreement, request that City engage a third-party consultant to
work alongside City staff, and who will be solely dedicated to the processing of
Licensee’s applications.

SECTION 3. Construction; Permits; Maintenance; Damage: Relocation; Conditions.
3.1. Construction of Communications Network.
3.1.1. The Communications Network constructed, installed, operated,
leased, repaired, replaced, removed, abandoned, or maintained pursuant to this
License shall be constructed, installed, operated, leased, repaired, replaced and
maintained in accordance with the Apache Junction Engineering Design Standards
(A.J.C.C., Vol. Il, Chapter 10) and all other applicable codes, regulations, policies,
and standards, whether mandated by City, State of Arizona or any other
governmental entity with jurisdiction over the Public Highways and, at a minimum,
consistent with the terms of this License. Public Highways under the control of City
shall be used according to plans approved by City Engineer or their designee.
3.1.2. The Communications Network to be constructed, installed,
operated, leased, repaired, replaced, maintained, upgraded and removed under
this License, shali be so located as to interfere as little as reasonably possible with
traffic or other authorized uses within Public Highways. Licensee shall provide
engineering designs to City, including intended locations of the Communications
Network, prior to construction in accordance with City’s permitting process. The
phases of construction and installation relating to traffic control, backfilling,
compaction and paving, as well as the location or relocation of the Communications
Network shall be subject to reasonable regulation by City Engineer or designee and
City’s permitting process.
3.1.3. Licensee will use commercially reasonable efforts to commence
construction on or before January 1, 2028, subject to any Enforced Delay. In
addition, following construction commencement, Licensee shall provide City with a
construction forecast for the upcoming three-year period each January ‘st.
3.2 Permits.
3.2.1.Prior to the installation, construction, maintenance,
abandonment, replacement, extension or relocation of any portion of the
Communications Network, Licensee shall apply for and obtain at its own expense
all permits required for such work and shall comply with all zoning, building safety,
fire, public infrastructure, sidewalk, pavement and curb cut, restoration, and
similar laws and procedures of every description. All work performed under this
License shall be done in compliance with Right-of-Way Improvement Standards, the
Uniform Standard Specifications and Details for Public Works Construction
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sponsored and distributed by the Maricopa Association of Governments (“MAG”) as
amended, City amendments to MAG, Apache Junction Standard Details and
Specifications, Apache Junction’s Approved Product List and Technical
Specifications, and Occupational Safety and Health Administration (“OSHA”)
regulations, as all of which may be amended from time to time. Licensee shall retain
a third-party testing company at its sole cost, approved by City in its reasonable
discretion without undue condition or delay, to test all materials that will be used to
remediate City and third-party facilities, and which are subject to materials testing
pursuant MAG, and City amendments to MAG.
3.2.2. Licensee shall submit the Right-of-Way Permit together with the
details, plans and specifications for City review and consideration, and pay all
lawfully applicable application, review, traffic barricading, remediation material
testing and inspection fees prior to any and all construction work performed
pursuant to the rights granted under this License including the installation,
operation, maintenance, location and attachment of any and all of the
Communications Network. The proposed locations of Licensee’s planned initial
installation of its Communications Network including related facilities or equipment
shall be depicted more specifically on engineering drawings provided to City with
the submittal of the plans and specifications during the permitting process. if
Licensee desires to change the location of any part of the Communications
Network, including any related facilities or equipment, from the location set forth in
the initial Right-of Way Permit or Right-of-Way Encroachment Application(s),
Licensee shall apply for a new permit prior to any relocation or construction.
3.2.3. This Agreement does not relieve Licensee of the obligation to
obtain permits, licenses, and other approvals from Licensor or other units of
government that are required for the installation, construction, maintenance,
abandonment, replacement, extension or relocation of the Communications
Network or from compliance with Applicable Laws.
3.3 Maintenance. Licensee shall be solely responsible for all repairs,
maintenance, and adjustments, and damage to the Communications Network and
City shail have no obligation to repair such damage, except where the damage is
caused by the sole and exclusive actions of City or its agent. Exciuding relocations
reasonably requested by City and repairs or maintenance to the Communications
Network, Licensee shall not relocate, materially modify, or materially alter the
Communications Network components any time after issuance of the permit(s),
except upon City’s written approval, which approval will not be unreasonably
withheld, delayed, or conditioned.
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3.4 Communication Network Underground Responsibilities. Except as
otherwise provided by this License, or permitted by City, all of Licensee’s
installations and Communications Network within City’s Public Highways, except
for above-ground or aerial facilities, and Cabinets, shall be underground and shall
meet the specifications set forth in a City-issued permit.
3.5 Coordination of Work. Where possible installation and relocation of the
Communications Network shall be coordinated with other utilities to accommodate
opportunities for common trench installation. Participation in joint trench efforts is
strongly encouraged, but shall not be mandatory.
3.6 Arizona 811. Licensee shail comply with A.R.S. §§ 40-360.21 et seq. by
participating as a member of the Arizona 811 Center (or other appropriate
organization selected by City). A copy of Licensee’s membership in a one-caill
notification center shall be submitted to City upon request.
3.7 Damage. If Licensee damages, disturbs, or alters the surface or
subsurface of any Public Highway or adjoining public property, any public
improvement, landscaping, or property of third parties, then Licensee shall
promptly, at its own expense, and in a manner reasonably acceptable to City, repair
and restore the damage or disturbance to a condition substantially comparable to
its state immediately before such damage, disturbance, or alteration. If Licensee
does not immediately repair or restore the damage, or if the repair is unacceptable
to City, City shall give Licensee notice of such and allow Licensee thirty (30)
calendar days to repair or restore the damage. If Licensee fails to complete such
repair within the 30-day timeframe, City may perform such repair and Licensee shall
pay all the actual, reasonable, and fully documented direct costs expended to
complete the repair. It is hereby acknowledged that City policy requires that
severed City-owned fiber must be completely replaced to nearest previously
existing splice point. Any trimming of trees by the Licensee in the Public Highways
shall be subject to such regulation as City Engineer or designee may establish to
protect the public health, safety, and convenience.
3.8 Emergency Disruption by Licensor. Licensor may remove, alter, tear
out, relocate or damage portions of the Communications Network in the case of fire,
disaster, or other emergencies if Licensor’s city manager or designee deems such
action to be reasonably necessary under the circumstances. In such event, neither
Licensor nor any agent, contractor, or employee of Licensor shall be liable to
Licensee or its customers or third parties for any harm so caused to them or the
Communications Network. When practical, Licensor shall consult with Licensee in
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advance to assess the necessity of such actions and to minimize damage to and
disruption of operation of the Communications Network to the extent practical
under the circumstances. In any event, Licensor shall inform Licensee after it takes
such emergency actions.
3.9 Public Safety Hazard. If the Communications Network or any other
Licensee equipment, improvements, or activities within the ROW presents any
immediate hazard or impediment to the public, to Licensor, to other improvements
or activities within or without the ROWs, or to Licensor’s ability to safely and
conveniently operate the ROW or perform utility services, public safety and other
public health, safety and welfare functions, then Licensee shall immediately remedy
the hazard, comply with Licensor’s requests to secure the ROW, and otherwise
cooperate with Licensor at no expense to Licensor to remove any such hazard or
impediment. Licensee’s work crews shall report to the ROW within two (2) hours of
any request by Licensor under this Section 3.9.
3.10 Relocation Due to Public improvements. Licensee shall bear the entire
cost of relocating its Communications Network facilities located within Public
Highways necessitated by the construction of public improvements by or on behalf
of City. If Licensee is required to relocate its Communications Network facilities due
to the construction of a public improvement, City shall provide Licensee with sixty
(60) calendar days notice before any required action of Licensee to relocate
affected portions of the Communications Network and shall cooperate with
Licensee to identify a replacement and alternative location within the Public
Highways for the relocation of affected portions of the Communications Network.
Licensee, at its sole cost and expense, shall remove the designated portions of the
Communications Network within the timeframes required by City, subject to this
Section 3.10. Licensee, at its sole cost and expense, shail restore all public and
private property damaged by Licensee’s removal and relocation of the
Communications Network to a condition substantially comparable to the condition
before removal and relocation of the Communications Network. City will make
reasonable efforts to design and construct projects as to minimize relocation
expenses to Licensee, and shall entertain a reasonable request to support existing
facilities in place. If Licensee fails to relocate as required by this Section 3.10, the
Licensee shall reimburse City for actual and reasonable direct damages and costs
incurred by City as a result of such delays.
3.11 Licensee’s Agent. Licensee shall at all times retain an agent who will
be available to City twenty-four (24) hours a day, seven (7) days a week who is
active, qualified, competent, and experienced to supervise all activities in the Use
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Area and the operation of the Communication Network and who shall be authorized
to represent and act for Licensee in all matters pertaining to emergencies and the
calendar day-to-calendar day operation of the ROW and all other matters affecting
this Agreement. Licensee shall provide notice to Licensor of the name, street
address, electronic mail address, and regular and after hours telephone numbers
of the agent. Any change in the name or contact information of the agent shall be
given in writing in the manner stated for notices under this Agreement.
SECTION 4. Licensee Payments.
4.1 Waiver of Rights. By entering into this Agreement, neither Party waives
any current or future rights reserved under the Telecommunications Act of 1996,
including but not limited to, those rights set forth in Section 253(C), reserving
Licensor’s right to manage the public ROW and to require fair, non-discriminatory
and reasonable compensation from Licensee for use of the public ROW.
4.2 Payment of Fees. Licensee shall make payments to Licensor as
follows:
4.2.1 Application Fee. Licensee shall pay Licensor an application fee
of Three Thousand Five Dollars ($3,500.00) for the administrative costs involved in
the issuance of a License which shall be due at the time of the submittal of the
License application.
4.2.2 License Fee. Licensee and Licensor acknowledge and agree
that the License Fee provides fair and reasonable compensation for Licensee’s use
and occupancy of the ROW. The License Fee will begin accruing on the Effective
Date and shall be paid annually. Licensee shall choose either the ROW Usage Fee
in Section 4.2.2.1 or the Lump Sum Payment in Section 4.2.2.2 as the License Fee.
4.2.2.1 ROW Usage Fee. The ROW Usage Fee shall be
calculated as two percent (2%) of Gross Revenues. The ROW Usage Fee will be
paid annually beginning on the Execution Date.
4.2.2.2 Lump Sum Fee. As an alternative to the fee
structure in 4.2.2.1, Licensee may make a lump sum payment of $30,000.00 ( “Lump
Sum Pre-Payment”) to the City for the right to occupy the ROW for a period of
twenty-four (24) months (the “Pre-Payment Occupancy Period”). The Lump Sum
Pre-Payment shall be invoiced by the City on the date Licensee receives its first
permit under this License Agreement. Licensee will pay the invoice within forty five
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(45) calendar days upon receipt. At the end of the Pre-Payment Occupancy Period,
Licensee’s fee structure shall convert the ROW Usage Fee set forth in Section
4.2.2.1.
4.2.2.3 If Licensee elects to make the Lump Sum Pre-
Payment described in 4.2.2.2, then it also retains the option to convert its fee
structure the ROW Usage Fee if it begins earning revenue prior to the end of the
Pre-Payment Occupancy Period. Upon that conversion, the City shail retain a pro-
rata share of the Lump Sum Pre-Payment equal to the number of months that have
passed under the Pre-Payment Occupancy Period. By way of example, if Licensee
chooses to convert to the ROW Usage Fee on the thirteenth month of the twenty-
four-month Pre-Payment Occupancy Period, then the City shall retain 13/24ths of
the Lump Sum Pre-Payment, and the remaining 11/24ths shall be applied as a credit
towards future payments of the ROW Usage Fee.
4.3. Payment of Licensee Payments to Lessor. Licensee shall make the
Licensee Payments to Licensor within thirty (30) calendar days of the Effective
Date of this Agreement and on the anniversary of the Effective Date for the Term
or any Extension Term. All payments shall reference the contract number and be
sent to: City of Apache Junction, Finance Department, 300 E. Superstition Blvd.
Apache Junction, AZ 85119.
4.4 Late Fees. Licensee Payments are deemed paid only when Licensor
actually receives good cash payment. Should any Licensee Payments not be paid
on or before the date due, a late fee shall be added to the amount due in the amount
of the greater of one percent (1%) of the amount due. Furthermore, any Licensee
Payments that are not timely paid shall accrue simple interest at the rate of one and
one-half percent (1.5%) per month from the date the amount first came due until
paid. Licensee expressly agrees that the foregoing represent fair and reasonable
estimates by Licensor and Licensee of Licensor’s costs (such as accounting,
administrative, legal and processing costs, etc.) in the event of a delay in payment
of Licensee Payments. Licensor shall have the right to allocate payments received
from Licensee among Licensee’s obligations.
4.5 Licensee Payments Amount Report. Each installment of Licensee
Payment, other than Permit Fee and Lump Sum Fee, shall include a report showing
the manner in which each component of the Licensee Payment was calculated. The
report shall summarize the transactions giving rise to the Licensee Payments.
4.6 Permit Fees. Licensee shall pay all applicable construction permit fees
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to place Facilities in the ROW, which includes charges for encroachment permit
applications, issuance, inspection, testing, plan review and any other fees adopted
by Licensor and applicable to persons doing work and/or encroaching in Licensor’s
ROW pursuant to A.J.C.C., Vol. 1, Article 13-3.
4.7 Performance Bond.
4.7.1 Prior to receiving any permit to construct, install, maintain or
perform any work on public property that requires a permit from Licensor pursuant
to Applicable Laws, Licensee shall cause to be filed and maintained a faithful
performance bond in favor of Licensor in the sum of One Hundred Thousand Dollars
($100,000.00) until either completion of the construction or termination of this
Agreement to guarantee that Licensee shall observe, fulfill, and perform each and
every condition of this Agreement. In case of any breach of this Agreement, any
amount of the sum in the bond, up to the whole amount, may be forfeited to
compensate Licensor for any damages it may suffer by reason of such breach. Said
bond shall be acknowledged by Licensee, as principal, and shall be issued by a
surety with an AM Best rating of A-Vil or better for the last four quarters. The
procedure for drawing upon, curing, and replenishing the performance bond are
set forth in Exhibit B.
4.7.2 IfLicensee has completed the above construction and wants the
bond released, Licensor will need to inspect and approve the construction prior to
such release. A performance bond will be required for each subsequent or
additional construction project and/or work on public property.
4.8 In-Kind Payment as an Offset to Licensee Permits. This Agreement
does not currently provide for any future in-kind payments by Licensee; however,
the Parties may agree in writing through an addendum to this Agreement to an in-
kind payment of Facilities or services provided by Licensee to Licensor to offset
such fees or transaction privilege taxes owed.
4.8. Taxes. Licensee shall pay any applicable city, county and state
transaction privilege and use tax. Such taxes are in addition to any non-tax amounts
owed by Licensee pursuant to this Section 4. Licensee consents to the disclosure
of any and all information reported on Licensee’s transaction privilege tax returns
by authorizing and allowing City’s tax collector to release such information to City
manager or designee.
4.9. Business License. Licensee understands that the activity described in
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this License constitutes “doing business in the City of Apache Junction” and
Licensee agrees to obtain a business license pursuant to Chapter 8 of A.J.C.C., Vol.
|, and keep such license current during the Term. Licensee also acknowledges that
the tax provision of A.J.C.C., Chapter 8A, may also apply and, if so, shall obtain a
transaction privilege license and/or other licenses as may be required by A.J.C.C.
Any activity by any subcontractor used in the performance of any aspect of the
work under this License shall invoke the same licensing and Licensee shall require
its subcontractors to obtain and keep all applicable licenses current.
4.10. Licensee Payment Amounts Cumulative. All amounts payable by
Licensee under this Agreement or under any tax, assessment or other existing or
future ordinance, law or other contract or obligations to City or the State of Arizona
shall be cumulative and payable in addition to each other payment required under
this Agreement, and such amounts shall not be credited toward, substituted for, or
setoff against each other in any manner.
SECTION 5. Insurance and Indemnity.
5.1 General Requirements. Licensee shall procure and maintain for the
duration of this Agreement insurance against claims for injuries to persons or
damage to property which may arise from or in connection with the performance of
the Work in the amounts and types set forth in this Section 5. Failure to do so, may,
at the sole determination of Licensor, be declared a material breach of this
Agreement and may result in termination.
5.2 Insurance. Not later than the Effective Date, and at all times thereafter
when Licensee is occupying or using the Use Areas in any way, Licensee shall
obtain and cause to be in force and effect the following insurance:
5.2.1. Commercial General Liability. Commercial Genera! Liability
insurance with limits of Five Million Dollars ($5,000,000.00) for each occurrence for
bodily injury and property damage and, Ten Million Dollars ($10,000,000.00)
general aggregate. Coverage shall be written on Insurance Service Office (“ISO”)
occurrence form or a substitute form providing equivalent coverage and shall
cover liability arising from premises-operations, independent contractors,
products-completed operations, personal injury and advertising injury and
contractual liability assumed under an insured contract. There shall be no
endorsement or modification of the Commercial General Liability insurance for
liability arising from explosion, collapse, or underground property damage. City, its
elected and appointed officers, officials, agents, employees, and special districts
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shall be included as additional insured parties under Licensee’s Commercial
General Liability insurance policy with respect to the Work using ISO Additional
Insured Endorsements or substitute endorsements providing equivalent coverage.
The policy shall contain a waiver of transfer of rights of recovery (subrogation)
against City, its mayor and council, employees, officials, special districts,
appointees and agents. Limits for the commercial general liability, commercial,
automobile liability and employer’s liability required by this Agreement may be
attained by a combination of primary and excess/umbrella liability insurance.
5.2.2. Automobile Liability. Automobile Liability insurance covering all
owned, non-owned, hired, and leased vehicles with a combined single limit for
bodily injury and property damage of Five Million Dollars ($5,000,000.00) per
accident relating to any ROW work. Coverage shall be written on ISO form or a
substitute form providing equivalent liability coverage. Such insurance shall cover
hazards of motor vehicle use for loading and offloading.
5.2.3. Workers’ Compensation. Such Workers’ Compensation and
similar insurance as is required by law and employer’s liability insurance with a
minimum limit of One Hundred Thousand Dollars ($100,000.00) for each accident,
One Hundred Thousand Dollars ($100,000.00) disease for each employee, Five
Hundred Thousand Dollars ($500,000.00) policy limit for disease.
5.2.4. Professional Liability Insurance. Professional Liability
insurance with limits of Five Million Dollars ($5,000,000.00) per claim and
aggregate covering the negligent actions of Licensee in the performance of
professional services under this Agreement.
5.2.5. Subrogation. All policies outlined in 5.2.1, 5.2.2 and 5.2.3, shall
waive transfer rights of recovery (subrogation) against Licensor and Licensor’s
employees, officials, representatives, officers and agents.
5.3 Policy Limit Escalation. Licensor may elect by notice to Licensee to
increase the amount or type of any insurance to account for inflation, changes in
risk, or any other factor that Licensor reasonably determines to affect the prudent
amount of insurance to be provided.
5.4 Form of All Insurance. The insurance policies shall be primary
insurance with respect to City. Any insurance, self-insurance, or insurance pool
coverage maintained by City shall be in excess of Licensee's insurance and shall
not contribute to it.
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5.4.1. Licensee shall require its insurers to provide Licensor thirty (30)
calendar days’ prior written notice of any nonrenewal, cancellation, or material
change in the coverage under such policy reducing coverage to below
contractually required amounts. If a policy does expire during the Term, a renewal
certificate must be sent to Licensor thirty (30) calendar days prior to the expiration
date.
5.4.2. Insurance is to be placed with insurers with a current A.M. Best
rating of not less than A-VII and legally authorized to do business in the State of
Arizona.
5.4.3. Policies must also cover and insure Licensee’s activities
relating to the business operations and activities conducted away from the ROW.
5.5 Verification of Coverage. Prior to commencing any work under this
Agreement, Licensee shall furnish Licensor with Certificates of Insurance, or
formal endorsements as required by the Agreement, issued by Licensor’s
insurer(s), as evidence that policies providing the required coverages, conditions
and limits required by this Agreement are in full force and effect. Licensor shali not
be obligated, however, to review same or to advise Licensor of any deficiencies in
such policies and endorsements, and such receipt shall not relieve Licensee from,
or be deemed a waiver of, Licensor’s right to insist on strict fulfillment of Licensor’s
obligations under this Agreement.
5.6 Certificates of Insurance. The form of the certificates of insurance and
endorsements shall be subject to the approval of the Apache Junction City
Attorney’s Office, shall comply with the terms of this Agreement. Policies or
certificates and completed forms of Licensor’s Additional Insured Endorsement (or
a substantially equivalent insurance company form acceptable to City Attorney)
evidencing the coverage required by this Agreement shall be delivered to City
Attorney, City of Apache Junction, 300 East Superstition Boulevard, Apache
Junction, AZ 85119.
5.7. Subcontractors. Licensee shall expressly bind any contractors,
subcontractors, and any other lower tier subcontractors, used in the performance
of any aspect of work under this Agreement, to the insurance requirements in this
Agreement, making such obligations applicable to the other contractor to the same
extent as itis applicable to Licensee. The purpose of this provision is to require any
lower tier contractor, regardless of level, to provide insurance and indemnity
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required by this Agreement.
5.8 No Licensee Limitation of Liability. Licensee’s maintenance of
insurance as required by this Agreement shall not be construed to limit the liability
of Licensee to the coverage provided by such insurance or otherwise limit
Licensor’s recourse to any remedy to which Licensor is otherwise entitled at law or
in equity.
§.9 Indemnification. In addition to all other indemnities and other
obligations under this Agreement, throughout the Term and until all obligations and
performances under or related to this Agreement are satisfied, Licensee (and all
other persons using, acting, working or claiming through or for Licensee or this
Agreement if they or their subcontractor, employee or other person or entity hired
or directed by them participated in any way in causing the claim in question), shall
jointly and severally pay, protect, indemnify, defend and hold harmless Licensor its
elected officials, employees, officers, special districts, representatives,
appointees, agents, and contractors for, from, and against:
a. any and all third party claims or harm related to labor, materials,
professional services and other work for Licensee’s Improvements and any
interest, penalties and other expenses which may be imposed, and from any lien
thereof or sale or other proceedings to enforce payment thereof;
b. any disturbance in Hazardous Substances in the course of the
contractor’s or other person’s work;
Cc. any loss or liability incurred by reason of any Hazardous
Substance on or affecting the Use Area attributable to or caused by Licensee or
anyone using the ROW under this Agreement;
d. Licensee’s use of the ROW;
e. the rights granted to Licensee with respect to the ROW or
Licensee’s exercise of its rights under this Agreement; and
f. all costs, damages, and/or expenses incurred by Licensor, its
officers, employees, appointees and agents in the defense of any litigation brought
by third parties challenging the right of Licensor to enter into this Agreement with
Licensee under Applicable Laws.
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